He had over a $100,000 in revenue, which is pretty cool for 6 months. He says he's started paying himself a bit, but all that money is his, so its all income as I see it. Other than a bit of server space, what are the costs? Obviously he's going to use some of it to pay for server space for his future prospects, but thats a pretty penny nonetheless.
Hi Maximilian, here's a breakdown of my top expenses:
- Salary: 13,500 (46%)
- Equipment: 5,400 (18%) I bought an iPhone and a 23'' Cinema Display this year
- Contractors: 3,500 (12%) I hired 2 devs for 2 different small projects
- Lawyers: 2,780 (9%) I hired a lawyer to help me incorporate and with the EULA
The rest is small stuff.
Yes all the money is technically mine, but I have started paying myself because I want to keep the rest for taxes and to re-invest in the company.
Next step: get an awesome accountant and start using that money to purchase anything and everything you could possibly write off. All that excess revenue will get raped by taxes.
No accountant can be awesome enough to write off much more than what is truly a business expense. The ultimate rule is that everything written off must have business purpose.
Now, you'll only get in trouble if you get audited, but writing off things that shouldn't be written off will stand out.
The best way to shelter yourself from taxes is to invest the money and then pay taxes on a long term capital gain (which have historically been lower than ordinary tax rates).
I had an excuse - sorry, opportunity - to use the online mockups app this year to generate some basic example page layouts for my boss. I was impressed by the speed at which I was able to just throw things together (normally I spend about 3 hours trying to remember how to use MS PowerPoint.. ick!)
All I have to do now is convince the boss I need the desktop version!
Peldi, I've really enjoyed hearing about your journey and congratulations on your successes. I've learned a lot reading your entries.
In your 2009 outlook, you wrote some goals, one being: "I will have to go from 'mr. Do-it-all' to be Balsamiq’s CEO, which will mean having employees, delegating..." - one thing from personal experience. When you make your first hire, you're going be tempted to get a friend you know is good. My advice: Don't. Your first hires will always see you in the light they had before you were their boss, and since you're growing so rapidly in business and life, it's 95% likely to end poorly.
It won't be the end of the world, but I disregarded this advice myself a couple times. Staff will learn and grow with you to some extent, friends to a much less extent. And since you seem like a really nice guy with a soft spot for people, then being in the super difficult position of it not making sense to keep working with someone - but you're their livelihood - will suck more for you than it will for a more heartless person.
Your call of course, just have a think over it, and best wishes and much prosperity in 2009.
Congrats Peldi! I'm surprised how dominant the desktop version is over the other web-platform versions. I think I read in one of your blog posts that you were too.
I am not surprised. In fact the availability of offline version is the main reason my clients are considering balsamiq. Anything online is inevitably slow on corporate Internet and unavailable in some meeting rooms, airports or anywhere on the go. Online apps are fine for time wasting, but when you have work to do and a paycheck to earn, most people prefer to have their tools available 24/7.
Thanks zhyder. I think the percentages will change as people move to the web, but then again, perhaps desktop/phone clients that sync to the web coupled with web apps to access the same data when you're on the road might be the solution. OMG I just realized I just described Outlook and Webmail...yuck! ;)
We shall see.
Hi Jasber, the link on my post was actually the first time I shared the pricesheet page with the public. I never show it to potential customers, but had to make it for partners and resellers (they really like to make sure they buy the right SKU for their clients). In other words, people get to the version they need via the site, which is hopefully clear enough to navigate (I'm not super-happy with it, but it works ok).
"... was wondering how long you plan to stay a one-man company for. If you are in an accident, who will support us?“ .."
Peldi did you overcome this problem?
"... I am still confident that the plugin versions will grow over time relative to the desktop version, as more and more people “see the light” and start working in the cloud. ..." ~ http://www.balsamiq.com/blog/?p=424
I think the biggest insight this game me was that desktop version had a bigger demand than the web version & that you could ship both using the same code base.
Is shipping the desktop version & web version difficult?
Hi bootload. Re: the "hit by a bus" scenario, I'm working on it on two fronts: one is hiring a second person, which I will need to do soon. The second is to entrust the company to my family in case I die, so that they can sell it if something happens to me.
Re: desktop vs. web, yes it's a surprise, but as I say above, a desktop app which syncs to the web is a pretty good proposition...we'll see more as I build my "web connectors" this year.
