November's Numbers
November was definitely an interesting month, mostly because I executed on a minor pivot, and am now targeting BugMuncher specifically at eCommerce sites and online apps. The update has been really well received, and I personally think BugMuncher’s UX is now by a wide margin the best it’s ever been. But that’s all stuff for a future post, as today it’s all about the numbers. So with out further stalling for time:
The Figures
| This Month (Nov 2015) | Last Month | Change | |
|---|---|---|---|
| Savings (end of month) | £17,089 | £18,189 | 6.1% |
| Monthly Recurring Revenue | $838 | $720 | 16.4% |
| Average Month on Month Growth | 10.6% | 7.8% | 36% |
| Paying customers | 19 | 17 | 11.8% |
| - Personal Plan | 9 | 9 | - |
| - Start Up Plan | 7 | 5 | 40% |
| - Corporate Plan | 3 | 3 | - |
| Unique users on landing page | 3,759 | 3,404 | 10.4% |
| New Free Trial sign ups | 44 | 47 | 6.4% |
| Free Trial sign up rate | 1.17% | 1.38% | 21% |
| New Paying customers | 3 | 2 | 50% |
| Lost Paying Customers | 1 | 1 | - |
| Free Trial to Paying conversion | 4.55% | 6.38% | 28.7% |
Not quite as much green as last month, but it’s not surprising, as this month I’ve allowed myself to spend most of my time programming in aid of the mini-pivot. Thus, marketing has taken a back seat, and sign ups have suffered as a result. What’s important is revenue is looking healthy, and I’m now hitting an average month on month growth of over 10%!
Another cool thing I’ve noticed is that the number of Start Up subscriptions is starting to catch up with Bootstrap. Soon I may finally be able to put a ‘Most Popular’ label on the Start Up plan on the pricing page. I’ve always wanted to, but I just can’t bring myself to do it when it’s not true. Sometimes I wonder if I’m too honest to be in business.
Revenue Growth
During November I had 3 new paying customers, one on the $19 / month Bootstrap plan, and two on the $59 / month Start Up plan. I also lost one $19 / Month bootstrap customer, but over all I’m really happy, especially as I didn’t do much marketing this month.
Last month my average month on month revenue growth was 7.8%, just ahead of the 7% I need to maintain to reach profitability before the runway runs out. I also said that ideally I’d like to be averaging 10% MoM growth. Well BugMuncher is now averaging 10.6% MoM revenue growth, which is awesome!
As the graph above shows, I’m currently smashing my original 7% MoM target, and I’m now ahead of my 10% ideal MoM growth. If I keep this up, December will bring it up to around $925 / month, and then January 2016 will see BugMuncher crossing the $1,000 / month mark! Here’s hoping.
Revenue vs Income
“Turnover is vanity, profit is sanity.” No matter how many times I hear it, or how true it may be, it still sounds a bit douchey to me.
However, $838 of revenue is great, but what really matters is how much landed in my bank. The thing is it’s hard to tell, as FastSpring pay on a two week cycle with a two week lag, so I’m now going to try and figure out my income from BugMuncher, and compare it to the revenue.
From FastSpring’s FAQ:
Then there are the transaction fees, 8.9% per transaction, or 5.9% + $0.95 per transaction. The default is 8.9%, and that’s what I’m currently on. But it doesn’t end there, as BugMuncher charges in USD ($), but my business account is in GBP (£), so conversion rates and fees come in to play. The end result is this:
| Revenue period | Revenue | Minus 8.9% fee | Payment date | Payment received | Effective conversion rate |
|---|---|---|---|---|---|
| 1 - 14 July | $248.00 | $225.93 | 04 Aug | £138.00 | 61.08% |
| 15 - 31 July | $421.00 | $383.53 | 18 Aug | £231.77 | 60.43% |
| 1 - 14 Aug | $248.00 | $225.93 | 03 Sept | £138.56 | 61.33% |
| 15 - 31 Aug | $372.00 | $338.89 | 17 Sept | £210.18 | 62.02% |
| 1 - 14 Sept | $316.00 | $287.88 | 02 Oct | £166.00 | 57.66% |
| 15 - 30 Sept | $254.00 | $231.39 | 19 Oct | £143.07 | 61.83% |
| 1 - 14 Oct | $515.00 | $469.17 | 03 Nov | £284.72 | 60.69% |
| 15 - 31 Oct | $205.00 | $186.76 | 18 Nov | £114.46 | 61.29% |
With the exception of the 2nd October payment, the conversion rate I received was about 3 - 4 points below what the actual conversion rate was at that time. It’s frustrating that FastSpring don’t have any clear information about their currency conversion fees.
Today I’ve worked out that I’d get an extra $7 / month by changing to the 5.9% + $0.95 fees, so I’ve requested to change to that - hey, every little helps.
Now for the first time ever, I’m going to evaluate income growth, instead of just the usual revenue. I’m genuinely scared of this, as income is what really matters, and for all I know, I could be failing miserably.
| Month | Revenue | Revenue Growth | Income | Income Growth |
|---|---|---|---|---|
| September | $570.00 | -11.13% | £309.07 | -11.38% |
| October | $720.00 | 30.67% | £399.18 | 29.16% |
| November | $838.00 | 16.39% | £467.89 (estimated) | 17.21% |
Average growth (working from my estimation for November’s income) is 10.29%. Using the trusty Startup Growth Calculator, working with my actual income, expense and capital figures, I’m still on target (phew). I still need 7% MoM growth to reach profitability, and I’m currently averaging over 10% growth on income.
I’m still not sure how or where to include the income in the main figures table. As the income I receive in any given month is for the revenue in the previous month, and when I write these posts, I don’t actually know what the exact income for that month will be.
My options are:
- Include the income I received, even though it relates to the previous month. Ie: This month I would put £399.18, even though that was the income for October’s revenue.
- Include the actual income once I know what it is, so this post wouldn’t include income figures until around the 18th December, but I can add income for all previous months.
- Don’t include income in the table, and just talk about it separately, as I’ve done in this post.
I’d love to know what you think is best, I’m currently leaning towards option 1.
Why not use Stripe?
I’ve been asked a few times why I use FastSpring instead of Stripe for processing BugMuncher’s payments. It’s a valid question, I’ve worked with Stripe for clients, and it’s an awesome API on which to build. On top of that, the fees are much more reasonable - 2.9% + £0.20 per transaction for international payments. Stripe are also upfront about their currency conversion fees, charging an extra 2%, which is again better than the 3-4% FastSpring seem to be charging me. Unfortunately, when I launched BugMuncher, Stripe wasn’t an option in the UK. But now it is, why haven’t I changed over? The answer is simple - VAT MOSS.
In their infinite wisdom, the European Union (or whomever) has decided that when selling to non-VAT registered companies, VAT needs to be charged based on the buyers location, rather than the merchant’s. The idea was to stop large companies incorporating in low VAT countries to save money, but the reality is that small companies get royally fucked with the extra work required to implement and keep on top of this system.
This is where FastSpring shines, they are technically a reseller of BugMuncher, so they take care of all the VAT hassles for me.
Based on my current figures, I’d receive an extra £30 / month if I was using Stripe. It would take a fair bit of upfront development work to integrate Stripe, and then I’d have the ongoing effort of having to manage VAT MOSS myself. For £30 / month, I just don’t think it’s worth it, there are far better things for me to spending my time on.
FastSpring may be expensive, but in my current position it’s the best option.
Closing Statement
So November was my first month with absolutely no freelance work (except a couple of 10 minute fixes for an old client, for which I did not charge), and with BugMuncher as my only source of income. December will most likely be a quiet month, but I’m going to be putting a lot more time into marketing than I did this month.
I’ve had such an amazing response to these blog posts, it’s really been quite overwhelming. Thank you for reading, and to everyone who’s commented and emailed, the support really helps during those inevitable times when I let the doubt set in, and wonder what the fuck I’m doing.
- Matt