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Some Lessons and Decisions After Five Years of Owning Usable Web Solutions, LLC

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Five years ago today, I started Usable Web Solutions, LLC with the intention for it to be a boutique web design firm that specialized in creating websites for local nonprofit organizations and start-up businesses in the Monmouth County area. And – five years later – I’ve only partially met that intention, but that’s not entirely a bad thing.

Happy Five Year Anniversary!

Like any businessman setting out on a new venture, I spent a good amount of time researching the competition prior to even opening Usable Web Solutions, LLC. Through my research I found that most of the local web design shops were charging outrageous rates for a substandard product and substandard performance. In terms of generating income for the new company, my intention was to price my services such that they undercut the local competition by 15% – 35%. The idea was that by undercutting the local competition by this type of margin, I wouldn’t sway any existing websites to switch to my services, but I would become the service provider of first choice for new websites.

And, honestly, that strategy pretty much worked.

However, what I learned as I went along was that my original intention of focusing on websites for start-up businesses was a losing proposition. The truth is that many local start-up businesses do not (and will not) generate any revenue from their website. And as we saw over the last few years with the tough economy, when times are tough companies begin to cut costs. So, if you’re a small business owner and you have to decide what gets cut in your budget – do you opt for cutting your website services or for cutting your salary?

I think we all know how that usually ends up…

Over the last few years, I’ve had a surprisingly large number of clients simply stop paying me for contracted services (i.e. deadbeats). In fact, altogether I’ve had 36 contracted clients since I opened up Usable Web Solutions, LLC. Actually, that’s not a bad amount of clients to sign up over a five year period considering that this website company is my side gig after my day job, teaching at the local university, and teaching at the online college. But to get back to the deadbeat clients – of the 36 contracts I signed in the last five years, 12 of my clients turned out to be deadbeats.

It’s an astonishing number when you think about it. A full third of my clients either just stopped paying, were horrible clients and screwed me out of contracted revenue, or just randomly disappeared. It’s outrageous. But, like I said above, I learned as I went along and what I learned was interesting on its face, but not totally surprising.

When I was working with outside clients, the chances of me getting screwed over were 1 in 2. However, when I was working with websites that I had a direct stake in, the chances of me getting screwed over were 0%. Some of you may ask, “what does it mean that you had a direct stake in the website?” Good question. As it turns out, of the 36 contracts that I signed over the last five years, 10 of them were with myself! That’s right – my best client looks at me in the mirror every morning.

Websites that fall within the boundaries of me having a stake in them include the one that you’re reading right now – JerseySmarts.com. In addition, I own 3 professional wrestling websites, 2 fraternity websites, 2 websites that are nothing more than domains right now, the actual Usable Web Solutions, LLC website, and a photo hosting website for my Mother’s eBay sales. Over the course of the last five years I’ve actually owned more than these 10 websites, but I’ve been shedding the websites that don’t turn a profit.

About two years ago, it became glaringly apparent that the majority of Usable Web Solution, LLC’s revenue was earned via advertising on the websites that I had a direct stake in. Further, it became apparent that with at least half of my outside clients screwing me over, chances were that I was wasting my time with them. So I began doing what any good businessman would do – I began shedding the outside clients and increasing my investment in the revenue generating websites.

From my perspective, this change in strategy from focusing on local nonprofits and start-up businesses to focusing on websites that I have a direct stake in paid off. For example, in its first three years of operations, Usable Web Solutions, LLC was losing money each year. Sure, it wasn’t losing huge sums of money, but it was losing money nonetheless. However, in the last two years the company has lost much less money. Now, some folks will read that and say that it’s still losing money and that’s true. But there’s no comparison between losing, say, $1,000 during one of the first three years of operations and losing, say, $20 during one of the last two years of operations.

Besides, the truth is that these losses are simply based on income versus expenses. Anyone who works in accounting could look at my books and know that, in terms of real dollars, Usable Web Solutions, LLC has been generating revenue since I started shedding the deadbeats. It’s been great, actually.

And that’s about as succinct a wrap up that I can provide after five years as a small business owner! I suspect that during the next five years I’ll continue this trend of shedding third party clients (I still have some) and focusing more on the websites that I have a direct stake in because – at the end of the day – it makes smart business sense.

Lessons from Four Years of Usable Web Solutions, LLC

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Are you SO excited?! No? Well, you should be! Yesterday marked the four year anniversary of Usable Web Solutions, LLC’s formation in the great state of New Jersey. On January 17, 2006 – after months of planning and, frankly, plotting – I filed for incorporation for Usable Web Solutions, LLC. For those of you that don’t know, Usable Web Solutions, LLC is the small business that I own. We specialize in providing solutions to small businesses, start-up organizations, and nonprofit groups. Starting this company was my way of taking my hobby and turning it into a revenue generating venture.

And now, after four years of owning a small website company in New Jersey, I’ve decided to share just a few pearls of wisdom that I’ve picked up from the last few years. For those of you who are looking to start your own businesses, maybe this information may come in helpful.

  • The Competition Will Lie.Since the economy went south in the last year and a half I’ve learned that the competition – even for a small website company like mine – will do whatever it takes to steal away your business. In my line of work this translates to: No web designer will ever give any credit to any other web designer – ever! And it’s the truth!

    I’ve found that no matter how great, how near-perfect, or how absolutely outstanding a website that you create for a client, some huckster will try to convince that client that you’ve done a shitty job and that they could do a much better job. I’ve been diligent in fighting back against the hucksters which relatively few of my clients have come into contact with (thank God it’s relatively few of them). What always gets me over in the end is the fact that I’m completely truthful and up front with my clients.

    When a huckster says that they can get my client to be the top result in Google searches, I explain to them how they do this by using AdWords and buying the advertisements above certain search results. And then I show my clients the real price to buy these types of ads (dirt cheap) and they compare those prices to what the hucksters try to sell them and they are floored by the difference every single time. These hucksters come in trying to sell advertising packages worth thousands of dollars when, in reality, the service that they “provide” can cost my client nothing more than a few minutes of time and less than $100 each month. Remarkable.

  • The State Takes Their Pound of Flesh. Each year I have to pay the State of New Jersey $50 so I can be in “good standing.” I’m not sure why I have to make this payment, but I have to make it every year. None of my company’s contact information ever changes and I have no tax obligations to the state, yet I have to make this payment every year. I don’t have the time to attempt to figure out the State of New Jersey, but I invite you to have a wonderful time trying to understand why I have to make this payment…
  • Most Clients Don’t “Get” My Company’s Services. Believe it or not, I actually turn away quite a bit of new business. My reasons for turning away new business usually have to do with my personal and professional time constraints, but sometimes it has to do with sensing a bad thing coming…

    You see, after four years of owning and operating this company it has become very apparent to me that most people don’t understand the difference between a web design and maintenance firm and a “go to guy” for all computer-related problems. For example, I have a client that calls me once every two or three months to tell me that their e-mail doesn’t work. And, every two or three months, I remotely check their e-mail servers and, invariably, they are perfectly fine. Then I go on to tell them that they probably have (another) virus on their computer and that they should call a computer repair person if they can’t get the virus off of the system themselves. I’m a website guy, not a computer repair guy!

    Other times I get clients that want me to do advanced software programming to make their companies integrate better with their websites – I have no idea how to do that stuff! Those are not the type of services that I offer.

  • Typically, Friends Are the Worst Clients. I’m blessed to have a great deal of friends and professional networks to tap into if an occasion to do so ever comes up. However, I’ve learned that when friends or professional acquaintances come to me to be their “web guy,” it usually will end in a friendly “parting of ways” after about a year. The problem, as I suggest in the point above, is that my friends and professional associations tend to think that I am going to be more than just a web designer for them because we have that outside relationship.

    Unfortunately, just because I know someone outside of my website company doesn’t mean that I’ve acquired new skills that I will use to their benefit! I offer a price break to those friends and professional associates that choose to engage my web company’s services, but I simply cannot offer services that I don’t know how to do – no matter what my relationship is with the client.

  • Some People Are Just Deadbeats. Sometimes you have a deadbeat client and you have to face that fact. You may not want to admit that your buddy or a friend of a friend is a deadbeat, but if they don’t pay their bills on time and they make your life a living hell just to have them meet their contractual obligations then guess what – they’re a deadbeat. I have two or three deadbeat clients that I’m looking to spin off in the coming year. I have to get rid of them – they’re just more trouble than they’re worth and they take time away from my paying clients and new clients that will likely be better to work with than they are…

The final thing that I’ve learned over the last four years is that as long as I keep a day job (which I intend to always keep!), I can’t run Usable Web Solutions, LLC by myself. Thankfully, I have two paid consultants that I can farm different types of work out to when the need arises. I also have two or three other consultants that I can engage on a case-by-case basis.

Here’s to four more great years of Usable Web Solutions, LLC!