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  • Passive Income For Web Designers & Developers

    By Danno

    Passive income for web designers and developers. Photo by borman818.

    If you’re a freelance or self-employed web designer or developer you know all too well about the ups and downs of cash flow.  You’ll also know that the concept of passive income in our field is not one that many of us web workers entertain or know much about.  So here’s what I can share with you on the subject of creating and profiting from a passive income as a web geek … and hopefully give you an insight into how you can smooth out the peaks and valleys of your cash flow in a way that can truly change your life.

    Passive model income for webs designer and developers

    Next time you get a web design and development project consider this.  Instead of charging $X for the project, doing the work, getting paid and that being the end of the deal, you can try this approach which I use frequently:  Rather than your regular fee of $X, charge a discounted fee of $Y for the design and development of the site. Then charge $Z per month for the following:

    • High speed hosting
    • X number of email accounts
    • Spam filtering
    • Database backup (if WordPress or Joomla etc. powered site)
    • HTML/CSS backup (site backup)
    • Security update (if WordPress or Joomla etc. powered site)
    • One hour phone training (if WordPress or Joomla etc. powered site)

    See where I’m going with this?  Your clients want all the above, immediately the high speed hosting and email (because every site owner needs this) and they also want to feel like they have everything being taken care of with the security updates and data backup.

    Why this approach rocks

    • Your client gets the site (or blog) they want
    • They get their site or blog at a discounted rate (“Normally $X, get this package for $Y”)
    • You get $Z every month to keep the site live, backed up and updated (WordPress and other platforms update regularly with core upgrades and security fixes). I charge a minimum of $47 a month for this.
    • If you hate hosting (like I do) then team up with a hosting provider who can do the hosting and provide hosting support. This is important to me because if I had to reset a password or answer another “I how do I set up my Outlook?” I would lose my shit. I’d rather pay $7 to $9 a month and get a hosting company to deal with it since that’s their core bizzo anyways.

    Risk reversal

    Clients love this model because they get into a great looking site for less (you are discounting the upfront design and development fee remember?) and you should love this because you will recoup that discount (and more) in the long run with the monthly fee.  The lower upfront cost is a great risk reversal and means more clients will take you up on the offer.  Just make sure you make it clear that they must host the site with you (or your chosen hosting partner) in order to take advantage of this offer.

    Be aware of new businesses

    You can safely offer this kind of package to an established business.  Reason being that anyone who been in business for four plus years is probably going to be around for years to come. However, given the failure rate of new businesses, you might want to consider traditional pricing and fee models with these clients. New businesses are by default just riskier to deal with.

    Quick math

    As stated, I charge a minimum of $47 a month and up to $135 per month for these kinds of packages with the pricing depending on the client.  For small, local business they get the $47 package.  $9 goes to hosting, the rest is for me and is (mostly) passive income.  It’s still a great deal for them and for me. Multiply that $47 by 20 sites and you’ve got a good recurring income predominantly on auto-pilot and a ton of happy clients who have killer sites, email and the knowledge that their site and database is being backed up and safe should hard drives crash, fires break out or hackers mess with their site.  Total win win equation.

    Give more value and get more passive dollars

    For more passive income, you can learn (or outsource) some basic SEO and bolt on a simple SEO package to the above.  Most local small businesses operate in markets that are easy to snipe for the keywords they want. It really isn’t all that hard to get a site to rank #1 for “carpet cleaning  [suburb] [city]” or “[city] [suburb] electrician” etc.  I do entry level SEO packages f0r $447 setup and $57 a month recurring.  And again, clients love them because they get their sites to the top of the search engines and actually start hearing their phone ring more often with calls of “I found you on Google, do you guys …  [clean carpets, deliver Chinese food, unplug drains or whatever]?” If you really want the business, you can naturally offer discounts on whatever your standard rates are to close more deals.

    Summed up

    OK so admittedly these aren’t totally passive models if you are doing the WordPress and plugin updates yourself (you can outsource that too) but they are pretty darn close.  The time is takes to update WordPress and a handful plugins for a client every now and then is minimal. And again, you are giving your clients great value with a discounted fee on design and development and chances are you will have them as a long term client who will be with you – and paying you every month – for years to come.

    Given the interest in this subject I am writing a thorough guide on this subject which I will be adding to the Elite Freelancing Method in the next few months.  Hopefully this will help some of you struggling to take your businesses to the next level with some steady cash flow.

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    About the author

    Danno started freelancing in 1996. He is the co-founder and (ex) President of Graphics.net, owner of FeedIcons.com, EliteFreelancing.com, FastCharacters.com and SteelAndSnow.com. He digs wind, waves, guitars and circles. Follow Danno on Twitter.

    Comments on this article...

    • freelancer:

      Good article. Value-added packages such as backup/security, social media management, SEO and the like can also be offered to clients at the end of a traditional project as maintenance packages.

      (Lots of spelling mistakes in the article btw)

    • Danno:

      Yeah I wrote that one by the seat of my pants! Thanks for the heads up.

    • Kurt:

      Danno:

      I shy away from hosting as well because I don't want to be a 24/7 support center. Can you explain how you offload the support to the webhost? How do you explain it to your customer?

      Thanks!

    • Danno:

      Hey Kurt. Yeah you bet … providing hosting support is the last thing I want to do. I'm not good at it, dislike doing it and there a people out there that have hosting as their core business who are more than happy to handle it.

      What I recommend you do is team up with a smaller hosting company. Give them a quick call and it's usually a small business and you'll get to speak to the top guy. Tell him what you are up to and ask if she wants to be your hosting partner. Make sure they understand you want no part of providing hosting support and that this responsibility would be theirs.

      Make sure you do some due diligence to see if the company has any complaints or a track record of disgruntled customers etc. You want to select a host that has a positive or at worst, a neutral reputation.

      Hope this helps.

    • Kurt:

      Danno: Thanks! I appreciate the response.

    • etipz:

      Thanks! I appreciate the response