We’ve shared plenty of components of Buffer’s enterprise transparently over time — and one piece we’ve at all times wished to develop on is the place your cash goes if you pay for a Buffer subscription.
We shared a put up about the place your cash went when shopping for a $10 Buffer plan again in 2014 — nevertheless it was nicely time for an replace.
Rather a lot has modified during the last 9 years, and we need to share among the learnings and insights gained from trying again at our numbers.
We’re additionally completely happy to share a extra sustainable approach of offering this info — our new clear pricing dashboard. You may discuss with it anytime to see the place your cash goes when buying a Buffer subscription, and even look again at earlier years to see how issues have modified.
How our funds have advanced whereas staying true to our mission
our funds during the last 9 years, you’ll discover fluctuations throughout the completely different classes. The most important improve you’ll discover will probably be our worker bills. Since 2014 our staff has grown from 34 to 78 staff members. These bills have additionally elevated on account of:
- the evolution of our wage formulation
- lots of our teammates rising into extra senior-level roles (and their pay reflecting this!), and
- our dedication to maintain up with market charges on the subject of how we pay our staff.
One other vital element to notice is how Common Gross sales Value (ASP) and Bills have modified over time. Our Common Sale Value (ASP) in 2014 was $13, whereas our complete Working Prices have been $3,575,897. In 2022, our ASP was $20, and our Working Prices hit $19,757,852. Whereas our complete Working Bills have elevated by 452 p.c within the final 9 years, our ASP has solely elevated by 54 p.c throughout the identical timeframe.
For us, that’s a rewarding indication we’ve stayed true to our mission and technique to assist small companies. We have now deliberately chosen to not go up-market and serve enterprise prospects, however quite we’re dedicated to serving to small companies and impressive people develop their manufacturers on social media.
A take a look at our pricing historical past
Our ASP additionally displays the modifications we’ve made to our pricing mannequin over time. Right here’s a take a look at how our pricing and plans have modified over time:
A more in-depth take a look at the place subscriptions go
Internet hosting
Buffer operates as a software-as-a-service (SaaS) firm. This implies our software program is hosted on the cloud and used over an web connection by way of an online browser or cellular app. Our internet hosting prices embrace service suppliers like AWS, Cloudflare, MongoDb, Twitter, and so forth.
Service provider Charges
At Buffer, we depend on Stripe, Google, and Apple for our cost processing wants. Stripe funds make up 98.5 p.c of our complete income and 83 p.c of our charges. Google and Apple funds make up 2.5% of our complete income and 17 p.c of our charges. These platforms are very important in simplifying our cost operations by offering a safe infrastructure to course of bank card transactions, deal with a number of currencies, and handle recurring funds with out complicated growth. Safety and compliance are essential to us, and utilizing cost processing instruments ensures the safety of delicate buyer cost info and maintains regulatory compliance.
Salaries + Worker Bills
Worker bills are our largest price range class making up over 80 p.c of our complete working bills. This class consists of the associated fee for our staff salaries, payroll taxes, and advantages resembling medical health insurance, employer contributions to 401k and pension plans, and persevering with training (like conferences, free books, and training!).
Instruments + Operations
We use quite a lot of software program instruments to assist our staff and prospects. These embrace admin instruments like Slack, Dropbox, Threads, Expensify, and Notion (to call just a few!), plus further instruments like Chartmogul, Mixpanel, and Section.
Every space inside Buffer additionally has varied instruments to assist their wants like our Advocacy staff that makes use of Zendesk to serve our prospects and Advertising that makes use of Buyer.io and Pendo for buyer communication and engagement.
A number of classes of bills assist assist Buffer’s general operations. These embrace bills like outdoors companies resembling accounting, authorized, and consultants. This class additionally consists of our workplace bills like enterprise insurance coverage, financial institution fees, and web and co-working prices to assist our staff to work wherever they’re happiest.
This class additionally consists of the price of computer systems for our staff. Every teammate is eligible for a brand new laptop each three years.
Retreats
Our journey price range consists of all prices concerned in staff gatherings like retreats and meetups. We intention to have one company-wide retreat yearly.
Journey is embedded into Buffer’s values—a lot in order that our complete distant staff meets up yearly at varied spots worldwide. Up till 2016, we had retreats twice a yr. However our staff grew so giant over time that it made much more sense to maneuver the gatherings to only every year. Despite the fact that we totally imagine we don’t need to be in the identical constructing (and even on the identical continent!) to do nice work collectively, it’s exceptional to see the impression per week in the identical place has on our staff.
Advertising
Our Advertising price range consists of prices for promoting (i.e., paid advertising on platforms like Google and Meta) and prices to assist work with a content material company and different consultants like those who present companies for app retailer optimization.
Taxes
This class helps the price of gross sales taxes in US states the place we’ve got reached Nexus (i.e., a enterprise presence in a specific state). We additionally pay VAT in the UK. In years the place we’re worthwhile, this class additionally consists of revenue taxes to the US IRS.
Trying forward at our future investments
Once we stay up for future years, we anticipate that worker bills will proceed to make up the vast majority of our Working Prices. We stay dedicated to paying our staff pretty and equitably (and transparently!). Buffer is what it’s right now due to the robust dedication of our proficient staff, and our working prices replicate how a lot we worth every staff member who has devoted their work life to constructing one thing particular alongside us. We have now plans to evolve our present wage formulation frequently, and we look ahead to the day once we can take away the Price of Residing element of our wage formulation.
One other merchandise on our minds is that we’ve got some thrilling updates coming round fairness at Buffer. We hope to introduce an worker buyback program within the subsequent 12 to 18 months as soon as we return to a spot of profitability.
We additionally plan to proceed to spend money on paid advertising. During the last 18 months, we’ve made an intentional effort to spend money on paid advertising, which incorporates paid advertisements primarily by way of Google Advertisements. Our common Return On Advert Spend (ROAS) during the last 5 months is a major 198 p.c. We’re additionally working with a number of outdoors advertising consultants to assist with content material for our weblog and Search Engine Optimization (website positioning) work. Our advertising price range has actually grown within the final two years, however we’re seeing this funding repay.
One other space we anticipate we’ll proceed to spend money on is AI. At this level, we’ve got constructed an AI assistant to generate content material for our prospects, and we’re additionally utilizing AI internally for areas resembling Engineering and Advertising. There are nonetheless countless alternatives for AI-powered buyer options, and we’ll proceed to construct upon what we’ve constructed. We additionally foresee that we are going to construct extra superior inside AI instruments to serve our prospects higher and proceed exploring how we will make the most of AI to develop and enhance the in-app assist expertise.
Lastly, we’ll proceed to spend money on staff retreats and we’re excited that we’ve got already kicked off preliminary planning for a full firm retreat for 2024. In 2022, we kicked off smaller staff gatherings as a technique to ease again into meet-ups whereas being conscious of Covid publicity. Our 2024 retreat will probably be our first full firm retreat since 2019, and we plan on budgeting $5,500 per particular person (roughly $440,000 complete).
Over to You
What else would you wish to learn about our funds at Buffer? Depart a remark under to tell us!
