10 Things I Wish I’d Known Before Starting a Web Design Business

John Tabita
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Freelancing on the side to earn extra income is all well and good. But if you want to start a business that generates a full-time income, here are some things to know.

1. Web Design is a Commodity

Low barrier to entry and an abundance of do-it-yourself options means clients have too many choices and no basis upon which to make the best decision. The sooner you acknowledge this, the easier it will be to break out of the commoditization trap.

2. Sales is a Skill You Must Acquire

If you’re unable or unwilling to learn how to sell your services, consider partnering with someone who can. Otherwise, don’t quit your day job.

3. Prospecting for Business is not Optional

“Sales” is everything that occurs after a prospect agrees to meet with you. Finding people willing to meet with you requires prospecting. While it’s not impossible to grow quickly through word-of-mouth alone, it’s the exception, not the norm. Just like SEO, word-of-mouth requires time; it doesn’t happen overnight. If you’re just starting out and need clients right away, go out and find them.

4. Cold Calling Works

Despite claims to the contrary by so-called experts, cold-calling is one of the most effective means to obtain new business. Unless clients are beating a path to your door, don’t be too quick to dismiss cold-calling.

5. Prospects Aren’t Buying What You’re Selling

Business owners don’t value your HTML skills or your time. They value vendors who produce results. Business owners are concerned with what puts money in their pocket or what keeps money in their pocket. If your service doesn’t directly impact their bottom line, you’re not selling what they’re buying.

6. Your Biggest Competitor is Not Who You Think

Over the years, I’ve lost more deals to the decision to do nothing than other web firms. Before getting too cozy with that prospect, find out whether this project is mission-critical, or if “doing nothing” is an option. As Seth Godin says: “Are you really worth the hassle, the risk, the time, the money?”

7. Never Offer a Proposal

Writing a proposal is a poor way to close a deal. But when I first started out, I’d offer to write one instead of simply asking for the sale. Once I learned otherwise, I found I could close a deal on a verbal agreement, then write the proposal to finalize the sale. So don’t write a proposal unless your prospect has agreed to sign it.

8. Never Agree to “Final Payment Upon Completion”

Obtaining content from the client is one of the most challenging aspects of web design. You are on dangerous ground when your contract stipulates that the client can make final payment upon completion. Conceivably, a client can delay the project for any number of reasons that are beyond your control and you might never see that “final payment.”

9. Clone Your Best Clients as Soon as Possible

Chances are, you’ll stumble on some good clients by accident. You know the type—the ones who give you plenty of ongoing work, always pay on time, never badger you for a lower price, and send you a gift basket at Christmas. Once you land a few of those, figure out what characteristics they have in common … then go after others like them.

10. Two Are Better than One

Having been in business as a both sole proprietor and a partnership, I can say that I prefer the latter. That said, a bad partnership can be nearly as disastrous as a bad marriage. But considering that partnerships generate more revenue than sole proprietors, I’d say it’s worth the risk.

There is my “Top 10” list of what you need to know before starting your web design business. Did I miss anything? Post yours below.

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  • Zaf

    I went into the web design business with my eyes wide open but learnt everything on your list as I went along. Your first point absolutely has the right to be there. I wouldn’t say you ‘missed’ anything except to offer some of my experiences. To get away from the ‘commodity’ trap I constantly work on my own site and one of my selling points is that “everything I do on my site can be duplicated yours”.

  • http://sherrodmedia.com Sherrod Media

    Great tips, still working on our sales ability!

  • http://www.timeclick.com Time Clock Software

    These are some great ideas. I think it applies to more businesses than just web design businesses though. Thanks for the insight.

  • http://webdesignpop.com Michael

    Thanks for the valuable tips. I think a lot of designers “forget” they have a business to run and web design/dev is only a fraction of the activities required, since it’s one of the most fun aspects(to me, at least).

    How did you go about finding a partner you liked and felt comfortable being in business with? I hear more horror stories than successes, which is why I stay solo, but I’m very jealous of those who pull it off. There’s no other way to scale.

    • http://smallbusinessmarketingsucks.com/ John Tabita

      My first suggestion is ask yourself what skills do you want in a partner? Should he or she be a designer, programmer, SEO, salesperson?

      Once you’ve figured that out, network in places where you’re likely to meet such a person. If you find a good candidate, you ought to “date” first. Partner unofficially to see how well you work together. For example, if your potential partner is a salesperson, agree on a commission split and see how much work he brings. That way, each of you can see if the other can deliver the goods. Try that for a few months before deciding whether to make it an official partnership.

      You don’t have to have a single partner, either. We had three: front-end designer (me), programmer, and business development. Nor must you divide up the business equally. One or more partners can own less equity in the business than another.

  • http://www.rbdesignd.com Ryan Brownlow

    Good article, thank you.

    “Obtaining content from the client is one of the most challenging aspects of web design”

    This statement is very accurate.
    The one thing that holds up progress on projects is not getting content from the client. It’s our job to find the line of educating the client about what we need from them and why, without overloading them with unneeded info.

  • http://www.opencopy.com.au Conrad

    Yet another great article by Mr. Tabita. I would like to ask, if you are not stipulating “Final Payment Upon Completion” then what milestone / deadline would you suggest to trigger an invoice?

    • http://smallbusinessmarketingsucks.com/ John Tabita

      Conrad,

      I start off estimating the amount of time I need to complete the site. So if that was, say 90 days, I’d structure the payment schedule like so:

      1/3 up-front to begin
      1/3 after 45 days
      Final 3rd at 90 days

      In my contract, I make it very clear that payment is due even if the client fails to provide the content I need to complete the site. So long as I’ve done my part, I will bill the client each time.

      If, on the other hand, I’ve fallen behind schedule, I have the option of not billing for the final payment until the site’s actually finished.

      Of course, you could also use two payments instead or three and/or split up the percentages differently, if you prefer.

      Hope that helps.

  • http://wickedesign.com Dave Levinson

    A well written article containing valuable insight. Thank you for sharing what you learned the hard way.

  • marcel

    thanx,
    very enlightening.