In my city there are literally hundreds of web design firms.  How do I figure out which ones are my competition?

Because barriers-to-entry are almost non-existent (“I have Photoshop and will design for food”), almost everyone is your competition… and yet few really are.

Instead of focusing on individual firms as your competition, what you should do is step back and analyze your competition as a set of distinct groups: large agencies, small agencies, local freelancers, overseas freelancers, in-house employees. Each has a business proposition for your potential clients. How do you stack up against each group? What do you bring to the table that will be unique? For which types of clients do you not match up well and does that reasonably rule out targeting that type of client? Where do you blow the competition away?

Example: for my consulting firm, I directly compete with small agencies, local freelancers, and overseas freelancers for all of my clients. I do not match-up well with the other groups, so I don’t bother competing against them. I’m less expensive and more responsive than small agencies; I’m better able to handle larger projects than most local freelancers. I’m local and speak the local language, so overseas freelancers are the least likely competition for me.

If you market your business across the world, overseas freelancers will provide more competition, since you’re entering their markets as well as they’re trying to enter your market.

Once you start this level of analysis of your business, it becomes easier to figure out how which marketing messages will be important and how to deliver them in the most effective way.

For freelancers just starting out, though, most likely you are more focused on landing clients — any clients! — and that’s smart.  Your biggest business threat when you first start out is your own cash flow issues: most businesses fail in the first year because they run out of cash.  If you focus on landing clients that will pay you well for the job you do and return regularly to have you do more work, you will position yourself to succeed while your competition fails.

Economic downturns usually mean more work for freelancers, since your customers need to do more with fewer salaries on the books, so extra money is usually available for subcontractors to help out.

Although there will be more business for freelancers, having more people out of work increases the pool of potential “freelancers”.  What to do to separate yourself from the rest of the crowd?

1. Learn how to turn every new client into a repeat client.  If you spent all that time landing the client in the first place, you want to get more than one project out of them, because every subsequent project will have a higher profit margin.
2. Make sure you are offering services and/or products that are important to the financial well-being of your clients.  Whether you are helping them improve their top line or their bottom line, make sure you focus your products/services in a way that does one or the other in an obvious way.
3. The biggest and easiest differentiator that a freelancer has is personalized service.  Anyone can get disinterested customer service.  If you provide awesome customer service, you will stand out from the crowd.  Don’t make price your differentiator unless you have a serious plan to continually increase volume while decreasing your prices further.

Have you ever gone to a directory of links, found something that sounded useful, clicked the link, and got a “Page Not Found” error?  Don’t you think it hurts the quality of the site?

We do!  So we’ve instituted a new program that will run a couple of times a month to check all web links on the site.  If the web URL fails on two-consecutive runs, the freelance listing will get deactivated and the freelancer will get an e-mail message indicating that the listing was taken offline until the URL is corrected.

Although this will slightly reduce the count of listings in our database, potential clients will be happier and waste less time looking for someone like you.

If you find that you’re no longer going to freelance, please take the time to remove your listing from our directory.  If you haven’t signed up yet, know that we value your contribution to our directory and are working hard to create the best freelancer listing available.

On another note, sorry for the delay since my last blog entry.  I’ve been swamped with consulting work lately.  I’ll start posting good articles again very soon.

Think freelancing is easy?  Just starting out?  Here’s what you need to know:

1. Freelancing is not easier than a 9-5 job.  You have to be everything from the worker to the manager to the salesperson, but you’re only really paid when you deliver something of value to a client.  Don’t forget that the non-paying parts of the job can be just as important. Remember to include the costs of those non-paying parts in your pricing.
2. Have money in the bank, at least 6 months’ worth at all times. If you start to run out, look for a short-term contract that will tide you over for 3-6 months.
3. Market your services like your business depends on it, because it does. Never sit around waiting for people to call you… until you are so busy you don’t want to talk with them anyway.
4. Know your best potential client like the back of your hand. If your answer to the question “Who’s your best potential client?” is “The one who will pay me” then you have not thought this out enough. By figuring out who your best potential client is, you’ll know where to look for them, where they will look for you, and how much they’re willing to pay for your services.
5. Don’t worry about your competition. Freelancers don’t fail because of their competition; they fail because they really didn’t have a clue how to run a successful business and didn’t have enough time/money to get a clue.
6. Never lower your price after giving it to the client unless you reduce the amount of work you plan to do for them. Never offer a discount up front unless everyone is getting the same discount as part of a promotion.
7. Everyone you know is a potential salesperson for you if you can only get them to learn what you do for a living. It’ll help if they also know what type of clients you want to land, but it’s not always required.
8. Never let the client dictate the terms of the relationship. You won’t be happy if they do. Be willing to negotiate and re-negotiate anything if it’ll help the project succeed.
9. An accountant may be necessary to do your taxes each year.  A good accountant will also help you structure your business and personal finances to your maximum benefit.  Once you get busy, find a good accountant.  What you spend on a good accountant will be more than saved each year.
10. Being the boss of your own company means you get to work when you want.  Don’t forget to take time off when you’re really busy. Don’t forget that when you’re not busy, you need to work twice as hard.

Q: I’ve been asked to provide sample idea designs for a new potential client before we have any contract in place.  Is this spec work — which is something I don’t want to do — or just part of the usual freelance interview process?

A: Here’s how you can tell if something is spec work or a legitimate question:

1. Do you create the sample work in front of the client or at home? Read the rest of this entry »

As a freelancer, we get to decide what our benefits package will look like. Often, though, we’d rather not think in those terms and instead just focus on whether we’re raking in the cash.

Bad things happen, though.  Many corporations provide you with ways to protect your income and your family’s finances in case something bad happens to you while you’re employed.  But being the business owner means you have to take ownership of this side of your finances.

What happens if you get hit by a car and end up in the hospital for a month and then need another 6 months of physical therapy before you can sit at a keyboard and work again?  How about you contract a tropical disease on one of your frequent vacations to the islands and can’t work for a year while you recover your strength?  That would be pretty devastating to your finances, huh? Read the rest of this entry »

I have a policy for CustomBytes: all of my new clients are going to become references to any new clients that come along after them.  I tell my new clients that, so they understand that they’re going to be treated just as wonderfully as all my past clients.

Some consultants collect testimonials for their web site and other marketing materials.  They do that so that potential clients can see at least a brief amount of feedback from their past clients.

Why have references or testimonials?  Read the rest of this entry »

One of the big pet peeves of freelancers — especially creative ones — is that they hate the client who decides one thing one day and the exact opposite thing the next day.  Or they tweak something endlessly because they can’t decide what they want.  The funny thing is that most freelancers will blame the client for this situation and not themselves.

I’m here to tell you: if you can’t produce what your client loves, it’s your own fault for not spending enough time to figure it out what the client wants and to help crystallize it in the client’s mind.

How do you do this? Read the rest of this entry »

We cleared 600 consultants today.  Our traffic is also up about 40% from 2 months ago.

Let us know how we can help your further or how we can help freelancers who don’t feel like this is a good place to list their services.