I’ve been inspired once again by SEOmoz’s open attitude and I too feel like sharing. Rand does it because “it fits with our philosophy and with our goals – to be as open as possible about everything that we do” but that’s not necessarily my reasoning. I figure it will be interesting to do, I’d love it if all my competitors did it, I don’t believe it can do much damage, and it could possibly do some good. Sometimes when I give people an idea of what MWI brings in people are surprised at how much we make, whereas I would expect most people to be surprised at how little.
As a disclaimer, let me say that these financials are for a private company, they have not been audited, nor have they undergone their final review by our accountant. They are provided to you, the public, purely for entertainment purposes and cannot be relied upon as anything other than pure fiction. Is that enough to remove me of any liability?
Also, these are not complete financials. There is some information I consider improper to share (employee salaries, how much each client paid us, etc.). I’m really just sharing some of the more interesting tidbits.
One last thing, these financials are presented on a cash basis rather than accrual, simply because I think cash means something and accrual is merely a predictor.
Income – $536,280.53
Advertising / marketing – $7,245.19
2006 Other items of interest
Best month (revenue) – Aug, $92,332.03
|2005 Year-end Comparison
Income – $403,913.84
2005 Breakdown Comparison
Advertising / marketing – $11,756.51
What can we learn from this?
Kids, entrepreneurship doesn’t pay. But seriously, we made a lot more revenue in 2006 (up 33%) but it cost us more to get there, enough that we actually had a loss in 2006 as opposed to a profit in 2005. You can easily see where the bulk of our expenses go–people. Employees, both contractors and full-timers, are the most expensive part of this business. Unfortunately as the executive I come pretty cheap.
I’m not sure I learned much during the last year that is new to me, but I’ve had a few lessons pounded more thoroughly into my head, and I’ve made some decisions to change things. The first and major lesson I’ve had repeatedly pounded in is that it’s all about sales. You can have the best product in the world but if you can’t sell it then your product may as well not exist. Second, I’ve learned that sales is partly about how you do it, but it’s more about who you know.
During 2006 we tried our hand at becoming a full-fledged advertising agency, spent a lot of money trying, and decided that wasn’t the route we wanted to take. Instead, we’ve decided to maintain our bread and butter web design and web development services and focus attention on a service we started getting involved with in 2004, namely search engine optimization. In the next few months we hope to launch an SEO offering through a subsidiary brand that will provide high-end SEO services to small business owners on the low end of the market. It could go down in flames or it might make us all ten-thousandairres, but either way we’ll be having fun all along the way.