[OzzieBlue]

I am a brogrammer and always have been thinking along this line this thread is motivation on steroids for me thanks Louis

[damianr]

Hey Louie, keep the good stuff coming.

[Exquirenoir]

Right when i'm looking to get into coding/ IT , this thread shows up . Looking forward to more posts.

[Phoenix]

Just found this thread. Very awesome.

I have one question: how do you keep the work pipeline filled? I assume this is your foremost responsibility, are you ever afraid that jobs will stop flowing (even briefly) and your whole company will be sat idle and collecting paychecks?

[Silver_Tube]

This same path can be followed in the Data Acquisition/Instrument Control/Advanced manufacturing Testing industry. So many hardware/mechanical oriented places have manual processes that can be computerized and automated. My first internship in school was for a guy doing this kind of hustle, cold calling factories. I wrote drivers for scada devices that were doing QA testing on circuit breakers and shit. I was the first kid he hired and by the time the year was done he had 10 of us. You do have to know some technical stuff I suppose, but it is only enough to know how to command your subbordinates, much like web design. Before taking us on he was doing little projects one at a time on his own and declining a bunch of work, he just starting taking everything that came his way and training new folks to do the work to get a good little firm going.

I'm contemplating something like this but with smartphone apps.

[LouieG]

(07-05-2015 11:28 PM)Phoenix Wrote:  

Just found this thread. Very awesome.

I have one question: how do you keep the work pipeline filled? I assume this is your foremost responsibility, are you ever afraid that jobs will stop flowing (even briefly) and your whole company will be sat idle and collecting paychecks?

Yep this is one of my biggest challenges. Two things:

First, most of my main developers are on three-month contracts that guarantee them 30-40 hours a week. So if I don’t need a guy, I’m never on the hook for that long, and then I won’t renew him.

Second, I have agreements with a much larger dev shop and with a developer staffing agency, where they absorb my guys for “punch work” assignments ranging from a couple hours to a few weeks. That work is almost no-margin for me but overall it’s a win-win: Since I charge a reduced rate, the agency & dev shop take any hours I give them, and it more than covers my payroll obligations.

[AntiTrace]

I have learned a lot about programming the past year or so. I've done Wordpress for a few small things, but most of my experience is in being the one man shop for full customization of two business web apps. That's full stack development: HTML/CSS/JS/PHP/SQ. I hustled my way into those two gigs, and it was an amazing experience learning as I went and solving real world problems with a few (well, maybe a few thousand) lines of code.

Everything Louie has posted here passes the logic check. I don't think anyone doubts you Louie, but I'll put my two cents in and say that this is a very doable business model. Although I would recommend learning some code, at least the theory and logic behind it so that you can better estimate costs and direct your contractors.

My current customized business web app will be completed in about a month. I was going to trip somewhere, but some other things popped up that will keep me in the states until the end of the year. I don't need to do any more work, but I get bored without a project going on. I could try to hustle another fully custom web app and code it myself, but I'd like to try out the PM side of things.

I'm seriously considering taking your model and running with it. Ideally starting with two small clients, so that if the contractors drop the ball I can jump in and finish things up.

Couple questions:

Louie, what industry yielded the most clients in your startup phase? I know you mentioned that it's easier to sell a business whose products are 10k a pop than a restaurant that serves $5 burgers due to the return on investment for them. But are there specific industries that gave you the biggest bang for your buck?

Where there ever any contracts you underestimated on, and had to foot the bill for the overage?

How did you obtain your contractors in the initial startup? Were you using the elance/odesk route, personal contacts, Craigslist style jobs, etc?

Any bad experiences with the contractors you hired on?

In regards to Wordpress plugins, some of the more useful ones have a cost. They range from single website use ($50 for example) to a developers license ($500 for example) that can be used on unlimited websites. Did you purchase these single oage plugins and then past the cost on to the buyer? Did you purchase the developers package and then consider it an investment? Did you do neither and instead rely on the contractors to provide them?



Apologies if you addressed these in your data sheet, it's been a minute since I read through it.

[redbeard]

I am looking to get into this. I organically came up with this idea after I was looking for a place to do car repairs but al of these people had shit websites. Lo and behold this datasheet pops up....

Anyway I'm interested in this question as well:

Quote:

How did you obtain your contractors in the initial startup? Were you using the elance/odesk route, personal contacts, Craigslist style jobs, etc?

[speakeasy]

What strategies do you guys use to figure out the client's budget? It's risky to go through that discovery process which can be time consuming just to find out your client's budget was $500 once it comes time to talk money. It's hard to quote a price without scoping out what they want specifically. And clients tend to stay tight-lipped about their budget for fear that they'll be ripped off. Yet you risk taking all that time figuring out what they want just to find out that their budget is a joke. How do you guys deal with this scenario?

[456]

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[LouieG]

Quote:

What strategies do you guys use to figure out the client’s budget? It’s risky to go through that discovery process which can be time consuming just to find out your client’s budget was $500 once it comes time to talk money.

First, it’s important to distinguish between a sales process and a discovery process. “Discovery” is billable and done under contract — it’s basically consulting to plan an eventual web development project. Sales, by its nature, is not billable.

When a client comes to me with poorly defined objectives, or goals that I’m not 100% sure how to fulfill, then I push them to begin to a paid discovery process. Obviously sometimes they’re not willing to pay, and if the potential project is large enough, I’ll say screw it and incorporate discovery into my sales process. But generally, if the client is not immediately giving me enough information to write a scope of work and begin a design or development phase, I’m going to insist that they pay me for some discovery work.

(That was not the case during my first 1-2 years in this business. At that point, you bend over backwards and do whatever is necessary to land the contract.)

As for finding out the budget — I just ask. It feels weird at first because we are accustomed to being so circumspect when talking about money, but anyone with business experience will understand the importance of getting a number. When people hesitate to give their price range, I often make an analogy to renting an apartment: you can rent an apartment for $1000 per month, and you can rent an apartment for $5000 per month. But those are two completely different apartments, with completely different amenities, in different parts of town, etc. And if you have the budget for the $5000 apartment, you probably wouldn’t even consider the thousand dollar apartment, although you certainly could afford it.

Similarly, I can set up an e-commerce site on Squarespace for $1000, or I can design & develop a custom Magento site for $100,000, soup to nuts. Both sites are e-commerce, but otherwise they’re completely different, and it doesn’t make any sense to start talking about feature set or functionality until you have an idea of what the client might conceivably spend.

Quote:

Louie, what industry yielded the most clients in your startup phase? I know you mentioned that it’s easier to sell a business whose products are 10k a pop than a restaurant that serves $5 burgers due to the return on investment for them. But are there specific industries that gave you the biggest bang for your buck?

Early on, I worked with a lot of nonprofits. That was partly because I was recently out of college and many of my university connections had gone into the nonprofit sector. But also, there are lots of nonprofits with deep pockets and big budgets for custom web work.

More recently, I’ve focused on publications and e-commerce sites. Publications are similar to nonprofits in that a lot of them are funded by wealthy organizations or foundations with essentially unlimited cash. And e-commerce sites are good targets for obvious reasons.

That said, if I were starting over, I wouldn’t target an industry, I would targeted type of business which you basically described: B2B, with high margins for each client. In any large city, there are a hundred thousand different businesses that fit that description. 99,000 of them have shitty websites and no SEO and would see significant ROI on a low five figures web overhaul.

Quote:

Where there ever any contracts you underestimated on, and had to foot the bill for the overage?

All the time. But by now, I know to charge high margins for my developers’ work, so it is hard for me to lose money, on net.
The bigger risk is burning through that margin. If I flat price a project where my goal is to do 300 man hours of work at a $60 margin per hour, and I end up going so far over my time estimate that my margin per hour drops to $20, I don’t technically lose any money, but I make much less than I was hoping for. That’s the more common scenario.

This is why you a) hire someone with the expertise to create accurate estimates and b) always pad your estimates. For padding, my rule of thumb these days is to multiply by 1.2 for estimates I’m sure are bulletproof, and 1.35 for estimates where there is any doubt.

Quote:

Any bad experiences with the contractors you hired on?

Again, all the time. “Bad” ranges from the developer being less skilled than I hoped, to someone falsifying hours they didn’t work. That’s the nature of hiring people. At the moment, my team is skilled and reliable, pretty much across the board. But for my first several years in this business I was constantly hiring, firing, and recruiting new developers.

Quote:

In regards to Wordpress plugins, some of the more useful ones have a cost. They range from single website use ($50 for example) to a developers license ($500 for example) that can be used on unlimited websites. Did you purchase these single oage plugins and then past the cost on to the buyer? Did you purchase the developers package and then consider it an investment? Did you do neither and instead rely on the contractors to provide them?

I don’t do much WordPress these days. But this is more a question of business principles, and my inclination would be to purchase the developers package for the first client who needed it, pass the entire cost (plus markup) onto them, and then use it going forward. Of course, every subsequent client who gets the plug-in on their site will be paying $500 for it, minimum.

If the plug-in does something useful, most clients won’t flinch at paying $500 extra for it, and they definitely won’t consider the possibility that they could buy and install the plug-in themselves for $50.

Always look for chances to grow your business on your clients’ dime. I learned that from one of my mentors/clients early on, and it has served me well.

[Grind]

@LouieG
When you first started out you mentioned some clients you worked for like an art appraiser and once you made their website they suddenly had more work than they could handle.

Honestly I feel like SEO is the hardest part. How did you learn so quickly on how to rank a new website? Any tips or books you read?

[Columbo]

For us developers, PMs are parasites living off our hard work and getting all the credit.