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Running a successful web development business
The document outlines the essential steps and considerations for running a successful web development business, emphasizing planning, market research, and establishing effective management practices. Key aspects include choosing the right business structure, focusing on customer service, and the importance of developing sales skills and managing projects effectively. It also highlights the significance of adapting business strategies and evolving the business to meet client needs and market demands.
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Running a successful web development business
- 1. Running a successfulweb development business Russell Searle 20 Jan 2013
- 2. Introduction • Introduction • Planning and getting started • Getting established • Selling your services • Running your business • Growing and expanding
- 3. What is success? Myversion of success No boss Business 100% based on free open source products Work when we choose for clients we choose Work from home or anywhere in the world Kids’ educations paid for Kids moved out Own our house Investments No debt
- 4. Planning and gettingstarted • Introduction • Planning and getting started • Getting established • Selling your services • Running your business • Growing and expanding
- 5. Hurdles Not everyone issuited to running a business Do you care more about security or freedom? Freelancer or business? Freelancers interested in the work itself => resist hiring Business focus on managed teams => hire best people High failure rate Potentially very serious consequences #1 cause of failure: bad management #2 cause of failure: undercapitalised Must have business development and management skills Either have them already or … Be committed to developing them
- 6. Market research Research yourmarket and competition Business volumes Market rates Margins Market segments Industry segments …etc
- 7. Develop your strategy SWOT Vision Focus Specialisations Valueproposition Measurable, time-bound goals Action plan Contingencies Reserves
- 8. Support services Accountant Lawyer ormaybe legal documents resource Local business peers or business network Small business support services e.g. Business Victoria, AGIMO, MMV Advisors / mentors Technical resources to complement your skills Graphics designers and artists Photographers Marketing support Web developers
- 9. Set up yourbusiness #1 Choose a safe, smart business name Use ASIC company search Register your business name Business structure Best options: sole trader or single-director company Limited Liability Company (LLC, Pty Ltd company) Avoid partnerships, specially with relatives and friends Register with the Australian tax Office Register for ABN and GST Register ACN for an LLC
- 10. Set up yourbusiness #2 Bank account Consider insurance Professional indemnity Public liability Home and contents Life insurance Customer contracts Employee/contractor contracts, if required Consider intellectual property risks Capital and operating funds
- 11. Start your engines#1 • Reach out to contacts and prospects • Your network will provide > 80% of your business • Organise your calendar • Build your website and your points of presence • Implement a CRM • Put serious work into your lead generation and sales skills • Budget > 10% of your work week to business development • Get used to the discipline of ongoing pipeline management
- 12. Start your engines#2 • Work your business • Treat it like a job, you are the boss and you should view your work performance as a boss would • Do unpleasant, boring tasks on a timetable • Use the UI grid (urgent-important) to manage your time. • Cash flow is king. Profitability is the state of grace. • If your business does not achieve a minimum 10% profit on top of all direct expenses within your planning horizon, you would be better off in a job
- 13. Key success factors Enthusiasm Spend most of your time doing what you love, and let it show Attitude Collaborative, consultative approach Honesty Be honest with everybody, but especially with yourself Professionalism Provide customer service that you would expect for yourself, then do better Focus Capitalise on your strengths, compensate for your weaknesses Action Do it right now! No excuses. Consistency Be reliable, keep commitments, do what you say you will do Persistence Have a solid, validated, adaptable plan, have faith in it, work it and stick to it
- 14. Getting established • Introduction • Planning and getting started • Getting established • Selling your services • Running your business • Growing your business
- 15. Consult and collaborate •Clients don’t want drills, they want holes • Judge yourself by your results, not your efforts • Outputs matter, not inputs • Don’t build web sites! • Work with your customers to produce IT facilities that solve their business problems or grow their business • Be a good, successful business person • Model ability and credibility so you can contribute to their business • Look for problems and solutions • Put in your best efforts and ideas to improve their business • Communicate • Assume nothing: ask questions and listen to the answers • Report clearly and often, in English and in optimal detail • Get understanding, agreement and approval • Never make promises you can’t keep
- 16. Business processes • Timerecording and billing • Daily accounting • Customer relationship management • Team project management tools • Benchmarking • Blogging and social media
- 17. Important relationships • Family •Business partners • Staff • Contractors and freelancers • Advisors • Network
- 18. Selling your services • Introduction • Planning and getting started • Getting established • Selling your services • Running your business • Growing your business
- 19. Marketing foundation • Yourpurpose (vision, mission) • Your pitch (position statement, slogan, tagline, USP) • Your focus (specialisations, target markets) • Your ideal customer profile • Industries • Turnover • Head count • Operations • Maturity • Problems and pains
- 20. Marketing plan • Purpose(purpose and pitch) • Market profile (focus and customer profile) • Competitors • Marketing strategy • Channels and methods • Pricing and selling • Project delivery • Measurement • Project performance • Profitability
- 21. Marketing channels Free Paid •Your client base •Sponsorship •Your peers and network •Advertising •Interest groups •Mainstream media •Events •Affiliate programs •Your website •Joint marketing •Social media •Co-branding •Forums and blogs •Search engine marketing
- 22. Selling skills • Yoursuccess has much more to do with your selling ability than your technical skills • Selling really means providing value to customers • Get over yourself • Be good at it • Not possible to cover selling skills in this workshop • Find and use a professional IT selling resource, e.g. • IBM PartnerWorld University (IBM business partners only) • Budget > 10% of your work week to business development
- 23. Running your business • Introduction • Planning and getting started • Getting established • Selling your services • Running your business • Growing your business
- 24. Customer service •Love theclients you have • Repeat business • Lowest cost source of business • Case studies, testimonials • Referrals, word of mouth • Reference sites • Keep communicating, stay in touch • See consult and collaborate, key success factors
- 25. Managing projects • Trackand measure activity and progress • Can’t improve without benchmarks • Can’t benchmark without recording activity • Use shared tools • Online project management system • Online PSA (professional services application) • PSA should also handle time sheets and billing • Blend waterfall and agile methodologies • Cannot ‘quote’ for an agile project • Waterfall project structure around agile work packages
- 26. Customise SDLC Customiseproject method for scope and context Section Stage Outcome Performed Approved Stage activity by by Definition Requirements Specs Account Customer Clarify and document requirements statement, then obtain customer Manager approval of requirements. Design Specs Designer Designer Design or model solution. Produce technical specs, revised task estimates and test scenarios. If required, conduct evaluations and recommend. Proposal Project Account Customer Propose solution, adjust requirements and specs if required and ask for plan Manager approval Development Construction Feature Developer Developer Construct features and solution. Emphasise quality, flexible function and maintainability. Unit test assigned features. Testing Feature Tester Tester Test features and system interfaces based on business process, boundary conditions and functional specs. Analyse results and control defect resolution. Sign off system testing and deploy features to acceptance testing platform. Acceptance Feature Customer Customer Test features, interfaces and business process in the context of realistic customer-specific data. Report defects to Psicom and sign off acceptance testing when satisfied. Delivery Feature Project Account Publish changed parts to customer's production server, configure, test Manager Manager and hand over for implementation.
- 27. Managing production • Softwareproduction management • Manage a continuous stream of software projects • Various sizes, multiple clients • Balance a changing mix of skills and resources • Within shifting demand • See Software production management article
- 28. Complaints • Complaints areopportunities in disguise • A customer whose complaint you have rectified is much more likely to recommend you • Take responsibility, but not necessarily blame • Be open, constructive, proactive • Clarify and agree requirements • Fix and confirm • Follow up
- 29. Difficult customers • Solutionsare not architected, they are shaped • Most customers can’t express what they want, but they can help you shape a prototype • But some clients are not worth having • Won’t pay (ask for a deposit) • Ignorant and unwilling to learn • Arrogant • Unrealistic expectations • Unresponsive • Assumers: ‘I assumed I was going to get x, y or z’
- 30. Growing your business • Introduction • Planning and getting started • Getting established • Selling your services • Running your business • Growing your business
- 31. Larger clients Good Bad •More demanding •Long term relationship •More stakeholders •Higher rates •More overheads •More realistic budgets •More politics •More professional •More reporting •Smarter people •More risk •Bigger projects •Tougher •More interesting work
- 32. Pitching to largerclients • Initially aim for smaller, low-risk projects • Sales cycle typically 9 – 18 months • Extensive, professional proposal required • RFTs are hard work, but can be won • Need formal legal structure and solid financials • Need prof indemnity/liability insurance
- 33. Evolve your business •Account management • Project management • Production management • Quality assurance • Technical range and capacity • Formalise maintenance support • Formalise tech standards and code reuse • Specialise market focus and internal roles • The purpose of a business is to be sold
- 34. Profitability for freelancers Howto eliminate tax return shock •Set your income goal for the year •Set your annual budget •Calculate your marginal tax rate •Add 2% to the rate •Put that percentage of every invoice into a separate provision account