A few months ago, a solo software developer told me that he had decided to “grow his business”. Toward that end, he decided to hire two full-time developers. A few months later, he excitedly reported to me that was already on track to double his annual sales numbers. Then I asked: “Okay, but… didn’t you nearly triple your costs?” His reply: “Oh, crap.” What is growth? Let’s talk about what it means to grow a software development business: Hiring more employees is not growth. Renting a bigger office is not growth. Landing a gigantic client is not growth. Increasing your annual revenue is not growth. So what is growth? In my opinion, there’s only one true measure of growth for self-employed software developers: Growth is increasing your profits. Profit is the only meaningful measure of business growth. Everything else is at best a leading indicator, and at worst a vanity metric. Think about it…. If you don’t increase your profits, how will you ever make more money and/or work less than you do now? What is profit? In the simplest terms, profit is the amount of money left over after you subtract your costs from your revenue. If you bill […]
All Posts By Jonathan Stark
Jonathan Stark has been a software consultant for the better part of fifteen years. He has given sold out talks on three continents, is the author of five books, and has helped brands like Staples, Time, T-Mobile, and others with their software strategy, tactics, and training. In his first year as a solo consultant, Jonathan doubled his income by ditching hourly billing for value pricing. He has over a decade of real-world experience successfully applying value-based theories to his own consulting work and that of 100+ developers he has counseled.