This month, Pelago celebrates its ninth year of life as a web development agency. In those nine years we’ve worked on 339 projects for 105 clients. We’ve built everything from basic brochure web sites to complex data crunching web applications. And we’ve dealt with just about every type of client you can imagine. Here are some lessons on how to run a successful business that we as a web development agency have learned along the way.
In this post…
1. Choose like-minded partners who share your vision
A typical web development agency will be started by multiple partners. It is important that the partners share common goals and have skills that are diverse in a complementary kind of way. You don’t want one person getting stuck with all of the peripheral duties like IT, HR, and Legal. It’s best if you can distribute these tasks across all owners. It’s like Tom Waits sings: “We’re chained to the world, and we’ve all got to pull.” You are in this for the long term, make sure your cohorts are too.
2. Don’t always be the nice guy
For whatever reason, some clients are known to make outlandish demands. These demands are harder to deflect when you are first starting out because you need the business. But as you become more established, you need to know when to be the nice guy and when to say no. The problem with being nice all the time is that it sets a precedent. You’ll say “sure, I can knock that out by tomorrow” because, what the heck, today is a slow day. The next time the client has a quick need, they won’t understand why you can’t help them out as quickly as you did the last time. If clients become too accustomed to quick turnarounds, they will start shuffling their internal deadlines around the expectation that you will be available at the last minute, and that is when you really get into trouble.
3. Do not apologize for your rates
It doesn’t really matter what other web development agencies charge as long as you trust that your rates are a fair price for the service you are providing. You know your business better than anyone else and what rates you need to charge to be successful. You are far better off taking on clients who want to work with you, regardless of the cost. Standing behind your rates and your work tells the client that you are confident and able. Being thrown into a pool of lowest bidders is insulting and a waste of time.
4. Be as clear as possible in your proposal
The proposal and resulting contract should articulate the specifications of the project with as much detail as you can muster. If there is any question about the deliverables, which there will be, you can refer to the spec. Without a clearly defined spec you are leaving the project vulnerable to disagreements that can ruin client relationships. It is also helpful to verbally iterate certain points of the contract before it is signed, in case the client skimmed it too hastily. For example, if you don’t offer web hosting as a service, make sure it is clearly spelled out. Otherwise, the client will expect you to get involved when a mac truck takes out the data center where their site is hosted.
5. Track your time and tasks
This is important enough that we rolled our own web-based time tracking software, Intervals, to manage our projects. Tracking time and tasks gives you invaluable data that can be used to accurately estimate new projects, gauge the health of current projects, and provide clients with detailed invoices. Without this information you will lose money on underestimated projects, fail to meet deadlines, and upset clients over money issues.
