How To Start A Web Business And Survive

Feb 15th
posted in

An SEOBook reader, Josephbm91, outlined a problem many of us have faced: when you're starting out, it's easy for clients to walk all over you.

So let's take a look at strategies for those starting out, be it in SEO, web design, or other small, web-based businesses. Those of you who have established web businesses, it would be great if you could share your experiences and strategies in the comments :)

Making The Start

How do you make the start? You've got a computer, an internet connection, and a few ideas. How do you get from that point to a thriving business, when you have no customer base, no money and no experience?

Yeah, it's hard.

But you'll literally work through it :)

Society Is Testing You To See If You're Serious

Ask anyone in business, sports, music or any other competitive human endeavor how they got recognized in their given field. They'll most likely tell you it didn't happen overnight. Whilst talent, luck and having the right connections play a part, the one trait common to those who succeed is persistent hard work.

In Outliers, a book about how people achieve extraordinary things, Malcolm Gladwell found that to achieve mastery in anything - be it golf, webdesign, programming, music, fashion - takes roughly the same amount of time: 10,000 hours.

Thankfully, we don't need to be masters at running a small business before we start one, else no one would ever do so. But the underlying idea is sound - persistent hard work is the key to success.

Being persistent sends a message to those around you, including potential customers, that you're serious about what your doing. If they see you often enough, doing the thing you say you do, then you'll eventually be recognized for it.

So if you feel you need to prove yourself, you're right. Society actually demands you do.

What Is Worth Getting Serious About?

Many people start businesses because they enjoying doing something. Someone who plays sport may have the desire to be paid a good living wage for playing the game she loves. Someone is good at art, so he wants to be a designer.

Whilst there is nothing wrong with this approach - having a genuine passion for something will help you get through the rough times - I'm sure you can spot the potential problem. There might be a LOT of people who have a passion for the same thing. The more people who want to do something, the more effort you need to put in in order to stand out.

In terms of sport, it's relatively straighforward. The sprinter with the fastest times gets recognized and progresses. Those sprinters with slower times either get better, or go find something else to do. In business, its a little more complicated, but the principle remains the same.

You need to stand out.

Supply And Demand

Think carefully about supply and demand. Ask yourself: is there sufficient demand for what I want to do?

Let's say you want to do web design. Is there demand? Why, yes, the demand for web design services is almost infinite. New companies start every minute, and most of them will need a web presence. Established companies who already have a web presence change their design from time to time, thus creating even more demand.

All good.

Now let's look at the supply side.

How many people want to be web designers. The answer is: quite a few. In fact, it would appear that web design demand is more than met by the supply of web designers. What happens in such situations is there is a downward pressure on prices, because those who create demand have a lot of supply to choose from.

The world is oversupplied with web designers. At least, it's oversupplied by people who call themselves web designers. There's a difference, of course, between someone who owns the tools of production and those who use those tools well to solve business problems. Owning a camera does not make someone a commercial photographer. Likewise, those with the most artistic design skills may make lousy web designers if they aren't focused on business aspects.

Recognizing the reality of the situation might may you reconsider your choice of career, and opt for an area where there is heavy demand and short supply instead.

Another way to face this problem is to differentiate. Can you do something better than other designers? You may be highly skilled in contemporary graphic design, in which case you may choose to place strong emphasis on displaying your portfolio, and target the type of clients who appreciate - and will pay for - this expertise.

You may have, or can acquire, detailed market knowledge in one particular niche - i.e. travel sites, real estate sites, etc. Clients, generally speaking, are a lot more comfortable with providers who understand their area of business. You have an advantage if you can speak their language, rather than just the self-absorbed language of design forums.

Can you focus on a geographic area? i.e. the immediate area where you live. Sometimes, people want to deal with someone local.

What is the thing you can do for which there is a market? If there are too many competitors in that market, then slice that market up until you can find a niche. Aim to be top of that niche. Then put in persistent effort working that niche in order to build reputation.

Chris Pearson gave away a number of popular free Wordpress themes on his site, created designs for popular sites (including Copyblogger & SEO Book), and then created the Thesis theme for web developers, which has since done 7 figures in sales volume. Yes Wordpress themes have become commoditized, but due to his strong marketing and continual increase in product value he was able to differentiate & build a solid business model. In his own words on starting out, Chris wrote:

Before I launched Thesis, I created a few free WordPress themes that became extremely popular. Although these themes defined the early stages of my career, they are really nothing more than visible markers of a learning process that continues today with Thesis.

Establishing Yourself

Once you've decided on an angle, you then need to establish yourself. Society wants to see how serious you are.

It is very difficult to market a business without some form of track record. But every business needs to start somewhere, and they don't start with a track record. So, the most important task for someone starting out - in any occupation - is to get one.

One way to get a track record is to treat your first few jobs as a marketing cost. This is the cost of establishing a reputation, and if you make any money at all from these first few jobs, it's a bonus. The aim is to get referrals and a portfolio of work.

Approach charities or small local business who need a web presence and offer your services for a deeply discounted rate, or for free. It's a win-win for both parties, because they may not be able to afford web design, and you need their testimonials and experience.

Be sure to make it clear that the job is being done at a discounted rate, and let them know what your usual rate it. This way, they'll perceive value, and won't be in for a shock when you ramp your prices up for any future work. Focus on building a positive relationship with these clients. If they are happy with your work, they may well refer you to others.

Once you have a track record, the risk to a future customer of hiring you is diminished. You become a known quantity, which puts you above the wanna-bes.

Is this working for free? Some might consider it that way, but it could also be seen as just another marketing expense, like advertising. Many businesses, including big, established businesses, give away products and services - in the form of loss leaders - in order to help get their foot in the door. People who train for careers pay to learn, whilst as a freelancer, you can potentially learn on the job for free. Clients can teach you a lot about your own business , especially where your strengths and weaknesses lie.

Pricing

It's important not to stay cheap or free, however.

Some think the easiest way to get business is to undercut competitors on price. This can be a self defeating strategy, especially for the sole operator, for a number of reasons:

You get cheap clients - people who seek the lowest price probably aren't placing much value on what you do. These type of clients, ironically, can also be the most demanding. They want the most for the least, and will often push you on the amount of work you deliver.

Someone else can always undercut you. There will always be a competitor who has a cost base lower than you do. From there, you're locked in a no-win race to the bottom.

If it looks cheap, it is cheap. It's human nature not to value something that is cheap, and place a lot of value on something that is expensive. In the book How We Decide, by Jonah Lehrer, the author describes an experiment conducted with wine. Participants were told one bottle was cheap and one was expensive. The expensive bottle got rave reviews from tasters, and the cheap one - not so good. However, the labels were switched. The expensive wine was actually the cheap wine.

Perception counts for a lot.

So if your angle is cheap, make sure your margins are still high enough to sustain you. Only you know how much you need to survive at any given time.

Alternatively, target ruthlessly, either by offering a superior, needed product, more niche know-how, or find some other angle where there is untapped demand. Be prepared to prove your worth by providing case studies describing how you've solved people's business problems in the past.

Got any other tips for those starting out? It would be great if you can share what you know :)

Published: February 15, 2010

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Comments

February 15, 2010 - 6:04am

Great post Peter, really nice to see you back.
This point is the one I also stress to the freelancers I talk to: the most important task for someone starting out - in any occupation - is to get [a track record].
I think when you are starting out, people don't want to feel they are giving you a break. They want to feel like others have used you before, and won as a result - so accommodate this for them however you can do it. I targeted non-profits that resonated with me on a personal level (feed the passions if not the purse) and by being published there (for free)it eventually got my foot wedged in a business door. One door led to the next, and it built well.
Testimonials are the other thing that can work really well for you when you are just starting out, for the same reason. Prove you are experienced, and obtaining more experience is simply a natural course of business.
Also, if you don't have any work samples, school samples (like papers you wrote, or fine art you did) does not substitute - don't use it. It is a megaphone that says "I have no experience" and closes the door very quickly on you in most situations. They tell you in school it shows drive and ambition, but they are bloated with useless academia.

And limit your emails and any conversations to be brief, succinct and on topic. They don't care about you (sorry - suck it up) - they care about doing their job well. If you can help that happen, you will illustrate it in short, meaningful and insightful communications, and they will notice. Every conversation matters. Be very careful, and very solid in how you communicate.
To me, when I struck out to do this on my own, I simply would not allow anything else to be possible. I believed that I could do this, and do this well, even when doors were closed in my face and the people behind them whispered "No way." I simply stuck to it, kept learning, and kept trying. Cold calls suck but for me they paid bills.
I also think it takes about 3 years to make your business take root...and the younger/less experienced you are, the longer your road may be. But stay on it - the pay-off rocks.

February 15, 2010 - 8:33am

Wow, thank you so much for all this information! I really need to rethink my business strategy. Since I currently don't need income to sustain myself (yay mom), I've been focusing solely on undercutting local designers. I guess the problem with that is it's easy to not identify what value you'll provide to your customers. You're just saying "the value of my service is the value of their service but cheaper" without defining what that value really is. I really need to consider what I can do besides just code and make a layout.

February 15, 2010 - 6:57pm

Great stuff. Experience, differentiation of services, learning on the job, and effective pricing are all important elements in creating an online business.

I would add (from my own humbling experiences):

1) Treat your first client as you will your 100th client - Establish your business patterns early on. Don't be afraid to adjust as the years go by, but by setting up your work ethic, client management, vision, and boundaries from the start, you ingrain these things into your "corporate culture" until they become second nature.

2) You HAVE to learn how to run a business - Taxes, payroll, vendors, contractors, expenses, invoices, marketing, time management, employees, etc. You're going to have to learn to separate your creative side from your business side. The vast majority of entrepreneurs fail because they can't run a business.

3) Be patient - Just because you have two clients your first year doesn't mean you won't have 20 the next year. So many people start business out of desperation. If you can't handle lean times in the beginning, rethink your time line. Aaron slept in his car to meet Seth Godin (or something like that). What he didn't do was give up because he wasn't making a living from SEO an hour after he decided he wanted to. Like Peter said, work hard and you'll see the benefits.

My own business is just now starting to achieve a level of success 14 months later. Clients beget clients, great work begets higher fees, experience begets trust. It's, like, biblical or something.

-Zach

P.S. Be professional! NOTHING will kill a service-based business faster than being unprofessional.

February 15, 2010 - 7:02pm

They don't care about you (sorry - suck it up) - they care about doing their job well.

.

That's a big one. Thanks Martypants.

February 16, 2010 - 7:45am

wow...thank you Aaron. This information is really valuable. I want to start o bussines of my own real soon and I had my uncertitudes but now I'm confident.
Thanks to Zach Wyrick too, for the Quick Tips.

February 18, 2010 - 3:10pm

my site is about programming,

address is bbs.prog365.com
I modify the format of the link, was it favorite to google?

February 18, 2010 - 9:18pm

In Outliers, a book about how people achieve extraordinary things, Malcolm Gladwell found that to achieve mastery in anything - be it golf, webdesign, programming, music, fashion - takes roughly the same amount of time: 10,000 hours.

I remember reading about that book (didnt end up reading it)...and I thought the "10,000 hours"-rule sucked :-).

I don't know where he got the data from (so admittedly, this is a bit of a guess on my behalf), but it reminds me of 2 things:

- Aaron mentioning in his SEObook, that people sometimes came up with concepts that were easy to spread, so they spread further. 10,000 hours is a surprisingly easy number to spread (wouldnt be surprised if we were dealing with a biased sample or something like that). Okay, now I'm gonna sound like an a**, and I really dont mean to, because i enjoy your posts, Peter :-)...I really hope you don't get this wrong, because like I said I do enjoy your posts :-)

but would you have given him distribution for his book, if it had not included the 10,000 hours rule? I bet not :-)

- I would simply be surprised if it didnt vary significantly between different fields, simply because different kinds of tasks are invovled, and in one field natural ability might be muhc more of the way than in other fields.

Take sprinting for example - Donovan Bailey (is that his name? hope im not mixing anything up) started sprinting only in his early 20's and was world class relatively soon after that (He also was a basketball player in college before, so there might have been a synergic effect).

I would say that for sprinting you don't need to know a bunch of different techniques - just the correct sprinting technique & practicing that one skill to death. I'm not saying this comes quickly (there's probably a saturation effect after a while, and it then takes persistence :-)), but I would be highly surprised if it took roughly the same amount of hours to be highly successful across a wide variey of fields, if the underlying skills, how they can be improved, etc. are so different... that would basically be a major coincidence.

...

Oh and as for the persistence thing. I think it is very important in all fields, but I think in some fields - "normal careers" it is much harder to use persistence to totally beat out the competition, b/c most of the competition is motivated by "social forces/pressure".

The vast majority of people I know sorta look at me like I'm from mars if I tell them I learned something that I was not forced to learn in my free-time (like a foreign language in school, back when everybody still had plenty of free-time).

However the same people have absolutely no difficulty studying their butts of at college cramming in material day and night for 2 months / semester, b/c they're motivated by social pressures (or well maybe the fear of not having food on the table is a bigger concern than the social pressures, but you get the idea :-)).

I really find it surprising how people can be so extreme..and I think most people are like that.

In a job for which degrees & a fixed framework exist (engineer,etc.), I think using persistence to beat out the competition is much harder than in other fields. Of course it helps, but the vast majority of the competition in that field will get their degree and work for 40 hours / week for the rest of their life anyway.

In a career in SEO (which you need to teach yourself) or running your own business, etc. I think persistence is (even) more useful.

In other words, just felt like saying that if you look at your strengths and weaknesses and persistence is one of your main advantages, you'd probably have an easier time crushing the c ompetition in a field where people can and will give up (and success takes patience) - a career in SEO for example. In fields for which you can get a college degree, and then simply work in the field for the rest of your life (and you feel safe, because everyone else does just that), only a tiny percentage of the competition ever gives up (once they have their degree) b/c of a lack of persistence.

PS: I still hope you didn't take offense Peter, b/c I didnt mean to give any, at all :-).

EDIT: sorry, I didnt keep in mind that this post actually was about starting and running a business - one of the careers I "identified" as being one of those where persistence is big(ger than in 9-to-5's).

March 15, 2010 - 8:42pm

Web companies have a reputation for poor service and broken promises. If you are going to call a customer at a specific time, then call them. If you say something will be done by a specific time, make sure you do everything you can to deliver for that time or contact the customer and tell what is happening.

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