Last time I checked, the goal of business is to make money.
It’s also nice to love what you do. And that’s probably why you’re thinking of starting a web design business. But don’t forget about the “Benjamins.” And I’m not just talking about $100 bills.
Benjamin Franklin said “If you fail to plan, you are planning to fail.”
Take some time to plan and forecast your income to see if a design business is even feasible for you. If you don’t know where to start, the rest of this article should get your wheels spinning when it comes to the fun part of your Income Statement
We’ll deal with expenses (the not so fun part) later in another post.
The Basic Approach
The thought process many aspiring web designers employ is not super advanced. It’s the kind of math you can do in the shower:
I want to make $50,000 per year.
I can charge $2,000 per website client.
Therefore – I need to get 25 clients per year @ $2,000 to make $50,000.
Done. Time to launch.
After you dry yourself off from the shower and give your brain a rest from all that mental math, ask yourself a few other important questions.
- How hard is it to find clients who pay $2,000 for a website?
- What will my costs be? (advertising, software licenses, etc.)
- How long will a single website take? Can I even complete 25 websites per year? That’s about 1 website completed every other week. This might be tough depending on the type of websites you plan to build.
- How many years can I continue to build 25 websites? What happens when I stop?
Income/Revenue – The Fun Part
Ok – we covered that business is about making money. So where and how do we make the cash. There are a few obvious cash flow sources and a few that are not so apparent.
- Design fees – This is what most web designers think of when they think of income. They charge a fee for creating a website. Many website designers wonder what to charge and I know because many of them ask me. There’s no set answer to this because prices have been all over the place for years. In the 90’s, businesses often paid $10,000 – $20,000 for basic websites and some still do – Crazy! In the new millennium, it’s more common to see prices under $5,000 for small business websites that are custom built. And business owners can get sites completed for under $1,000 thanks to pre-designed website templates that have increased in quality and usage in the last several years.
- Hosting – Many web designers don’t consider hosting as part of their business, and so overlook one of the major revenue streams in the website design industry. Big mistake!
Selling hosting may not be for everyone but you gotta AT LEAST consider it as a potential income source. About.com put together an interesting list of comments from web designers on why they do or do NOT sell hosting.
Even though selling hosting isn’t a slam-dunk decision for every web designer and many choose not to sell hosting, I don’t think it should be overlooked as a potential income source.
Most business owners creating websites are not set on using a particular hosting company and will go with your recommendation. If you include hosting, it’s even better for your client since it’s one less thing for them to worry about.
Many popular hosting companies have reseller plans for under $50/month that can handle hundreds of website clients. And website builders like IM Creator, provide you with a white label solution to sell everything your client needs (including hosting) in one package.
- Affiliate Income – As a web designer, you probably will interact with a ton of potential clients. Whether it’s chatting online, meeting face to face, or talking on the phone, they will all look to you for advice even if they don’t become your client. And since you probably have useful knowledge about website builders, software packages, and general computer maintenance, you can offer a lot of advice to people in the form of recommendations. The beautiful part of this is – you can turn these recommendations into income through affiliate marketing. This is where companies pay you money for referring leads and paid customers to their services. All your clients have needs. They need domains, email, hosting, spam blocker, and SEO services, just to name a few.If you can recommend some reputable services and make a small commission in the process, this can become a substantial income stream.If only 1 out of 10 prospects become a client, you can still help the 9 others and make recommendations of affiliate products that are useful to them.
2 Tips on this: Be upfront about the fact that these are affiliate products and try to only recommend products and services you’ve personally used.You never know…affiliate income could someday outpace your web design income. That’s my long term plan!
- Hourly Work & Consulting – As your client base and contact list grows, you’ll start to get more and more requests for work outside your normal business of building websites. I’ve found this to be true in my business. From setting up autoresponders to consulting on starting a successful blog, I’ve had several requests from clients and non-clients that result in hourly work. There are some important questions to answer here…
What’s your hourly rate?
What services are you willing to perform?
Is this work taking away from your main business?
Don’t expect this hourly work to be a large part of your income in the beginning, but as client and contact lists grow, it may grow to be a significant percentage of your total revenue.
Brain Spinning? Comment Below…
Every business and individual is different. And this post just scratches the surface of planning a website design business. Books can be (and have been) written on each of topic I mentioned. My hope is just to get your business brain spinning.
Comment below and share your thoughts and questions on this topic so we can fill in the gaps.
New web designers: What’s your business plan?
Established web designer: How has your plan worked and how has it needed to change?
Images credit: #2 https://www.flickr.com/photos/whatladder/8595230649 #3 Another picture option: https://www.flickr.com/photos/68751915@N05/6736166839