november-2016

Monthly Update & Income Report – November 2016

Well, October was tough. But November was even tougher.

This isn’t a complaint. I’m just staring the hard truth in the face.

Does it mean that it’s the beginning of the end? Hell no. It just means that we need to keep fighting and reinvent ourselves. More on this below.

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Key Numbers

Situation

Nothing has changed since last month. We’re still 4 in the team.

Gross Profit

Gross profit is the difference between our revenue and our expenses (before tax):

Profits in November 2016.

We knew that October, November and December will be bad months. We stopped working with some clients to focus on our best clients and it took us longer than expected to secure new clients.

We had a good cash reserve but it’s starting to dry up.

Recurring Expenses

This is the amount of stuff we pay every month. This includes salaries, accounting costs and operating expenses.

Slices Consulting Recurring Expenses November 2016

We expanded the team last month so our expenses keep going up.

One-Off Expenses

We call one-off expenses the things we pay for that are difficult to plan. It mostly includes expenses related to client work like user testing, usability tests, development, graphic design, etc.

Slices Consulting One-Off Expenses November 2016

November is our worst month in term of one-off expenses.

We had to invest in getting a solicitor to draft solid legal contracts, pay in advance for some client expenses, and pay for our company retreat.

Taxes

None this month.

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What we’ve done

Most of our time has been taken by client work. All hands on deck.

Outside of that, I’ve continued to develop Transparent Nation and our no-BS marketing podcast. I’ve now interviewed 8 people for the podcast and started organising written interviews for the Transparent Nation project.

We started to work with a solicitor to have better contracts.

Finally, I’ve attended Congregation, an unconference where all attendees are speakers. This has been the highlight of the month:

What’s next

Besides client work, our main focus this month is to prepare our retreat in January.

It has become clear that our positioning needs to be improved. We need to niche down our services and focus on a particular target market; we are too small and are losing our focus.

We’ve started interviewing existing our customers to understand what we could do better. We’ve also started to do customer development with companies within the target market we are thinking of exploring.

Finally, we’ve booked a session with Philip Morgan, an expert in positioning with technical firms.

I firmly believe that it’s by making mistakes that we’ll get better. Judging by the number of mistakes I’ve done recently, we should get better pretty soon.

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  • Why aren’t you billing clients for the one off expenses?

    • Oh we are, but we are billing them after a few weeks based on our agreement. It’s just a cashflow issue as we weren’t expecting to be in this situation.

  • Hi Louis, always enjoy reading the newsletters 🙂 As John says, any client expenses should be billed to the client as part of their contract, right? Otherwise you would definitely be making a loss. It would be similar to managing a client’s AdWords campaign and paying for the clicks yourself!

    I think side projects (like the podcasts / Transparent Nation) are good and will help build Slice’s profile over time. However, I feel they are for when you are focused, have a foothold within your ideal target market, and are consistently profitable. Until then they are a distraction and just take a lot of time away from the core business.

    Finally, one thing I notice is that you never blog about clients, or client results, etc. This is obviously a great way of showing the world the work you are doing, the results you are achieving, and most importantly it is a way of attracting the type of client you want. You can always use ‘client in industry X’ instead of actual client names of course. When you blog about the results you’ve achieved for a hypothetical sportswear company with traffic / revenue of roughly X, then it probably won’t be long before a similar sized client in industry Y comes knocking.

    • Anton, thank you so much for your comment.

      Yes, our clients do pay us for the expenses related to the project after a few weeks. Some other one-off expenses like solicitor, retreat, are not client-related.

      You’re right, side projects can definitely be a distraction. This is however a deliberate tactic that has started to pay off by expanding our network and building relationships with some very cool people. My job is to build the business and I have 3 people in the team to focus on delivering great work to our clients.

      We know that we have to get clients outside of Ireland in order to thrive.

      As for the case study, you’re absolutely right, and we are working on it.

  • Susan Donohoe

    Hi Louis, as the other commentators have said, you need to take control of your ‘one off expenses’. They are the direct costs of the job/client expenses/outlay and should be predictable or every effort should be made to identify what they will be before taking on the work. How can you price the job unless you have a handle on the costs? You should also try to be paid for these outlays at commencement where possible. Lack of cashflow will bring you down while you wait for the profits to roll in.