qvalpro — 2010-05-04T08:33:38-04:00 — #1
I have been thinking about this for a long time and did not find the right answer - Is my approach of running a web design & development company based on freelancing sites a sensible option?
Before going to the details, let me give you some information about our background.
Me and my partner returned back from US a few years back and started a website design & development venture in India. When we started this venture, we were hoping that our technical domain knowledge coupled with our project management experience that we gained in US will help us in establishing a successful web design firm. Unfortunately, things did not work as we had expected.
When we were at the start-up stage, we worked patiently towards building a good technical team and we worked hard to get website projects. We did manage to find some projects through getafreelancer.com by bidding aggressively and we could build up a decent portfolio over a period of time. Since the Indian market hasn't matured enough in terms of website demand, we are still relying on the international market. Though we are still managing to win projects now and then at getafreelancer.com by bidding heavily, we haven't been successful in finding a long term client with regular projects to outsource to us till now. Unfortunately, all the projects that we won at getafreelancer.com were one time assignments (personal projects) with little or no scope for continuous work.
So, despite the fact that our prices are highly competitive for the quality and customer support we offer (our 25+ one time customers can vouch for us), we are still in a situation where we have to bid at freelancing sites to get some projects.
The fact that we aren't able to attract long term clients after putting so much efforts in our venture is frustrating at times. We even thought of making a trip to US or Europe to find long term website projects, but dropped this idea based on some expert suggestions.
As we have to bid very aggressively in getafreelancer.com for winning projects, we either make no money or end up making negative margin when we work on those projects. We are pretty sure that this cannot continue for ever, as our recurring costs of running a company is slowly killing us.
As I had already explained, we now have a decent project portfolio and a team of highly skilled resources. Though I know that the long term business relationship is not an easy thing to happen, I want to understand if we need to adopt a different business strategy to garner a good client base instead of just relying on the freelancing sites.
I look forward to your inputs.
Thanks & Best regards,
doug_peters — 2010-07-13T11:01:19-04:00 — #2
Though you can get good projects (and sometimes even long standing clients) from freelancing sites like Elance, Guru etc, relying on them solely is a recipe for disaster. Try approaching companies directly instead and attend your local chamberof commerce to network and know people to attract more business.
rageh — 2010-05-05T18:21:19-04:00 — #3
In a word, bad.
You have to find other markets to attract different clients. Try to advertise in Europe or North America. You may target certain market sections trying to place ads in their publications. It is not cheap. But who said running a webdesign & development service is cheap? Before you set up the company, you should have thought about how you were going to get clients. Relying on getafreelancer.com and the likes is not enough. It is not a proper business plan.
May be the best way is that one of you go back to US getting clients and sending the work to you in India.
sagewing — 2010-05-05T18:43:37-04:00 — #4
I would consider sharpening your offering in whatever ways possible. Even the combined 'design and development' offering might be hurting you. I know that I look for vendors that offer either, but not both.
In my observation, the offshore model works best when the vendor seeks partnerships rather than looking for end clients. These partnerships are tough to create, and you can't really 'look for them'. Instead, a lot of vendors try to specialize in one very distinct thing and hope that people find them that way.
For example, about 5 years I was always looking for Joomla service providers. Everyone says they do it, but only a handful of shops truly specialize in it. I found a little group in Vietnam that was kind of rough, but was willing to become an all-Joomla shop if we could agree on certain terms. After 2 or 3 months and a couple of visits, we put them on a retainer partnership that is still going today (although I sold the company). Another group that I worked with specializes in Flash games - just games! Another deals in training/educational web-based delivery and wow are they making money.
Demand is still high, but clients are pickier so the broad service offering has become really tough to do from abroad.
thereddevil — 2010-05-05T20:02:16-04:00 — #5
It is possible to start out as a company using the freelance websites, but in the long run I dont believe its a viable solution. Though of course this depends on where the company is based and operation costs.
Back in the days when I started the company, I was using freelance website as well (scriptlance.com). As your customer mass grows and most important as the word of mouth goes around you will slowly but surely get more work outside the freelance websites as long as you have something that is valuable for the customers.
It is important that you bring value to your customer and that you are able to "sell" this fact to them. Bidding on the freelance websites is not about who is placing the lowest bid, its about who is the best to "sell" their solution/company. Its always about this, the person that is able to "sell" their idea/company so the customer believes in them will get the job even if they are more expensive.
You might want to go through your customer qualify process (i.e. what projects to bid on) and on your approach to win the project (how you sell your company to the customer). Point out why you are the best choice etc.
jeffwalden — 2010-05-05T21:28:14-04:00 — #6
No matter what sort of business your in, to rely on a sole source of customers is a recipe for disaster. In this case, freelancing websites. Furthermore, you weren't a freelancer so your business goals were misaligned from the beginning. Freelancers and full-service firms have completely different offerings.
Just because your 2nd cousin made his own Geocities website doesn't mean that anybody can create a work of art. There's far more that goes into a website than the actual programming. I assume you understand this as you set out to create your own firm. That being the case, most clients that are looking for help from a freelancing website do not understand this and they're looking for a $400 website to mimic Amazon.com. You all laugh because you've had it happen to you too. My point: freelancing websites are not a reliable source of quality clientele.
fcolor — 2010-05-06T04:43:21-04:00 — #7
Well, I think that web designers who knows their price should get in touch with businesses directly. The freelance design market places are places to find a low budget clients.
smithshn — 2010-05-06T09:01:41-04:00 — #8
As a free lancer or as a company both should have know the CRS(Customer Requirement Specification) properly.
Both should not have any confusion about customer requirement.
And best way to specified of the customer requirement is ask a FAQ.
Because customer not too much technically sound as developer.
sg707 — 2010-05-06T14:59:01-04:00 — #9
It seems like marketing section of your company is very lacking. Yes, creating a portfolio is great! but that's not enough. How much effort are you putting in to advertise your company? For example, setting up a booth on a popular IT conference is a good idea. I'm guessing you're doing none of these because it costs $$$. Of course, you want to be in a company that's Profit > Cost. But, for short run you may have to live w/ Profit < Cost. Also, if you're genuinely confused abut business strategy then... well... g'luck!
system — 2010-05-07T09:55:23-04:00 — #10
My answer is bit of both.. !! When the CRS will be in control it will be an awesome combination if not, can be wild and crazy .. Dont stick to certain strategy check out which ever is available and best suited for the situation..!! I wish best of luck..!!
sg707 — 2010-05-07T10:33:32-04:00 — #11
As easy as this sounds but in some area...it is EXTREMELY hard!!! I'm not joking... If your client is willing to give you say 2 digit million dollars and he has no idea what his requirements are..would u turn it down? At least I wouldn't!!!
newviewit — 2010-05-09T11:46:38-04:00 — #12
Freelance sites are extremely difficult to base your whole business on. Most only use them to build up their portfolio.
Specialize in a certain industry/segment if you want to chase after international projects.
Next step is to get creative. I would suggest focusing on your local market, the city where you are located. Print some business cards and go to networking events. Build a free site for the local chamber of commerce or other business related group in your community. Get your name out there.... if you provide quality work then projects will follow.
ssj — 2010-05-10T03:42:40-04:00 — #13
I agree with you when you said to target local markets but seems he is in India, It will not work at all. B'coz in India, It's really tough market and one can hardly find a good project in this field. I am also from India and running a successful web design and development firm so I am aware of this very well.
@OP, I'll not suggest you to keep going with freelancing websites. I'll suggest you to contact some US, UK companies who are outsourcing their work to India. Before that you need to do a lot to convince them and for that you need to have a strong portfolio with some creative work.
alexdawson — 2010-05-10T04:12:43-04:00 — #14
I would also go as far as to recommend seeking out new clients in perhaps places people wouldn't expect. There's a lot to be said for hunting down leads using everything from social networks, to established businesses who have too much on their plate (and want to outsource some of their work to a trustworthy business). Take out an advertisement in a technology magazine (I'm sure some exist in your country) - they can boost business as readers work of recommendations from third parties as justification that their trustworthy and perhaps even go to your previous clients as a follow up to see how their website is doing and enquire as to if they need any other work doing (or perhaps hinting at something their lacking which may benefit their business)
pothi — 2010-05-12T09:44:23-04:00 — #15
Short answer: No.
As already suggested, one can't rely on only one client or source (unless the project brings millions, that's unlikely to happen for a start-up). If you have a pool of technical experts with enough experience but lacking enough projects means only one thing. You are most probably lacking in the marketing department, concentrating too much on the technical side.
rustybuddy — 2010-05-12T10:15:28-04:00 — #16
I think others have touched on it, but in my mind specialization is one key to success. You can still offer all the other services, but focus on being the 'best' at one thing and sell the crap out of it. A major benefit that comes from being great at one thing is the efficiencies you gain from this area of expertise. One of my companies, from the beginning, focused on one industry and one niche out of that entire industry. We started chipping away at the client base of competitors continually adding residual income accounts. We were profitable from day 1 (which is unusual). We worked extremely hard to build long-term relationships with our clients, no matter how large/small they were. Which brings me to my next point....
Residual Income. I don't see how web dev firms exist without it. Do whatever you can to add residual income whether it's in the form of a client or a widget for sale. If your programmers are sitting idle you should come up with project 'X' that your company will sell to add another stream of income. In order for your company to run there has to be a steady reliable stream of cash coming through the door.
Sales. It doesn't sound like your company has a salesman or frontman. Distribution is king. You could have the best development firm in the world but if you can't sell it to the first client then you really have nothing. Sounds like you need to partner with a salesman located in the countries you want to sell your services in. Most clients that you will actually want are not going to find you through freelance sites, most people associate these sites with elCheapo work with elCheapo quality.
Best of luck with your venture.
system — 2010-05-13T07:30:52-04:00 — #17
In one word .. It depends on the size and structure of the firm.
pothi, I agree with you mate.. only thing will never work here..
Coming to rustybuddy, relatively fair, Sales thought was fine and plain. It may differ in terms of small revenues (residual income).
Partially effective, while supporting any of these statements .. (Good or bad).