November's Numerations
Much to my relief, November was a really good month, but then, it didn’t take much to be better than the shit sandwich that was October.
The Figures
| This Month (November 2016) | Last Month | Change | |
|---|---|---|---|
| Savings (end of month) | £5,977.57 | £5,687.40 | 5.1% |
| Monthly Recurring Revenue | $3,009 | $2,5… |
Hang on a second… did my savings just go…up? That can only mean one thing:
Profit!
I did it! I fucking did it! And one month ahead of schedule! For the first time in over a year, the money in my bank account has actually gone up!
Well, that’s pretty fucking awesome! (I fear this may be a profanity and exclamation mark heavy post, so my apologies for that).
Anyway, lets get back to the figures:
The Figures (take 2)
| This Month (November 2016) | Last Month | Change | |
|---|---|---|---|
| Savings (end of month) | £5,977.57 | £5,687.40 | 5.1% |
| Monthly Recurring Revenue | $3,009 | $2,516 | 19.6% |
| Actual Revenue | $3,038.00 | $2,561.23 | 18.6% |
| Fastspring fees | $252.19 | $210.26 | 19.9% |
| Expenses | £1,569.30 | £1,814.08 | 13.5% |
| Income | £1,849.47 | £1,729.84 | 6.9% |
| Average Month on Month Growth | 11.1% | 10.5% | 5.7% |
| Paying customers | 47 | 40 | 17.5% |
| - Personal Plan | 21 | 19 | 10.5% |
| - Startup Plan | 18 | 14 | 28.6% |
| - Corporate Plan | 8 | 7 | 14.3% |
| Free plan subscribers | 46 | 33 | 39.4% |
| Unique users on landing page | 2,216 | 2,368 | 6.4% |
| New Free Trial sign ups | 57 | 69 | 17.4% |
| Free Trial sign up rate | 2.6% | 2.9% | 10.3% |
| New Paying customers | 9 | 3 | 200.0% |
| Lost Paying Customers | 2 | 4 | 50.0% |
| Free Trial to Paying conversion | 15.8% | 4.3% | 267.4% |
| New Free plan customers | 13 | 20 | 35.0% |
| Free Trial to Free plan conversion | 22.8% | 29.0% | 21.4% |
| Paying to Free plan downgrades | 0 | 3 | 100.0% |
| £290.17 | £-59.24 | 589.8% | |
| Runway | Infinite! | 8 Years (96 Months) | ∞% |
As you know, October was my worst since I started working full time on BugMuncher. Where as November was by a wide margin my best! Just look at those numbers, look at all that green!
Not only did I finally reach profit and achieve my $3,000 MRR goal, I also added nearly $500 to BugMuncher’s Monthly Recurring Revenue, a new record!. But that’s not even the best part: Fastspring (BugMuncher’s payment provider) pay me a month in arrears, which means this is actually from last months MRR of $2,516. Next month will be even better!
And while we’re talking about record breaking stats, have you seen that free trial to paying conversion rate - 14.0%! My previous best was 12.5%, and almost every other month has been below 10%.
I’ve added a new column, “Paying to Free plan downgrades”, I predicted last month that after the initial spate of downgrades due to the introduction of the Freeloader plan, downgrades would become a much less frequent occurrence, and with zero downgrades this month, so far I was correct.
Expenses
| Supplier | Expense | Amount | USD |
|---|---|---|---|
| Total | £1,569.30 | ||
| Me | Salary | £1,345.29 | - |
| Me | Home office allowance | £54.71 | - |
| Heart Internet | Domain Name | £14.39 | - |
| Digital Ocean | Hosting | £8.41 | $10.00 |
| SauceLabs | Selenium Servers | £57.66 | $69.00 |
| Linode | Hosting | £20.75 | $25 |
| Pingdom | Uptime monitoring | £9.95 | - |
| Talktalk | Internet | £37.95 | - |
| O2 | Mobile Phone | £20.19 | - |
You may have noticed there’s no £180 payment to Barnstaple Work Hubs for my office space this month. That’s because I’ve stopped renting a desk there. I’ve loved having a space away from home, but unfortunately the co-working space is huge, with just one tiny radiator trying (and failing) to heat it. It gets uncomfortably cold in the English Winter, so I didn’t want to pay £180 / month to freeze my balls off. I’ll be back there next Spring, and hopefully they’ll sort the heating issue for next Winter.
This doesn’t take away from the achievement of reaching profitability, as my profit was way more than £180, so even if I was still renting a desk, I’d still be in profit, it would just be £110.17 instead of £290.17.
Other than that, this was another fairly standard month in terms of expenses, still no sandwiches.
Revenue
I’ve put some distance between me and that God damn 10% growth target again, now I just need to make sure that gap keeps growing.
Freeloaders
Last month I predicted that by the end of November I’d have more freeloaders than paying customers. While that isn’t quite the case, I wasn’t far off - 46 Freeloaders, 47 Paying customers. The BugMuncher server did take a bit of a hammering through November, and even briefly fell over a couple of times, but that was because of an unoptimised database backup script, combined some new, high traffic, paying customers. Once again The freeloaders have not had any noticeable effect on either server or my cognitive resources.
November’s signup conversion was still higher than the pre-freeplan days, but not by a huge amount. I’m definitely not seeing a continuation of the doubled signup rate I saw when I first launched the free plan.
What now?
Nothing’s gonna change now that I’ve achieved profitability, I’ll still be posting these monthly income reports, and I’ll still be running BugMuncher with complete transparency.
Back in my freelancing days I was taking home £2,200 / month, but as soon as I started full time on BugMuncher I cut that by over a third to £1,400 / month. I’d really like to be able to afford to pay myself £2,200 / month again. I think $4,500 MRR should be enough to acheive that goal, but $5k is nice round number, so my next goal is $5,000 Monthly Recurring Revenue.
Another, much more important goal, is to stay in profit. I could just up my take home salary now and plunge back into the red, but I know I can survive on what I’m paying myself now, so that would be monumentally foolish. Having said that, starting from December I’ll be paying myself an extra £100 (£1,500 / month), as I know that will keep me in profit, but the extra money will be a nice reward.
The timing of BugMuncher’s becoming profitable is interesting, as my accountants have just finished preparing my annual company tax return. Unsurprisingly, this is the first year that Matt Bearman Ltd. has posted a loss. For reference, in my last year of freelancing (2014 - 2015) profit was around £30,000. This year my company posted a loss of around £5,000.
In the UK, companies pay corporation tax of 20% of their profits, so last year I paid about £6,000 in corporation tax. The nice thing about making a loss is that it can be offset against last year’s profit, so this year instead of paying corporation tax, I’ll be getting a refund of around £1,000.
Plans for December
Working a four day week through out November has definitely worked well for me, I’ve been infinitely more productive than I was in October. I’ve still not quite finished the custom questions update, but it is currently being tested on the staging server. I don’t think I’ll make it live until 2017, as pushing a big update live is always risky, and I really don’t want to spend my days before Christmas putting out fires.
Other than that, I’m gonna be winding down and taking it easy for the rest of the year. I’ve got a bunch of blog posts in the pipeline, so I’ll be doing a lot more blogging next year.
That’s it for this month, and this year, thanks so much everyone who’s been reading. In the course of this journey from side project to profitability I’ve had so much support and encouragement from readers, and made some awesome friends. It’s been a fucking crazy year, on to the next one!
- Matt