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.
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