8 Ways to Build Recurring Revenue in Your Web Design Business

8 Ways to Build Recurring Revenue in Your Web Design Business

Freelancing brings many benefits, such as the freedom to be your own boss and the chance to work on many exciting client projects.

But the biggest challenge plaguing most freelancers is often the unpredictability. Clients come and go, and some projects dry up sooner than expected. All this affects your income potential every month. More often than not, it’s unpredictable.

If you have experienced freelance or agency life then you are familiar with the “feast-and-famine” cycle. Unpredictable income means you are not able to keep up with your financial obligations. It also adds unwanted stress, which then affects your productivity and performance.

But, some freelancers have managed to increase their income month-over-month without burning themselves alive with over-working.

How? It’s through recurring revenue!

In this article I’ll explain what recurring revenue means, and why it’s essential for both your bank account and your sanity. I’ll also share eight proven strategies that you can use to generate recurring revenue starting this very month.

What Is Recurring Revenue, and Why You Need It?

Recurring revenue is a portion of your income that is predictable, stable, and usually received periodically (monthly, quarterly, or annual).

The most common example of recurring revenue is seen in the software industry.

Let’s say you have a subscription to a productivity software such as G-Suite, Office 365, you are usually on a monthly or annual subscription.

recurring revenue gsuite pricing

As a consumer, you benefit from predictable and straightforward billing. You also benefit from getting access to that software at a fixed low-cost rather than purchasing the entire software upfront.

For the software provider (vendor) — it provides them with a clear insight into how many customers are paying for and using their products in any given period.

Another example of recurring revenue is subscriptions/membership plans. Whether you sign up for Netflix or your local gym — it’s recurring revenue for that vendor.

recurring revenue netflix pricing

So if the entire SaaS (Software-as-a-Service) industry and your favorite streaming provider can do it so can you.

A few web-design agencies have already figured out a way to do the same. They offer their clients with monthly support packages or retainers (I will explain both these options in the sections below).

recurring revenue kitzmiller media package

recurring revenue wpbuffs wordpress care plans

There are many benefits of adding a recurring revenue stream to your business.

It Provides You Predictable Income

With recurring revenue, you will know in December how much income you can expect to make in April next year. It offers you greater peace of mind and it allows you to plan or manage both your business and personal lives.

Wouldn’t it be nice to know that you can take a week-long vacation in March and not be worried about if money is coming in or not?

It Will Reduce Your Stress

Running your freelance web design business or an agency is often stressful. You are constantly worried about client acquisition, project completions, meeting deadlines, and financial instability.

Unstable income is the most common cause of stress for most freelancers.

If you can generate a few thousand dollars in additional monthly or quarterly revenue, it will help alleviate some of the financial pressures.

Loyal and Happy Clients

If a client is willing to work with you on a retainer or a monthly maintenance plan, then it is an excellent sign that they are satisfied with your services.

Such clients are also more likely to provide testimonials, case studies, and even potential referrals.

It Can Help You Scale

Once you have fixed revenue coming in each month. You can then build the systems and best practices in place to support those clients.

At this point, you can potentially outsource or hire additional help for these tasks. You are slowly and surely evolving from a one-person operation to a full-grown team.

Also, the additional income from recurring revenues can be re-invested into your business towards marketing, sales, learning new skills, etc.

8 Ideas to Build Recurring Revenue as a Web Designer

In this section, let’s look at some of the most commonly used strategies by other freelancers and agencies to generate additional revenue on a monthly basis.

Some of these ideas can be set up instantly while others might take time to develop and launch.

Website Maintenance Plans

As a web designer, the majority of your revenue probably comes from website projects for your clients. These projects could last a few days, a week, or sometimes even months.

But should your income end as soon as your client’s website building project is over?

What if you can extend that relationship with these clients by other services, and still have you on their payroll?

That’s precisely where website care plans or support packages or website maintenance plans are an excellent way for freelancers to generate recurring revenues.

You can offer your clients a monthly package that includes some common tasks involved in maintaining a website.

  • Theme maintenance.
  • Content Backups.
  • Database Backups.
  • Plugin updates.
  • CMS updates (WordPress, Joomla, Hubspot, Shopify).
  • Security Monitoring.
  • Website Hosting.
  • Reporting.

Most websites (both old and new) need these tasks routinely checked and optimized to ensure that they are always up-and-running.

WPCurve built an entire business solely on delivering monthly website care packages. They started offering WordPress care packages starting from $79 per month, and at one point boasted close to 1000 customers.

Their service was so successful that GoDaddy purchased the company in 2016. The service has now been rebranded to GoDaddy WP Premium Support.

If you conduct a Google search for “website care plans” or “website maintenance packages.” — You’ll find examples from various other agencies or freelancers who are already offering this type of service.

It’s an easy way to get started with trying to build recurring revenue. You can contact existing clients and offer them maintenance plans and there’s no upfront cost to getting started, apart from time.

Offer Consulting Services

If you have been building websites for a few years, then you have unquestionably acquired new skills, knowledge, and expertise.

It’s now perhaps a chance for you to convert that knowledge or experience into a kind of revenue.

Start offering your expertise in the form of consulting services to both your new and existing clients.

Here’s the key difference between your standard web-design engagements and consulting projects.

When consulting, you are not building websites or apps. Instead, your clients are hiring you for ideas, strategy, and guidance.

Consulting services are often more profitable than development services.

A typical WordPress developer charges anywhere from $10 to $60 an hour (with only 2% charging over $60 per hour). Consulting services usually receive a higher hourly rate ranging from $50 to $150 an hour, and it varies based on the experience.

The most challenging part is obtaining your first consulting project. However, once you do that it will be easier to acquire more clients for consulting services.

Here are a few consulting ideas that you can offer:

  • Website conversion optimization.
  • Creating marketing funnels.
  • Improve SEO (search engine optimization).
  • Website content strategy.
  • Email marketing.
  • Social Media marketing.

I would recommend that you choose one niche to focus on. It could either be a specific consulting niche (as above) or a specific industry. Once you have decided upon your niche, it’ll help you to secure larger consulting projects or dictate a higher hourly rate.

FlowPress, a web design agency based in Toronto, Canada offers consulting services. They even break down the type of consulting projects that clients can hire them for.

flowpress consulting services

Adxotic Digital Marketing based in St.Peters, Missouri is another web design agency that offers consulting services as one of its offerings.

adxotic website consulting

Become a Subcontractor

This strategy is similar to #1 (Website Maintenance Plans). However, instead of dealing directly with clients, you are working with other larger agencies.

In this case, the agency becomes your client, and you become their subcontractor.

Larger agencies outsource most of their work to freelancers simply because they can’t handle the workload internally, or they need a specialist for a specific project. This could be a perfect opportunity for you to offer your services on a project-based or fixed-monthly pricing.

Let’s say an agency only specializes in building websites. However, they don’t have the time or interest to offer maintenance packages. You can help them fill this gap.

Or, a consulting practice is requested by their clients to deliver a website project. This consulting agency would be looking for a viable partner to help them, and you can be this partner.

It is a win-win-win proposition for everyone involved.

The end-client wins because they get their projects completed. The agency wins because they can offer a different service to their clients. Finally, you win because you have unlocked new revenue.

Here are a few things to consider before you offer subcontracting services:

  • Be selective about who you work with. Make sure that it is aligned with your core services, and you can support them.
  • Position yourself as a problem-solving partner, not another cost-saving solution.
  • Negotiate the price in advance, so they can justify your price to the end-client.

The advantage of subcontracting is that when you choose the right partner, there is often a steady flow of projects coming your way. This helps you with income predictability.

Offer Monthly Payment Plans

SaaS (software-as-a-service) companies have successfully pioneered periodic subscription payments (monthly, quarterly, or annual) into their business models.

Instead of asking consumers for the full-price of the software upfront, they can win more customers with lower monthly pricing.

However, keep in mind that not all software companies are like Netflix or Amazon Prime (where customers can cancel any time).

Most SaaS providers sign a one year or 3-year agreement, and the payments are set monthly. The customer gets access to the entire software and features during the term of the contract.

As a service provider, you can use the same pricing model.

Instead of asking for the entire payment upfront for completing the web design project, you can encourage your clients to make monthly payments.

Most clients would like this idea because it allows them to stretch their payments as it helps them with managing expenses if the project is over $50,000+. In many cases, they might not have the funds readily available to hire you right away.

Installment payments are easier to implement and manage. It also saves you the hassle of sending monthly invoices. The client’s accounting team does not need to spend time reconciling and approving your invoices as they know in advance what is owed to you each month.

A significant point to consider is that you shouldn’t accept monthly payments for every single customer project. Ideally, you want to use this option for a high-value project ($50,000+). For smaller projects, you can set a payment schedule based on hitting milestones.

Regardless of which option you choose, always ensure that you a prior-written contract and everything (delivery schedule, milestones, payment terms) is crystal clear.

Offer Retainers

Retainers are pre-arranged between you and the client. They are structured in such a way that the clients will pay you in exchange for ensuring your services are available to them for a specific period.

The primary benefit of a retainer agreement is that it guarantees a certain number of hours per month to your client at a specified amount. It helps you plan your work as you know how many hours to allocate for a client each week/month.

It is different from installment payments.

For payment plans both you and your client are clear about the scope of the project and estimated delivery. The only thing changing is how you are getting paid, monthly instead of lump-sum.

Retainers differ because the client is paying for a set amount of time to get access to your expertise or services.

Retainers are very common in the legal industry. Clients often hire lawyers on retainers, so they can get access to legal advice for a certain number of hours each month.

Here are some services that you can offer in a retainer agreement:

  • Website Redesign.
  • Social media marketing.
  • Email marketing.
  • Content creation.

The most critical thing about retainers is that you must set expectations upfront with your clients.

Always create a contract before starting a retainer relationship. Be clear on what your clients can expect. Also, provide clarity on what is outside the scope of work.

I recommend using retainers only for development or design work and not for maintenance. Any website updates should be part of website care plans (as discussed above). That’s why it’s important to clarify in your retainer agreement what is included and what isn’t.

Resell Products or Services

It is not unusual for freelancers to use and recommend the same tools for all their projects.

The primary reason is that it makes your job predictable and reduces your learning curve of using various tools.

You probably use a wide range of tools for website building website hosting solutions, premium themes, premium plugins, backup solutions, SSL.

These software vendors can be another source of potential revenue. Most of these software companies offer affiliate/reseller programs, and they are always welcoming new partners.

In exchange for helping them sign up new clients, they will offer you a hefty commission check.

Here’s an example of a partner program from hosting provider SiteGround.

siteground hosting affiliate program

You can find similar information from most of the other providers in the WordPress ecosystem.

Most of these companies have a regular payout schedule, and this makes it easy for you to predict how much you can earn.

Affiliates/resellers are one of the fastest ways to build recurring revenues.

We also have an affiliate program here at Astra.

If you have used our tools in the past, or are interested in leveraging the Astra theme to build WordPress websites why not take advantage of our program. Check out the Astra Affiliate program here.

astra affiliate program

Create a Software Product

As a freelancer, you have acquired all these web-development skills, and you have used them exclusively for your client’s projects.

You can also convert these skills/knowledge to build products and start selling them to your customers or your audience.

If you closely look at the WordPress ecosystem – there are over 54000+ plugins and 11000+ themes. Independent developers like you created most of them.

13% of the plugins created in the WordPress ecosystem are premium plugins i.e., the developer is earning revenue each time a customer purchases and installs their plugins.

We here at Astra are a prime example of this. If you are familiar with our story, we started as a web development agency in 2009. However, in the last few years, we pivoted to a product company creating products such as Astra, Schema Pro, etc. Today all of our revenues come from our suite of products for WordPress and WooCommerce users.

If you have experience building WordPress websites then build WordPress plugins or solutions to start earning recurring revenues.

Most CMS (Content Management System), website builder and software companies have an apps marketplace. You can join them, create add-ons/plugins and sell them on these marketplaces.

Create an Informational Product

If you have a proven track record then your peers (other freelancers) might be genuinely interested in learning from you. They might even pay you a premium to learn from you.

You can convert your knowledge and expertise into informational products and market it to your audience.

Here are some ideas of monetizing via informational products:

  • Ebooks
  • Podcasts
  • Courses
  • Membership sites
  • Coaching Calls

The benefit of selling informational products is that your costs (time, effort, resources) are mostly upfront. Once they are created and launched then the revenue will keep coming in each month. Your ongoing maintenance costs are minimal as the products are already created, and support is often minimal.

Nathan Barry, a former iOS developer and the founder of ConvertKit, is an excellent example. He created an ebook filled with tutorials, case studies, and interviews called the App Design Handbook, and started selling it on his website. Nathan earned over $10000 in the first 24 hours of launching this ebook, and he has also earned over $100000 in total income from some of his other ebooks.

app design handbook

Conclusion

I hope you found this article and the 8 ideas to generate recurring revenue valuable.

I encourage you to implement not just one but as many as these ideas to maximize your earnings. Go ahead, take control of your future earnings and turbocharge your freelancing business.

Do you have other ideas to generate recurring revenues? Let us know in the comments below!

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