When it comes to expanding per-project revenue, service businesses are at an immediate disadvantage. As our "product" is essentially our time, increasing income on a per-project basis almost always comes with extra work and an increased time commitment. Office hours increase, personal time slips away, and before we know it, the "extra" $300 weekly income has turned into little more than lost time.
Product-based businesses have a distinct advantage when it comes to increasing revenue. Rather than increasing per-hour costs or per-project estimates, all that’s required is an increase in scale. Expand your operation, ship more units, and earn more money. While service businesses can take a similar approach–more employees, more projects, and relatively more income–scale can again become a problem.
These ten approaches to per-project earnings could help you boost total revenue and profits. Of course, they’re not foolproof, and some businesses will inevitably invest time into a strategy only to have it prove ineffective. However, they do work, and with the right balance of time investment and experimentation, they could become the changes that drastically increase your per-project, per-client, and per-hour revenue.
1. Don’t take on stressful or high-risk projects
Risk is a part of business. While service businesses operate at a slightly lower level of risk than a major product-based business or global company, they’re still taking cost-related risks whenever they accept a new project. The amount of time required could surpass expectations, the project’s complexity could be deceptive and surprising, or the entire project could be a stress-test disguised as something simple.
Whenever certain revenue is the goal, take on projects that offer security and relatively smooth income. Increasing revenue can be as simple as taking on more work, which is made easier when you’re not juggling complex projects.
2. Keep a network of contracted designers for project overflow
There are hundreds of reasons to network with other designers, and managing work overload and excess projects is just one of them. As with any business operating at 100% capacity, there are going to be times when your clients will expect you to take on work that’s simply not possible. Rather than scrambling to find new designers, managers, or developers, it’s best to keep a relatively wide network of professionals ready to offer contracted work to.
This selective and optimized outsourcing also gives you an opportunity to increase overall revenues. While your design team works directly on clients projects – earning on an input basis – outsourced design teams can bring in a relatively stable per-project income for you.
3. Use affiliate programs to help clients with hosting
If your design business specializes in local businesses and low-tech companies, it’s not unlikely that your clients will need their own hosting space or dedicated server. While it’s unwise to take care of hosting entirely on your own – problems can often arise, and client support is not a business that you want to be involved in – passing clients on to an affiliated hosting company is never a bad idea.
A range of hosting providers offer affiliate programs, some of which are more lucrative than others. Whenever possible, aim to provide hosting that meets a clients needs, not those of your business. It’s worth eating a small commission to keep a major client, and it’s never worth selling out a client for a one-off hosting kickback.
4. Don’t use a reseller hosting program for clients
Reseller hosting programs are often viewed as an ultra-simple passive income solution for web designers. Unfortunately, they’re about as far from passive as anything can be. Whenever you take responsibility for web hosting, you also inherit every problem that would otherwise be directed to the web hosting company.
Every second of downtime becomes your concern, every connection speed issue becomes a phone call to your office, and every time a client forgets their cPanel password, you’re the person that’s called for support. Focus on low-maintenance revenue increases, not income streams like reseller hosting which require ongoing support.
5. Market yourself as a premium provider
Don’t want to deal with clients that pay poorly? Then don’t market to them.
Whether you’re a freelance designer or part of an established design business, the audience that you market your services to is by far the largest influence on your per-project income. Audiences that have come to expect low-cost services will expect the same from you, and explaining a premium cost structure instantly compromises your ability to offer services.
Study the market that your business operates in, and approach premium clients with your services. Most businesses don’t mind paying a higher price for high quality services, and if you can back up your promises, those clients can be great long-term assets.
6. Network other creatives and online professionals
Networking gives you an opportunity to hand off work to extra designers in the event of a quantity crisis. It also gives you an opportunity to market your services to other online workers, increasing your professional network and creating another stream of incoming clients.
However, there’s another benefit to networking, one that can do wonders for per-project earnings. Most online services businesses are happy to pay for business leads, or at least offer a commission for valuable projects. Create a professional network between yourself and some online marketers, copywriters, and other service businesses that are beneficial to new businesses.
That way, when you’re approached by a new client, you can offer them extra value through related services, and yourself more per-project income through related commissions. Win-win.
7. Offer extra services in project updates and pitches
There’s nothing wrong with a friendly, non-pushy upsell. By including an ‘extra services’ rate card or list of related products or services with every project email, you’ll find your business increasing and your professional relationships extending. Most clients want your web design services to increase their long-term business income, and extending projects to incorporate long-term marketing, design, or website upgrades can often do just that.
8. Aim for ongoing business relationships
Short-term projects can be a hassle. While they’re often worthwhile from an earnings perspective, the amount of stress and unnecessary headaches that come with them can drive a sane business owner crazy.
There are two ways to deal with short-term projects effectively. The first, and most effective method, is to ignore them completely and focus entirely on long-term projects and ongoing work. The second method is to make your short-term work more immediately profitable and effective. Charge higher rates for short-term projects, let your clients understand that you work with other clients too, and create accommodating timeframes your yourself.
9. Prioritize clients that have long-term growth potential
When seeking out new clients, it’s tempting to fall for the "take all" approach where you let accept almost any project, so long as it meets your income criteria. While this strategy is great for filling out a schedule, it almost never works effectively for maximizing per-project income and total revenue.
Opportunity cost is a true nightmare for a service business. Product-based companies can pass over opportunities only to focus on scale, but service businesses with set resources and time allotments are always stuck with the projects that they’ve taken. Taking each and every project that’s offered to you leaves you with no room to focus on the most profitable and valuable clients.
Whenever possible, prioritize new clients that have massive growth potential. The brand new marketing firm with a dedicated owner is more likely to need your ongoing services than an aging local business with relatively low online needs. Give time to clients that have huge potential to expand, and you’ll end up getting it back again in projects that are lucrative, long-term, and very secure.
10. Say "No" more often
Saying "yes" wins you clients, opportunities, and information, but it also locks you into deals that might not work in your favor. Despite the old "customer is always right" maxim, the reality of service businesses, particularly design businesses, is that the client often isn’t right. Design is subjective, and when a project comes coupled with a client that just doesn’t know what they want, things can become a major headache.
Increasing per-project revenue isn’t just about optimizing what projects you do have, but making sure you pick the right projects not to have. Every potential opportunity can be a drag for your business – an ongoing annoyance that brings in income but leaves you shut out of more lucrative products. Fight away per-project time-killers by saying "no" more often. It hurts at first, but the more you do it, the more effective your business will become.
Have you ever experimented with different revenue streams or per-project income strategies? There are hundreds of ways to increase per-project earnings, and we’ve just scratched the surface!
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About the Author
Mathew Carpenter is a 17-year-old business owner and entrepreneur from Sydney, Australia. Mathew is currently working on AddtoDesign, a website which provides value added design buzz. Follow Mathew on Twitter: @matcarpenter. Follow the development of @AddtoDesign.