Expenses
I’ve spent a lot of time in this blog series talking about profit (or lack there of), and I’ve mentioned a couple of times that BugMuncher costs me around £1,800 / month to run, but I’ve never gone into more detail than that. There’s a good reason I’ve never gone into more detail, it’s not due to my usual fear or a lack of transparency, It’s simply that I didn’t know the full details, £1,800 is an estimate.
So for this blog post I’m going to dig through my bank statements, invoices and payment confirmation emails to finally figure out exactly what BugMuncher costs me to run each month.
The majority of BugMuncher’s expenses is my wages - £1,400 / month, gotta keep food on the roof and a table over our heads.
It may seem odd to be drawing wages from my not-yet-profitable endeavour, but it’s just how things worked out. When I decided to start working on BugMuncher full time, I had around £20,000 in my business bank account from living frugally through my years as a freelance website developer. I could have taken that all out of the business in one go to cover my living costs, but I’ve always found I manage my finances better when I receive a steady monthly wage.
For the rest of this post I’m going to be looking at non-wage expenses:
Co-working space - £180 / month
As I’ve mentioned in this blog a few times before, I rent a desk in a local co-working space for £180 / month. I find I’m more productive there, and it’s nice to be able to get out of the house, so it’s definitely a worthwhile expense.
Accountants - £128.20 / month
One of my biggest expenses is what I pay my accountants to keep Matt Bearman Ltd. up to date with HMRC. I don’t begrudge these costs at all though. When I first started freelancing in my early 20’s I tried to do it all myself, and ended up making a huge mess of it all, and had to pay an accountant to fix it. I’m happy to pay ~£130 / month to not worry about it.
My accountancy costs break down as:
- £57.60 / quarter - Real Time Information submissions
- £912 / year - Preparation of company accounts and corporation tax return
- £168 / year - Preparation of P60
- £168 / year - Personal tax return
- £60 / year - Annual return
Total: £1,538.40 / year
I’ve never actually worked out my full accountancy costs before, but I’ve always said I pay around £1,500 per year. Quite impressed with the accuracy of that estimate.
Selenium Servers - £47.89 / month
In order to generate screenshots, BugMuncher uses a selenium server farm provided by SauceLabs. This means I can accurately recreate web pages and snap screenshots accurately in over 700 browser / operating system combinations. Not bad for $69 / month.
Hosting - £24.28 / month
BugMuncher’s hosting is divided between Linode for BugMuncher itself and DigitalOcean for this website and blog.
Linode provide me with one 2 GB virtual server for $20 / month, and automatic backups for $5 / month
Since this site and blog is a simple static site built with Jekyll, I’m able to run it on one of DigitalOcean’s smallest 512 MB virtual servers costing just $5 / month
Internet - £22.40 / month
Broadband internet connection for the home office.
Mobile Phone - £19.54 / month
Since I’ve stopped freelancing, I don’t need my mobile phone for business very much any more, the main thing I use it for is replying to emails and checking on things when I’m not at home or in the office.
Uptime monitoring - £9.95 / month
I use Pingdom to keep track of BugMuncher’s uptime and response time, as well as alert me if the site goes down.
Graphic Design - £5.12 / month
Once upon a time I used to do website design as well as development. I grew to hate photoshop, and eventually stopped doing design entirely. You may have noticed that all these blog posts include a big featured image, thankfully I discovered Snappa.io, which makes creating images like that amazingly simple. For their service I pay $90 / year.
SSL Certificates - £1.27 / month
BugMuncher uses two SSL certificates, one for app.bugmuncher.com and one for www.bugmuncher.com. Both are RapidSSL, bought from Namecheap for £7.59 / year.
Domain Name - £0.71 / month
HeartInternet provide the bugmuncher.com domain name for £8.49 / year.
Total Expenses - £439.36 / month
It’s worth noting that a few of these costs are paid in US Dollars, so for the £ amounts I’ve just used what I paid in the most recent month, these amounts will fluctuate with exchange rates.
So BugMuncher actually costs £1,839.36 / month, my estimate or £1,800 was pretty close. In fact, looking at my accountancy costs, I tend to underestimate expenses by about £40.
Of course I’ll have to adjust my calculations for future monthly reports using this new figure, but using the figures from March, the extra £40 / month in expenses doesn’t actually affect my runway :)
Things for which I don’t pay (but probably should)
There’s also a few freemium services I use for BugMuncher, I feel they should get an honourable mention:
Cloudflare CDN
Currently I just use Cloudflare to serve the embeddable BugMuncher Javascript and CSS, for which their free plan is more than enough. I’d like to put everything behind their CDN soon, at which point I’ll upgrade to a paid plan.
SendGrid
I can’t believe I’m still not paying for transactional emails! Over four years down the line and BugMuncher is still not sending more than 12,000 emails per month. I’m not sure if I should be happy or sad about that. In fact, in the last month BugMuncher sent less than 4,000 emails, so looks like I’ll be on their free plan for a while yet.
Heap Analytics
When I first installed Heap it blew my mind, being able to define an event and retroactively see every time it had already happened was a revelation. Their free plan includes 5,000 sessions per month, but if you add a Heap Analyitcs badge to your website (which I have) that becomes 50,000 free sessions.
I’ve always been a little scared of my love for Heap, as when I signed up, the first paid plan was $99 / month, quite a jump from $0, and a lot of money for a small business like BugMuncher. Since then they’ve made it even more scary by removing the paid plans entirely - the only options are Free or Enterprise, ie: contact them for pricing, and I’m sure it will start at more than $99 / month. Thankfully I’m no where near the 50,000 session / month free limit.
MailChimp
The mailing list for this blog is powered by MailChimp, which has a free plan for 2,000 subscribers. I have 109 subscribers, so once again, I’ll probably be on the free plan for a while.
So that’s what BugMuncher costs to run each month. As always with these types of posts, this has been hugely useful to me, as I’d never fully analysed my expenses until now, and I’ve noticed a few places I can save some money. Most notably it’s reminded me that I’m still on flat rate VAT, which used to save me money as a freelancer, but now that Fastspring takes care of all my VAT needs, being flat rate is actually costing me money, so I’m going to look into getting that changed.
That’s all for now, thanks for reading.
- Matt