Economy, economy, economy. I swear it is all you hear about these days. Turn on the news. Go to a cafe. Doesn’t matter where you are, someone mentions how bad the economy is. Because Steve and I left extremely stable and secure jobs, we often get asked, “Are you feeling the hurt?”
So are we? Currently and thankfully, we are a not. On the contrary, we have noticed an increase in project requests in December and January. Granted, project requests do not always turn into projects, but I think for us they are pretty indicative of interest.
Here are my unfiltered and most likely naive thoughts on our current circumstances. I believe that even though the economy as a whole is hurting, there are pockets of growth. I believe that one of those pockets is the web. I believe that if you are a company that has been fiscally responsible, grown at a reasonable rate, and continually provided high quality products and services, you are going to be fine.
The answer is no. The web is obviously not recession proof, but if there is any industry right now that provides opportunity, it is the web. Stop worrying about the economy and focus on strengthening your business. What do we do, here at Ordered List, to make sure we are strong?
- Cash flow. We don’t obsess over cash, but we require payment to do work. Yep, we are paid before we do work, not after. If a client wants a fixed price, they’ll get one, but they’ll pay all or at least half of it up front. If the project is larger, we work in 100 hour blocks. Once we have logged 80-90 hours, we let the client know and go from there.
- Keep reserves. It is tempting to pay yourself a ridiculous salary or pay out large profit checks, but that is very short-sighted. We pay ourselves modest salaries, even for South Bend, and always make sure we have several months of expenses in the bank before we partake in profit sharing.
- Spend money where it counts. If you don’t need an office, don’t pay for office space. This is different for everyone, but instead of paying rent and utilities every month, we choose to keep our recurring monthly expenses low. Instead, we splurge more on laptops, gadgets and conferences. We care a lot more about that.
- Build a reputation online. Every piece of work that we are commissioned to do comes from the reputations that Steve and I have built online. Geographically, our closest client to date was almost 100 miles away. Our clients find us online and we work remotely for them, which opens up far more opportunities than if we focused on the local chamber of commerce. Recently, someone asked me what the market was like in South Bend. My response was, “I don’t know.”
- Stay current. Don’t shoehorn yourself into one thing. Our primary service is website and application design, but we are also pretty knowledgeable in Ruby and Rails, and more recently, have been diving into iPhone development. The great thing about being small and current is that different opportunities are more profitable at different times, and if you are current, you can not only see them coming, but also take part in them.
I could be wrong. We could be in for dark times, but worrying about that won’t get us anywhere. Focusing on what is going good and attempting to amplify that will.
What is your sense of the web world right now?
Thanks for this. I would agree that our company is getting a lot of requests too. The sad thing is that a lot of companies probably let full time employees go only to hire contractors at a higher wage ( I shouldn’t complain because we benefit from this :P, but I wonder about its long-term impact ). I also think times like these will weed out the complacent and unstable. Thanks again.
John, you are dead on with what you wrote. We also feel like we now have more work then last year and we feel like a lot of our clients are starting to put their neglected websites back into shape hoping the websites will save them now in this crisis ;). And they will. That’s our job, we love to help.
And thanks for sharing your know how. We appreciate that.
Five simple, concise points. Right on. I think another thing to mention is this: Build your own web projects. If you have a great idea and think the web needs what you have to offer, don’t be afraid to put it out there. I know you need to work for clients to get paid, but try spending two hours a day on something you love and it can pay off.
It does seem to be the general consensus that the current economy does not seem to be harming the web industry (at least as far as client work is concerned), and perhaps even pushing it forward somewhat.
It makes me wonder about what the thought process is behind people hiring more web designers and developers during an economic downturn. It’d be interesting to see a study done on that, but my best guess is a combination of people placing more emphasis on their web presence that other advertising and people starting more side projects… I’d love to hear your thoughts based on what you’ve encountered thus far.
I’ve found the same, as a freelance web designer I’ve not had so much work to kick the year off. Partly I think it’s to do with the risk factor, a full time staff member is a long term cost and risk if the clients business tanks.
Also the fact that nearly all businesses understand now that a web presence is the only way to go forward if they want people to buy their services, this means there is a long list of companies who need to get a proper site online, economic downturn or not.
Great point about down payment, I’ve only recently started to charge 50% upfront, I’ve found it does two things, firstly and obviously it weeds out the bad payers immediately but secondly I’ve found it sharpens the mind of the client, they don’t want a project to drag as they now have MONEY invested in it.
I like your payment policies. When I owned a web dev. co. there was a big divide over charging per hour and fixed prices.
All of those are valid points. I’d add as the most important guideline not to freak out about the recession. Just do everything you can to do a great job and the money will come.
You make some great points… but I doubt the web is going anywhere. For me personally, I’ve found that right now is a GREAT time to make money. My freelance work has gone up tremendously, people are clicking on my AdSense more than ever… I have noticed that there are more and more people trying to sell stuff on Ebay & Craigslist, but they are selling cheap, so I like to buy their “lots” and then re-sell it all individually.
if you know what you’re doing on the web… you’re gonna make money, regardless of whether the country is in a recession……. at least that’s my take on it.
Right on the money about your comments. I have several pending contracts ready to go. We are waiting for the green light from the clients. There is an abundance of freelance work out there now.