#004 – How to Run a Profitable Web Design Business

How to Run a Profitable Web Design Business

Welcome to Episode 4 of the Profitable Web Designer Podcast, where we’re committed to helping web designers to stop undercharging, overdelivering, overworking, overworking and create profitable, sustainable web design businesses.

I’m Shannon Mattern, your host and founder of the Web Designer Academy where we teach the business side of running a web design business, and if you wanna make a consistent, full-time income as a web designer but you’re struggling with things like pricing, boundaries, mindset and marketing and you’re EXHAUSTED from going it alone… well, my friend, you’re in the right place. 

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Today we’re talking about what it means to have a profitable web design business, and how to grow sustainably!

Before we dive in, if you’re ready to transform what you think about how much you can charge, raise your prices and work with your dream clients, then I wanna invite you to watch our Profitable Pricing Framework training for web designers. Just head to https://webdesigneracademy.com/pricing and I’ll send the free training straight to your inbox.

In this episode, I’m gonna cover:

  • Why profitability and sustainability go hand in hand
  • How to break down the numbers for YOUR specific business
  • The formula I use to breakdown my business expenses
  • How to reverse engineer your goals to set your prices
  • Why more clients IS NOT the answer to more revenue

Key takeaways from this episode:

  • If you hide from your numbers, you won’t know what you don’t know. The pathway to sustainability is all in knowing how to use your numbers,
  • The secret to a profitable, sustainable business is QUALITY over QUANTITY – more clients does NOT equal more revenue, and it leads to burnout.

If you’re ready to raise your prices, work with dream clients and take control of your web design business, then I wanna invite you to apply to work with us inside the Web Designer Academy!

Simply fill out the below form, tell us about where you’re at now and where you’d like to be, and if we think our strategies are a good fit for your goals, we’ll invite you to learn more about our proprietary pricing frameworks and hear directly from us how we work with our students to empower them to create $10K revenue months.

Zero obligation, zero pressure, we teach and live the exact opposite of pushy and sales-y, filling out that application is simply a chance for you to find out what unique opportunities we see for you and your business and to get all of the information you need to decide if working together is right for you.

Shannon Mattern: Welcome to the Profitable Web Designer podcast, where we're all about helping extraordinary web designers like you to stop undercharging over delivering and overworking, and finally create the profitable, sustainable, and scalable web design business. You've been dreaming of I'm your host Shannon Mattern, founder of the Web Designer Academy, where we teach the business side of running a web design business. So if you wanna make a consistent full-time income as a web designer, but you're struggling with things like pricing and boundaries and mindset and marketing, and you're just tired of going it alone while my friend you're in the right place. But before we dive into this week's episode, I wanna invite you to sign up for our totally free profitable pricing framework training that breaks down five mindset shifts to five X, your prices without working five times harder, just go to https://webdesigneracademy.com/pricing and enter your name and email address. And I'll send you our proprietary pricing framework that will totally transform what you think about how much you really can charge for web design. So go sign up https://webdesigneracademy.com/pricing, and then meet me back here for this week's episode.

Shannon Mattern: Hey there, welcome to today's episode of the Profitable Web Designer podcast, where I'm gonna break down for you. The core components of a profitable web design business. What do I mean when I say profitable? What I mean is that you're generating enough revenue every single month to pay yourself the amount of money that you need to make to do life, whatever amount of money that is for you personally, you're making the amount of money you need to make to cover investments that you'll be making into your business. And you might hear me say cover your business expenses. But every time I say the word expenses, you have to start thinking about literally every dollar you spend on your web design business as an investment in you. And we'll talk about that in just a second. We wanna make sure you're making enough money to pay taxes, whatever that means for you based on your personal situation and where you live and have enough money left over to set aside that for emergencies or ebbs and flows in your revenue, or to just give yourself a big fat bonus.

Shannon Mattern: Okay? So those four parts of profitability, paying yourself first, investing in tools and training, paying your taxes and having savings come into play. When you are deciding how much to charge for web design and those numbers are going to be very unique to you and how you run your business. We want our web design business to be profitable, right? But we also want it to be sustainable and sustainable means that you're not overworking. You're not burnt out. You're not emotionally, mentally, and physically drained. You have time for yourself, for your friends and your family. You have space in your days and weeks for other things other than your web design business, okay? Profitability and sustainability go hand in hand. You cannot have one without the other. In the first three episodes of the Profitable Web Designer podcast, we talked about why web designers undercharge over deliver and overwork.

Shannon Mattern: And while it is possible to be financially profitable, while doing all of those things, it is not sustainable over the long term to operate your business in a way that causes you to have to constantly book new low paying clients, to generate enough revenue, to be profitable, the level of effort to manage all of those clients, the volume of marketing and consultations that you need to book that many clients not to mention doing the actual work. It is unsustainable, unless you want to. And even if you wanna scale into the agency module, you still have to be profitable in order to have freelancers working for you or have a team or any of those things. So if you're listening to this podcast and you're profitable and you've been under charging over delivering and overworking, I wanna ask you, is it worth it at what cost to you personally is your web design business profitable?

Shannon Mattern: Why are you putting your client's business and budget ahead of your own business and budget and lifestyle and needs and mental health and physical health and time, right? Because that's essentially what we do when we undercharge at our own expense. We're saying it's more important to save my client money or prevent harming my client by taking money away from them than it is for me to have a profitable, sustainable, healthy web design business. And if I asked you if you'd pay for half of your client's website for them, you'd probably look at me like I'm crazy, but that is what you are doing every time you undercharge. It's like you're paying for the service yourself. And 50% is about what our Web Designer Academy students are under charging on average at the low end, before they come to work with us and we help them at least double their prices.

Shannon Mattern: But honestly, most people are under charging 80% less than what they could be charging 80%. So if I asked you, would you pay for 80% of your website for them? It'd be like, no, Shannon, that's crazy. But that is what you are doing when you are undercharging. So you cannot have profitability without sustainability. You can't have sustainability without profitability, and you cannot have either of those, if you are undercharging. Okay? So if your business is profitable on paper, but you are working constantly and feeling exhausted and overwhelmed and resentful, it is not sustainable. On the flip side, if you're working 24 7, while you're also not meeting those four key parts of profitability, which are paying yourself first, investing in tools and training and mentorship and support paying your taxes. Cause we all gotta pay our taxes and having money left over for savings, emergency fund bonus, weathering the ebbs and flows in your business.

Shannon Mattern: Your web design business is not sustainable or profitable. So how do you create profitability and sustainability in your web design business? First, you need to know your unique numbers. These numbers are unique to you and they should also be realistic. I know so many of you come to me and you say, I wanna make $10,000 a month and have a multiple six figure web design business. And it is totally possible to do that. But you have got to start where you are today. So maybe you wanna make $10,000 a month in your web design business, but maybe you don't need to make $10,000 a month right now to pay for today's lifestyle in today's business investments. Right? If that means that you are someone who avoids your finances in your personal life or in your business, and does not want to know your numbers, you get to work on that.

Shannon Mattern: If you have a partner or someone with whom you share household expenses, what is your expected contribution to those expenses? How much money does it take for you to pay for today's life? How much are you investing every single month in the tools that you need to run your business? Things like web hosting and your client management systems like dub, Soto, all of your tools and your training and your subscriptions. How much are you investing in courses and training and mentorship, or are, are you burning all of your time on YouTube university? Right? YouTube is amazing. It's incredible. But how much of your time are you spending, trying to figure this all out on your own when you could invest in courses and training in skills, instead of just trying to figure it all out on your own. When you start thinking about every dollar you spend on your business, not as an expense that has gone forever, but as an investment that you've made that will generate a return for you in the future, your whole entire decision making process for how you spend your money and your time changes.

Shannon Mattern: Okay. So how much do you need to invest in tools and training every single month to grow your web design business? So before starting the Profitable Web Designer podcast, I had a podcast called pep talks for side hustlers where every single month I published an income report that shared exactly how much money my business made, how I made the money, how much I paid myself, how much I spent on tools, mentorship, training, taxes, teams, and all the things down to the penny every single month. So if you are interested in that, you can go to https://shannonmmattern.com/category/income reports. We'll link that up in the show notes for you, but you can go see what that looked like for me on my business journey. From before I made six figures all the way up to making multiple six figures while I was still doing one-on-one client work.

Shannon Mattern: And after I stopped doing one-on-one client work. So you can see what all of that looks like and follow that journey and see, what does it actually look like for a web designer who is running a business to what, what are their finances look like? What does that look like to invest in growth? Okay, so you can go check that out. What do you need personally, to set aside for taxes? That's that third piece of profitability and it is going to vary drastically based on where you live and what your situation is. I am not an accountant. I'm not a CPA. I am not at a tax professional. This is not tax advice but what I will tell you is what I have personally done. When I started out doing freelance web design as a solo entrepreneur, we can talk at future episodes about business structure and what mine looks like today versus in the beginning.

Shannon Mattern: But I set aside 20% of every dollar I brought in into a separate business bank account for taxes. And I live in the United States. I'm in Columbus, Ohio, and you are taxed here on what's left. After you've paid for your business expenses. I call them investments. The IRS calls them expenses. so the formula that I used was revenue minus my investments, not including paying myself times 0.2, if you're doing this on your calculator. And so I set that money aside, I paid it to the IRS quarterly through quarterly estimated taxes. And then at the end of the year, when I did my taxes, maybe I'd owe a little bit more. Maybe I get a refund, but that's how I, I did it. Then if I didn't need all of the money that I set aside, come tax time bonus right. I either kept it in my business account to build up a cushion to whether the revenue ebbs and flows.

Shannon Mattern: Sometimes I gave myself a nice little bonus. So I did a little bit of both of that. But what most people do is pay themselves. What's left after making business investments and after paying all their taxes, which oftentimes does not equal what they want to make to fund their current life, or they pay themselves. What's left after making investments and set aside nothing for taxes and then freak out when tax time comes. So part of knowing your numbers is not avoiding your numbers and part of knowing your numbers is critical for you to determine how much you get to charge for web design. Okay? Let's say for some easy math, you wanna pay yourself $3,500 a month. That could sound super low to you. That could sound super high to you. But this is for sake of example, like if you live in Columbus, Ohio, where I live 3,500 bucks a month, that's actually not bad.

Shannon Mattern: But if you live in venture California, where one of my team members lives, she probably couldn't eat on that. right. So it's very unique to you. And if you wanna pay yourself 35 a month and you wanna spend 1500 a month on tools and training and mentorship, that's a total of $5,000. And remember, we're only adding that 20% for taxes on top of what's left after we've made our investments. So that's 20% of 3,500, which is $700. Remember I'm not an accountant, I'm not a CPA. I'm not a tax professional, just telling you what I did. And this is how it worked for me. . So now we know that we want to make at least $5,700 every month to pay ourself 3,500, invest, 1500 in tools, training and mentorship, and help us get to help us get to those 10 K months and beyond, and then set aside 700 for taxes.

Shannon Mattern: And that's that very basic formula that I used every single month to figure out like my target revenue goal. You gotta then once you know those numbers, because you have an understanding of how much money you wanna make every month to do life, then you do the math, right? You do the math. What's the gap between how much money your web design business is making every single month today. And that goal revenue number of let's say $5,700. How much are you charging for your web design services? What are you charging for a website right now? Let's say you're charging $2,500. That's on average what our Web Designer Academy students are charging for an incredible product, which it, it still blows my mind. I'm just like, how are you charging $2,500 for what you're doing? That's insane. You should be charging five times more, but their mind's not there yet.

Shannon Mattern: So we have to work on that, but let's say you're charging 2,500, the gap between that and your goal revenue is $3,200 easy. So we know now that what we need to create in terms of revenue to be profitable, right? $3,200, but here's where it can all go wrong. right. So you do the math, the gaps, $3,200, and you think, okay, I charge 2,500. I just need to get another web design project. And let's say seven monthly maintenance clients at a hundred dollars a month. And I'm golden. And I really want you to think about that for a minute. It sounds easy enough, right? Two new clients, a month, seven retainer clients. But the reality of that is not nearly as simple. And I think most of you listening to this podcast have experienced what I'm talking about. If you manage to get those seven retainer clients, you end up with seven bosses who want you to drop everything for their quote unquote emergencies.

Shannon Mattern: And don't understand the sentence of, that's not in the scope of our agreement. So what am I paying you a hundred dollars a month for right? And then you're hustling to book those two $2,500 clients by responding to posting Facebook groups, saying where people are saying, Hey, I'm looking for a web designer. And by the time you finish your comment, yours is the 50th one down. And if by some miracle you do book the client, the project drags on forever, because you can't get them to give you content. And you're not marketing to get new clients because you're completely overwhelmed with these seven retainer clients who act like you're, they're your boss. And that you're at their service 24 7. Any time they wanna change that thought color on their sites. They're like, oh, I have a really quick change for you. They say, and really it involves like two hours of you digging through someone else's code to find that one simple change.

Shannon Mattern: And one more client will simply push you over the edge. Have any of you listening, ever experience this? Cause I'm basically describing my life in my first year of being a freelance web designer. And so you get stuck in this cycle of needing more and more clients, but not doing anything to get more clients, because in reality, your brain is trying to protect you from going all the way over the edge, right? So you've got all these open web design projects hanging out there, undone that you're not actually getting paid for. We call those zombie clients inside of the Web Designer Academy. And then you've got seven bosses and their emergencies and poor planning and existential business crises or hundreds of new ideas to deal with. And you are not anywhere close to your minimum baseline revenue goal. And you're working like crazy. That is not sustainable.

Shannon Mattern: So long story short, more clients is not the way to create a profitable, sustainable web design business. So what is the answer? The answer is raising your prices and working with less clients . So what I see when most people come to work with us inside the Web Designer Academy is that they're undercharging by at least at least 50%. That means most people can double if not triple or quadruple their prices. What would one, $5,000 web design project a month and two, $500 retainer clients a month do for your business? That's three clients. Three. What about one $10,000 project a month period? What about one $15,000 project? Every two months, that's six clients a year. So this secret to a profitable, sustainable business is quality over quantity. And I'm talking quality in terms of quality of client, right? But one of the big fears that people have when they increase their prices, especially if they've already been undercharging and over delivering for a long time and are super burnt out, is that the more they charge, the more they'll quote unquote owe their clients.

Shannon Mattern: And the more they'll be beholden to them and tied to them and responsible for their results. And so it's like, oh, if I charge $15,000, they're gonna expect more of me and that's just not worth it. I'm not capable of delivering that. All of this mindset stuff comes up about what we will have to do at that price. And we're like, it's just not worth it. I just want you to notice if that's coming up for you, because there's one more piece of having a sustainable business that if you're missing, it's never going to feel good or safe for you to get more clients or charge more. Whether they're paying you $1,500 or $15,000. And that piece is boundaries boundaries. In order for you to have a sustainable business, you must create boundaries that feel good to you. That's a critical part of the boundaries, because if they don't feel good to you, you won't hold them.

Shannon Mattern: So boundaries that feel good to you so that you can confidently communicate the boundary and demonstrate them to your clients from moment. One of meeting you, okay, boundaries are not some law that you enforce after something that you don't like happens. They are something you decide on for yourself ahead of time, design processes, and systems around communicate to your clients in, in words, and in actions from their very first interaction with you, and then reminds them of them over and over and over again throughout subsequent interactions and communications before, during and after your project. Now , that might sound very tedious to you, or like the opposite of freedom or like a punitive parent or whatever, but I can promise you that boundaries done in the way that we do them inside of the Web Designer Academy are this secret sauce to a sustainable web design business.

Shannon Mattern: So to recap, in order to run a profitable web design business, you not only need to have your prices like dialed in so that you can generate enough revenue every month to pay yourself first, invest in tools, training, and mentorship, pay taxes, have that leftover for savings and bonuses. You also get to take care of you first, and that means your pricing must be sustainable. And that means you're working with the least amount of clients possible to hit the revenue number that you need to hit to do your life. And you have baked in boundaries into your business by way of your client interactions, processes, communications, before the client ever crosses the boundary. Cuz honestly, most people are gonna respect boundaries that they're aware exist. So yes, systems are important. Processes are important, obviously skills are important, but what is more important than all of that?

Shannon Mattern: If you want to have a profitable web design business where you're not working 24 7, and you actually want to enjoy the freedom and the money you've created, you must have sustainable pricing and solid boundaries. And that is what we help our clients create inside of our Web Designer Academy program. So if you're interested in learning more about how we help our clients with that simply go to https://webdesigneracademy.com, click on that big apply to work with us button, tell us where you're at now and where you'd like to be. And if we think our strategies are a good fit for your goals, we'll invite you to learn more about our proprietary pricing frameworks. And you'll get to hear directly from our students on how we work with them, to empower them, to create those 10 K revenue months and beyond zero obligation, zero pressure.

Shannon Mattern: When you fill out that application, we teach and live the exact opposite of pushy and salesy. So filling out the application is simply a chance for you to find out what unique opportunities we see for you in your business and get all of that information that you need to decide if working together is right for you. Your action steps after listening to this episode are to know your numbers, do your math, go back and listen, figure out everything that you need. What's the gap between how much you're charging today and what you need to be charging. Raise your prices. You can raise your prices, right? Start raising your prices, start closing that gap. And we will see you in next week's episode.

Shannon Mattern: That's it for this week's episode. And we've linked up all of the resources we talked about today in the show notes. So you can go to https://webdesigneracademy.com/podcast to get your hands on those. And we'll be back next week with another episode designed to help you up level the business side of your web design business. So be sure to subscribe to the show, wherever you're listening. And if you like today's episode, we would be so grateful if you would share it with all your web designer friends. And if you're feeling extra generous, we'd love for you to leave us a rating and review so we can get in front of even more web designers and help them transform their businesses and their lives. So simply scroll up on this episode in your podcast player and tap that, leave a review link, or go to https://webdesigneracademy.com/review. And it'll take you to the right spot. Thank you so much for listening and I'll see you right here next week. Bye.

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