Simple Financial Budgeting and Modeling for an Indie App

first-check
My first payment from Apple!

Getting paid is for an indie app is a tricky thing because money wasn’t the original motivator or driver in building the product. Like most of the things that I’ve done I first built it for myself and then much later decided to bring it to market.

And not all of the things that I build will ever see the light of day outside of my own personal computing system.

For instance, there are a few scripts and smaller web apps that I’ve built for myself so that I can generally operate at capacity. An example of this might be a Google Chrome extension for productivity.

But for those that I do bring to market I definitely want to make a few coins here and there as I think that’s an important part of the feedback process for making the product better.

I mean, there few things more powerful than the feedback loop created by an actual paying customer (in contrast to someone just complaining that your app doesn’t have X, Y, Z feature and that they won’t buy it until X, Y, and Z feature are present).

So two weeks ago I received my first check from Apple to the tune of $3,322.40. I nice start, for sure! One of the natural challenges of doing the Mac App Store is that there can be a significant delay in receiving the monies from sales – up to 45 days later!

For those that are trying to make a living off of their sales this delay can be a significant financial burden, let alone the emotional burden that often accompanies the financial wait. So forecasting and budgeting become an absolutely critical part of not only success but also survival.

On the latter one I can’t speak too much about (because I’d rather not at this point in time) but the former I can – budgeting for strategic spend and costs as an indie app developer is paramount. Creating a “marketing machine” is, without question, a proven and well-worn traction model to make something profitable and sustainable.

But when your payment is delayed how do you make sure that you can stay ahead of your growing costs? And how do you create a system where you don’t have to dig too deeply into your own pocket to make things work? The answer (duh) is budgeting.

Not to be overly-simplistic, but this is essentially it and it actually does work really well on paper:

Bottom Line: Dollars In > Dollars Out

I do this every week and then forecast monthly after that. My overhead is minimal and I don’t have any major monthly app-based operating costs (e.g. cloud data delivery, etc.) although I clearly have some hosting / server costs as well as a few subscription services that help me get my junk done.

And, by the way, I literally do most of this on paper, especially in the beginning as I figure out a rhythm for operation:

desk-marketing

It’s nothing sexy or complex. To be honest I try to keep things like that in the very beginning as things can become overly complex really quickly.

So, for the first month (October) I spent $0 because I didn’t make any money and I wasn’t sure how well it would perform. Remember the above model (Dollars In > Dollars Out)? Simple, right?

The next month, November, I began to see some traction, and so I quickly moved to spend most of what I had made in the last few days of October and then the first 2 weeks of November. I spent nearly all of it on DaringFireball and a few other blog posts of note (as you can see in the image above).

But, I stayed on top of my model: Dollars In > Dollars Out and thus maintained the elusive profitability. Was it risky? Hell yes. Was it worth it? Hell yes.

As things become more standardized I use something like Freshbooks for easy operation budgeting and management. I’ve been using that system for 5+ years (wow…) and it has yet to fail me. Seriously love that web service.

So that’s how I do very, veryvery, budgeting for an indie app and project. Nothing scientific nor magical. Just numbers… and I can do numbers as long as they aren’t complex formulas (I am terrible at math).

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