Web Design Business Dead?

[zactive]

So, how do you all manage to stay in business? It seems im keep losing work to the people over seas and their ridiculous bids of $10-$12 an hour. I might as well go work for an employer for this bottom feed.

I once had a web design business with over 30 employees and making a few million a year, last year had about 10 employees and this year it is just myself and not even pulling in a $1k a month. It started to really change in 2009.

Im changing one of the businesses to a different sector all together but curious if there are any usa companies here who are not facing the same issues?

What are you doing to survive? Ive changed the business model into more of an all inclusive service / consultancy but still nothing.

[Sagewing]

When you say 'making a few million a year' are you talking revenue or profit?

I'm not really seeing this dynamic at all, actually. If anything, I'm having more people come to me that are dissatisfied with the cheapo offshore design they received and want to go domestic. For development, it's become hard to compete with offshore vendors (that isn't a problem for me because I'm right in the middle of it) but with few exceptions there hasn't been all that much success in offshoring design work except for in the cheap-seats category.

But, business is changing all the time even without these dynamics. A web design firm that was set up to succeed in 2001 would never work now, or the reverse. The 'pure design' strategy doesn't work well any more and the 'all inclusive everything shop' doesn't work well. The business is more sophisticated and unless you are a mom and pop type boutique shop, you have to specialize or otherwise develop an edge or at least a strategy.


What does 'all inclusive' even mean anymore? Not many firms can offer it 'all' in such a large space. What was your business model that went from millions to 1k/month?

[zactive]

Profits were shy of a million.


Initially we allowed customers to choose what services they wanted however then those same customers started to off shore in late 09' big time. Then we went the route of providing value over price and marketing it with specialized websites. The rates start at about $80hr. Customers complain saying that the rates are way too high and that they can get providers in other countries for $10-$12 an hour. Clients who have used us have reported that due to the expertise behind the work that was provided that they saw their money back in a couple weeks and their businesses took off pretty well compared to before. I firmly believe once this economy turns around will be sitting well but until then....

[Sagewing]

Something doesn't sound quite right about all of this.

I'm not sure what it means to allow customers to 'choose what services they want' but usually a company will offer a specific service or product. It would be impressive if you could provide customers with an ROI in two weeks, but it's hard to swallow that claim - if you could do that your business would be exploding. An $80/hour rate isn't usual and for a company with 30 people (though you said it was 20 in a previous thread) it would keep you competitive.

And what is this we you speak of? Aren't you down to one person now? To me this sounds more like a 1-person shop trying to grow rather than a larger shop dealing with downsizing.

If you had managed 30 people and were bringing in a million annually, I doubt you would be suddenly dumbfounded at how you wound up all alone making $1000/month. Actually, I think most people who have that kind of success wouldn't bother doing services for $1000/month, they would be looking a new businesses to start or otherwise looking for a 'next thing'.

[zactive]

Hello,

Typically after the new work goes live clients see results immidtly since they already have traffic coming to their site but arent taking advantage of it approrpirately.
With new metrics in place they ussually see their money spent in a couple weeks as they are able to obtain clients faster with out spending more on advertising. Initial work takes anywhere from 14-28 days on average.

So, if a client needs a logo or a website design or coding, etc etc. Now it is a package deal with everything they need.

In 2009, my business had 30 employees, in 2010 it had 20 and now it is down to me. Im trying to adjust but just don't see how it is possible. Yes it is down to only me which makes it extremely difficult.

I was making over a million gross and under a million profit 3 years ago. Ive been working on preparing to launch a new business.

The only reason why I have kept this business open is because I firmly believe that once the economy turns around this business will do ok again and with all the work done the past several years I don't want to abandon ship and just ride it out.

[Sagewing]

Sorry it just sounds like doublespeak to me.
I'm actually in the market for a new website and marketing strategy, copywriting, etc. Can you get me that kind of return?

[zactive]

There are too many factors to answer that however im sure there is a good chance that I could. Ill send you a message and see how I can help.

[donmarvin]

Something sounds very wrong with your business if you think web design is dead and going overseas. Business is booming. You're not attracting serious clients with real money to invest in their site. Are you keeping up with the latest technology? Are you specializing in any platform(s)? Or are you coding static html websites in a 2001 style?

[ChrisWiegman]

I'm finding business to be booming for anyone who is good at it. The disparity between good work and cheap work has become something many are conscious of and are willing to pay to have it done right.

[Sagewing]

I agree, there is a nice divide between good clients in PITA clients these days. The offshore revolution has helped everyone, I think, except those who couldn't navigate the changing world.

[zactive]

Main focus is cheaper end work with cms these days. No Javascript, Custom Programming etc.

[Sagewing]

zactive,

I hope that you can take some time to think it through before you make claims about what your focus is. Via PM you offered me the following services:

Layout Design
UI and UX Design
Conversion Optimization
Bounce Rate Optimization
Social Media Marketing
Search Engine Marketing
Search Engine Optimization
Internet Marketing

Then you said,

I have contractors to get other work done like logos, graphics, etc.

Then you offered me hosting through your 'new' hosting program.

I think that the idea of 'focus' is really a good one for you. I would recommend that you focus solely on focus by not making any claims whatsoever about the services you offer and instead try to think about what you are good at, what you can sell, what you enjoy, etc.

[zactive]

Yes, however the following is basic.

Layout Design
UI and UX Design
Conversion Optimization
Bounce Rate Optimization
Social Media Marketing
Search Engine Marketing
Search Engine Optimization
Internet Marketing


As it does not have to have advanced features like programming, javascript etc. No contradiction here. Yes, as mentioned I agree I should focus more like I did in the old days.

Id like to request for this thread to be closed since sagewing was nice and reconfirmed my beliefs.

[Sagewing]

Basic, maybe 10 years ago.

Nowadays there are expert ux consultants, expert conversion consultants, expert everything. Add logo and design to the mix and you are suffering from jack-of-all trades. Add hosting and it's a mess.

Trying to be everything to everyone is not a business strategy - you need to think about what you are good at, what you can do well, and what you can sell.

[Ted S]

Trying to be everything to everyone is not a business strategy - you need to think about what you are good at, what you can do well, and what you can sell.

Well put.

In addition many of the skillsets are repetitive. Internet Marketing is a category, SEM incorporates paid and organic. If you want to list keywords to explain skillsets you can do so but I'd suggest that it's better to offer a solution (we optimize your business from search to conversion) than a tactic (we optimize your seo, ppc, bounce rate, landing pages, funnel, etc).

Social Media is an entire field as is Ecommerce conversion / funnel optimization. Two very different groups are looking for these offerings and while it's great to say you're a social media marketer who can think through the funnel, that's a far cry from being an "expert" in both.

It is possible to be broad but increasingly rare. Those of us who started in this field 10+ years ago accumulated skills as the web changed but while I may know dozens of topics, I don't proclaim to be an expert in all of them and, for the sake of focusing my business and providing a clear sense of offering to potential clients / employees, I've narrow in on a few areas I feel I am best at and are the most important for the market right now.

Focus is crucial.

[zactive]

Bottom line:
Trying to do too much at once, not focused enough. It is easier when you have others doing the work and you guide, different when your a sole provider as there is not enough time.

[Sagewing]

I'm not sure about that. Even the larger shops that try to do it all with 'integrated full service' etc. and floundering. This field is too big now for that kind of thing.

[zactive]

Good to know it's not just my business. I know businesses in general are struggling because of the economy.

[Sagewing]

zactive you respond to everything in a way that is dodging the statement and twisting it so that you can blame the economy for the state of your businesses. Nobody is saying that. Businesses who lack focus will always fail, especially in a bad economy. But in this thread, people are saying that business isn't bad at all and that your business needs to be redeveloped.

Your business is struggling because it lacks focus.
Take responsibility for this, or you will never progress.

[algozone]

There is an effect from the economy, this is the fact, but the business is still going and growing.
I think it is important to concentrate on what that you can do best and not waste time on side details. I think this was already mentioned.

Design business is definitely changing, but good design is still good design and can be done only by professionals in a field. Most know, that you get what you paid for and good design for $10 an hour is not always a case. There is always somebody that needs to put experienced touch to the work and that person cost way above $10.

[donmarvin]

I don't know how someone in 2011 can offer web design services without providing database programming as well. No one is creating new sites in static HTML.

In this decade designers can make money in the templates for CMSes, like Joomla and WordPress. Make the template once, sell multiple times.

[transio]

I've always struggled to get bid price on projects, but I find that the quality of my company's work justifies prices, and although it's a struggle, it's possible to stay in business, even in a global market like Miami, where many, many people have direct connections with overseas companies providing parity services at 1/4 the price or less.

That was a run-on sentence.

That was an odd digression.

That was another one.

The best way to keep your business thriving is not to get "stuck" in a set of services. This is an ever-changing marketplace. Mobile apps have been dominant for the last few years, and mobile app developers have been making a killing, just as you once did with web. Mobile is now going the way of web, with overseas providers offering parity services at 1/8th the price.

Next!

The key to commanding high prices is to reinvent and stay ahead of the market. You should be looking at "what's next" instead of trying to compete with "what's hot". Social integration / marketing services haven't been played out to the fullest yet. I'm working on inventing some services in that sector. Web 3.0 services will be hot for a while (starting in a few years). SPARQL anyone?

Keep reading, researching, and inventing, because that's the only way you can justify making a million+ per year, and if you never had to do that before, I say that peak year was a fluke and you got lucky, and should be thankful for it, and you should be very content with 6 figure profits.

That was another run-on sentence.