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Moving from a "Freelancer" to a Real Business

by kemdev
13 replies
This is one of those hurdles I can't quite seem to get past. I've been surviving on getting clients here and there for three years now, and at this point I feel like I'm at a crossroads. I'm not doing terrible - I'm surviving on my 'business' - but I'm not really getting anywhere. My business isn't growing at any measurable pace and I'm in a constant state of feast and famine. I'll go out and get some clients when I need to and live off the income until I need to go out and get more. It can be extremely stressful - especially when tax season comes around or when unexpected expenditures pop up. And at this point I'm basically fed up. This needs to either grow or die - quick.

I'm the typical offliner. I build and promote websites for small businesses. My 'hook' of course is that the websites I build lead to more phone calls and sales. And they actually do - I'm pretty good at building out a property and driving traffic to it. My typical sale is around $1,500 but I've had a handful at $3,500 + a monthly fee. Truth be told I'm on the best terms with the larger clients and they've given me more repeat work. They're also getting the best results from their sites.

I've gotten all of my clientele so far from cold calls, referrals, and personal connections. Two sales last year came in from my personal website. I don't really do a whole lot of lead generation for myself, which I know is a mistake. Typically what happens when I run out of work for an extended period of time is I hit the phones hard. This happened a couple months back but I didn't strike any gold. Luckily some repeat business came in from currents clients and I was able to stay afloat. Wasn't a great situation to be in though.

I work out of my room and it's just me. I delegate a few time consuming tasks away but the vast majority of the work is done by me. Profit from a single project is at least 90% and I could handle 10 or more a month if I had them. My problem is I'm just running in place most of the time.

I'll be completely honest - I don't know a damn thing about what it takes to start a legit business. I have a high school education. I grew up on all this Internet Marketing stuff. I'm 22 now, but I've been reading about this stuff and building websites and playing around since I was in high school. I use to sell WSOs a long time ago (don't remind me) and buy into all the "anyone can do this in 1-hour a day while sitting on your couch eating pizza" bullshit that flies around here. Now that I've actually done something business related, I know that's not the case.

I guess I'm just looking for some guidance. I have a good service and I know how to sell it (decently at least). I just don't know how to translate that into something that can grow and do more than just sustain me. I want a brand, you know? I live in a fairly small city, and dammit I want people to recognize my business. I want to be a part of that legitimate 'business community' and not just be the kid who does some website stuff.

What's it take to make that leap? How did you do it?
#business #freelancer #moving #real
  • Profile picture of the author iAmNameLess
    Well you already know what it takes to make that leap. You've answered the question yourself within the question you asked.

    You've neglected lead generation but you're surprised that you're not growing at a measurable pace. One important detail you left out though, is whether you're growing at all or if you're declining some here and there?

    You have to generate leads regularly. Maybe look into more automated ways of doing it.

    Another thing... you mentioned you have SOME clients that are paying a monthly fee. You have got to get your residual income up a bit. How can you do that? Or did I misunderstand and you actually have ALL your clients paying already? Either way, how can you increase that?

    You're selling websites, but the hook is that it's going to make their phone ring, so you're not simply building a website, you're doing extra work to make sure it works out for them. These clients would be willing to pay you a monthly fee.

    What about hosting? Are you making money off hosting? If not, you should start. What about SEO? You could sell your existing websites at the same price and add an on going monthly SEO maintenance deal to it to bring in residual income.

    Ideally, you want to live off of your residuals. The extra one time sales income should be reinvested into a medium of lead generation that you can scale.
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  • Profile picture of the author iAmNameLess
    If you don't mind me asking, what is your average monthly income? If you don't want to display it on here for everyone to see, could you PM me? I'm curious about which stage you're really at.
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    • Profile picture of the author kemdev
      Originally Posted by iAmNameLess View Post

      Another thing... you mentioned you have SOME clients that are paying a monthly fee. You have got to get your residual income up a bit. How can you do that? Or did I misunderstand and you actually have ALL your clients paying already? Either way, how can you increase that?

      What about hosting? Are you making money off hosting? If not, you should start. What about SEO? You could sell your existing websites at the same price and add an on going monthly SEO maintenance deal to it to bring in residual income.

      Ideally, you want to live off of your residuals. The extra one time sales income should be reinvested into a medium of lead generation that you can scale.
      I don't have all my clients paying monthly because honestly not all of them need it. When I say monthly fee, there is always an end point as well. For instance my larger package is $3,500 + $299 for 3-6 months, depending on what I think is necessary to rank and get a lot of traffic. I haven't yet sold a monthly package that has an indefinite time period attached.

      Originally Posted by iAmNameLess View Post

      If you don't mind me asking, what is your average monthly income? If you don't want to display it on here for everyone to see, could you PM me? I'm curious about which stage you're really at.
      Monthly income? I really couldn't say. Like I said it's a brutal cycle of feast and famine. Last year I made roughly 28k. The year before that close to 34k, so I guess things are on the downslope.
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      • Profile picture of the author iAmNameLess
        Originally Posted by kemdev View Post

        I don't have all my clients paying monthly because honestly not all of them need it. When I say monthly fee, there is always an end point as well. For instance my larger package is $3,500 + $299 for 3-6 months, depending on what I think is necessary to rank and get a lot of traffic. I haven't yet sold a monthly package that has an indefinite time period attached.



        Monthly income? I really couldn't say. Like I said it's a brutal cycle of feast and famine. Last year I made roughly 28k. The year before that close to 34k, so I guess things are on the downslope.
        Are you hosting these sites yourself? I think you should try to implement a $50/mo maintenance fee that includes hosting... It's not a huge fee, but just 10 clients doing it, adds $6,000/year in income, which was the difference between last year and the year before, for you. If you implement that and only get 10 clients a year doing it, that's an increase in 6K each year.
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  • Profile picture of the author DABK
    If you got those 10 or more clients, given your set up, you'd still not be a business (though you'd be making more money).

    A business is a set of systems that make money even if the owner isn't working every day.

    To get a real business, think about this: Can you sell your systems to anybody? How much would somebody pay you for your business, so you can walk away?

    Read Gerber's book The E-Myth Revisited: Why Most Small Businesses...The E-Myth Revisited: Why Most Small Businesses... .

    Originally Posted by kemdev View Post

    Profit from a single project is at least 90% and I could handle 10 or more a month if I had them.
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  • Profile picture of the author kemdev
    Right now I'm hosting at $200/year. Probably half my clients are on my hosting now. Before I would just refer them to HostMonster and pick up the commission. Do you charge that monthly or yearly? I couldn't see someone paying an extra $600 while dropping $1,500 on the main package.
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    • Profile picture of the author iAmNameLess
      Originally Posted by kemdev View Post

      Right now I'm hosting at $200/year. Probably half my clients are on my hosting now. Before I would just refer them to HostMonster and pick up the commission. Do you charge that monthly or yearly? I couldn't see someone paying an extra $600 while dropping $1,500 on the main package.
      Both monthly and yearly. Sometimes I will give a $100 off special if they pay yearly.

      You said something very important.... you can't see someone paying an extra $600 while dropping $1,500 on the main package...

      There are people charging $500 that can't see anyone paying $1,500 for the same thing.
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      • Profile picture of the author savidge4
        Originally Posted by iAmNameLess View Post

        There are people charging $500 that can't see anyone paying $1,500 for the same thing.
        I had clients that were paying close to $600 for monthly services on a $1500 build. If you "Can't See it" you will always have an issue charging it. Bottom line.. do you think what you provide gives VALUE?

        As iAm said, you need to REALLY get into the hosting thing. Keep in mind when "hosting" is brought up, its not payment for having the site up.. its a small collection of services. site back ups, periodic changes at no charge, etc. It really does have VALUE. and in terms of value to you 10 clients is $6000 per year, build to 20 clients and its now $12K per year... build to 50 clients and it is equals to what you made last year... $30,000.

        The one thing that stuck out for me reading your post, was the pattern of work. You get a few jobs when things got tight, and then you slacked off, things got tight and you went out and got work. Consistency and patterns of behavior are the key to success. I personally dedicate an allotted amount of time every day for the process of sales.

        For me personally it was hard to get into this pattern. I had stuff to do, jobs to complete, etc. But right down to brass tacks... no sales, no work, no income. And if you are not consistently producing sales, then you are not consistently working, and you will consistently have little or no income.

        To get from what you call a "freelancer" to becoming a business, you have to get to YOUR breaking point. simply put, there is not enough time in the day for YOU to handle the work at hand. This is when the option of growth should come into play.

        An option that is not spoken about much here... is actually using freelance sites to your advantage. do you have accounts with Freelancer and elance and the like? I personally use these sites all the time. Time spent in quoting work is far less than hitting the streets getting work. And seriously don't think because you are on these sites looking for work that you need to discount your services. At first it surprised me that that there are actually people in the world that do not take the least expensive option. Many times over I was the most expensive option... it comes down to VALUE, and the way you communicate it!
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  • Profile picture of the author kemdev
    I understand both your points. I use to sell for $500 and never thought anyone would pay more, so I get it. I just made a list of all the clients not currently on my hosting plan. I plan to call each Monday and offer it at $250/year as that's what the majority of my hosting clients are already paying.

    Moving forward I'm gonna charge $39.99/mo. or a flat $350/year.

    I hadn't really thought of using freelance sites. I suppose I could knock $500 off to at least be competitive. Prices in those marketplaces are crazy low. And again I build citations and twenty other things that are useful for small business specifically, so I don't know how the market would respond there. I suppose it's worth a shot though.
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    • Profile picture of the author savidge4
      Originally Posted by kemdev View Post

      I hadn't really thought of using freelance sites. I suppose I could knock $500 off to at least be competitive. Prices in those marketplaces are crazy low. And again I build citations and twenty other things that are useful for small business specifically, so I don't know how the market would respond there. I suppose it's worth a shot though.

      Like I said.. don't think you have to knock back your price. Selling there is no different than selling anywhere else. Present VALUE ( the list of 20 things you do ) and even though your price may be greater... so is the VALUE offered. you don't want the cheap clients.. you want the ones that understand and VALUE of what it is you are offering! Call it pre-qualifying if you like. Let the cheap skates go with offshore developers, and set a standard for yourself and your business based on the services and VALUE you provide.


      Just because.. ill say it again VALUE hahaha
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  • Profile picture of the author Luke Dennison
    Feast and Famine usually comes about when you have a bottleneck in your sales pipeline.

    If you're getting clients, you're doing good, but you need to be constantly getting leads and selling to them.

    I bet you just get a client, and concentrate on doing the work for them, and then when its done, you start cold calling again.

    Always be on the lookout for new clients, even if you are really busy. You may even want to outsource some lead generation, or just stick to sales and hire someone to do the SEO.
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    • Profile picture of the author iAmNameLess
      Originally Posted by Luke Dennison View Post

      Feast and Famine usually comes about when you have a bottleneck in your sales pipeline.

      If you're getting clients, you're doing good, but you need to be constantly getting leads and selling to them.

      I bet you just get a client, and concentrate on doing the work for them, and then when its done, you start cold calling again.

      Always be on the lookout for new clients, even if you are really busy. You may even want to outsource some lead generation, or just stick to sales and hire someone to do the SEO.
      Yeah he's at that awkward stage where you need to balance your time between delivery, lead generation and sales. It's easier said than done. This was one of my biggest struggles when I started out as well.
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  • Profile picture of the author gettingricherdaily
    Is there any kind of business?

    I don't know a damn thing about what it takes to start a legit business
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