How to Make a Living in the Web Industry

John Tabita

Like most small business owners, you and I probably decided to go into business for ourselves because we has a skill we loved and figured we could make money offering our services. But when the honeymoon ended, we realized it wasn’t that simple.

According to at least one survey, having a written business plan doubles your chance of success, yet most don’t have one. One key piece of that equation is: how much revenue must I generate in order to make a living and a profit?

For round figure’s sake, let’s say you need to earn $50,000 a year to make a living and support your family, and that your average project is $2,000. That means you must land 25 projects over the next 12 months. And to prevent “feast or famine,” ideally you want to spread that out at about two jobs a month.

To land those two jobs a month, you must do four things consistently:

  1. Generate conversations with enough people in your target client base
  2. Separate the prospects from the suspects
  3. Set appointments and make sales presentations
  4. Close sales

Let’s work that list backwards.

Close Sales

Sports columnist Tony Kornheiser once said he wanted to come back in the next life as a weatherman so that “I can be dead wrong 80 percent of the time and not get fired.”

The average sales person closes a deal about 20 percent of the time. So just like a weatherman, you can get it wrong 80 percent of the time and still make a good living.

Set Appointments and Make Sales Presentations

But that 20 percent success rate is a double-edged sword. Being at least as good as the average sales person means you’ll only sell one in every five decision-makers you meet with. In order to land those two projects, you must set appointments with and make sales presentations to 10 decision-makers a month.

Separate Prospects from Suspects

You’re going to have to speak with a lot more than 10 people to find 10 viable prospects. If you walked into a roomful of 100 business owners or corporate decision-makers, they will fall into one of three categories:

  1. Those who will never do business with you
  2. Those who may do business with you in the future
  3. Those who will do business with you right now

Unfortunately, when we first start out, we’re naïve enough to believe that many will fall into category Number Three … when in fact, the exact opposite is true.

Generate Conversations with Enough People

Simply put, if you aren’t talking to enough people in your target audience, you won’t be able to fill up your sales funnel. Having a funnel full of potential prospects ensures that at least two clients a month make it to the bottom and money flows into your bank account. Too few means eating Top Ramen six nights a week.

I won’t sugar-coat it. You need to get in front of a lot of people in order to generate the type of conversations that drive in sales. So don’t rely on a single marketing method, because marketing is like a team—the more players, the better. But it’s not merely quantity. Three highly-effective team members are better than 100 mediocre ones.

A lot of us design websites on the side to earn extra income. I did the same for a time. But if you intend to earn a full-time income providing web design and marketing services, you’re playing a completely different game. You need to start thinking like a business person, not just a web designer or developer.

That means marketing and selling must be your primary function. Instead of waking up each morning and thinking, “I get to design websites today,” you must ask yourself, “What must I do today to find another client and grow my business?”

Remember, nothing happens until you land a client.

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  • Steve

    What an excellent wake-up call! Knowing how to run a business and how to get clients are two different things.

  • Simon

    That’s true and well-putted. Main issue is : doing both in the same time !

    • http://smallbusinessmarketingsucks.com/ John Tabita

      That’s the hardest part of being on one-man company. You must wear all the hats. It’s one reason partnerships have a higher success rate than sole proprietors.

  • Chris

    It’s always that dominant strategy- be a good businessperson- that worries me because it overshadows whatever expertise the production of the product/service requires. If, for example, I like fixing bikes and want to run a shop on that, how can I enjoy the the work of business when it is not related to fixing bikes?

    To make business work more interesting to me, I would want to leverage my technical skills somehow in a way that translates into good marketing skills.

    • http://smallbusinessmarketingsucks.com/ John Tabita

      That’s the challenge. If you love fixing bikes, but hate the business aspect, you’re better off working for someone else. I enjoy both the business and marketing side as well as the actual designing.

      You may never enjoy the work of business as much as development side, but if you do the business side well, the more you get to do what you truly love.

  • http://www.andymci.com Andy

    Agreed on all points. These tips are universal for all types of industries, too.

    I know a few small business owners (retail) who should spend much more time thinking about the exposure they’re bringing to their stores. Simply setting up shop and waiting for customers to walk in the door won’t cut it. You won’t turn a hobby into a business unless you make a serious commitment.

    • http://smallbusinessmarketingsucks.com/ John Tabita

      You’re right. The same process applies to selling mobile phones or cars. It takes advertising and marketing to drive enough people into the store or lot so that sales conversations can take place. People who sell cars are trained to separate the tire-kickers from the buyers, and the test drive becomes the sales presentation.

      Sadly, trapping you in a back room while two or more sales people gang up on you is often their method of closing the deal.

  • http://www.franboud.com Francis Boudreau

    Really interesting, but please help us find clients!

    • http://smallbusinessmarketingsucks.com/ John Tabita

      I will … in my next article.

  • http://www.openmindent.com John Stroud

    Hi John,

    I’ve been transition into IT for about 3 years. Current and emerging technologies, Front-End, Server-Side-PHP, CMS & MVC frameworks and Agile are my areas. 6 months of self-taught, 1 years of web | app development formal class instruction and projects earning advance professional degree from top university, and last 8 months broken down would probably equal 1.5 months contract work, 4 months continuous self-development: research, study – tutorials, practice: code academy,codeschool, nettuts, etc. Reading and Practice: Sitepoint Books (Jquery:Novice to Ninja, Php and MySql) and etc).

    I am very business savvy and entrepreneurial driven, professional in appearance, with my undergrad education in business management and finance.I co-founded a web design company immediately after graduating with several other students (I thought I saw a niche opportunity with so many recruiters calling us everyday, and a chance to continue to grow together as we were attempting to secure career opportunities). I definitely ran into those unforeseen ( but widely publicized as in this article) issues starting your own business.

    The main issue I have found in trying to secure a career position in and/or grow a business (attract clients) in Web Development is the amount of time and energy, I have to put into continuous learning and developing while trying earn a living (finding a job is a job, gaining clients is a sales job).

    I wonder can you relate and do you have any suggestions ?

    Lastly as a side note, it seems that the technical and social work different mentally. It’s hard to turn one off and switch to the other (for me). I’ve had a situation where I’ve been doing some kind of development almost up until I’ve had an interview or networking call and it wasn’t the most poised transition.

    Any thoughts ?

    • http://smallbusinessmarketingsucks.com/ John Tabita

      Yes, I can relate. If you’re trying to find a job and build a business at the same time, I suggest you do one or the other, not both.

      If landing a job is a requirement, find one first, get settled in, then turn your attention to building your business on the side.

      Or, if you think you can earn a living solely from your new business, ditch the job-hunting and go all-out finding clients. Like you said, both are full-time jobs.

      Regarding your side note: I’d suggest you have separate production and marketing days. On days that I had a client meeting or a networking event, I found it difficult to return to the office and start working on a client’s site.

      I also tried to schedule client meetings in the early part of the day so that my primary focus was preparing both mentally and physically for the meeting. So rather than being on the computer beforehand, I’m mentally rehearsing the meeting in my mind at the same time I’m pressing the dress shirt and pants I’m going to wear. Sometimes it’s the simple things that make the difference.

      Hope that helps.

  • http://bluenettechnologies.com Sumit

    what an explanation and well suits me. I have to think like a business person to run my web design company. Thanks for this great article.

  • http://www.maquinastudio.com Cristian

    What a great article. The big idea I take note of is that partnerships are better than sole proprietorships. Absolutely true. Find someone who complements your skill set. The lone ranger approach is not sustainable. I did it alone for a few years, but my business grew once I partnered with another developer. I’m more of a marketer/designer myself. So the next logical step was finding the right talent to work with. In my case a developer.

    Another thing which I’ll point to, and I’m sure you’ll cover this in the next article, is to target your market. Trying to be the best web designer/developer in the whole wide world will get you nowhere fast. There’s just too much competition and noise. And there’s no real differentiator. But once you target a specific group, say mobile design/development for startups, then it becomes easier to reach your business goals.

    • http://smallbusinessmarketingsucks.com/ John Tabita

      Your story mirrors my experience. I also partnered with a developer, but he also is very business (not marketing) savvy. Our other partner was extremely well-networked. Once we teamed up, we developed more sites in six months than I’d done in the previous two years on my own. And larger projects as well.

  • TF

    I have found getting clients in this economy in an average low wage town of 50 thousand is quite tough. Many state they have the Facebook and/or want to keep the cheesy site they already have due to the cost of a new one. My partner and I in the web design/development business have marketed our LLC by way of brochures, post cards, business cards handouts, a small newspaper ad, face to face and even a few cold emails to local businesses. We have had few results in all the money spent on marketing. Maybe I need to keep marketing and get outside of the city I live in. Hopefully things will turn around for us both, we do not want a hobby. Thanks John for the article. It inspired me to hang in there and keep trying using your steps.

    • http://smallbusinessmarketingsucks.com/ John Tabita

      I live in a town of about 75,000. But 20 miles north is a major city with more than twice that. And 60 miles north is an even bigger city with over four times the population of my home town. While I certainly wouldn’t neglect my own backyard, I’d most likely focus most of my efforts in those other two cities.

  • Craig

    Great article! I’d like to add one more very important aspect – retaining the clients you land and pleasing them with your work, attitude, and responsiveness to their needs. Plus, give them a little more than they expected.

    For example, I just finished a site for a musician who is marketing his new children’s CD. He was very happy with the site, and that we stayed within his limited budget. Yesterday, I decided to animate (on hover) the main graphic, which is a cartoon caricature of him playing guitar. It took me about 30 minutes. I’m pretty sure that is one of the highlights he will bring up when he shows the new site around to his friends and family – “He even did that funny animation for free!” You can’t buy marketing like that, but you can easily earn it.

    I’ve been solo since 2007. (Foolishly, I did not make a business plan, and I still don’t have one.) But what I’ve found that happy clients generate two very important things: referrals, and ongoing income via changes and updates to the original site. About 25% – 35% of my monthly income is due to site updates and enhancements from my existing clients. Almost all of my new business comes from client referrals.

    Best of success!

    • http://smallbusinessmarketingsucks.com/ John Tabita

      Good points. Part of your income can come from both site maintenance and hosting fees, so instead of two new jobs a month, perhaps you only need one to hit your monthly revenue goal.

  • http://billhaenel.com Bill

    Great plan. But this assumes that you’ll have time to complete those two $2000 jobs per month as well. I ran a shop full time for six years and found consistently that what clients were willing to pay $2000 for couldn’t be completed in the time available. For example, using your 2 x $2000 monthly model, each $2000 job would either need to be completed in two weeks, or be able to be worked on in parallel with another job of the same size over four weeks. If the client expects a project that is more in line with three months worth of work but still only wants to pay $2000 for it, that sets the entire balance off. On top of that, if the client delays the project, your entire revenue plan is all out of whack. In short, I’ve found that clients in our market aren’t willing to pay what we need to charge in order to make ends meet on both time and money basis. This business is becoming harder and harder for the small entrepreneur. My solution was to sell more jobs than we could physically handle, then sub out anything more than we could work on ourselves. It’s a lot to juggle, and your job changes from being a developer to being a people-handler. But it’s about the only way to make a living. I eventually had enough of it and gave up.

    • http://smallbusinessmarketingsucks.com/ John Tabita

      I was trying to keep the equation simple, but since you brought it up, you make a good point.

      Here’s a typical scenario. You need to bring in $4,000 a month. A $2,000 job has a 60-day time-frame. Your payment schedule is half up-front and the remaining half at 60 days. That means two new jobs each month bring in a $1,000 deposit each, only half of what you need.

      But … the two jobs you started 60 days ago are due to be completed, so you are billing those clients for the final payment of $1,000 each to meet your monthly revenue goal of $4,000.

      In reality, it won’t pan out as tidy as all that. But if you don’t attach the final payment to a production milestone (such as “final payment upon completion”) then you can get paid on schedule, even when a client delay causes the site to remain incomplete.

      As far as going from developer to people-handler, my former partner has done so quite well. He tells me what he enjoys most is now he can pick and choose which jobs he wants to work on and which he wants to sub out.

  • sorina

    Hi John,
    Thank you for enlightening us, great article! When you start working for a client, do you have a kind of form for him to fill out, with all the description of his web requirements? Or how do you proceed to getting organized input from client in you work, so that he won’t change the requirements on the fly on a daily basis? Thank you!

    • http://smallbusinessmarketingsucks.com/ John Tabita

      Part of that is uncovered during the initial sales consultation, during which I have a standard set of must-ask questions. The finer details come out when developing a project plan. This becomes a legal document that I go over verbally with the client before he even signs, so that there’s no misunderstanding or mis-communication. I make it clear that there will be additional charges for changing requirements after-the-fact.

      After a few years and a number of missteps, I finally got it to the point where every likely scenario and expectation was addressed.

  • http://www.adobetec.com Percy

    Great post! I understand better the process, how is supposed to work and the other reader question are as well excellent way to learn. Keep up the good work

    Percy
    Miami

  • http://www.adonim.net Angela

    Very great wake up call, indeed. I’ve hit rock bottom this year, after 14 years doing independent graphic and web design … simply because I have the hardest time “acquiring new business” now that several regular customers went out of business themselves … sigh :-)
    My niche, small businesses, word-of-mouth, are suffering and don’t spend money on websites or brochures, etc. Now What?
    I LOVE your domain name! smallbusinessmarketingsucks.com … couldn’t have said it any better! LOL

    • http://smallbusinessmarketingsucks.com/ John Tabita

      Adapt, change, innovate, or die. Find a different niche, target an industry that’s growing instead of going out of business.

      Keep in mind that “small business” is not a niche. It’s very untargeted. A niche is filling a need not being addressed by mainstream providers, such as mobile design & development for startups mentioned in the comment by Christian below.

      Another way to target is by vertical, such as ‘attorneys’ or ‘dentists.’ The more specific, the better, like Bankruptcy Attorneys or Pediatric Dentists.

      Easier said than done, but if it were easy, everyone would be doing it. The tougher things get, the faster those designing websites out of their basement with a cracked copy of Dreamweaver will drop out of the game.

  • http://www.sbs.co.ke Hassan

    I think the best way forward for starters is to team work with a fellow developer and through monthly rotation, one can handle marketing while the other handles development. That way you both remain attached to the project and at same time you both refine your marketing skills. One or two days in a month can be set aside to meet and exchange more ideas, while regularly you could keep each other abreast through online collaboration. This arrangement, I have found works best if you are both in the same city.

  • http://www.greygoomedia.com David Albert

    Great article written in plain language. I ran a 20-person independent agency for 10 years, was acquired by a big(ger) agency I worked at for 2.5 years, and now I’m back independent with just myself and a partner. I can say from experience that the greatest factor to winning business is client confidence–that is, when you’re client believes that you understand their pain points, understand their industry, are competent at doing what you’re proposing to do, and have done it successfully for others like them, then you have a much greater likelihood of winning that client’s business. Cover those bases when responding to proposals, presenting capabilities, and pitching and you’ll do well.

  • http://www.MooreBusinessConsulting.com Jay Moore

    Great Article.
    I love the part about doubling you chances of success by having a business plan.
    The plan is key.
    It does not have to be fancy, long, or even 100% accurate.
    But it needs to be written – especially the part about what makes you different from your competitors.
    As everyone knows, there are b-zillions of “so called web designers”, but what separates the successful from the also “rans” is usually the competitive advantage they identify for their company.
    Your competitive advantage is what makes you or your company unique — to the customer. Uniqueness is “sellable” and usually at a price higher than the market rate. Examples might include a complete knowledge of a business segment, super fast project turnaround, or simply lowest cost. Once you identify your competitive advantage — that your customer values — you have the good start to a business plan and will at least double your chances for success.

  • Frank.S

    I love the topic,excellent points and communication thread.
    It’s my pleasure to recommend Michael Gerber’s life long contribution on coaching individuals in transitioning from being ‘technicians’ to business owners & entrepreneurs. i.e., the Myth of becoming an entrepreneur. From being a manager, department head in a large organization, or a consultant; when you realize that “you can do it better” than your boss, your employer, or your competition and decide to go at it on your own, it is a wise step and excellent counsel to have a plan of when and how you will grow “your” business beyond “doing it all yourself.” Enjoying the ‘work’ you do isn’t and won’t be enough when you are forced to focus on making a profit and supporting your self, your business, and your family.

    Keep up the good work – and wishing you all much success.
    The E-Myth Revisited… recommended reading: it is a short read & you will be blessed by the insights your will gain.
    http://www.e-myth.com/shop/

    (no, I’m not associated with Mr. Gerber or his company; I’ve just found his books helpful & gladly recommend the works to friends & colleagues.) I think we should all love the work we do, work to live & not live to work. Stay creative and bring excellent experiences to our ‘users’.

    Best.
    Frank

  • Gita

    Great to the point article. Web design is like any other business. Sales and marketing is the most important acitivity. You have to focus on that all the time. Get your sales funnel down to pat. Work how many suspects you need to convert to prospects and to clients.

    Once you have clients look after them and provide excellent customer service. (this will bring repeat sales and word of mouth refereals)
    I use to hate sales and marketing. Taught myself to like it and also outsource it now. Whatever works for you but never take your eyes of the ball of marketing and sales.

  • http://www.digitalark.co.uk Simon

    John

    Good article. You are right on the point that when you are full time you are in marketing. I listened to a podcast the other day where they quoted that if you are not spending 90% of time on getting / talking to clients you are not doing your job. I think it was high but definitely think it should be over 50%.

    Simon