This quarterly income report is meant to document the ups and downs of being an entrepreneur. It’s a way for me to be transparent with you if you’re embarking on the same path of consulting.
We’re documenting and learning what has worked well and what hasn’t worked so well so that you can avoid any mistakes and gain from our successes.
Take a look at my other Income Reports.
Here’s a summary of Q2 2022
Gross Income: $122,160
Total Expenses: $114,013
Net Profit: -$19,373
Net Profit difference from Q1 2022: -184%
Highlights
Q2 continues to see steady growth as we gained three net new clients. One company in data SaaS, in biotech, and in retail.
We reached these clients in three different ways. One found us through Google search results. Another was from a previous engagement, and the last was a referral from a vendor.
The last two are important to highlight because they wouldn’t have happened if relationships weren’t nourished. It’s important to work on your relationships regularly. You never know where people might need your help in the future.
We added one additional Managed Network Service client under the Proactive Monitoring portfolio where we utilize Wyebot network sensors. This is a new service we’re rolling out to select clients.
As quickly as we onboarded those three clients we completed all three total projects near the end of Q2. The workflow for Wi-Fi projects is getting fined tuned. I’m able to identify issues quickly, resolve them, and develop a report with my findings. While onsite, I have certain targeted tasks to complete. Then I have the client approve or implement recommended changes. I’ll follow up to find out what the results were.
Income Analysis
Packet6 drove in a total of $122,160 in revenue. That’s a -50.5% difference from the prior quarter.
$84,500 of the revenue came from professional services. The difference from the prior quarter is +86.4%.
Additionally, $27,500 came in the form of managed network services. The difference from the prior quarter was +8.3%.
We did not resell much hardware in Q2, only seeing $3,584. That’s a difference of -100% from the prior quarter.
That leaves us with a Gross Profit of $94,393. A difference of -50.5% from the prior quarter.
Expense Analysis
We had a whopping $114,013 in expenses which includes salaries. That’s a difference of +26.8% from the prior quarter. Almost half of our expenses went to taxes, about $51k.
Approximately $8,300 went to travel expenses, which we usually charge back to our clients. Maybe some of it was a little heavy on the meals. Something I need to adjust for next quarter.
We spent $1,660 from Clear To Send as we have now brought in a producer to help with our podcast episodes and videos.
Lessons Learned
Sales is up and down. We didn’t win a big Meraki deal even though we did the quoting. We lost it to a competitor who was able to take a loss on margins. Anything to win the sale, right? I also did not dedicate enough time making calls to existing clients. That may have contributed to the lower revenue.
We started offering a new service called Managed Network Services. Packet6 acts as an augment to an IT team providing network engineering expertise. I’ve only offered this to specific clients where I can safely manage the work. It’s another source of income that’s predictable. And the work can be very rewarding, increasing experience.
Time management is tricky. Packet6 is a side business so I must dedicate my time to my full-time employer. It’s only after hours and weekends I can really dedicate time to the business or if I use vacation hours.
We’re definitely leveraging subcontractors. More work is coming into Packet6 but my time is getting spread thin on the technical work. I would love to hire an engineer to share the load of professional services and managed network services. That would free up my time to work on the business rather than in the business.
Unfortunately, we ended with a negative quarter, -$19,373. We realized expenses were a big factor in the middle of the quarter. We went through our list of expenses and purged things we thought were no longer needed.
Some expenses wind up being part of experiments or tests we do on the business and sometimes it doesn’t work out to our advantage. But this time around we’re going to shed some of that weight.
What’s Next
We’re prioritizing time to increasing our knowledge around the use of QuickBooks. How can we integrate the software into our workflow for higher efficiency and accuracy of our books.
Soon, our website will be redesigned to enhance the story we’re trying to tell to our ideal clients. In the past, I’ve been the one building the website. I’m not a web designer so it made sense to outsource that to a professional in WordPress.
We’re waiting to see the outcome from canceling expenses. We should be expecting a decrease in expenses through the next 9 months.
There are a lot more processes we want to nail down. Much of it needs to be documented. Training needs to be created and completed. There’s a lot of work but we’ll reap the benefits in the future.
After operating Packet6 for 5 years, there has to be some cleanup. We’ve had a small growth that exposed areas that needed attention. We’re in a small period of recovery so that we may see additional growth in 2023.
What do you want to hear about? Let me know in the comments below.
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