Seven reasons to start a web development business

Evan Kimbrell
A free video tutorial from Evan Kimbrell
Founder of Sprintkick | Ex-VC | Ex-startup founder
4.4 instructor rating • 22 courses • 593,014 students

Learn more from the full course

Running a Web Development Business: The Complete Guide

Learn how to start and grow a successful web development business. Get up & running and making sales in under a week.

11:00:44 of on-demand video • Updated March 2021

  • Understand how development stacks work and pick which stack is ideal for you
  • Predict the timeline for starting your business
  • Decide between hiring in-house employees or contractors for your business
  • Decide between offering generalized or specialized web services
  • Choose a winning combination of traits that you want your business to convey
  • Understand the different types of contractors and where to find them
  • Effectively allocate your time
  • Assess the core components of successful web development firms
  • Find cheap and professional ways of creating an online presence
  • Select a name that's attractive and conveys your core messaging
  • Master the biggest platforms for contracting: Freelancer and Upwork
  • Use advanced search techniques to fill the gaps of your development work with contractors
  • Create and organize a professional and effective portfolio
  • Use a few uncommon techniques to grow your portfolio faster
  • Utilize 15 different strategies to attract potential clients
  • Create three different types of proposals and know when to use them
  • Use tools like Proposify and Nusii to create and streamline proposals
  • Strategically use ballpark estimates to close clients sooner
  • Manage clients effectively while using your time efficiently
  • Keep client retention rates high and minimize churn
  • Sniff out a client's budget before they tell you
  • Use advanced best practices to maintain your businesses growth
  • Recognize client red flags before you start working with them
  • Figure out the optimal pricing configuration for your rates
  • Handle client meetings in person
  • Gauge when clients are not likely to accept an estimate or proposal
  • Make long-term decisions about which clients to retain and which to lose
  • Integrate Asana into your workflow to increase transparency and efficiency
  • Manage a team of subcontractors online
English [Auto] Hey guys. Welcome back to the course so let's go over seven reasons why you should start a web and or mobile application business. Honestly there's a lot of reasons why you should start a development business. I've picked the top seven the seven that have I mean the most to me and have meant the most to everybody here at Sprint. So some of the perks of starting a development business are pretty obvious and some of them are not so much so much to cover a little bit of the obvious and a little bit of the not so obvious. All right. So let's start with number one. So number one it's actually very very rewarding work. Tell her I mean being able to have someone come to you with the new idea here their idea from scratch and then to see that go all the way from that napkin on a table to something that you can actually see play with and then you start seeing people interact with that is actually very redeeming. You feel like a creator. People who are entrepreneurs have always had a horrible problem with this. We always think of ideas and how many of your ideas have you actually seen go all the way through the process and get to the point where it's actually out in the market not enough I'd say for me probably one in a thousand. That's just how I work. But when you run a web or mobile application development studio you get to see all these ideas come in the door and when they come out the door the real they're alive and they're walking. You get to really put your finger on the pulse of what's popular what's hot what's not what flies and what dies. You got to stay up to date with all sorts of breaking things in the web and in the mobile development world. You get to see what's working what's new what's out the door what's old news. If you're someone who loves tech it's just a very very engaging and fun way to make money. Now number two a little bit less obvious. The bulk of money in any web or mobile project is in its development. Now what I mean by that every Web online product or mobile application product has multiple sections to it. Typically you start with the conception stage then you move to a design phase then in development and then a launch. Now conception and launch those are two things that are typically handled in-house by your client. But design and development are the two that are most frequently outsourced or contracted out. Now within those four phases the bulk of the money goes to design and development. Again like I said the other two are handled internally so every different company handles that in some different way. Some of them skip those processes entirely. Now within design and development typically the vast majority of that work thats going to be in development not in design design really can it can run the gamut if you're if you're designing something that's really small it could cost you $500. Maybe you are designing something that's big and you need branding with it. In that case that could cost you a couple thousand dollars maybe a big fancy studio might charge you $5000 plus but with a development project it is not very unrealistic to have a project that's well over $5000. Now when you design something for five hundred dollars the development side of that could easily be a $10000 project. Let's take for an example. Let's say we're building a mobile application and we need to have it branded and we need to have it completely designed and then developed from concept all the way to deployment. Now the design and the branding and the logo and the launch icon that could cost $5000 the development could cost anywhere from $10000 to $100000. If I had $100000 project it would probably cut down the line around 85 percent of it goes to development and about 15 percent of it goes to design. So developers in the development side will get the bulk of the money. That's where the real opportunity to make a lot of money into scale is number three and this is something a lot of people don't realize. Margins in the web and mobile development are rocking. Amazing typical product businesses out there could have margins in 10 to 20 percent of retail items have margins that are as low as 5 percent. An airline typically has a margin anywhere from 2 percent to 4 percent of custom web or mobile development project. The margins can be as low as 25 percent and as high as 70 percent. Now obviously not going to tell you exactly what our margins here at Sprint. When we first started out they were literally 50 50. Now they're a little bit different but they're healthy margins. Now if you're somebody is coming at this and you're non-technical you're going to be subcontracting primarily when you subcontract your margins are clear and simple. And they usually fit within that 25 to 70 percent range if you're developing it yourself. Well it's hard to think of margins but what ends up happening is you can pay yourself a fantastic wage that you never would have gotten if it was just you freelancing on your own. The best part about doing this as a developer it's like you can magically double yourself all of a sudden if you make $50 an hour you start taking a larger project have someone work next to you and then someone work next to that person. It's all of a sudden you're like you've multiplied yourself. And like if you multiplied yourself you are going to get a lot more done and you're also going to make a lot more money. Number four you set yourself up for startup success in the future. Now what do I mean by that. Well think about it. You have spent all this time putting together a well oiled slick professional team to make awesome web mobile projects right. You go through trials and tribulations you work with different freelancers you figure out who's good at what you piece them together. You create an awesome system and an awesome product. Now when you have an idea all you have to do is flip the switch and point that system at whatever it is you're trying to build. Regular founders they take months to find the right people and they could potentially take years to figure out who fits in their organization who doesn't. What does everybody good at. What are we capable of building you as someone who runs a development business. You have that pretty much from day one when ever you want to start your own thing. Think of it like a factory you are producing product after product after product and it's getting better and better and better. All you have to do is decide that the next one coming off the production line is yours. Great example of this. 37 Signals company out of Chicago started as a web development studio. They created base camp as a project to solve a problem they had internally. Then they created some other ones like camp fire and high rise. Now they're a billion dollar product company. Number five you're going to get exposure to a wide variety of online disciplines disciplines that it's very hard and take years and years to get experience with. You're going to learn project management you're going to learn client management you're going to learn sales management you're going to learn how to manage accounts you're going to learn how to hire how to fire how to vet people how to recruit them how to figure out who's good and who's not. You're going to develop basic skills in product management and you X user experience you are after all in charge of making a successful product that successful product involves understanding user experience understanding the product managing IT managing its feature set. These are all very very in-demand skills skills that if this doesn't work out for you you can go and pick up a job in any of them. You're going to learn how to go out and get your own sales. You're going to learn how to prospect clients you're going to learn how do you get the good clients and how to keep them. You got to learn the basics of account management. You're going to get a wide variety of exposure to different technologies you're really going to understand your craft at the end of this even if you're not a developer. You're going to talk like a developer. You're going to be able to actually communicate with your development team. You know what works and what doesn't work. You know you're in a perfect situation to assess what's hot what's not. So how else would you possibly get experience in all of these rounds. I can't think of really anywhere else you could do this. Number six the opportunity to set it and forget it. So for those of you out there that are looking for a passive income source actually web development mobile development it's actually a great opportunity. Now you probably think to yourself what do you mean are you constantly busy bringing in new clients managing them managing projects will not actually if you wanted this to be a passive income source you would just work on getting a couple good clients and then making sure that you have your process down and you continue to work with them and retain them if that's the case and you work with agile methodologies which we'll cover later in the course you're going to be literally checking in on your projects every two weeks when you get paid. So that's it. You have two clients three clients four clients that means you have four meetings every other Friday. The rest of the time the other two weeks you do whatever you want. I used to run Sprint kick were living in India then living in Thailand then traveling all over the world number seven. And I think honestly this is one of the best reasons because it's the most immediate. It's something that can help you today. For those of you out there that are freelancers people out there who run a consulting business people who do marketing for their own clients if you do design for your own clients maybe you run an NCO outfit. Imagine the power of being able to say to your clients and you've already gone through the hard work of getting Hey what I can also do the development for you. Now remember development is the bulk of the money. Now we're also going to cover later in the course. Reasons why clients stick with you. And one of the biggest reasons why they'll stick with you is because you can take care of all their needs. Now all of a sudden you're one step farther doing full service. You can say not only can design it I can also develop it. Now if you're not a developer don't worry we're going to cover this from the non-technical perspective as well as the technical perspective. I'm going to show you how you can contract it out and build a really good team to do this. Even if you can't program. So this is one of the best self-employment small business consulting hacks I've ever seen. I've seen as CEO outfits or designers that go from making $3000 a month with the same with the clients that go to making ten or fifteen thousand dollars a month for the same exact client. So they're not even doing anything. They're not creating new relationships they're not even doing sales they're just offering another service. OK you guys have seven reasons wasn't enough. You're just going to have to watch the rest of the course and come up with your own reasons. I'm excited to teach this course so let's get into it. I'll see in the next lecture.