When we talk about adding web services to your repertoire we are talking about more than just websites. In order to really be a single source provider for all your client’s marketing needs, you’ll need to provide a smattering of services that can all lead to additional, recurring revenue.
This article will touch on the many different ways you can generate income selling web services. We will cover each one of them in more details one at a time. Topics we will cover over the next several articles include:
- Websites design
- Content creation
- Search Engine Optimization
- Search Engine Marketing (pay per click)
- Website maintenance
- Email Marketing
- Custom website development
- Mobile websites
- Mobile apps
Depending on the topic we may cover several or combine complimentary offerings together to better help you understand how you can bundle services. This article will focus on two of the easier ways to generate residual income; hosting and maintenance.
A website is simply a collection of files. The files by themselves, are somewhat useless. Without a hosting environment to serve up the files via a browser a website is about as good as a business card that never leaves the box.
A Host of Money
You can generate significant ongoing residual revenue by hosting your client’s websites.
What is it? Hosting is literally a rental fee for the space that a website occupies on a server and the usage of bandwidth when the site is served to a viewer. Hosting is inexpensive insurance to keep your site available whenever someone wishes to view it. Every website needs a host.
Your customers do not care about hosting. They only care that their website is accessible, the site loads quickly, their email works and that they have access to their site files when/if they need them. That being said, wait until something goes wrong with any of these things to see just how much they do not care about hosting. Ok, so they do care, but not in the sense of what it does or how it is done. They only care that it works, every time, all the time and that they can get in touch with someone if it does not.
Not all hosting companies are the same, nor do they all provide the same services or level of service. Important things to look for in a hosting environment are regular backups, good system uptime and support. Hosting is somewhat of a commodity item in that usually the lowest price wins. However, the lowest price typically does not come with the necessary security or backups that a small business owner will want for their site.
How do I do it? Generally speaking you contract with an existing hosting service provider. These range from inexpensive hosting space only, to full managed services hosting providers. The more services the hosting company provides the more expensive the services are. If you do not feel comfortable with setting up services, configuring domain name servers, configuring email accounts, backing up your hosting spaces and other services typically handled by a systems administrator, then you will want to look for a provider who can handle all of these things for you and is available to answer your questions. Other options include setting up your own Network Operating Center (NOC), but I have yet to see a printer or typical web developer set up their own NOC. The hardware and equipment expense, fiber optic lines, backup generators, security and systems administrator salaries typically prohibits smaller web development companies from setting up their own hosting environments.
How do I make money? Basic hosting costs can start around $5 per month. Add in domain based email, back-ups and support and hosting fees can go to $50 or more per month depending on the needs of the organization and the provider. Hosting is typically quoted by the month, but billed annually. Quarterly and monthly plans are available as well, but these usually cost additional to cover handling fees. Typically your profit on hosting services is going to be between 40 to 50 percent margins. Remember a 50 percent margin is a markup of 100 percent. Selling a couple of website hosting projects per month over the course of a couple of years and you will be generating $3-4,000 per year in ongoing recurring revenue. You can also add services agreement and maintenance fees on top of your hosting fees to further add to your hosting revenue income.
Maintaining Your Way to Larger Profits
What is maintenance? Websites need to be updated regularly. Whether it is the addition of a staff member, a new product line or a change of address, a website needs to reflect the current status of our business. When selling web solutions, talking about regularly maintaining the website is necessary.
How do I do it? Most websites being built now have a content management system (CMS) or an admin panel that allows a user to easily make changes to their website. Using a CMS will allow you to make regular updates to your client’s website based on new or changed information they send you.
How do I make money? Maintenance can be sold a’la carte, monthly, quarterly or annually. If you know the client will be having you make changes on a regular basis, a monthly package my work best. Start off with a couple hours per month and monitor how much time you are spending making the updates. If you regularly go over or under time, you may need to adjust the amount of maintenance you are providing. Many developers offer a discount if maintenance is paid for or a regular basis as opposed to on an as needed basis.
Both hosting and maintenance are hard to get excited about until you look at them as part of a comprehensive solution and as a profit center. Both of these items are added on to a website sale with relatively little additional “selling” needed. Most small business owners want to use one solution provider for all things web related and look to the web developer to suggest a host and a way to maintain the site.