Let’s start with the obvious: I help run a (very) very small, young business. By very nearly any measure, $1 million in annual revenue shows no great scale.
But for this first-time entrepreneur, slowly bootstrapping a niche news company like Technically Media, it means a lot to me to hit that nice round number in 2015. We have a full-time team of 15 with another half-dozen independent contractors who support the daily production of a news and events product with a strong reputation. We continue to find purpose with Technical.ly and expect our second brand Generocity.org to signal a coming explosion of local social impact conversations like local tech is here now.
I want to share what this means to us.
My cofounder Brian Kirk and I try to be as transparent as we reasonably can be with our team — and, actually, with our community and supporters through sharing like this. In December, we hosted our annual All Team Day, where the pictures here are from, and it’s possible we under-celebrated the $1 million in 2015 revenue milestone. When we did talk about revenue growth, we made sure to share that figure (60 percent growth year over year, after 90 percent growth the year before) in context of profit margin — it’s still slim (more on that in a moment).
Revenue and profit can be a touchy subject in the strange world of mission and in news media, and, in particular, with a relatively young, relatively inexperienced staff. It’s in part why we insist on talking about it with our team, though it’s a challenge to think about when and how.
Consider a few inputs that keep us exploring how much to share with our team about our business:
- Some still get queasy when profit and mission are mixed together — Informed by our beginning to publish Generocity, with an editorial focus on impact mattering more than method (or tax status), I know there is still great angst about it. Some might call Technically Media a social enterprise: from our very start we had a mission of strengthening and connecting and challenging. We think we’re having a positive impact on the communities we report on, and we’re doing it as a for-profit to maximize flexibility. We have it so lodged in our collective consciousness that nonprofits don’t also have to think about income that some uneasily conflate our talking about revenue with our prioritizing money over mission. But we have years of experience and a net of examples of us balancing the challenge. We don’t hide our incorporated status but, as with so many things, bringing the topic of money into a dialogue leaves it dominated. Money, being a proxy for power and injustice, too often leaves no room for mission and nuance in any conversation it joins. Some want great orgs with stable profit margins, while some to me prefer if all good work evaded profit. So we toe that line carefully.
- The traditional editorial wall of news organizations has left this industry confused — We think our reporters and editors should know how we make money. We think they should know how we’re doing at it too. For every other type of organization I can think of, that’s an entirely unambiguous and obvious statement. Yet it has gotten me into as many barroom debates and conference back-and-forths as anything. The anti-authoritarianism that so defines much of journalism leaves many of our editorially-inclined team members with a mixture of feelings — of course they want the organization for which they work to grow so they can too but some seem unsure of whether surging revenue might also signal corruptibility. That’s an instinct I want to deflate somewhat on our team. If we’re meant to be a business news organization, we’ll need to temper that skepticism with an appreciation for how organizations can only last with some degree of business success.
- We’re a team mostly of young, post-recession Millennials figuring out what kind of adults they’ll be — For most, if not all, of our team members, we’re the most transparent organization they’ve worked for (and for several team members, we’re the first and only organization they’ve ever worked for). That means we put out on the table how the business is doing, which means we’re challenging our team to think about what revenue and profit means to them. Because we’re still such a small team and because BJK and I are trying to push openness, there are unusual dynamics, in which the team is instinctively assessing how competent BJK and I are based on what we report and, therefore, how they feel about the success (or potential lack thereof) of the company.
This comes back to the important, if at times elusive, number of profit margin. BJK and I are salaried employees of Technically Media and that salary represents the overwhelming majority of take-home income we’ve gotten from the company in all the years of owning it. We’ve continued to put money back into the company, and so we’ve only shown a modest effective profit margin over the last several years — under three percent, a figure that many restaurants beat.
There is, of course, wide-ranging variation across industries and business types. But, for context, a 10 percent profit margin has always felt to me to be a strong goal for a business, a nice round number average I came to through the years of conversation with business owners. (Highly profitable software companies do many times more than that, and the world’s most profitable companies do too, like Apple’s near 40 percent) Even more profitable restaurants have been climbing toward a five percent margin or more in recent years — though famously low-margin supermarkets still look at one percent margins. I know nonprofits that see three to five percent margins as still risky.
For our part, we want to consistently post more than five percent profit margins, a figure that remains a goal.
So our earnings growth has allowed us to add to the business — like a(n incredibly, outrageously) smaller example of what Amazon is doing — but we really need to grow that profit margin to build a business that can last. Profit margins allow for experimentation and investment, they cover risk and reward the role that founders can have if they aren’t paid strictly as salaried employees. That’s the final business test in this phase of growth.
BJK and I are responsible for defining clear roles that could be filled by other experienced leaders and should aim to develop a profit margin that could potentially compensate us for our effort, which comes with a different set of expectations, rather than as a salaried employee.
That, of course, is a longer term vision and that that’s what every single small business is aiming to do, in one form or another. Maybe that’s the point, shedding some of the mystery and being more frank.
I want to do meaningful work. I want to be surrounded by people who want to do the same. I want us all to be paid appropriate and proportionally for that work, and we’re in a cycle at Technically Media where we’re aiming to determine how much that is. We need to be mindful of profit margin and $1 million in revenue is no big number, but I am proud of it nonetheless.