Hard times ahead for web design companies?

OK just a quick poll

[richardb]

Over the last 2-3 months, we’ve been contacted by a number of local web design companies (mainly sole-traders). Packing up, selling on their client lists, wanting to sub-contract, looking for employment…

Most if not all the local 900lb gorillas have downsized, further flooding the market. The pattern fits with the economic picture 911, financial markets downturn, Iraq…

What’s it like for you guys?

Rich

Location:UK
Status: OK

[mack]

Good overall observatin.
The problem being that the larger companies are possibly now reducing their prices and are within the budget of the smaller customers who would have been targeted by the freelancers and small scale operations. Result is now that the small fry has to make do with the bottom of the barrel.

Location: UK
Status: getting by.

Mack.

[le_gber]

Agree with both of you, big web design companies had to reduce prices to catch up the small customers, hence had to reduce overheads, hence fire people.

Nowadays the big companies and even the small ones, have in-house designers, creating a hole in the potential customer base. Hence need for us to found other source of income.

Location: UK
Status: sole trader, only started 6 months ago, will diversify to ensure prosperity.

Leo

[lorax]

Well this sole proprieter isn't going away soon. While I'm working on a few personal projects that are intended to help me get out of working for others - there's no shortage of work to be done.

I have seen several local multi-designer shops close up recently. Not sure why but I'd guess the work just wasn't there - probably because they never figured out how to step beyond design into SEO - or even knew about it.

Location: USA
Status: doing well

[DaveN]

to much work on at the moment upped prices again last month.

DAve

Location:UK
Status: Struggling to keep up with demand

[edited by: DaveN at 5:55 pm (utc) on July 2, 2003]

[bunltd]

We're a two person shop, and we're busy. In addition to work for clients, we're working on some personal projects to diversify income sources. (you know: more eggs, more baskets)

We get resumes weekly from people looking for jobs or contract work. In fact, we are taking over a site who's original design firm is no more...

No matter where you are being in business isn't easy, it seems like some people just can't do it.

Location: USA
Status: Happy

[richardb]

Thanks for the replies folks.

I think (with hindsight) the question is phrased badly -- but would like some more replies.

I would actually like to run this one again with a few more in depth questions.

Did a bit more research on this one today. It appears to be the sole-traders who have never got med to large-scale contracts, e.g. they do sites for local clubs, self-gratification type sites... who are dying.

We are increasingly getting redesign work re. Lorax's point "probably because they never figured out how to step beyond design into SEO".

Perhaps Johnny does distinguish between results even if he can't search!

Rich

[Chicago]

Two years ago yesterday, I laid off 25 people (the hardest thing I have ever had to do)from my full-service Internet solutions firm ~Strategy, Design, Dev., Mkrt. Two years of profitability later, our core team is finally bringing in additional talent. This time, guess what department/competency is/will lead the way..

The marketplace? Ummm, done this since 98, I have just two observations to spare you from one of my diatribes:

1-I really like that others have convinced themselves that this maketplace is going away and that it can't generate profits.
2-I haven't seen a client marketplace more hungry ~ever~for specific types of value-driven Internet solutions ~then right now.

<added> ~ Internet services coming back? Yes, strongly, into another, smarter, cycle. There is no way to stop it.

[edited by: Chicago at 8:29 pm (utc) on July 2, 2003]

[quiet_man]

I think it depends what you mean by 'web design'. If it's just shapes on a page that work in a demo to the client, then the 'designers' will get what they deserve. If there's an attempt to produce a solution for the real world - including usability and SEO considerations - then people will pay for results.

I'm a sole trader and have a full order book for next four months. Hope that doesn't sound too smug. But if you get results for your clients, they will come back for more.

Location: Ireland
Status: Busy

[dragonlady7]

Well, from the in-house perspective, I have to say that I don't think my company saved any money by having me learn webdesign and SEO to redo their ancient dinosaur page instead of hiring a company to do it, but they feel like they're saving money and that's the key.

I hate economic downturns; they make people dumb. Upturns make people dumb too, but at least it's a _happy_ dumb.

I'm also peeved that I was in college throughout the entirety of the last upturn, with dreams of founding my own dot-com... darn you all, what was it like to be in the job market when there were actually jobs?

I'd love to freelance someday but it just seems to insecure. You have to be too smart. I think I'll stick to faking it in-house for now. :-/ It ain't exactly a sweet gig but it's a gig, and better than my parents' attic.

[Chicago]

if you get results for your clients, they will come back for more.

very well put quiet_man. couldn't agree with you more. you can trace everything back to that.

Location:Chicago:US
Status: Getting Stonger and Smarter

[edited by: Chicago at 7:09 pm (utc) on July 2, 2003]

[mack]

Curently I am doing on-going work for a fairly small number of clients. Most of my work comes from recomendations from those same clients. If you can forge a reputation and deliver then you have a solid foundation. Lately most of my time has been spent on a personal project, but I still make a living from my freelance work.

Mack.

[Undead Hunter]

Well, I read a book on running a web design business that has access to a database of prices for web firms. I think something like 80% of businesses made under $50k a year. The local french fry stand kicks your ass at those wages!Really, that's hardly a business, you'll make more working for someone else long-term once you start subtracting your expenses! So I'm NOT surprised to hear/see some fallout.

I think there's a ton of us (me included) who started this 'cause we liked website design. NOT because we looked at this as a business per se...like it was a coffee shop or something! With efficiences, price leveraging, and so on. And I know a ton of designers who simply *hate* sales & marketing... doesn't bode well for their future.

Status: Best year yet, but room for growth and improvement. Getting bigger rather than smaller.

[Emma McCreary]

I've been doing web design as a business for less than a year, after doing it as a hobby while in college (didn't study anything related though). My business has grown every single month and I've raised my rates as I realized I was too cheap (still am really, still feeling it out).
Right now I'm full for the next month or two, mostly from recommendations from my clients - the key is I live in a smallish town and am not trying to get rich. I'm doing great for just starting, and am trying to learn how not to work all the time. Maybe my expectations are low, but I think I'm doing well although to some people I may be doing small fry etc. My clients are usually small businesses and nonprofits - around $1000, sometimes less sometimes more. Many people wouldn't take these jobs I guess but they pay my bills and I like working with them. It's all relative.

Location: Oregon, USA
Status: Great and Growing