Bootstrapped startups and the shit I learn in therapy

In July we launched our new Open Agency initiative, becoming the first agency (that we can find) to share our financials with the world. 🌏

I talked a lot in that post about why we chose to become a fully transparent company, so I won’t go into too much detail on that. Suffice to say, it’s in our core values for a reason.

The response was even more incredible than I had hoped for. So I want to start this post off by saying thank you to everyone who shared and encouraged us. We had high hopes, but we were still nervous about how this project would be received. Our community is incredible, and we’re so grateful for all of you.


Here are a few interesting numbers that hopefully demonstrate the impact the article had:

🐦 33 retweets & 124 likes on twitter (that’s huge for us)

🙋🙋 2 current clients reached out to tell us they were impressed

👀 1 potential client has already told us they found us through the post

👀 1 potential client, who had gone cold, came back and mentioned the post in our first meeting

😻 A ton of people (both friends and strangers) sent us super encouraging messages

🔍 1 friend decided to share his own numbers!

There’s still a lot more we can do to get the word out, and I don’t ever want marketing to be the sole reason we choose transparency. But these numbers show the power of transparency.

New Kritters!

As for the month of August… we officially have two new Kritters!


I’ll be diving into how this has affected our numbers in the rest of the report.

💵 Revenue

Our revenue for the month of August was $25,460. It would have been lower, but we asked a couple of our clients to pay half of the first month up front as a deposit (something we should have included in our contracts from the beginning). I felt comfortable asking and in turn they were happy to do it because we have established trust. Having strong relationships with your clients pays off… literally.

Moving forward, one thing we’re going to do is charge for each month up front to make cash flow simpler.

We’re also working with a financial advisor to get a better handle on our costs per billable hour so we can set more intelligent pricing. Right now our cost per billable hour is between $90 and $120 - based on what our average capacity is (I’ll talk more about this once we have it better figured out). Our current rates, for reference, are based off of an hourly rate of $125 per hour, so we’re going to be raising rates for future projects.

Our monthly revenue goal at our current size is about $50,000 which is higher than we’ve ever hit (as you can see in the graph below).


💰 Expenses

Our expenses jumped by 37.5% in August to $33,370.55. The vast majority of that jump went to the salaries of our two new employees. Also, we now offer benefits to all of our employees (are we a grown up company now? 👼). Those costs don’t technically start until September but we factored them in to our cash flow spreadsheet in August as well.


Note: keep in mind these numbers may be slightly off, because our tracking for all of this is still a little clunky. We’re working with our financial advisor to improve our tracking system.

We also bought Fitbits for everyone in the company when Garrett and Jerry started, which has been a surprisingly fun perk.


Note: Austin went to Colorado for a week and went hiking and mountain biking which is basically cheating.

👥 Revenue per client

Our revenue per client looked much more normal in the month of August than the previous month because we didn’t have huge payments up front for any of our clients. The largest client made up 35.3% of August’s revenue and the smallest client made up 3.8%.


👨💻 Number of employees

This is our big news this month. We now have five full-time employees, three of whom are part-owners. We also have one contractor who we work with to write our newsletters and an agency who we worked with for the past quarter to write two blog posts each month.

Note: Moving forward Laura, who writes our newsletters, will replace the agency. She does incredible work and just went full-time as a copywriter, so if you need help with your newsletter or other content, let her know!

📈 Recurring revenue

In the month of August we had $20,000 in “MRR” which made up 78.6% of our revenue! I put “MRR” in quotes because our two biggest contracts, while technically structured as a flat monthly fee, might lapse or decrease after the initial MVP builds. I’ll work on finding a better way to categorize these different types of MRR in future posts.

Our goal is to keep moving our pricing model towards monthly recurring contracts so that we can create a more stable income stream. This will probably always include a combination of a few large contracts and many smaller contracts, though.


📊 Revenue per employee

Our revenue per employee in the month of August was $5,092. This obviously won’t cut it long term, but we knew that revenue would be low in August as we ramped up two big new clients. Our current goal is to get this number up to $10,000 per employee, although even that isn’t high enough to support long term growth. For a point of reference, Google’s monthly revenue per employee is over $1 million.

💸 Salaries

I’m excited and proud that we’ll continue sharing our salary numbers as our team grows. Our current salaries are:

  • Andrew Askins (Partner / CEO) - $49,200 year
  • Austin Price (Partner / Designer) - $49,200 per year
  • Kevin Hoffman (Lead Developer) - $61,800 per year
  • Garrett Vangilder (Developer) - $70,200 per year
  • Jerry Hardee (Developer) - $70,200 per year

A couple of notes on our salaries, and why they are where they are. We set Garrett and Jerry’s salary by looking at data for developer salaries in Charleston on Glassdoor. We made them as high as we could afford within the range we found. We’re aware that they’re still on the lower/middle end of this range and want to increase them. But we also want to improve our margins first so that we can build up our runway. One way we’re considering accomplishing both of these goals is by working towards establishing a profit-sharing program.

Kevin started at $48,000 with us almost two years ago, which is woefully under what he could make anywhere else. We also gave him 5% of the company (as stock, not options). We have done our best to steadily increase his salary every chance we’ve had, and will be increasing it again starting in October.

Austin and I made $500 per month for the first year and a half that we ran Krit. We have steadily increased our salaries as we needed to and could afford to. We believe in paying ourselves well enough that we’re not overly worried about money. But we also believe our employees should always be paid first. They’re taking a chance on us, so we should always do right by them. One day, if Krit is successful, we will make more than our employees. But right now, we would rather focus on paying them and putting the rest towards growth and profitability.

What questions do you have?

If you made it this far, thank you for reading the second month of our Open Agency project! If you have any questions or feedback, let me know. I got recommendations in August that I explain our salaries and include more graphs, so I am actually using the feedback!

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