Web design agency

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Ridge_N

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Hi all. Not sure if this thread should be here, but just a quick question.

I've started a web design agency and wanted to find out, in the day and age with high tax rates, is it still possible to get funding from individuals?

Thanks in advance.

Regards
Siya
 
I don't have a business like that but why do you want to lease property,furniture etc where as you have a place to stay where you can base your business at and look for clients and take it from there start that business from home then when things are going well then do your leasing etc my opinion anyway
 
Yeah I'd like to do that, but the whole idea of me getting distracted by stuff that needs to be done at home like when my grandparents need help with something. But I guess I need to have patience.
 
You just have to find a balance between the two it's either that or get the stress of paying rent and salaries etc every month for a small business that's not what I recommend, but maybe there is things that I don't understand. Small companies must stress about getting clients not paying landlords
 
I have my own web design company which I started and am still running from home.

You don't want offices etc. right now. This is a very volatile industry and keeping a steady income to pay rent for an office, pay staff, pay stationary accounts etc. is not something you want to worry about when you start off.

You should focus on getting clients and maintaining that client base with a steady monthly income before you find an office and hire staff.

You need to remember that when hiring staff, you are going to have to register for UIF, PAY-E etc. You will most likely also need someone to handle payroll, do your books etc. That is not a cheap expense, especially ensuring your books are in order for SARS.

I strictly get contractors to help me should I not have the time to handle a project alone or for any other reason I would need help. I also do not use a single contractor for more than 24 hours in a month. That means no UIF registration necessary. I also do not let a single contractor work for more than the amount compulsory to pay tax in one month. This means no PAY-E registration is necessary.

Starting off the hard way is going to seriously deteriorate your chances of success in this business. You need to make good money before you can spend some money :)
 
No - dont get offices and such - make sure you have good products and build your rep up.Clients dont care where you work as long as your product suits their needs and you are honest and open.Start small, dont just dive in the deep end by racking up all these expenses.
 
I see this all the time with people who get excited about running their own business and so they throw what little they have down the drain.

* When I was in varsity a friend and I started a computer business, did the paperwork to register, got the business bank account etc etc and wound up with nothing. We did a few 10s of thousands in sales but the business and bank costs destroyed that over a matter of months. Stupid of us but lesson learned.
* A friend of my GFs started her business, hired a lawyer to draw up the contracts for her business and agreements for end users, paid for a website, paid for business registration. She's lost about R30k-R40k as the business didn't take off.

The lesson here is start the business from home, with little or no cash injection from yourself whatsoever. Get a few clients, average out the costs vs what the average you get paid is. See if you can get a somewhat steady income with constant income of work. When, and only when you can get to this point, should you entertain the idea of registering a business. When your business is making 100s of thousands each month, only then is it a good idea to possibly start looking at getting premises. You might never actually need premises in which case you can save yourself and the business a ton of cash that you can put towards that Ferrari you always wanted.

What you are going to do is wind up taking out a loan as no one would bankroll you as you have no signs, never mind a track record, of constant income of which is a high figure. Investors only invest in businesses that are already showing a healthy growing profit and need cash to take the business to the next level. Then you are going to throw away you loan cash on renting offices while possibly not making enough to cover the rent costs, never mind water, electricity, and other small overheads, or even paying yourself a salary.
Then you are going to spend many moons working a job you hate to pay back the loan you took out. Then you can give it another go in 5-10 years.

Businesses are mostly successful because they cut unnecessary costs to maximise profit. When your profit is ridiculous that you can afford all sorts of stuff comfortably then great, get the office, the ferrari, the boat, whatever. If your business does not comfortably make enough profit each month to cover these expenses then all you are doing is creating debt and screwing yourself over in the end.

Whether you like that truth or not makes no difference. If you can't manage the small challenges of your grandparents irritating you now you definitely do not have what it takes to run a business.
 
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Ridge_N said:
Yeah I'd like to do that, but the whole idea of me getting distracted by stuff that needs to be done at home like when my grandparents need help with something. But I guess I need to have patience.
Click to expand...

Patience is key, I'm glad you understand. Build slowly and solidly rather than putting yourself in a terrible situation from the get go. Work from home and build up your reputation. Focus on keeping your customers happy and the rest will come in time.
 
^^vampire^^ said:
I see this all the time with people who get excited about running their own business and so they throw what little they have down the drain.

* When I was in varsity a friend and I started a computer business, did the paperwork to register, got the business bank account etc etc and wound up with nothing. We did a few 10s of thousands in sales but the business and bank costs destroyed that over a matter of months. Stupid of us but lesson learned.
* A friend of my GFs started her business, hired a lawyer to draw up the contracts for her business and agreements for end users, paid for a website, paid for business registration. She's lost about R30k-R40k as the business didn't take off.

The lesson here is start the business from home, with little or no cash injection from yourself whatsoever. Get a few clients, average out the costs vs what the average you get paid is. See if you can get a somewhat steady income with constant income of work. When, and only when you can get to this point, should you entertain the idea of registering a business. When your business is making 100s of thousands each month, only then is it a good idea to possibly start looking at getting premises. You might never actually need premises in which case you can save yourself and the business a ton of cash that you can put towards that Ferrari you always wanted.

What you are going to do is wind up taking out a loan as no one would bankroll you as you have no signs, never mind a track record, of constant income of which is a high figure. Investors only invest in businesses that are already showing a healthy growing profit and need cash to take the business to the next level. Then you are going to throw away you loan cash on renting offices while possibly not making enough to cover the rent costs, never mind water, electricity, and other small overheads, or even paying yourself a salary.
Then you are going to spend many moons working a job you hate to pay back the loan you took out. Then you can give it another go in 5-10 years.

Businesses are mostly successful because they cut unnecessary costs to maximise profit. When your profit is ridiculous that you can afford all sorts of stuff comfortably then great, get the office, the ferrari, the boat, whatever. If your business does not comfortably make enough profit each month to cover these expenses then all you are doing is creating debt and screwing yourself over in the end.

Whether you like that truth or not makes no difference. If you can't manage the small challenges of your grandparents irritating you now you definitely do not have what it takes to run a business.
Click to expand...

+100000 :D
 
if you must work in an office, hire something like Regus or those pay per hour type offices.

Learn some discipline, work from home or look for places that rent out hot desks, co-working enviroments etc.

Work on getting clients and retainers first.


Personally, your post comes across as someone who wants an investor to take the risk of paying for your offices, staff, furniture and fixtures. While you sit back and delegate work to staff and enjoy the returns. And if things dont pan out.. tough luck and move onto another venture while your investor has been burnt.
 
Ridge_N said:
Thanks for the input guys. It'll help a lot. Much appreciated. :)
Click to expand...

I think one thing you will find is when you start earning the money after putting in hard work and long hours is that you will most likely become savvy with it. You will start learning where you can cut costs and still deliver with 100% efficiency which is ultimately what your clients want. You'll also learn that choosing between a nice 2 week holiday overseas or an extra months rent is a no brainer :)

I've been running my own part time website/software business for 6-7 years. I've still not got offices and push not to have to meet clients if possible. If I do I will meet them either at a restaurant/coffee shop or at their home/offices. This way I just need to look half decent when I meet them and don't have to worry about impressing clients with an office. My total running costs every month comes to R500. This has allowed me to use profits that I otherwise wouldn't have had to enjoy what I want (travelling). So far it has gotten me and the GF to Thailand, Mauritius, Mozambique twice (North & South), Zimbabwe (Vic Falls), Botswana, Zambia, Zanzibar and a weekend cruise. It's also contributing to paying for our immigration costs which is +-R75000.

Work hard at pleasing your clients, everything else will follow naturally.
 
^^vampire^^ said:
I think one thing you will find is when you start earning the money after putting in hard work and long hours is that you will most likely become savvy with it. You will start learning where you can cut costs and still deliver with 100% efficiency which is ultimately what your clients want. You'll also learn that choosing between a nice 2 week holiday overseas or an extra months rent is a no brainer :)

I've been running my own part time website/software business for 6-7 years. I've still not got offices and push not to have to meet clients if possible. If I do I will meet them either at a restaurant/coffee shop or at their home/offices. This way I just need to look half decent when I meet them and don't have to worry about impressing clients with an office. My total running costs every month comes to R500. This has allowed me to use profits that I otherwise wouldn't have had to enjoy what I want (travelling). So far it has gotten me and the GF to Thailand, Mauritius, Mozambique twice (North & South), Zimbabwe (Vic Falls), Botswana, Zambia, Zanzibar and a weekend cruise. It's also contributing to paying for our immigration costs which is +-R75000.

Work hard at pleasing your clients, everything else will follow naturally.
Click to expand...


Preach!

Same boat as you, also freelance web work for clients. and yets its helped me fund many trips to foreign lands. Best part is, virtually all my clients came from word of mouth. Come to think of it, i've done zero advertising!
 
naeem said:
Preach!

Same boat as you, also freelance web work for clients. and yets its helped me fund many trips to foreign lands. Best part is, virtually all my clients came from word of mouth. Come to think of it, i've done zero advertising!
Click to expand...



^^vampire^^ said:
I've been running my own part time website/software business for 6-7 years. I've still not got offices and push not to have to meet clients if possible. If I do I will meet them either at a restaurant/coffee shop or at their home/offices. So far it has gotten me and the GF to Thailand, Mauritius, Mozambique twice (North & South), Zimbabwe (Vic Falls), Botswana, Zambia, Zanzibar and a weekend cruise. It's also contributing to paying for our immigration costs which is +-R75000.

Work hard at pleasing your clients, everything else will follow naturally.
Click to expand...

off topic, but... This has been my dream for the past few months. How did you guys start ? What experience did you have ?
 
Dylan_G said:
off topic, but... This has been my dream for the past few months. How did you guys start ? What experience did you have ?
Click to expand...

I did a few jobs for cheap and either the same people came back to me for more work or they told people they know about me. I also have a friend who runs an IT company and he passes work my way from time to time as he only handles hardware and support.

I also got lucky and managed to get onto 5FM where I ran a special where whoever called after hearing me on 5FM would get a website for free and only had to pay the hosting. That brought in quite a few clients :)

The advantage I have is that I have a full time job so I can afford to undercut the market in most cases. Did a job a few months back that would have easily cost R50000 or more for R12500. The trade off is that the client will have to wait longer for the deliverables. Now that people are getting to know about me by word of mouth I'm starting to only take the bigger jobs as the smaller ones are no longer worth it unless I have a small gap to fit them in. Also the value add of me being willing to make changes or help out with support issues without charging is a huge plus for some of my clients; elsewhere they could easily be charged R350-R500 for something silly. It does get frustrating sometimes but it's my niche and works for me. I sometimes even go so far as to give free support to clients who I have built a website for but chose to host elsewhere. I can guarantee you if they want another site done, they'll be coming back to me, even if I increase my prices.

Either way, my motto has always been that if you give quality work and service then everything else will follow. If you get into business just to make millions then you tend to fail. I set out to give people quality websites at a reasonable costs. My pricing was insanely low when I entered the market. I worked at a web dev shop that was charging R30-R60k per website, I was giving my first batch of clients the same thing for R2500. I will do a site for really cheap from time to time to get people in and paying hosting which is great for a passive income.
 
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^^vampire^^ said:
I did a few jobs for cheap and either the same people came back to me for more work or they told people they know about me. I also have a friend who runs an IT company and he passes work my way from time to time as he only handles hardware and support.

I also got lucky and managed to get onto 5FM where I ran a special where whoever called after hearing me on 5FM would get a website for free and only had to pay the hosting. That brought in quite a few clients :)

The advantage I have is that I have a full time job so I can afford to undercut the market in most cases. Did a job a few months back that would have easily cost R50000 or more for R12500. The trade off is that the client will have to wait longer for the deliverables. Now that people are getting to know about me by word of mouth I'm starting to only take the bigger jobs as the smaller ones are no longer worth it unless I have a small gap to fit them in. Also the value add of me being willing to make changes or help out with support issues without charging is a huge plus for some of my clients; elsewhere they could easily be charged R350-R500 for something silly. It does get frustrating sometimes but it's my niche and works for me. I sometimes even go so far as to give free support to clients who I have built a website for but chose to host elsewhere. I can guarantee you if they want another site done, they'll be coming back to me, even if I increase my prices.

Either way, my motto has always been that if you give quality work and service then everything else will follow. If you get into business just to make millions then you tend to fail. I set out to give people quality websites at a reasonable costs. My pricing was insanely low when I entered the market. I worked at a web dev shop that was charging R30-R60k per website, I was giving my first batch of clients the same thing for R2500. I will do a site for really cheap from time to time to get people in and paying hosting which is great for a passive income.
Click to expand...

+1

I also have a permanent job so I go in cheaper than most web design agencies out there. When I started off I did a few sites for R500 each and I also did a few free sites which really helped.
 
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