Friday, June 26

Growth

One of the measures of business is sales growth. Especially with new start-up companies, where profit may be many years off, sales growth shows whether your business is working on a fundamental level - are you successfully selling your products/services and are you selling more than you did before?

One of the difficulties of starting a business is keeping track of how things are going. When you don't have years of experience to call on how do you keep track of things? I've had a quiet few months from February to May. Is that normal? Is it a time of year thing? I can't really compare it to last year because during that period last year I was selling hand-made games or completely out of stock.

Yesterday I tried to catch up with my books, which I've fallen a little behind on. At the same time, I thought I'd start tracking a bit more sensibly how my sales are going, both now and historically. I knocked up a quick spreadsheet in OpenOffice Spreadsheet and started pumping my sales figures into it.

It's hard to compare things, since I registered for VAT last year (previous my sales figures would have been all for me, now I have to just consider the non-tax part of it). In addition, I've decided to split the game sales from the shipping costs, starting this financial year, so although both are sales (one is a product, the other a service) from now on my sales figures as I keep track of them will be smaller. However things are looking pretty good. I've done all the figures for last year, and I've got two previous years to compare them to:

In the above graph blue is my first financial year (hand-made Border Reivers), Red is my second (hand-made It's Alive!) and yellow is my third (first full-time year, It's Alive! reprint and Carpe Astra).

It looks pretty good, but there are some things to take into account. For the first two years, I made games by hand, and sold mostly directly. These were short runs and so my sales were pretty small. Last year I started getting games made for me in larger numbers and selling mostly to distributors, hence the hike in sales numbers. My growth for the first quarter of last year was negative, seeing as I ran out of hand-made games to sell halfway through. The second quarter there was no growth, I had two months of nothing to sell, but It's Alive! turned up in September and that was as much sales (after tax) as I'd managed in the whole of the equivalent quarter the previous year. The next two quarters have a sales growth of 1100% and 1200%, but it's not a fair comparison, selling large volumes of professionally manufactured games to distributors as opposed to selling individual copies of hand-made games to gamers.

The first quarter of this year will probably have growth around 750%, but the real test will be the next two quarters. Last year I released It's Alive! in Q2, this year I'll just have the residual sales on the three products I've got out. Q3 last year had: Essen, my best month's sales ever, the release of Carpe Astra and initial stocking orders from most of my European distributors. I'll have to do well to top that, and there's no chance of doing ten times better!

2 comments:

Tao - Starlit Citadel said...

That's pretty impressive growth in Q3 and Q4 of last year! But definitely different if you're now doing this on a full-time basis too.

Good idea to split the shipping & product sales revenue. It'll make your life easier in the future. I'm sure you're already splitting sales of product types right in the software? That way, you can track backwards too.

One thing to consider, and perhaps look at for future projections - how sales trend over months after product release. So X game sells X copies (or generates Y revenue) in month 1, 2, 3, etc.

It'll help with some projections later on, especially cashflow.

Jack said...

Hiya Tao,

Yes,

That's definitely something I want to do, but not something I've gotten round to doing yet. I've got the information, just not tabulated correctly yet.

Cheers,

Jack