We almost returned to “profitability” despite additional investments in certifications for ISO 27 001 and ISO 9 001. Welcome to our Open Startup Report for August 2023.
Contents
August at Friendly in numbers
- 🤖 Software revenue: 15 865 CHF (+1%)
- 🧠 Consulting revenue: 6 764 CHF (+55%)
- 💰 Total revenue: 22 629 CHF (+13%)
- 💸 Costs: 22 781 CHF (+6%)
- 🧾 Profit and loss: -153 CHF (-90%)
- 👩 Active customers: 106 (+6%)
- 💔 Churn rate: 2% (∞)
- 👋 New trials: 17 (+42%)
- 🔎 Website visits: 7 552 (+127%)
This is what moved us in August:
Revenue: Software revenue up slightly, consulting revenue up significantly
Our monthly recurring revenue (MRR) from software subscriptions increased for the third month in a row in August, albeit only slightly by +1% to CHF 15,865. This is again the highest software revenue in our history.
We had many smaller new customers who used the last days until the new Swiss Federal Act on Data Protection (nFADP) came into effect to switch from Google Analytics to a Swiss alternative.
Although this only made a slight contribution to revenue, the number of our customers rose by a full +6% to 106 – another record.
This development is very welcome for us. We are safer with little revenue from many customers than with a lot of revenue from a few major customers.
Our revenue from consulting grew again by a whopping +55% to CHF 6,764 after the slump in July. About half of this came from work on Friendly Automate and half from work on Friendly Analytics. This is interesting because Friendly Automate accounts for almost 80% of software revenue. The consulting revenue for Analytics is therefore currently disproportionately high in relation to the software revenue.
Our total revenue for August was CHF 22,629, an increase of +13% from the previous month and the second highest revenue in our history after June 2023.
Costs: increased due to investments in safety and quality
Our costs increased by +6% to CHF 22,781 in August, the third highest in our history. The biggest increase was in the “Product” division.
We are increasingly receiving requests from companies and organizations that process sensitive data and have high data protection requirements. We have therefore decided to invest heavily in the security and quality control of our offerings despite limited resources.
With the support of a specialized partner, we are setting up a so-called management system to identify risks and continuously improve safety and quality.
As proof of these activities, we are striving for certification in accordance with ISO 27 001 (information security) and ISO 9 001 (quality management). The first external audit is planned for the end of the year. If we pass this, we will be officially certified in these areas
The costs for setting up the management system amount to CHF 15,000, and another CHF 3,825 will be due later for the initial audit. We can only afford this investment from a cash flow point of view because both partners thankfully allow us to pay in installments. Accordingly, we write off the costs for the installation in the cost report over 12 months.
There was a slight increase in salaries. On the one hand, we finally reversed Kathrin’s salary reduction and increased her salary back to the previous level of 3,000 CHF. On the other hand, our CTO Joey finally has a developer in his team again: Matic Zagmajster from Slovenia. Matic initially starts as a freelancer, but with a fixed workload of 10% for €500 per month.
The other cost categories were about the same as the previous month. Here are all our costs including salaries for August 2023 in detail:
Conclusion
After slipping into the red numbers in July for the first time in three months due to the slump in consulting revenue, we almost returned to “profitability” in August*.
This is all the more remarkable as we have begun a major investment in our information security and quality control with certification for ISO 27 001 and ISO 9 001, which significantly increases monthly costs.
* “Profitability” is deliberately put in quotation marks because I have not yet paid myself a salary for my work and, as a sole founder without investors, I have yet to make up for the loss so far.
Our goal remains to achieve sustained profitability and to expand the margin to such an extent that I will be able to pay myself a salary this year if possible.
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