What Does “6-Figures” Really Mean?
There are 260 work days in the year. If you work eight hours per day, that means you're working 2,080 hours per year. If you want to make $100,000 take home income, you need to be making about $48 per hour.
The truth is, when you're running your own business, there's no way all of your hours are going to be billable. It's more realistic for about five hours per day to be billable. That means, you really only have 1,300 billable hours per year (5 x 260). So, you need to be making at least $77/hour ($100,000/1,300) to get your take-home income up into the six figures.
Targeting $100 Per Hour
So, as we talk about building your own six-figure web design business, I don't recommend hourly billing, but I am focusing on making at least $100/hour during your billable time.
$100,000 In Your Bank Account
When I talk about building a six-figure web design business, I mean you take home and put six figures in your bank account. I do NOT mean the gross revenue of the business is over $100,000. I mean, you actually keep at least $100,000.
What difference does it make if your business generates $100,000? Your business can generate $100,000 without any profit at all.
My 6-Figure Business Definition
So, when I talk about building your own six-figure web design business, I mean you make over $100,000 of personal income without employees, serving your own clients with websites and marketing while working out of your house with a laptop.
Now that we're clear on what we're doing, the more interesting question becomes how do you pull that off?
Mainstream Is Outdated
I personally don't believe the mainstream approach to running web design business in the United States is a viable path to six figures anymore. There's too much competition for garden-variety web design. The industry is commoditized. It's virtually impossible to fill up your billable hours with $100/hour work.
- Finding clients consistently is extremely difficult
- Too much non-billable time wasted on proposals
- Generic “portfolios” don't pull leads
- Very low (if any) subscription revenue
- Clients focused more on price than value
Problems To Solve
Solving these three problems is the key to building a true six-figure web design business.
- Better monthly plans
- Clients open to long-term relationships
- Stop wasting time writing overwhelming portfolios
Stop pricing hours. Hourly billing for garden-variety web design is not a viable path to generating $100,000/year in 2023 and beyond. There are two other pricing models that are much better.
- Value-based pricing
- Stack subscriptions
The idea behind value pricing is to charge between 10% and 30% of the total value the client will experience over the next 12 months for the project. Value comes from three basic categories:
- New revenue
- Saved expenses
- Emotional relief/satisfaction (desire)
I developed this value-based pricing calculator for web design if you want to dig into the details and come up with some actual numbers.
The most important thing to the client (and to me) is results. Getting actual, measurable results for the client involves the combination of multiple skills and services stacked up together.
For example, it's not enough to just run Google Ads. There is a lot more going on than just the Google Ad Manager.
An ad campaign needs the following stack:
- Ad copy
- Optimize targeting (who sees the ads)
- Dedicated landing page for the ad traffic
- Primary call to action on the landing page (buy/call)
- Secondary call to action on the landing page (email opt-in)
- Followup lead nurturing (drip email sequence)
- Call to action for the lead nurturing sequence
- Online calendar for booking calls
See how this is a lot more than just “Google Ads”? Also, most of these items are going to need ongoing optimization. You'll be trying new audiences, testing new headlines on the landing pages, experimenting with different lead magnets, updating the lead nurturing sequence, etc.
Rather than pricing the hours, or giving line-item pricing for each task, value price the whole stack as one thing.
Value Pricing vs. Stack Subscriptions
What's the difference between value pricing and stack subscriptions since both are based on the value of the results?
Value Priced Projects
Any custom consulting project can be value priced. It doesn't have to have any subscription services. It doesn't have to be reusable.
The idea is to figure out how to create the desired result. Then price the project as a percentage of the value created.
Stack subscriptions are like “service as a platform” products. They are reusable. They target a specific niche audience. They don't require proposals.
Solution First Agency
I think the best way to build your own true 6-figure web design business is to combine these two concepts together. A Solution First agency offer has one-time setup components like web design and branding. But it also includes at least two Stack Subscriptions as well. One stack is the technical stack (hosting, maintenance, and technical support). The other is the marketing stack the client needs to generate ongoing results.
That's where the name DoubleStack comes from.
Tech Stack + Marketing Stack = DoubleStack
Why This Works
In my experience, when you're doing something different, the biggest challenge is pricing your work. You can't put new wine into old wineskins and you can't put a new pricing model into an old web design business.
From The Client's Perspective
That means you can't just crank up your hourly rate. Even though hourly rates are meaningless because they don't account for how fast you work, clients still negatively respond to high hourly rates.
You also can't crank up the price of a website because clients will feel like they can get “the same thing for less” from somebody else.
The framework of a Solution First agency gives you a new framework that is one of a kind. The client can evaluate your offer with an open mind because you're presenting something unique. There are no hourly rates, and they can't get what you're offering anywhere else.
From Your Perspective
Develop your solution first, so you know what you need to do. Figure out who is going to do the work. It could all be done by you. Maybe you white-label some services. Then price it so that you're making at least $100/hour for your time.
Now you have a system that generates great results for your clients and works for you too!
The Next Step
If you want to get on the fast track to building your own 6-figure web design business, hop on a Zoom call with me, and we'll figure out the best way to develop a DoubleStack offer for your clients based on your skills, interests, and the type of clients you'd like to work with.
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