Forget budgeting. Model and track instead.
“What’s my budget for this?” is a question I’ve been asked, or have asked myself, over the years. It usually arises from a marketing effort, or the purchase of hardware, or deciding how much to spend...
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The size of software product development companies
My goal with Great Not Big is to help people who build and run software development companies. Naturally, I wondered how many people would be interested in this topic. To figure this out, I tried to...
View ArticleArranging your income statement (P&L organization)
The Income Statement (aka Profit & Loss Statement or simply P&L) is critical for understanding the financial performance of your company from an operational standpoint. The economic model of...
View ArticleMitigating risk with financial buffers
Being good at software development requires you to estimate responsibly and accurately. One element of a responsible estimate is knowing how to buffer estimates for risk or uncertainty. The same need...
View ArticleProfit margin matters more than profit
Profit alone is not a good metric for tracking your innovation services company’s performance. Profit is of course what you can spend or re-invest in your business, so it matters a great deal, but it...
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Profitability varies by firm size
Curiosity drove me to learn more about how software development firms of different sizes vary financially, and whether or not there have been recent changes in our industry with respect to firm size....
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Accounting for calendar distortions in your financial results
We track Atomic’s financial results on a quarterly basis. This seems to be the right frequency, neither too frenetic (monthly) nor too inattentive (yearly). I don’t believe traditional budgeting is the...
View ArticleFour easy changes improved our P&L statement
The profit and loss (P&L) or income statement is critical for understanding your business. Every quarter we close the books, analyze the P&L, compare against our economic model of the company,...
View ArticleCompensation games distort the whole economy?
Might compensation games be distorting the entire US economy? I wrote last week about my belief that using money to motivate people was a bad idea. As a leader of a company, you need to figure out a...
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Creating financial leverage in a service firm
Innovation service companies, like Atomic Object, sell their time and talents to help clients grow revenue or expand a market through the creation of software. Without products of their own, innovation...
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Compensating sales people in software service firms
Salespeople are most often compensated either fully or partially with commission. The conventional wisdom is that sales people need incentives to sell and should be kept hungry through at-risk...
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Shutting down secondhand feedback
I have been aware for some time that my position and the demands of my job at Atomic Object isolate me, to some extent, from a complete and accurate understanding of how employees are feeling and what...
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Measuring the happiness of your company
People are the only valuable asset of an innovation services company. While reputation, client list, culture, standards and tribal knowledge are also valuable, those all derive from and are maintained...
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Pair lunch: an inexpensive, effective benefit to strengthen company bonds
There are easier places to work than Atomic Object. We don’t specialize in one industry or technology domain, so we’re constantly learning. We push hard to build the best app possible for a given...
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Transparency requires positive engagement
Transparency in a company does a lot of great things. Perhaps first among them is it builds trust. Transparency also creates the potential for broader employee participation in the analysis and...
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Could you build and run Atomic?
The philosophy behind Great Not Big isn’t simply one of avoiding growth, or a hard limit on how large Atomic Object might eventually be. Instead, it’s a question of focus. Our focus and priorities have...
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Company governance: sham or effective?
Nearly three years ago, Atomic started experimenting with a new form of governance. Today, our Board approves nearly everything brought in front of it. Does this mean we’ve created a rubber-stamping...
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Guidelines, rules, and consequences – the things I’ve learned
We have very few rules at Atomic Object. Our employee handbook is intentionally labeled “Atomic Guidelines”, and is full of examples, expectations, and explanations but very few concrete rules. The...
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What’s your company worth?
What is an innovation services firm worth? I had to answer this question when we started broadening the ownership of my company beyond its co-founders. The traditional answer to the question of what a...
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Is a company like family?
Can a company really be anything like a family? Is drawing the comparison naive, or a selfish attempt at employee manipulation by a cynical CEO? I use the word “family” for Atomic Object both casually...
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