Q2: ROI on Time and Other Goodies

Applingua Ltd’s second ever quarter ended on 30th June 2011 and, as promised in my Q1 ROI post, I’ve got some numbers to report.

Q2 was incredibly different from Q1. Clients, developers and friends started referring to Applingua as an organisation in its own right and not as “Rob’s new project”. Revenue also increased and my client base tripled on Q1. The average number number of projects per client was and encouraging 2.5. 

In my previous blog post I discussed how ROI  and ROI on Time tells only part of a much bigger story for new small businesses and “start-ups”. Return on Investment  alone can be used to decide whether a company is successful or not, it’s a superficial metric which assumes the sole purpose of a company is to produce maximum revenue. While Applingua could not exist without revenue, nor I without a salary, Applingua was not started as some get-rich quick scheme. Despite this, I still get that age old question from friends who hear I’m going at it alone, “so how much money you making then?”. If only it were as easy as incorporating and drawing a six figure salary over night.

There’s so much more at stake. Learning opportunities, partnerships, networking. Even personal social life is affected by starting your own business. All things you can’t particularly quantify, but important nonetheless.

At the end of Q1 I decided to compare 4 ROI metrics: ROI, ROI on Time, ROI (Social Life) and ROI (Learning). I wanted to take two solid financial equations and represent them alongside two of factors I deem important: Learning, because all I ever seek to do is learn new skills, and Social Life, because I’m fully aware no social life will eventually stop me from going at it alone and force me to return to an office environment where I can waste company time bond with colleagues over tea.

I’m going to continue with these four metrics for Q2 to make a fairer comparison with Q1. If you would like to see how these percentages were worked out, see the original post.

The big winner this quarter is clearly my return on monetary investment. Remember, however, that 3900% figure is 3900% ROI on initial investment (and I haven’t disclosed how much, or how little, initial investment was). The percentage shows gross profit, not revenue. ROI on time has also increased and I am now edging slowly back to my previous salary. I hope next quarter it will look more like 85%. Remember the bar is raised every month that goes by and is not simply my salary now vs before, but rather foregone salary over the last 6 months vs salary earned during the quarter at Applingua.

Social life still takes a back seat again compared to my life pre-Applingua, but has improved considerably since being able to afford myself a fixed monthly salary and learning to say no at weekends unless absolutely necessary. I also set up @CardiffTweetup to meet new tech tweeps in my home town. Our second TweetUp is this week! Learning hasn’t particularly slowed down on Q1. I attended some great workshops (like this one), I learned a lot from new clients and from running a business. I also learned from my mistakes, I made a few which did cost me big on my margins, but we all live and learn.

So there you have it. Applingua and my personal stats from Q2, April – June 2011. It’s been fun and things are definitely looking up for the future. Come back in 3 months and catch up!

I would love to hear your thoughts…
  1. paul says:

    Nice way of measuring things Rob. Earning a profit straight off is indeed impressive, but I’m guessing that’s down to a lot of careful planning on your part.

    My take on working for myself for the last 2 years is that I still ‘pay’ myself a base salary, in fact it’s probably less than when I worked full time. The rest stays with the company a/c until the end of the 1/2 year or year. This allows me to continue to ‘pay’ myself in the case that I don’t have as much work in one month and takes the pressure off knowing that cash flow for unexpected outlays doesn’t hurt as much.

    Keep up the good work !

    • Rob says:

      That’s the same here really. First two months I didn’t pay myself anything, third month a very small amount to test accounting skills / learn UK PAYE. April onwards I’ve paid myself the same wage every month. It is lower than I was earning before, but allows me to mount up a little in the account like you say. I’ll see at the end of the year if there is any dividend I can take out or not.