How to Start Treating Your Web Design Business as a BUSINESS

Posted in Web Design4 years ago • Written by 19 Comments

Most of us treat our web design businesses not as a business but as a hobby. And hobbies are dealt with in a different way than businesses. Most of us don’t know the exact definition of a business; even Wikipedia says: “the exact definition of business, like much else in the philosophy of business, is a matter of debate and complexity of meanings.” It definitely is.

In my opinion, as a small business owner, in order to start treating your web design business as a business you need to focus on 2 things.These two things are actually the most important parts of small businesses by many. They are something like wheels for your business to stand on. So, it is important that they be strong wheels which will carry your business without major problems.  They are:

a) Growth

b) Profitability

Growth

Growth mostly requires investing money. Remember the old saying “you need money to make money”. Well, that is mostly true. I say mostly because 20 years ago when internet businesses didn’t virtually exist, it was not easy to create a business without money. In fact, it was almost impossible. I’ve talked to many people who own an internet business and was surprised to see that not many of them invest more than 10-20% of their money back in their business.

So many people seem to have fallen into that dream of working from home without an effort. This is a bad approach because it is like seeking a magic bullet. Sure, when your business really develops and you start to make large amounts of money from it, you can decide easily whether it is worth it to invest in your business or not. But, in the beginning stages of your business, you must be willing to sacrifice more by investing more of your profit back into your business. This is a necessary component if you want to have your business go faster through the stages of its development.

Growth requires:

a) Re-investing the money you made into your business. New tools, employees etc. There a lot of art and science into investing your money wisely.

There are a few books on this, however, most of them seem to be of interdisciplinary nature. That means they combine various things like psychology (how to not get tricked in spending your money on un-necessary things), simple management and some common-sense lessons. So far I haven’t found any book that promises to teach you how to invest and manage money in a truly scientific matter, if you know please write in the comments.

b) Effectively managing cash flow. One of the primary reasons small businesses fail is not a lack of profit but a lack of CASH. If you want to exactly learn why, I highly recommend this article (PDF). Cash flow is very important.

Make a cash flow prediction and have some overview of where the cash goes and from where it comes and when. You can take a look at the PDF file above for examples.

Profitability

After cash flow, profitability is usually the second most important thing a business should focus on. Without profitability, there is no point in creating a business. Like we said above, you can’t also expect profitability immediately. First you have to work and to invest, and watch your profitability slowly increase. Sometimes it may increase fast. Whatever happens, it must me on you mind most of the time. You increase profitability by:

a) Lowering costs

There are probably hundreds of things you’re doing right now in your business that you can do more efficiently. For example, if you hire a virtual assistant for $600 per month, you can probably spend some time and find a cheaper virtual assistant for $300. If you have a tool you use that costs $50, you can probably find it for a cheaper price or have it custom-made so it’s cheaper in the long run. Since everything is changing so fast today, you always have to be looking for a cheaper solution. Because, if it is not here today, there is a big chance that it might be available tomorrow.

A good exercise I once heard is to spend 2-3 days of the week, 5 minutes a day brainstorming different ways I can increase your efficiency. Definitely invest time to see what you could improve so that in the end you have more leverage.

b) Increasing revenues


Getting new clients and keeping existing ones is an essential thing for a web design business. In my article, What Can Web Designers Learn from Business People I outline different ways you can keep existing clients. What about getting new ones? Don’t always focus on keeping the same clients. See what clients are worth keeping the most. The ones that seem like they are going to do more bad than good are probably not worth the effort of keeping compared to the clients that seem like they are going to be even more worthwhile in the future.

A good strategy for that is to go where your clients go. If most of your clients are internet marketers and small business owners, many of them hang out on forums (Digital point, Warrior Forum, WickedFire) which have a special section where people provide their web design services. Freelance sites are just one piece of the puzzle. Put yourself in the shoes of your clients. Try to imagine how you would think if you were them. Where would you go if you were them? Who would you contact if you were them? If you start to think like this, it will definitely help you get closer to your clients.

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19 Comments Best Comments First
  • Erika Napoletano

    Wednesday, September 8th, 2010 01:15

    1

    Thank. You. Darren. This was forwarded to me on Twitter by a follower and I just want to say that I love seeing you beg your colleagues to step up their game. My recent diatribe to “freelancers” did the same.

    And now, thanks to a referral, I have a new blog for my Reader :) Ahhh…the joys of social media!

    @RedheadWriting

    0
    • Darren

      Thursday, September 9th, 2010 10:30

      10

      Erika, glad you found this useful and welcome!

      0
  • Travis Ulrich

    Wednesday, September 8th, 2010 23:05

    7

    One thing under “Increasing Revenues” I’d add is to make sure you’re charging enough for your services. I find a lot of graphic & web designers are bad for under-pricing their work and trying to be the cost-leader.

    0
  • Jenny

    Wednesday, September 8th, 2010 23:30

    8

    This is a topic that deserves more attention than it seems to get. Thanks for the link to the Harvard Business article. I’ve been continually reinvesting in my business and have grown out of the home-office and into a small-office, but now I worry about cash flow.

    0
  • parry

    Thursday, September 9th, 2010 06:59

    9

    thnks..gr8 post…will really help in developing my business..
    spread love…

    0
  • Phillipe Calmet Williams

    Wednesday, September 8th, 2010 23:31

    6

    Nice and useful article. Thanks for posting it :D

    0
  • Andrew

    Wednesday, September 8th, 2010 17:01

    5

    Very nice and useful articles.

    Love how it goes direct to the point and also give some examples on how to actually implement the tips!! I feel like these tips can actually work for many type of businesses, not just for web design business!!

    0
  • Hastimal Shah

    Wednesday, September 8th, 2010 05:48

    2

    Nice one.. It will be helpful to me
    As am newbie.

    0
  • Andrew

    Tuesday, September 7th, 2010 23:53

    3

    Totally agree with you about reinvesting back into the business.
    so many people I talk to dont put enough money back into this.
    great info
    many thanks

    0
  • wushi

    Wednesday, September 8th, 2010 08:17

    4

    Great article. I have a full-time job and freelance as a web designer, and never looked at it as a business, just as a money-making hobby.

    It’s really time to start approaching it as a business.

    Any articles on how to keep or get new clients?

    Props from Mozambique

    0
    • Darren

      Thursday, September 9th, 2010 10:32

      11

      About getting new clients, the key is to explore many things..not just freelance sites. Try out new things, that would be the best advice I could give.

      As for keeping, there are a lot of factors really, you can do some things, however, like fulfill (and if you have the resources, exceed their expectations), lower the ‘effort’ they need to put into the whole interaction (have everything available on a click of a button, expect what they’ll going to ask upfront and try to answer those questions etc.)

      0
  • delima

    Wednesday, November 9th, 2011 01:41

    17

    very helpful topic.i have just serious about my webdesign business now.

    0
    • Kevrel

      Tuesday, December 13th, 2011 23:34

      18

      It’s always a relief when somoene with obvious expertise answers. Thanks!

      0
  • Davies Geoffrey

    Monday, December 19th, 2011 20:34

    19

    In my own humble opinion, I think the best way to get started as web designer is to draw a good business plan and action plan. Web design business can be a lucrative venture if one can take it as you would take a normal business. The problem with most web designers out there is that they take web design as a hubby rather than a business. You should differential between the two if you must succeed as a web designer.

    Also, having a good Anchor Tag: Web Design Business Toolkit would help you get off from the ground easily.

    0
  • Mark

    Sunday, July 24th, 2011 06:03

    16

    Good article. Great tips to give a newbie some general goals.

    0
  • Brett Widmann

    Saturday, January 29th, 2011 00:51

    15

    There is a lot of great tips in this article! Thank you for the help.

    0
  • Victor

    Thursday, September 9th, 2010 22:50

    12

    Dude, you write great articles with actual substance. It’s nice to see applicable advice, and doable actions. Great post!

    Thanks

    0
  • New Pulse

    Friday, September 10th, 2010 07:16

    13

    Thanks for this useful information, I’m also dealing with web site development and design as a business. I’m sure that these tips will help me to get higher results in my business. Thanks again and keep up the good work.

    0
  • ERica

    Wednesday, October 13th, 2010 08:25

    14

    Thanks Darren, Good one

    0
  • Davies Geoffrey

    Monday, December 19th, 2011 20:34

    19

    In my own humble opinion, I think the best way to get started as web designer is to draw a good business plan and action plan. Web design business can be a lucrative venture if one can take it as you would take a normal business. The problem with most web designers out there is that they take web design as a hubby rather than a business. You should differential between the two if you must succeed as a web designer.

    Also, having a good Anchor Tag: Web Design Business Toolkit would help you get off from the ground easily.

    0
  • delima

    Wednesday, November 9th, 2011 01:41

    17

    very helpful topic.i have just serious about my webdesign business now.

    0
    • Kevrel

      Tuesday, December 13th, 2011 23:34

      18

      It’s always a relief when somoene with obvious expertise answers. Thanks!

      0
  • Mark

    Sunday, July 24th, 2011 06:03

    16

    Good article. Great tips to give a newbie some general goals.

    0
  • Brett Widmann

    Saturday, January 29th, 2011 00:51

    15

    There is a lot of great tips in this article! Thank you for the help.

    0
  • ERica

    Wednesday, October 13th, 2010 08:25

    14

    Thanks Darren, Good one

    0
  • New Pulse

    Friday, September 10th, 2010 07:16

    13

    Thanks for this useful information, I’m also dealing with web site development and design as a business. I’m sure that these tips will help me to get higher results in my business. Thanks again and keep up the good work.

    0
  • Victor

    Thursday, September 9th, 2010 22:50

    12

    Dude, you write great articles with actual substance. It’s nice to see applicable advice, and doable actions. Great post!

    Thanks

    0
  • parry

    Thursday, September 9th, 2010 06:59

    9

    thnks..gr8 post…will really help in developing my business..
    spread love…

    0
  • Jenny

    Wednesday, September 8th, 2010 23:30

    8

    This is a topic that deserves more attention than it seems to get. Thanks for the link to the Harvard Business article. I’ve been continually reinvesting in my business and have grown out of the home-office and into a small-office, but now I worry about cash flow.

    0
  • Travis Ulrich

    Wednesday, September 8th, 2010 23:05

    7

    One thing under “Increasing Revenues” I’d add is to make sure you’re charging enough for your services. I find a lot of graphic & web designers are bad for under-pricing their work and trying to be the cost-leader.

    0
  • Phillipe Calmet Williams

    Wednesday, September 8th, 2010 23:31

    6

    Nice and useful article. Thanks for posting it :D

    0
  • Andrew

    Wednesday, September 8th, 2010 17:01

    5

    Very nice and useful articles.

    Love how it goes direct to the point and also give some examples on how to actually implement the tips!! I feel like these tips can actually work for many type of businesses, not just for web design business!!

    0
  • wushi

    Wednesday, September 8th, 2010 08:17

    4

    Great article. I have a full-time job and freelance as a web designer, and never looked at it as a business, just as a money-making hobby.

    It’s really time to start approaching it as a business.

    Any articles on how to keep or get new clients?

    Props from Mozambique

    0
    • Darren

      Thursday, September 9th, 2010 10:32

      11

      About getting new clients, the key is to explore many things..not just freelance sites. Try out new things, that would be the best advice I could give.

      As for keeping, there are a lot of factors really, you can do some things, however, like fulfill (and if you have the resources, exceed their expectations), lower the ‘effort’ they need to put into the whole interaction (have everything available on a click of a button, expect what they’ll going to ask upfront and try to answer those questions etc.)

      0
  • Andrew

    Tuesday, September 7th, 2010 23:53

    3

    Totally agree with you about reinvesting back into the business.
    so many people I talk to dont put enough money back into this.
    great info
    many thanks

    0
  • Hastimal Shah

    Wednesday, September 8th, 2010 05:48

    2

    Nice one.. It will be helpful to me
    As am newbie.

    0
  • Erika Napoletano

    Wednesday, September 8th, 2010 01:15

    1

    Thank. You. Darren. This was forwarded to me on Twitter by a follower and I just want to say that I love seeing you beg your colleagues to step up their game. My recent diatribe to “freelancers” did the same.

    And now, thanks to a referral, I have a new blog for my Reader :) Ahhh…the joys of social media!

    @RedheadWriting

    0
    • Darren

      Thursday, September 9th, 2010 10:30

      10

      Erika, glad you found this useful and welcome!

      0

Comments are closed.

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