The year ends on a quiet note: we didn’t set any records in December, but only just managed to achieve a small plus. Welcome to our Open Startup Report for December 2023.
Contents
December at Friendly in Numbers
- 🤖 Software revenue: 18 022 CHF (+2%)
- 🧠 Consulting revenue: 5 638 CHF (-50%)
- 💰 Total revenue: 23 659 CHF (-19%)
- 💸 Costs: 23 338 CHF (+1%)
- 🧾 Profit and loss: +321 CHF (-94%)
- 👩 Active customers: 120 (-)
- 💔 Churn rate (lost customers): 1.7% (-62%)
- 👋 New trials: 11 (+10%)
- 🔎 Website visits: 3 763 (-4%)
These were the key developments in December:
Revenues: Sixth consecutive month of growth in software revenue, total revenue drops due to consulting
Our monthly recurring revenue (MRR) from software subscriptions rose reliably for the sixth month in a row with a small increase of 2% to CHF 18 022 in December.
This not only continues the positive trend of recent months, but also of the past few years: In our almost 4-year company history, the MRR has only failed to rise in 7 out of a total of 47 months.
Admittedly, all monthly increases were within a modest range of just a few hundred francs. Even though we would like to see slightly faster growth, we recognize the stability that we achieve through slow growth with small and medium-sized customers.
On the one hand, this allows us to avoid cluster risk and, on the other, gives us enough time to keep pace with the changes in our company.
However, our consulting revenue is constantly keeping us on our toes: In December, the zigzag course once again moved downwards and, at CHF 5 638, was a full -50% below the previous month’s revenue, and even in a one-year comparison for 2023, still -25% below the monthly average. (More on this in our Open Startup Annual Review, coming soon).
At the same time, the number of our active customers stagnated at 120 for the first time after a 6-month increase. As we also recorded a very low churn rate of 1.67%, we are still just about satisfied with this result.
Overall, our total revenue fell by -19% or more than CHF 5 000 to just CHF 23 659 this month.
Costs: Personnel costs stable, cost increase due to initial ISO certification
On the expenses side, most cost factors remained constant: marketing and administration costs hardly changed and wage costs also remained largely at the previous month’s level. However, our freelancers worked slightly more hours.
The ISO certification for the 9 001 & 27 001 standards has a noticeable impact. In addition to the preparation costs, there are now also the costs for the initial certification.
We amortize both items over 12 months each, so we pay CHF 1 735 per month for this investment in the future, or CHF 20 820 in total. This is a considerable sum for our small start-up, but we are confident that we have taken the right course with the certification.
Together with the low expenditure in the area of training & events, there was nevertheless only a slight increase in costs of +1% to CHF 23 338 this month.
Here are all our costs including wages for December 2023 in detail:
Which tool is this actually?
One of the most frequent questions we receive about our Open Startup Report is which tool we use to create our cost table. In the spirit of our Open Startup philosophy, we are of course happy to share this with you too. 🙂
We are using Soulver. It’s a text editor that can do calculations. Soulver integrates simple spreadsheet functions into its clean notebook interface and is much slimmer than an Excel spreadsheet. The tool is available for a (one-time) fee and only works on Mac.
Conclusion
At the end of the year, we achieved a narrow “plus”* of CHF 321 in December, a profit that is over CHF 5,000 lower than in November. Despite steadily rising software sales and stable costs, this was once again due to the fluctuations in consulting.
As a sole founder without investors, I have not yet been able to pay myself a salary for my work at Friendly. I mentioned several times in my Open Startup reports that I wanted to change this within 2023. We have missed this target in the past year.
Despite this, the last month of the year saw a (small) “black figure”* and, for the first time, we recorded a five-digit “profit”* for the year as a whole.
In all likelihood, 2024 will therefore be the year in which we will be able to build up financial reserves at Friendly for the first time.
* “Profit”, “plus” and “black figure” are deliberately put in quotation marks because I have not yet paid myself a salary for my work and I have yet to make up for the loss so far.
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