Early Exit #1: May 2023 Finances

The financial performance of my business in May, a partial month of self-employment.

Jun 05, 2023

You’re reading Early Exit Club — a twice/month newsletter by Nick Lafferty about leaving the 9-5 workforce to build a $20k/month solo business.

Surprise! This newsletter is 2 weeks early.

After the amazing response to my LinkedIn post I wanted to keep the momentum going and get you all the juicy details asap.

Again, thank you all so much. It means the world to me that so many of you signed up to follow my journey.

I’m planning to send 2 emails every month:

1 finance review (you are here)
1 project update deep dive (in 1-2 weeks)

So how’d we do in May?

First a quick look at where my revenue comes from.

Income Streams

I have two buckets of income right now:

Display Ads: I run ads on my website that either pay per impression or per click.

Affiliate Sales: I sell Notion Templates and SaaS software and get kickbacks for each purchase.

Growth Marketing Consulting: I have 2 clients on a mix of hourly and monthly retainer models and just signed a 3rd client to start in June. I help them with growth strategy, paid ads, SEO, and affiliate marketing.

I plan to eventually build my own SaaS product to add a third bucket and hopefully replace my consulting income, but that’s a ways off.

I’ll write a longer history of how I grew my blog traffic, but it took me 3 years of blogging, a few lucky breaks, and getting links from every company I worked at to grow my blog to a decent amount of unique visitors/month.

May Numbers

Drumroll please…

Here’s a brief detour into my accounting methods (wow so exciting):

Revenue is on a cash basis. It only counts when it hits my bank account.
Cost is the sum of everything my wife and I spent money on last month. I use Tiller to easily export all my bank account and credit card info into Google Sheets and build a simple budget. It’s a really cool tool for spreadsheet nerds.

Highlights

🔴 Web traffic was down 3%

🔴 Revenue was down -51%

🔴 Cost was up 32%

😱 I lost money!

Not a great start.

Here’s a breakdown of each category.

May Summary

My last official day at Magical was May 12th, so this month I was self-employed for part of the month.

I received one paycheck, which I excluded from the revenue numbers above, and I had company-sponsored healthcare through the end of the month.

Next month I’ll have no paycheck and will need to pay for health insurance through the marketplace which will increase my costs by $640/month.

Web Traffic: Down 3%

The web traffic listed here is all to my website, NickLafferty.com. Google Search is 95% of my traffic, with a trickle from Twitter, Bing, and Pinterest to fill out the rest.

I rank for a lot of Notion keywords and those keywords have seasonal trends that align with the school year. January and September are big months for me and things slow down in the summer.

But I’ve also seen my rankings in Google slip for a few keywords. I moved from position #2 in Google for a high volume keyword down to #4-5 which negatively affected my traffic.

I also had some thin content on my website that used to rank well before a Google algorithm update. I’ve started refreshing all of my thin content and I’m confident I can start making gains here, but it really sucks to see your traffic decrease every week instead of increase.

I refreshed 8 blog posts in May and I plan to dedicate more time to creating new content and refreshing my old content in June.

Revenue: Down 50%

Why is revenue down?

Affiliate revenue:

My affiliate revenue has a one month lag time, so my May numbers reflect my April performance. April was the worst month I’ve had since October last year due to my web traffic starting to decline. May was better but I’m expecting some slowness over the summer due to the seasonality for Notion keywords.
I run display ads on my site (I know…) and I changed providers back in March. The old provider paid me Net 30 but the new provider pays me a much slower Net 65 so there’s a gap in my payments. The upside is I’m making 2x more revenue with the new provider despite their slower payment terms.

Consulting revenue:

April was a light consulting month for me, I didn’t have any billable hours for one of my clients. However…
My billable hours in May increased and I added another client in June 🎉

I expect this revenue to increase over the next few months.

My plan is to take this revenue and use it to buy tools and hire freelancers to help automate some of the manual tasks I can’t get to every month.

Cost: Up 32%

In the future I’ll break this into business costs and personal costs, but for now it’s enough to know that my business costs are very small.

I do everything myself (often to my detriment) and my website’s bandwidth is free through Cloudflare.

My only business costs are a few SaaS subscriptions.

The cost increase was entirely for personal reasons. My wife and I had a scheduled trip to NYC the week after I left my job.

We stayed in NYC for 4 days: two nights in a Manhattan hotel and two nights at our friend’s place in Brooklyn.

The total cost for the trip was about $1.5k, largely due to me picking up the dinner tab twice for our friends who graciously let us crash at their house.

I have a mountain of credit card points so our flights and 2 nights in Manhattan were completely free.

June Plan

I’m breaking my tasks each month into inputs and marking what types of output they drive.

I’m doing this to prioritize my time and make sure my efforts are driving the right outcomes for my business.

My plan for June falls into two buckets:

Write and refresh blog content. Aiming for 4 new posts and at least 4 refreshes. My consulting work really gets in the way here so I’m going to experiment with using AI to help draft the frameworks of my post to speed this process up.
Launch a digital course on how to become a Notion template affiliate. I’m one of the largest source of affiliate sales for all of my Notion template partners and I have unique knowledge and experience. I want to package that up into a course and sell it.
Invest in a new channel. I need to add a new source of traffic and I’m looking at both Pinterest and TikTok.
Record 2 podcast episodes. I launched a podcast called Template Titans where I interview creators making thousands of dollars a month selling Notion templates.