State of the Biz: 2017 (Annual)

Last year I did an informal annual report and then even followed that up with a my first quarterly business report. However after that I lost steam and never revisited the well intended attempt to post regular state of the business reports. Of course we’re small business, don’t have share holders or investors and really answer to nobody but ourselves from a financial and business perspective.

With all that said, I take great pride in this company and the team of people who work with me to continue it’s growth and provide services to the many clients that rely on us to do so. I believe these reports show a stability and seriousness that not all our competitors can say they have.

It would be my hope that current and potential clients would take great confront to know that we are financially stable, that they are by far not the only ones to trust us and that we are going to be here for the foreseeable future.

The Numbers:

Organizations served: ~60
Revenue growth from previous year (2016): 6.9%
Average earned per client: Up 12.5% from 2016
Websites hosted: 71 (up from 58 in 2016)

How We Generated Revenue

For a few years now I have been tracking revenue in four different categories. The following graph shows how we generated revenue in regards to these categories in 2017.

fatlab 2017 revenue by service

Note: In the above chart, agency hosting and support agreements are only represented as “agency partnerships” and not also included in “web hosting” or “Support Plans”. Most support plans include web hosting, the web hosting category is representative of only those clients that host but do not have a “support plan”.

This breakdown is fascinating to me, in fact I questioned the numbers a few times because of how they compared to 2016:

There’s a Reason for Everything

All of this can be explained and I would argue all are very positive. First of all, agency partnership revenue is up and this is simply due to an increased number of executed projects and the size of projects. It’s also important to note that agency partnership revenue includes flat rate projects, monthly revenue from hosting and support plans as well as some hourly support (all categorized here as “Agency Partnerships”).

Support plans are up while web hosting is down because we successfully marketed our web support plans to new clients as well as converting some previous straight hosting clients to plans that generate greater revenue. To put this in perspective we make about $30-$60 dollars per month from a web hosting client. Of course we hope that they call with some hourly support issues through the month but we can only bet on the monthly hosting revenue. However our support plans start at $225 per month, so you can easily see the revenue swing and why the graph looks the way it does compared to last year.

Who We Served (Success & Failures)

2017 The Year of the Nonprofit Client… Not

This one, to be honest… I’m pretty disappointed in. It’s not about liking nonprofit versus commercial clients better or worse. It’s the fact that going into 2017 I really thought 2017 was going to be the year of the nonprofit client for us. We did some advertising with the American Society of Association Executives and Ritz Penaranda had joined us late in 2016 and was already managing a large nonprofit client for us.

The advertising campaign fell short of a success and I can’t attribute any new clients to it. Looking back, I also recognize that we put a lot of time/effort into our various support plans and our managed WordPress hosting services. With the flop of our advertising campaign, we really didn’t proactively push the nonprofit angle as hard as I thought we were going to.

Obviously the year was not a failure but I do think the my vision of a large nonprofit push was not a success. Again, from a total business perspective we don’t really care whether a client is a commercial or nonprofit client. It’s those Washington, DC roots that drive me to make this distinction.

Still a Success

With all that said we cannot ignore the fact that one of our largest clients in 2017 and projected for 2018 is the Food Processing Suppliers Association a nonprofit out of McLean Virginia. We even held a meeting onboard a sunset cruise in Costa Rica this year, no joke!

 

Nonprofits VS Commercial Clients (by Revenue)

FatLab 2017 revenue

Note: In the above chart, only nonprofits that we work directly for are included. We work for a good number of nonprofit organizations through agency partnerships, though in these models that revenue is classified as “commercial”.

 

A Few More Highlights from 2017

  • We hit my revenue goal for 2017.
  • Niki Sebastino, who joined in 2016, become more and more involved with the day to day operations of the company. I’m sure many clients recognize that name from tickets and email. She also helped keep me sane by spearheading several internal projects and providing direct coverage which even allowed me some real vacation time last year. A BIG thanks to Niki!
  • Ritz Penaranda continued to grow our nonprofit practice by keeping one of our largest clients so happy that they have not only signed on for 2018 but have grown their account with us.
  • Ryan Wadsworth and I broke away from “simple” WordPress site development a few times this year, in collaboration with one of our agency partners, and developed a number of custom applications. Amongst these applications, complex lead-generating “calculators” which proved so successful that we already have two more planed for Q1 of 2018.
  • I took a last minute trip to Baltimore to solidify a partnership with Sage Growth, a health/medical communications firm, after my day-to-day contact announced she was leaving the firm. Today this partnership is stronger than ever and Sage Growth is one of our largest clients.
  • We released a new logo.
  • We launched a new website.
  • I finally released an eBook on website security.