Web Consulting Doesn’t Have to be a Struggle

Web consulting is a tough way to make a living.

Or at least, it can be if you suck at it. I’m not talking here about the quality of your code, the polish of your designs or your ability to learn the latest JavaScript library that all the cool kids are talking about.

I’m referring to your ability to generate ongoing and predictable revenue streams. If you suck at that, you’re in trouble.

I should know, having spent five years running my own small web consultancy. To an outsider looking in we probably seemed fairly successful, and there were certainly times when we felt like we were rocking. At our peak we had five staff, blue chip clients, six-figure website projects and our own office in the CBD.

We were even profitable for four of those five years, including reasonable salaries for the founders. So what am I complaining about?

Peel back the layers and you expose two problems that underpin almost every small web development company.

1. Income is incredibly choppy. Some months you make out like a bandit, others you’re on the soup line.

2. The percentage of your income that comes from your top few clients can often exceed 50%. We had two years where more than 50% of our income was attributable to a single client.

It’s a stressful way to run a business, and if we hadn’t moved sideways into a product-based revenue stream we probably would have thrown in the towel after a few more years.

If I was going to do it all again, what would I do differently? How can you protect your lifestyle as a freewheeling web developer without going down the path of 20 cold calls a day to generate new business?

The not-so-secret sauce required is recurring revenue. Revenue that doesn’t depend on the number of hours you can work in a day. Revenue that adds an incremental and predictable incline to your bottom line.

Here are five simple solutions you can use to get your business on the way to a recurring revenue stream.

1. Email marketing

Seems like an obvious one, and I am sure many freelancers and small web shops are already providing a solution. But if the solution you are providing doesn’t at least require a monthly fee or payment for emails sent, then you are leaving money on the table.

If you recommend Mailchimp, hook yourself up to the Creative Agency Discount. If you recommend Campaign Monitor, rebrand it and mark the pricing up. And don’t just add 10% on top like a sucker — double whatever the base price is and make that your markup. Giddyup.

2. Web Hosting

In the early days of web hosting, reselling a single shared server to multiple clients used to be a surefire way of making a metric butt-tonne of money. These days it’s a far more competitive space.

But guess what? Your clients are not technical, and so therefore don’t treat web hosting as a commodity they can get anywhere for the cheapest price. Take that server and cut it up 10 ways for your smaller clients, but price it for the value that you provide.

If a client wants a dedicated server, resell them one but add at least 50% to the monthly price that you are getting charged. Boom — recurring revenue.

3. Maintenance Agreements

This is a bit of a no-brainer, but it’s surprising how many freelancers and companies don’t bother to implement a basic maintenance agreement.

The trick is to charge for a set number of hours per month, irrespective of whether the hours get used or not. Do not roll the hours over into the next month if unused!

4. Content Marketing

As a subset of inbound marketing, content marketing is probably the hottest thing on the web right now; mainly because it works so well.

Every client you have has a deep desire to improve their marketing, and generating great content for their website is a top strategy if done well. But you know most won’t bother, which is where you step in and proactively offer to generate the content required for their blog.

You don’t want to get into the trap of writing the blog posts yourself, though. That’s just charging for more of your own time, which is what we want to get away from. Instead, find a service you trust that generates the content for you on a regular basis and mark up the price.

5. Search Engine Optimization

SEO is another great service you can add to generate monthly income. But you don’t want to be in the business of building links, generating content or optimizing the title tags yourself. It’s hard work and takes time to produce a result, so whatever you can outsource to a specialist you should.

The best path forward is to find a freelancer or small firm that you trust. Reach an agreement with them for a number of packages, then sell them back to your clients at twice the price. If you’re feeling bold you can do a Google search for “white label SEO”, but be prepared to work your way through a number of firms before you find anything suitable.

Each of the ideas above may only add small amounts of income in the early days, but that’s okay. Over time, each step you take towards implementing a recurring revenue plan will add up. Given enough time and enough clients, hopefully one day you will wake up and find you have a stable, predictable and profitable business.

What other ideas have you tried to implement recurring revenue streams for your web business? Let us know in the comments.