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August 11, 2004
The Business of Web Design
When I first started writing HTML years ago, this thought was always in the back of my mind that I would one day go into business for myself. I've watched my parents successfully run their own company since I was living with them in high school. I've seen the ups and downs, the long crazy hours, the infighting, the life of owning your own business (or it owning you). Despite all of that, I still want my own.
I've been incredibly fortunate to work inside big corporate America for the last 5 years while I learned (and continue to learn) the many technologies, processes, and skills that have helped me become a pretty damned good web professional. Its been a nice, safe environment to grow and sharpen my skills, and learn the intricacies of client and management interaction, and how to organize myself and my projects. I feel I've accomplished most everything I want to with in my current path and its time to take the next step. And that next step is inevitably outside my comfy confines, and into the reality TV show of the small web firm.
Here's where I kinda screwed myself. I have zero idea on where to start with an actual business. Not the running of the firm itself, but the actual business end of it as in accounting, pricing, billing, etc.
Pricing
This is my biggest concern. I have little to no idea about the pricing structures and methods of the web design businesses in my area. And, as is explained very plainly on the HWG website, it is illegal to gather and publish this information in any form. So, where the hell do I start with this? The HWG and SitePoint suggest using a formula to derive a rate from a salary range for your service. This is all well and good for freelance work, but what about an actual firm? How do you model a clear, consistent, and competitive pricing structure?
I found that B2B Online has a price index, but its 2 years old. And that seems to be a theme in most of the writing about web as business, its all old.
Some of the Old Rules May Not Apply Anymore
Most of the information I find is either skewed heavily toward freelance or its all pre-bubble content that I don't trust it to accurately reflect the latest guidelines and business strategies. Even the best writing on web business at A List Apart is from 2000.
Even further, I think most of the information is biased to more design-centric coastal regions, which is very different in economy and availability of designers to the plains of Colorado where I live.
I'm quite certain the web design business has changed drastically since the over-inflated businesses of yore exploded, leaving only the willing to pick up the crumbs, and I'm really interested to know how they accomplished it. Did they choose new business models? How did they still profit while dealing with a world now skeptical and much more scrutinous of the internet? Can they still wear Birkenstock's and yesterday's t-shirt to work?
An Open Question
I will be playing the role of Matt Drudge over the next couple of months, investigating other web firms locally to discern how they work. But I would also like to open this question up to the freelance/small firm community at large:
- If you own a company, what resources or formulas did you use to use to come up with your pricing model?
- Do you use a straight fee, or some sort of blended fee, tiering pricing according to the service being provided?
- Do you have a specific story or anecdote about how your business changed pre vs. post bubble?
- What is your most effective form of marketing?
This is just the first volley. I expect to have lot more questions in the near future, and I'm looking forward to sharing my findings with and methods with the rest of you.
