Why do some web dev companies grow so fast?

[JamesBarnsley]

I cannot help but notice that quite a few web development companies I look at online seem to grow so fast.

One company I was looking at the other days already has 4 employees and was only founded last year.

I have seen a number of companies with about 10 - 15 employees and they where only founded 3 or 4 years ago.

How is this possible? What kind of contracts are they getting to support this kind of growth?

 

[Paul Norman]

I am involved in a technolgoy/web development company that has 4 employees.

We quickly needed that number to handle projects. Doing a reasonably sized project (like a big E commerce installation) is not easy if you are one person. Most of our assignments require a team of people to complete.

This does not totally answer your question, apart from the fact that we really needed that many people from day one.

 

[ryedale]

We have 5 at present and also use several freelancers. Could easily take on several more full time but I'm keeping the growth steady

Web design is very much a word of mouth business. If you do a good job, then your client nearly always knows someone else who needs a website and so on. Equally, they are very likely to require new work / updates in the future.

 

[AllUpHere]

It's a fairly easy question to answer. If you are running such a business properly, you need staff. If you are working on anything but the most basic of sites you need a team made up of people with different skills. Add that to the fact that web dev and web design businesses are incredibly easy to market, and you have a recipe for relatively young businesses with a good few staff.

 

[Jeff Nev]

Websites are in high demand I suppose, and If you're going to keep doing them to a high standard, and getting more interest from other companies, you'll need more staff quickly to keep up that high standard.

That's the great thing about quality web design; your work is easily accessible and instantly significant in how good your work is.

 

[zigojacko]

The replies so far have skipped around the actual point of the OP.

It's quite obvious that an agency needs additional developers to cater for the workload but the real answers from this thread will be those that come up with suggestions of how a new company can gain enough high-end website design/development work within 12-48 months or so that will pay for the likes of 4 web developer salaries at £20k+ per annum depending on the location in the country.

It's a good question that I'm sure many of the directors and many experienced members on here should be able to contribute to as you're essentially needing a new business with no history/reputation generating a revenue of £200k+ per year just to be able to afford 4 web developer salaries (includes other overheads that an agency has of course, could be more, could be less).

Now it is unlikely that a brand new business is likely to generate contracts in the tens of thousands of pounds almost immediately after trading. So, thoughts everyone?

Investors?
Partnerships?
Funding?
Sub-contracting?
Ad-hoc?
Company rebranding?

There is a potentially huge leap from generating enough revenue for the steady business growth, earning you a decent salary to being able to take on skilled employees on £20k+ pa salaries whilst still being able to sustain growth and stay afloat.

 

[bobrudolph]

One company I was looking at the other days already has 4 employees and was only founded last year.

I have seen a number of companies with about 10 - 15 employees and they where only founded 3 or 4 years ago.

Frankly speaking, I don't see anything unusual here. You need people to work on a project - so what's so amazing about having 4 people in the team? You want to offer more diverse services and get more and bigger projects - you need to hire new developers

 

[zigojacko]

Frankly speaking, I don't see anything unusual here. You need people to work on a project - so what's so amazing about having 4 people in the team? You want to offer more diverse services and get more and bigger projects - you need to hire new developers

Sheez man. Am I the only one that actually understood the point of the OP's post... :/

 

[AllUpHere]

Sheez man. Am I the only one that actually understood the point of the OP's post... :/

I think we understand, just don't see it as strange. Almost any business in any sector could have a few staff after only a short period of time. Web type work is easier than most, as it's easy to get a lot of work in quickly.

 

[StevePoster]

The reason why they grow so fast is that the Web development companies are establishing their business from their targeted clients.

 

[zigojacko]

I think we understand, just don't see it as strange. Almost any business in any sector could have a few staff after only a short period of time. Web type work is easier than most, as it's easy to get a lot of work in quickly.

I don't think you do...? This still doesn't help nor answer the OP's question. It's not just a case of recruiting a few employees at starter salary entry, but skilled web developers that will likely be seeking salaries from £20k p/a upwards. For a new business to grow and generate that kind of revenue required within their first few years, is quite some growth rate (and few businesses will not succeed in achieving this). Simply attracting work worth £1k here or £2k there will unlikely be at the revenue level required to quickly recruit a handful of skilled and experienced web developers (for example).

The OP wants to know how businesses are able to do this so quickly... Are new web development businesses able to consistently attract clients with £20k+ web development projects almost immediately after start of trading? Mostly unlikely (of course, not impossible).

There is a whole load of answers or possible suggestions / possibilities that would touch upon this other than people just saying something along the lines of "you need the extra staff in order for the business to accommodate the new work", this is pretty self-explanatory and obvious.

 

[JamesBarnsley]

"Simply attracting work worth £1k here or £2k there will unlikely be at the revenue level required to quickly recruit a handful of skilled and experienced web developers (for example)."

My thoughts exactly. I go on freelancing websites and see websites going for £200, the £1K and £2K projects can almost be considered a luxury let alone a £20K project the likes I have never seen accept from contract jobs where agencies are paying a day rate over the course of a number of months.

 

[DesignForge]

web dev and web design businesses are incredibly easy to market

For most of my career I was an employee web developer. Now I'm trying to do a living on my own, but find it hard to get to clients. I have to say, I'm happy to read statements like yours above, but I still wonder, how is this so simple to market my business? Any tips?

 

[ryedale]

Having started from scratch eight and a half years ago and built up to a team of 5 full time developers now, it's not a level I could have reached in the first 4 years or so when I worked by myself.

It took a lot of very long hours making sites for low prices to build up a good reputation of trust which lead to high levels of repeat work and referrals at which point I could bring the work up to market prices and bring in other designers.

To be able to sustain the wages for a number of designers you need to have a solid flow of decent value projects to be able to compensate for the project that goes on longer than planned or the client that doesn't pay on time which inevitably happens.

Once you've got that steady flow of work , then assuming you don't mess up disastrously!, then the agency should be able to continue to expand at a steady rate.

 

[DesignForge]

hey ryedale, not sure... is this an advice for me or an answer to topic creator...?

 

[ryedale]

Well it's a general observation for the thread really but that's how it worked for me

I think it's a lot harder for someone to start out now than when I did because there are so many different ways to get a site made now and people's expectations are higher.

 

[DesignForge]

Well, AllUpHere says it's "incredibly easy"

As for the expectations, I am well prepared to meet them all, with more than 6 years of experience, developing web applications around 60 hours a week, on average. Unfortunately marketing isn't my domain, so I guess there is no shortcuts and I need to work my way up slowly as you did... Anyway thanks for your input

 

[AllUpHere]

Well, AllUpHere says it's "incredibly easy"

What I said is that marketing such a business is incredibly easy, and therefore getting the work and money in the door is (ipso facto) easy too.

I'm not, however, suggesting that building such a business is easy, as there are many challenges facing such a business.

I'm looking at this from my own perspective (as a marketing consultant who specialisies in helping such businesses with their marketing). If I couldn't confidently market this sort of business I wouldn't be very good at my job. However, if you put me in front of a computer and told me to design or code a website, I would be worse than useless.

It all comes down to the skill set of the people running the business. If they have a strong and targeted understanding of marketing, the business is an easy one to scale. If they are weaker on marketing, and are in the business because of their technical coding or design ability it will be more of a challenge.

 

[Page]

What I said is that marketing such a business is incredibly easy, and therefore getting the work and money in the door is (ipso facto) easy too.

I'm not, however, suggesting that building such a business is easy, as there are many challenges facing such a business.

I'm looking at this from my own perspective (as a marketing consultant who specialisies in helping such businesses with their marketing). If I couldn't confidently market this sort of business I wouldn't be very good at my job. However, if you put me in front of a computer and told me to design or code a website, I would be worse than useless.

It all comes down to the skill set of the people running the business. If they have a strong and targeted understanding of marketing, the business is an easy one to scale. If they are weaker on marketing, and are in the business because of their technical coding or design ability it will be more of a challenge.

Exactly - if you know the business and what you are doing and plan and market etc etc etc - then that is very different from someone thinking of going into the web business and maybe just understands the technology side but nothing else about business

I have built my own business over many years and with a lot of hard earned learning.

If I was starting again but with the knowledge I have in my head now - boy could I have grown fast to 4 people and within a year

 

[Jane101]

Web developing companies know how and what kind of sites to create to attract cleints and also keep them as that's what they specialize in.

 

[francy22]

Web Developing Companies Know Their Clients and Specialization..

 

[Graham Curtis]

Easy to branch out into other areas like SEO and command high fees!

 

[Craig Pettit]

Here is a random fact, I signed up here today on the random,
The company James is talking about is mine.

and the answer I relaid to him will be the same to you guys.

We landed some high profile clients. and put in an extreme amount of work hours!

You make your own luck. We have not been blessed, we have worked extremely hard!

Craig

 

[DesignForge]

We landed some high profile clients. and put in an extreme amount of work hours!

You make your own luck. We have not been blessed, we have worked extremely hard!

wow.

 

[Alan]

What I said is that marketing such a business is incredibly easy, and therefore getting the work and money in the door is (ipso facto) easy too.

Obviously you are not in the web design business, or maybe I have completely missed the easy bit in my experience. The web design business is saturated at the lower end as every one that has picked up a WordPress theme is a 'web designer' and undersells their (limited skills), coupled with an whole sub content of low cost workers in appalling conditions selling there efforts on freelance website for not a lot. And at the higher end with the established firms that have been around for a lot longer.

As mentioned, the successful Web Design companies specialise and pick up some high value high profile clients, either from very hard marketing efforts building up relationships, and /or through reputation / word of mouth.

 

[Paul Featherstone]

Many grow fast which is possible with junior staff and enough clients coming through the pipeline but how many survive 2 or 3 years of trading is a different matter.