We started off with a bang and found ourselves in a pandemic by the end of the first quarter of 2020.
Packet6 started off strong. I worked on strengthening my relationships with existing clients and vendors. It’s easier to earn additional revenue from repeat clients. There is this metric, cost of acquisition, that can eat up your profits if you aren’t being strategic with sales.
I don’t focus a lot of energy acquiring new customers. Meaning I don’t do a lot of cold calls, cold emails, mailers, ad spend, etc. I’ve been lucky to rely on my existing relationships with people by leveraging word of mouth and search engine optimization.
By February 14th, I had made a decision to not participate in any conferences or events for the rest of the year. My schedule had gotten out of hand and days spent traveling and participating in events was taking me away from three things:
- My full-time job (if you didn’t know I have a full-time job with another employer)
- Paid work (through Packet6)
In January and February 2020 I was able to accomplish a lot of Packet6 work. And it was a lot by side hustle standards. I did outsource some work that I was unable to do but I kept it inside my circle of trusted engineers.
In March there wasn’t much work to be done unless I was doing it remotely. That only included some Wi-Fi design work, light network troubleshooting, and potential sales (which may only come into fruition later in the year.) By March, we retreated to our homes, sheltering in place with no ability to commute to local Bay Area offices or travel to out of state clients. So begins the side hustle turmoil. But I am still saved by my full-time employer.
The percentages displayed below are for Q1 and in comparison to the previous period (October – December 2019). I’m still thinking about how I could display more detail and numbers in an easy to understand method. A lot of it is me getting out of my uneasiness of sharing so much. So let’s dive in.
My main focus is on professional services involving Wi-Fi and network design, configuration, and troubleshooting. Keeping that in mind..
Services revenue increased by 65.95%. That’s wonderful news to start 2020. Some revenue required me to make phone calls. As the business owner, you have to make those uncomfortable calls to companies who are late to pay their invoices. I still have one client who has yet to pay their invoice.
I was able to spread out my work evenly to avoid overlap or double-booking on my schedule. In the Lessons Learned section I’ll touch upon this briefly.
Hardware revenue increased 232.85%. The increase could be a new budget cycle for companies that are ready to purchase equipment. Meraki resale made up all of the hardware (and licensing) sales. I’ll just mention that keeping track of sales tax can be a pain in the butt in QuickBooks. I know I can have my CPA help here as well. But I’d like to know exactly how I could do it myself prior to outsourcing it altogether (the tracking of tax obligations.)
One new additional thing I should mention is Packet6 is now a Juniper Partner!
Affiliate revenue increased 8.96%. Sounds a lot but it really isn’t. Total affiliate revenue was under $50 😂. Affiliate sales are items that I’ve recommended and people have purchased. This is mostly Amazon affiliates. The items I typically recommend are books and hardware available from Amazon.
Total revenue decreased at -40.78%. The reason for the dip was mainly due to cable and installation services sold in the previous quarter being much higher than Q1 of 2020, which was zero. I often times evaluate whether to take on cable and installation projects. It’s not my expertise but I do partner with a reliable company and I leverage my project manager experience. The service goes well with the reselling of hardware and my professional services. If we remove cable and installation services completely, total revenue was positive.
Over time I’ve grown to hate expenses. Especially when I’m looking at the numbers as often as I am. Sticking to a company budget is harder than I thought or maybe I just like to spend money. My template has been the budgeting tool within QuickBooks. Maybe it’s time to take another look at it.
Expense dropped by -77.88% and I couldn’t be happier. Just need to keep it up every quarter to create a lasting impact. And again, I need to hold myself accountable to a budget. /That’s where I should begin and end/.
If you recall from my last income report, my expenses had increased by 223%. If this goes overlooked, my profits would vanish. In response to my previous income report, I had canceled some subscription services and decided to spend less.
Important Lessons Learned
Even with the COVID-19 pandemic, I maintain a positive outlook for the year. It’s allowed me to work on projects I have not been able to put attention to. And this is just in a matter of a few weeks being stuck at home.
During this time, my mind has shifted towards maintaining good health and keeping everyone safe, including my clients.
One thing I’m glad I’ve implemented is the Profit First mentality. I highly suggest you read the book if you haven’t already.
Because of this slow down, it’s important for me to maintain contact with my clients. There may be ways to help them. Some are considered essential businesses to the public. A simple call or email with a hello and how are you would be a good start.
There is one thing we all could do during this time is learn how to do bookkeeping. I’ve had to clean up a lot of QuickBooks errors due to my lack of understanding it. I know having a good bookkeeper and CPA can help me but I like to take a hands-on approach early on to have a full understanding and then slowly outsource that work to someone else. My expertise is not in finance but I shouldn’t be ignoring it as a business owner.
When it comes to dealing with late payments, it’s best to collect 50% up front before any work starts. Some companies might not like that but as a small business owner.. as in company of one.. it can be difficult waiting to get paid 90+ days. I’m not a big fan of Net 30 or longer. Getting 50% up front can make a difference. It can help you purchase equipment needed for the job, pay independent contractors, and more.
As I’ve kind of mentioned above, having some sort of lifestyle balance is needed. I have a family, full-time job, and a side business. Scheduling can get hectic. But that order is my priority. One thing that I forgot to list there is self-care. That can come in many forms, from exercise to a vacation. Sometimes I indulge in a good video game to relieve stress. And let’s not forget the benefits of a good night’s sleep.
Be better than yesterday