Growing a successful web design business is not as easy as producing outstanding work. In this post, I share ten lessons I have learned from 13 years of running an agency, three years of going solo, and mentoring dozens of other business owners.
One of my favourite parts of my job is mentoring other web design business owners. But I do get frustrated sometimes. I get frustrated because I see people making the same painful mistakes time and again. Mistakes that I wish I could have spared them from sooner.
It is understandable. After all, nobody teaches us how to run a web design business, and there is only limited support available. Most of us (myself included) learnt through trial and error.
In this post, I want to spare you some of the more common mistakes, by sharing the top pieces of advice I find myself talking about on a regular basis.
Successful Web Design Business Owners Know What They Want
We begin with the most fundamental question you will ever ask as a web design business owner; why are you running your business? Put another way; why don't you just work for somebody else?
Everybody starts a web design business for different reasons. Some people want to spend more time with the family, others like the idea of building a thriving business. There is no wrong or right answer. But it is essential to be clear about your underlying motivation.
It is easy to lose sight of that motivation when you are caught up in day-to-day work, and before you know it, you are miserable. For example in an attempt to bring in enough work you end up working evenings and weekends, despite the fact you aimed to spend more time with the family. In such circumstances, you might be better off getting a job!
Also, be careful that you are honest with yourself about your motivation. If you are not, you can end up going down the wrong path in your business.
For example, it is easy to think your motivation is to grow a large agency when it is to earn more money. We can believe that one leads to the other, but that isn't always the case. I make far more as an independent consultant than I ever did running an agency.
Be in control of your business finances
Talking of money, if you want to run a web design business, you will need to have a clear understanding of your finances at all times. It is not enough to just hire an accountant. You will at least need to know what your costs are, what your cash flow position is like and what your minimum charge out rate should be.
You will need to be comfortable with terms like operating profit, have money set aside for the tax-man and know your way around a profit and loss report. You will also need a buffer of cash behind you for when things go wrong.
All of this may sound scary, but it is not that bad. Some great apps make all of this stuff incredibly accessible. I use FreeAgent, but there is no shortage of alternatives.
When Running a Web Design Business, Invest in People
The next piece of advice I can offer is to invest in your staff, and that includes you. The most value any web design business has is its people. It is therefore crucial that you support them adequately.
Spend time and money ensuring their skills are up to scratch. Give them a training budget and set aside ample time for them to learn.
Also look after their wellbeing too. Don't push employees (or yourself) too hard. When you first set up a business, it is easy to justify pouring in hours working weekends and evenings. After all, you will need to work hard to build strong foundations for the business.
But you cannot live like that over the long term, and it is easy for that startup mode mentality to become the new normal. Before long you find yourself working way harder than you ever did working for somebody else and you are left wondering why you ever quit.
You also set a bad example for staff. If you come in early and leave late, your team will feel obligated to do the same. That inevitably leads to a decline in quality and reduction in efficiency.
The result is a culture that uses up people and eventually spits them out when they get a job elsewhere. Instead, you should be seeking to build a sustainable culture centred around working smarter and not longer. A culture where improving skills is as crucial as developing quality solutions for clients.
The Success of Your Web Design Business Depends on Marketing
One of the more common mistakes I observe is business owners underestimating the breadth of skills they need to run a successful company. They know they can build quality websites and so think that is enough to be a success.
Of course, in reality, there are many other required skills, not least the ability to sell and market your services. In my experience at least, the ability to market your business is what ensures long-term success.
I am not necessarily talking about traditional marketing channels. In fact, I have never observed much success in techniques like pay-per-click and cold calling. Instead, it could be anything from running a successful blog like this one to regularly attending networking events.
There is no magic formula to marketing your business because every business owner is different. Some hate public speaking; some find blogging hard work, others find the whole idea of marketing vaguely repugnant! But every business needs to be doing something and doing it regularly.
The problem is that most owners only put effort into marketing their services when things are going badly. But marketing takes time to have an impact, and so often it is too little too late.
Instead, we need to set aside regular time to market our services in whatever way is right for you. Time that you dedicate no matter how busy things get, otherwise before you know it those leads will start to dry up.
Are You Having Success Winning Reoccurring Revenue?
Many web design business owners are only a few weeks away from closing up shop. That is in part because they aren’t in control of their finances and have no buffer behind them. But it is also partly because the company lacks reoccurring revenue and so just cannot see that far ahead.
Of course, saying that your business needs reoccurring revenue is easy. Making it happen is much harder.
One area I have seen much success in is to take on the active management of websites. Clients are increasingly coming to realise that you cannot create a site and abandon them. That in truth they need to be actively managed, optimised and evolved. But, they rarely have the internal capacity or skillset to do it. They also often cannot justify hiring a full-time person to fulfil that role.
Instead of hiring internally, a growing number of companies are purchasing dedicated hours from web design businesses to ensure their site is actively managed. Under this arrangement, a member of the web design business will work on the client's site for an agreed number of hours per week. In that time they will proactively monitor and iterate the site to improve its effectiveness as well as make changes requested by the client.
How to Nurture Repeat Business With Exceptional Service
The considerable advantage of the above forms of reoccurring revenue is that they have a much lower cost of sale. No marketing activity is required to attract the work, and neither does it need a pitch or proposal. Of course, this is not just true of reoccurring revenue; it is true of any repeat business, which is why this is such an important thing to encourage.
Repeat business from existing clients should become the lifeblood of your business. If you find yourself always seeking new clients, then you are doing something wrong. You should be working with the same clients for many years in many cases.
Many web design business owners think that encouraging repeat business is down to producing quality work, but that is not the whole story. Of course, the quality of your work is a huge component, but the experience is probably more important in the long run.
Clients are not just buying a website from you; they are purchasing a service. If you are going to win repeat work from them, they will have had to enjoy the experience of working with you.
That means we need to get better at communicating often and regularly with clients. We need to improve our soft skills and involve the client more in our projects. In some cases, we also need to adjust our attitudes and stop seeing the client as an inconvenience to producing great work.
However, probably most of all, we need to get to know our clients. We need to make them feel liked and appreciated. We need to make them feel special.
There Are Damn Good Reasons to Stop Competing on Price
Of course, offering an outstanding client experience is not easy if budgets are tight, and so often they seem to be. I work with many web design businesses who have found budgets continually shrinking over recent years. Clients have come to expect more and more from them for less and less. The result is that they are forced to cut corners to remain competitive.
They find themselves in this position because they have started competing on price. Freelancers working out of their parent's garage are routinely undercutting them, and so they have lowered their prices to compete. But that is a mistake.
The days where people will hire you for your technical abilities are on the decline. There will always be somebody who can do it cheaper, either at home or abroad and the growing number of tools like Squarespace or Wix means that even that is not necessary.
The future for us as web design businesses is not in our ability to cheaply build websites; it is in our knowledge and expertise to make those sites successful.
The result is that if you are operating at the bottom of the market, it is time to start pushing upwards. To begin, target higher value clients that need a level of expertise they will not receive from cheaper sources. To do that you need to specialise.
It Is Time to Specialise Before You Become Obsolete
If higher value clients hire you for your expertise and knowledge as much as your ability to build sites, then you will need to build up sufficiently attractive skills for which they will be willing to pay a premium. That means specialising, because you are not going to be able to have a deep enough knowledge in enough areas to offer real value as a generalist.
There are two possible ways you can specialise. You can either focus on a specific set of deliverables or in working for particular sectors.
If you specialise in what you deliver, you might focus on mobile e-commerce solutions or intranets. It is not enough to concentrate on WordPress sites or similar. There are hundreds of thousands of others who could make the same claim. You need to be more specific than that.
The other option is to specialise in a small set of sectors. Every sector has its unique challenges, approaches and jargon. If you really get to know an industry well, clients will favour you because they know that you have a proven track record on similar websites.
Specialising has another advantage too. It focuses your limited marketing efforts. You can only put so much time and energy into your marketing, so it makes sense to focus those efforts on a smaller group of people. That way you have a better chance of reaching them.
But don’t misunderstand me. I am not saying you should turn away other work when you specialise. I am just saying you should focus what you become an expert in and how you market your business. After all, when things are terrible, beggars cannot be choosers.
Resist the Urge to Embrace the New. Establish Tried and Tested Approaches
Another big problem I encounter is that many of the companies I mentor have razor thin margins. They don’t seem to be making any money on the projects they run.
Part of the problem is that they are undercharging for their services. But that is not the whole story. They are also working incredibly inefficiently.
One of the biggest mistakes I see companies making in this regards is that they are always trying new things. Every project is like reinventing the wheel because they want to try out some new framework, content management system or technique.
Although I understand that the web evolves and we need to change with it, from a business perspective this sucks because it erodes margins as we struggle to implement the new.
There is a balance to be struck. Where possible we need to settle on an approach and stick to it, only reviewing that every couple of years. We should be reusing code, design assets and techniques on every project, so saving us hours of development time.
But we shouldn’t stop there. I often find that there are significant efficiency savings to be made in how we organise ourselves. From how we manage files all the way to how we spend our time. There are so many ways we can improve how we work. But we need to step back and take stock.
Please Don’t Struggle Alone
Finally, I want to encourage you to find support. Running a web design business is not easy. It can feel isolating and all-encompassing. You can feel like you are making it up as you go along, with no idea of whether you are approaching things in the right way.
Find other people in a similar situation. That doesn’t mean hiring a mentor like me, although I would be delighted if you did! It could be finding the time to attend local community events or join a slack group like Boagworld.
Whatever the case, you need to be able to bounce ideas around with other people outside the company. Without that, it is so easy to fall into a rut that can ultimately drive your business into the ground.