Joe Wellborn shares how to Propel Your Earning Potential to New Heights

Joe and I talk about an early career lesson he learnt from his art director when designing postcards and the Sistine chapel.

- Calibrate your level of effort for the type of job you're working on.
- Collaboration with other Web Designers and experts has been a big factor in successful projects.
- Work an hour, bill an hour. Why you should re-think this and build long-term cashflow for your design business.
- Vertical markets, leveraging what you've learnt and go after more of the same.

Listen to my interview with Joe, Founder and CEO of Practically Inspired and read his insights below:

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Propel Your Earning Potential to New Heights With Business Catalyst

Joe WellbornI've always thought the good part of being in this business is you get to be creative, it's exciting and often fun -- and you actually get paid for doing something you enjoy. How great is that?

On the other hand, one of the things I've never liked about this business is that to a large extent, your earning potential is limited by how much you are willing or able to work. It's the classic "work an hour, bill an hour" revenue model, in which you provide a service, and then you bill for your time. Unfortunately, there are a limited number of hours you can work in any given day, which limits the amount of money you can earn. And after all, you are trying to make a living.

Sure, you can try and scale up your business, but that's easier said than done because 1) we are in a service business that relies heavily on your personal relationships with clients, which is not easily scaled, and 2) hiring designers, coders, and project managers adds an expensive layer of administrative overhead that largely mitigates the value of those team members. To put it differently, if it were easy to scale a web development business there would be lots of web dev businesses with hundreds or even thousands of employees, and those business owners would be very wealthy. For the most part, they don't exist.

So how can we -- as sole proprietors and small shops -- increase our earnings while remaining about the same size and doing the business we enjoy? The short answer: passive income. To be more specific: develop a steady and growing stream of passive income with hosting fees on your Business Catalyst platform.

Let's compare a couple scenarios for a typical web development shop.

Consulting-Only Revenue Model

We'll start with a consulting-only revenue model over a five-year period. In the example below, the business earns $3,000 for every website produced, and three websites are completed each month. At that rate, the business generates $108,000 a year, which totals $540,000 after five years. For the sake of simplicity, I'm not factoring in all the ongoing billable support services that would likely come with this many websites. All in all, not bad if you're a sole proprietor.

Consulting-Only Revenue Model

Consulting Plus Hosting Revenue Model

Now let's take a look at what happens if the shop becomes a Premium Partner and starts earning $30/month in hosting fees (you can obviously play around with numbers to suit your own needs).

Consulting-Only Revenue Model

In this example, the shop owner still earns $540,000 in consulting income after five years, but now there is an additional steady stream of passive income, totaling $164,700 for the same five year period, and it's growing each year. What's more, the passive income curve is accelerating, while the consulting income remains more or less the same, because it is limited by the factors previously mentioned.

Now, if you imagine projecting this out for an additional five or ten years you can see that the earning potential of the consulting-plus-hosting model substantially outpaces the consulting-only business. And the really amazing part is you can do it without fundamentally changing what you already do best: building great websites for your clients.

A Word About Verticals

After considering the example above, it doesn't take much effort to start thinking how valuable it would be to your business to ramp up the number of websites you produce each month. My example is based on three websites a month, which is a reasonable pace for a small shop. But think about what would happen to your passive income curve if you could increase the number of websites to 5 a month. How about 10 or even more? Well, now of course we're running into the same limitations I mentioned at the beginning of this article: there are only so many hours in the day, and it takes time to produce quality websites, so we're stuck, right?

Wrong. Vertical markets present a great opportunity for you to accelerate the number of websites you can add to your hosting platform each month. With vertical markets you can create a strong website solution that -- thanks to BC -- you can easily duplicate again and again, far more rapidly than producing one-up websites. If you haven't yet attended one of Colin Frost's webinars on Multi-Site Channel Strategies with BC, then you should sign up for one now. Also be sure to check out a great video by Brent Weaver at BC Gurus.

If you're like me, you'll find yourself genuinely inspired about the opportunities for propelling your business -- and earning potential -- to new heights with BC!

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