Our two cents: Financial results 2018
It’s that time of year again when we evaluate our financial situation, and take a look back at the highs and lows of the last semester. Our buzzword at Muxu.Muxu is transparency, and we are firm believers in practicing what we preach. This is the first in a series of articles examining our achievements of the last few months from a range of perspectives, and evaluating where there’s room for improvement.
In the first semester of 2018, our revenues were 200 000€, which represents a 50% increase on our results from this time last year. To put that in context, at this time in 2017 we were unable to pay salaries to all employees; 80% of our expenses went towards external service providers. We were hoping to launch our paying products and that these would represent 25% of our revenues by the end of 2017. We didn’t yet have a real idea of what our cash burn was, but we knew we wanted to expand the team and had also decided to invest money and energy into finding our own offices.
So where are we now? We’re all set up in the Muxu.House which has become a real hub of activity; we love to welcome clients and colleagues to join us there. The team has expanded in number and we are now able to pay full salaries to all employees. This marked a big milestone for us and since then, we’ve even managed to raise those salaries and are now actively seeking to expand the team further.
Plus, we’re also able to offer perks to the team English lessons, massages, team-building activities such as cooking workshops. These perks are a way of transmitting our ethos and values to new recruits. We don’t underestimate the impact employee happiness can have on productivity.
Our outgoings have increased, but this is because we are spending more on salaries and less on external service providers. This latter now represents about 25% of our costs, for needs that still can’t be met in-house such as motion design or translation.
Unfortunately, as far as our paying products are concerned, the situation hasn’t changed much. They still represent some 4% of our total revenues. That’s really our main regret about the last semester.
We’ve been giving this some thought lately. Together we have decided that we will set aside time in the coming months to develop our own identity and products. We’ll start to reduce the number of clients we take on so as no to be be constantly up against deadlines, with projects on every week and no time to spare for investigating other avenues. And it’s precisely thanks to our revenues from this trimester that we are able to do this. We know our cash burn and we know precisely how much revenue we need to make in order to survive without making a loss. So that allows us to know how much time we can go for without taking on new projects from external clients.
The challenge, and recurring question, is how we can protect our core values and identity whilst we continue to expand our team and grow our revenues. We’re very aware of the need to be proactive about this. Every week we hold the ‘Friday lunch’ paid for by Muxu.Muxu. It’s an opportunity to talk about the week’s events; the aim is to create an atmosphere where everyone can say what they think. There is a presentation, with info about any ongoing recruitment processes and, importantly, the financial stats: how much we have in the bank, how much money we have spent that week and how much we have made. We think of these open discussions as like training a muscle it’s not always easy to be fully open and say what we really think. Sometimes it’s harder with the newer employees to transmit the core Muxu.Muxu values of autonomy and a long-term vision, especially if they are younger or have come from other more conventional industries. But if we train regularly enough it will become like second nature to keep talking about this question of how to protect and grow our identity in the context of expansion.
So what’s next? A key takeaway from recent Friday lunches has been that we feel ready to invest money back in ourselves and our own image. With hindsight we can see that we first had to focus on growing our client base and getting to where we wanted to be in terms of salaries and employees. Doing so has put us in the position we are in now, where we are able to focus time and energy on updating our website, launching our paying products, and producing more content for and about our clients in the coming months. Those will be the main investments that we make in terms of time and money, and it will allow us to make the next step in terms of growing our identity. We’d like to spend more time showing clients why it is different to work with us, and let our past projects speak for themselves in terms of the quality of our output.
Written by Emily Fiennes for Muxu.Muxu. ✨