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Once the project is defined I ask for half the fees up front as a retainer, but sometimes it takes clients weeks or months to get me content and during that time I am not billing out the second half of the project. Now I may have other projects to work on during that time, but the problem is still the same. Some months I have plenty of cash coming in and some months I have almost nothing coming in.
I would like to know how those of you who are doing this full time have done to try and level your income stream out so it isn't this feast or famine thing going on each and every month.
Second question, I am trying to get out of the "project" business and find ways to earn multiple sources of Internet related revenue at the same time. Hopefully from many different sources that aren't related that way it not only helps level the income out, but also comes from many sources so the loss of one or two clients doesn't kill you.
How have others addressed these two problems in their own businesses?
excellent post, because I am mulling this same issue over. I am considering a couple of different things which may help me and the cash flow.
One, I am thinking about starting to bill out at certain time-periods, or maybe milestones, rather than 25% down, the balance at completion, and so on. Mainly because, like you, I find that the content becomes the big drag in getting the site completed. One particular client is going to provide a decent payday, when then give me a final punch list, which will be whenever....25% down now, 50% down upon "significant completion", and the rest when done.
Although I love the project side of this business, because the creativity, problem solving, and customer service aspects are great, I am thinking that maintenance contracts may be a good secondary source of regular streams of income while the projects ebb and flow.
Part of the problem here is that so many client now, one of the first things out of their mouth is "can I maintain the site myself?" and, although I usually set them up with a nice wysiwyg CMS solution, it takes money out of your pocket, and ultimately, at least half of the clients booger their sites up with ungodly font colors and sizes.
but I am trying to determine a way of nudging clients away from CMS and toward maintenance contracts. We'll see how it goes.
ultimately, I expect that the sheer number of incoming new clients, update jobs, final bills, and monthly income from maintenance contracts will provide relief from the ebb and flow. But I am curious to hear about other solutions.
Like you I thought maintenance contracts were the way to go and I think it is, but for small companies they are not easy to sell for the reasons you stated. However I throw in goodies they can't get with a CMS solution. First I offer to do all their visibility and log tracking reports to show them how they are scoring in the search engines and how people who come to their site are behaving. From this data I am able to develop constant small additional "tweaks" to keep their site moving up and humming along. I also agree to sit down with a quarterly meeting to review this and offer a discount on my future work.
One thing I am discovering is you can't just sell them your services because unfortunately for us that is getting to be a commodity to some degree. Rather I try and sell them on my web marketing expertise and how I can use that knowledge and the data to boost their sales, which is what they really want anyway.
The one thing I am really looking for is other streams of related services or products that I can offer in addition to projects and maintenance to keep residual income coming in each month.