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At the start of the year, I develop new objectives to aim for. Some of those objectives are revenue targets.

I’m considering this year to be a development phase of Packet6. And what I mean by that is identifying ways to keep the business relevant and continue to provide value to clients in this changing climate.

See my other Income Reports.

Highlights of Q1

In the last couple of months ending 2021, I was studying for the Palo Alto Networks Certified Network Security Administrator (PCNSA) exam. In January 2022, I was able to take the exam at home and pass! I’m glad I passed because I had been working on Palo Alto Networks firewalls for most of 2021.

A week after, I passed the JNCIA-MistAI exam.

Both certifications reflect the work I’ve been doing in the past year with Palo Alto Networks and Juniper. I wanted to put some certifications behind it.

One of the big things that will really pay off is hiring a podcast producer to work on Clear To Send episodes. It will allow more focus on recording and freeing time for things that need my attention. A big game changer for the podcast.

And as we focus on improving the business, we are learning and implementing tax strategies. We’re registered as an S-Corp which allows us to take on certain deductions. This lowers the business’ taxable income.

It’s a lot more strategic than that. Not as simple. There’s some additional management overhead but we’ll see how it works for Packet6 this year.

Lessons Learned

The first quarter was very busy. I took on too much weekend work filled with network cutovers, traveling, and performing validation surveys. I don’t want to overdo it again which means I need to bring in some help.

Sometimes weekend work is required since Packet6 is a side hustle. It can’t affect my full-time employment.

After having done that much work, I realized we didn’t leave space to do more regular reviews of how the business was performing. Tasks and projects were kept in Todoist but I didn’t have a method of properly reviewing what was completed.

We’ll be changing how we keep track of active projects, have end of week and quarterly reviews to make sure we’re not letting things slip.

And speaking of letting things slip, the Packet6 blog has been collecting dust. I’ve implemented a content calendar to keep track of publishing blog posts. We’ve been fortunate to have many new clients come in through the website that it would be a shame to let it wither on the vine.

Income Analysis

Now we get to talk about numbers. I’ve always been nervous about sharing these but I’d like to be transparent to allow others to learn from my successes and mistakes.

Eventually, these income reports will expand in more detail. There is much more to organize when it comes to tracking finances.

	Q1FY22	Q4FY21	% Change
Revenue	$246,817	$163,233	51%
Expenses	$89,936	$114,420	(21%)
Net Income	($17,641)	($33,056)	47%

We were fortunate to have great projects completed in Q1. We’ve embraced the help of subcontractors and it’s removed some weight off my shoulders. But Professional Services revenue dropped 11% compared to the previous quarter. It was offset by an increased in revenue from Managed Services.

I believe all of the Pro Services work came in as referrals or existing business.

The biggest challenge we’re facing is the shortage of equipment. Some clients waited 6 months, others 3 months, but they arrived in Q1 which allowed us to invoice for network hardware, increasing hardware revenue by 110%. All of Q1 hardware sales were Meraki products.

	Q1FY22	Q4FY21	% Change
Pro Services	$43,345	$51,127	(11%)
Managed Services	$25,384	$19,038	33%
Hardware	$112,659	$53,714	110%

Our Q1 profit margin was 29.2% which is a -41.3% decrease compared to Q4FY21.

Expense Analysis

The biggest objective that has been carried from last year into 2022 was lowering expenses.

Maybe the most important expense goes to salary of two employees. I want to be sure we can always pay ourselves. You hear about business owners who forgo their income in order to keep the business afloat. That’s no way to live.

Another expense that is new this year will be reimbursements back to us for using a portion of our home as an office and for other business expenses incurred that we’ve personally paid for. Gas mileage is an example of this or reimbursement for your home office usage and Internet.

	Q1FY22	Q4FY21	% Change
Travel	$12,300	$6,173	99%
Web Services – Subscriptions	$2,260	$5,214	(57%)
Legal & Professional Services	$897	$2,025	(56%)

I saw travel expenses increase by 99% but most of it is charged back to clients. This is for airfare, lodging, and rental cars to locations such as Arizona, Los Angeles, Seattle, Denver, etc. I’ve stayed with Delta Airlines and Hertz for rewards. Sometimes the cost being higher compared to an airline such as Southwest.

We took a good look at all the SaaS services we use. Some are experimental and others become less utilized. So it was important to cut these subscriptions out and we were able to reduce this expense by 57%. Big win in my book so I’ll take it.

And in the previous quarter we spent a little more on Legal & Professional Services in the previous quarter but in Q1FY22 we reduced this expense by 56%.

We have other expense categories but need to clean it up for improved tracking.

Overall, expenses were down 21% compared to the previous quarter. I’ll take it!

What’s Next

We’re improving our business processes to keep things consistent and to ensure we’re operating with intent. I’m documenting technical processes for future training purposes.

Some examples of processes:

• Weekly reviews
• Quarterly reviews
• Project & task management
• Sales calls
• Podcast production

Our reason for working on processes is to have an overall system that allows us to work on the business instead of in the business.

Now that we have many of our processes documented, we’ll begin to offer Managed Services to more clients. This would bring in recurring revenue in addition to Professional Services & equipment reselling.

I’m also going to go back to creating useful content for technical audiences from my personal website. Packet6 content will have a content targeted for IT decision makers.

I hope this Income Report was valuable for you. Send your questions in the comment section below.

Just like that we’re in 2022. We just kissed 2021 good bye. This year brings on a clean slate with fresh challenges. I’m coming into this year with great optimism but it’s going to require some careful planning.

Highlights of Q4

Completed an SD-WAN Project

I spent a good chunk of evenings learning how Palo Alto Networks does SD-WAN with their acquisition of CloudGenix. I first came to know about CloudGenix from Networking Field Day as a delegate where I listened about their products.

Here I am, now as an end-user and reseller, deploying Ions at multiple locations for a retail customer of Packet6.

Rested

At the end of December, I finally got to put my feet up and rest. What a year.

Lessons Learned

Just in time learning

After reflecting on SD-WAN, I thought about how much reading and learning was required. Having access to documentation and vendor support was critical in helping me understand how certain parts of SD-WAN technology worked.

Exercise

With my days and nights being occupied with multiple cutovers, I spent the rest of my time sleeping. Without exercise I don’t think I was at my best and I know I definitely gained additional weight at the end of the year. Next step is to put health as a top priority in 2022.

Income/Expense Analysis

This quarter was exceptional compared to Q3 2020. We were still in the pandemic last year and saw huge decreases all around. Things have positively looked good in 2021 and I remain hopeful.

Businesses are in full swing trying to fix issues as people came back to the workplace. Others were getting ready for the return to office. The trend I have seen is less carpeted office Wi-Fi work was needed. The environments I’ve been in are primarily warehouses or higher education.

Expenses keep creeping up. It’s been a goal of mine this year to decrease expenses and I’ve rolled it over to 2022 as well. They’ll eat into your profits.

	Q4	2020 PY	% Change PY
Revenue	$163,232.89	$45,742.54	256.85%
Expenses	$114,420.23	$37,297.13	206.78%
Net Income	($33,062.19)	($749.49)	(4,310.50)%

Revenue analysis

Revenue more than doubled compared to the previous year Q4. It’s a good metric to see increase year over year.

There was a big jump pro services, increasing 117.75% compared to Q4FY20. We couldn’t have done it without help. I’ll be tempted to do project work alone especially when you can earn most of that income without paying it to someone else. But working alone is not the answer. More projects begin to pile up and that’s when we start looking for assistance from other professionals.

Hardware reselling activities increased 462.83%. Another big quarter in reselling right before the vendors increase their prices. None of the reselling activity came from cold calling sales activities. This was mainly increased due to new projects from existing clients.

	Q4	2020 PY	% Change PY
Pro Services	$51,127.50	$ 23,480.02	41.68%
Hardware	$53,713.51	$9,543.55	734.51%

Expense analysis

This is the category that brings us to a negative profit number. I’ve mentioned it in previous quarters but I’ll say it again – watch your expenses.

What really drove up our expenses this quarter was pre-paying federal taxes. I’d rather not have a large tax bill in April so I ended up pre-paying taxes for previous quarters. I’ll note that I’m supposed to pre-pay quarterly, if not, I’ll see some penalties for skipping it. This was our largest expense item. Not sure if I should even classify taxes as an expense but it was money that left our accounts – a question for my CPA.

Where things went well was the decrease in Office Supplies & Software by 60.90%. But we saw Web services – subscriptions increase by 238.83%. Not a good sign. But that was due to a subscription payment of ZoomInfo for sales, the largest expense in that category. I better make up for this next quarter! Other increases in expenses moving forward will be a vehicle lease. A decision that was made in December.

	Q3	2020 PY	% Change PY
Vehicle	$6,116.11	$516.55	1,084.03%
Web services – subscriptions	$5,214.13	$1,538.86	238.83%
Office Supplies & Software	$2,000.94	$5,117.62	(60.90%)
General & Admin Expenses	$17,261.98	$10,528.90	63.95%

I didn’t meet my goal of decreasing expenses in Q4FY21. At the end of the year there are decisions to spend money which would lead to a lower taxable income, a strategy we’re looking to improve for 2022.

FY21 Review

	2021	2020	% Change
Revenue	$623,160.35	$224,880.26	177.11%
Expenses	$272,681.16	$141,317.72	92.96%
Net Income	$147,499.11	$40,113.54	267.70%

	2021	2020	% Change
Pro Services	$192,868.07	$132,531.10	46.28%
Hardware	$247,889.74	$33,687.08	635.86%

Given that 2020 was a rough year with the pandemic, we did very well in 2021. We were able to meet some of our key objectives of increasing sales by 70%. Reselling of hardware really paid off.

Last year I was able to obtain my CompTIA CTT+. In December 2021 is when I started the planning on how I could better utilize what I’ve learned from CTT+. The goal here is to see the product by the end of Q2FY22.

We closed deals with 5 new clients last year. A few who were new and came through out website and others that were from previous relationships at other companies. It’s always good to nurture the relationships you have since people will change roles or companies often.

Most of the revenue comes from existing clients. Repeat business with companies that trust us. When you treat people like people, have good intentions, and over deliver on promises you will be rewarded.

Where we failed was operating within budget. The expenses nearly doubled. But luckily, it didn’t hurt us.

What’s Next

Our biggest objective is to keep an eye on unnecessary expenses. Even operating as a small business, we’re placing an additional process for expenditures. Budget forecasting is new for us but we have 4 years worth of data to develop a budget. We’re also implementing an approval process which means I can’t go rogue with purchases.

We’re improving upon the processes we’ve implemented in 2021 and continue to add new ones in 2022. Subcontracting will likely be more involved with that process to free up precious time. But we have to be strategic with who we work with.

In 2022 we’ve laid out some objectives to reach:

• Increase website visits by 15%
• Increase reselling revenue by 10%
• Increase pro services revenue by $5-10k each quarter
• Publish training material
• Lower expenses by 7%
• Obtain two new clients via cold sales activities

I hope you found this information useful if you’re thinking about starting your own business.

I’m proud of the progress we’re making no matter how small.

We’re nearly at the end of 2021 and the Q3 quarterly income report is here. The purpose of publishing these income reports is to summarize how my side business of IT consulting is performing, where revenue comes from, and to analyze expenses.

Highlights of Q3

Kicked off an SD-WAN Project

The business, Packet6, focuses primarily on Wi-Fi services. That’s our expertise. But occasionally, we have clients asking if we can work on other parts of the network. Most people will shy away from taking on a task outside of their expertise. They’ll stay comfortable. As business dynamics change, we have to adapt. So when this opportunity came across I decided to take a calculated risk. I’ll update you on the results at the end of Q4!

Migrating multiple warehouses to Palo Alto Networks firewalls

Just as I said above, we need to adapt. Our clients do the same thing. They start off with one technology and grow out of it, creating a whole new set of requirements. A few warehouses were using Meraki MX firewalls. After a few years, company growth pushed them into a whole new set of security requirements that the MX firewalls couldn’t do. Our existing client asked if Packet6 could help migrate them to Palo Alto Networks firewalls.

Started developing processes

This year, Packet6 really started to get an influx of services work. That’s where I realized, having documented processes will not only help us but it will increase profits. I can’t be storing everything I know in my brain. I started dumping various processes into documents. From processing payroll, invoicing clients, to configuring different technologies. That meant documenting my Wi-Fi design and validation methodologies so it can be replicated by someone else. Yep, we’re beginning to ask others for help!

Increased reselling activities

Pro services is just one revenue stream. We needed to diversify our revenue. If you’ve read my other income reports you’ve seen how I’ve wanted to increase reselling of hardware. Packet6 is a partner to a few vendors and we need to leverage our expertise. It’s slowly paying off.

Lessons Learned

Time management

I recently began using Toggl to keep track of where my time is spent. Being that I have a full-time job and a side business, I needed to ensure I spend my time wisely. And the majority of my time must be spent with my full-time employer, hence why Packet6 has been getting help from other professionals.

One area of focus is preventing mental fatigue. Jumping from task to task can be exhausting. I’ve begun implementing time blocking on my calendar. For example, I have time set aside to look through email in the morning and afternoon. I have a task in Todoist (affiliate). By the way, I have a ton of tasks in Todoist to keep me organized.

Time blocking also keeps out a lot of unnecessary meetings scheduled on my calendar.

Another tool I use quite often is Focus on iOS and MacOS. This prevents any alerts, phone calls, texts, from interrupting me during deep work.

Project management

Juggling multiple tasks, projects, and other work shouldn’t be left in your head. I recently started using Notion to manage all aspects of projects, and also my processes! Everything is kept in one place, it’s easy to share with others, and its super flexible with various data formats on a single page.

Thankfully, I’ve taken project management classes in the past. Otherwise, I’d be in a world of hurt.

Income/Expense Analysis

This quarter was exceptional compared to Q3 2020. We were still in the pandemic last year and saw huge decreases all around. Things have positively looked good in 2021 and I remain hopeful.

Businesses are in full swing trying to fix issues as people came back to the workplace. Others were getting ready for the return to office. The trend I have seen is less carpeted office Wi-Fi work was needed. The environments I’ve been in are primarily warehouses or higher education.

Expenses keep creeping up. It’s been a goal of mine this year to decrease expenses and I’ve rolled it over to 2022 as well. They’ll eat into your profits.

	Q3	2020 PY	% Change PY
Revenue	$103,643.86	$44,997.66	130.33%
Expenses	$49,968.12	$42,692.29	17.04%
Net Income	$42,826.74	$1,630.51	2526.59%

Revenue analysis

I want to highlight a few line items within revenue.

It was good to see pro services increase 41.68% compared to Q3FY20. We’ve reached that breaking point where we need to bring in help. I am only one person and I need to maintain my sanity.

Hardware reselling activities increased 734.51%. Big difference. If you’re curious about what type of hardware that might be, it was primarily Mist access points and other network components such as Ventev bollards, wall mount brackets, and cables.

We continue to to have one course sold through Clear To Send. We plan to make more but we’re fighting against available time. So far that single course has been great for offsetting costs to run Clear To Send and we’re now looking into leveraging other people to help produce the podcast.

	Q3	2020 PY	% Change PY
Pro Services	$55,319.61	$39,046.17	41.68%
Hardware	$13,435.68	$1,610.00	734.51%
Courses	$993.24	$1,742.94	-43.01%

Expense analysis

Looking into our expenses, it’s important to understand what drives these numbers up and if they are worth it.

Advertising & Marketing was a big number. In the beginning of 2021 I wanted to increase sales. Well, I spent money to try to get more sales. Has it worked? Not as much as I’d hope it would but most of those issues are because of my lack of commitment to doing sales. Waste of money? So far it is.

The rising cost of web applications is beginning to show. At the end of 2021, we really need to look at what services we’re paying for, which ones should we keep, and which ones should we dump? Same goes with Office Supplies & Software. There’s a little bit of overlap there so we need to clean up our accounting.

Then there’s Equipment – internal, which is a line item expense for lab equipment. Can’t always work on production, right?

	Q3	2020 PY	% Change PY
Advertising & Marketing	$3,750.00	$83.70	4380.29%
Web services – subscriptions	$1,745.70	$1,151.77	51.57%
Equipment – internal	$935.82	$450.19	107.87%
Office Supplies & Software	$713.66	$392.61	81.77%

It’s a challenge to work on the business and in the business. Time needs to be spent efficiently and we’ve realized that it’s time to work on this.

What’s Next

Overall, Q3FY21 was amazing for Packet6. We’ve implemented processes and continue to do so. That was a goal from last quarter. We’re subcontracting some work to others where it is needed and that’s important. Another goal we touched upon last quarter.

Q3 was busy working in the business. We’re creating plans to work on the business, work efficiently, and delegate as needed.

I hope you found this information useful if you’re thinking about starting your own business.