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Splitting profits in a design startup - how much to charge?
Old 07-07-2008, 10:02 PM Splitting profits in a design startup - how much to charge?
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I've been planning to launch a web design business for musicians/artists for years, and I'm finally going to do it. I'm a professional musician so I have a built-in market - and after doing sites for friends/colleagues, I know the ins & outs of what musicians need.

HOWEVER...I can't do it by myself, and I'll need to outsource some of the design work. (This is not a Marketplace listing, I just want some opinions/advice)

How do most businesses split profits?
Does it make sense to have a team of 2-3 designers?

I've charged WAY too little over the years, working for colleagues. Looking online, companies doing similar work charge $800-1500 for full sites with content management systems. Is 50% typical for this kind of work (for the designer)?

I realize I can save $$ by doing it all myself, but it would be at the risk of sleep & sanity. Advice is greatly appreciated!
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Old 07-08-2008, 05:40 PM Re: Splitting profits in a design startup - how much to charge?
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Honestly i would start with just yourself. Web design is an industry with alot of competition so it is unlikely that you are going to be swamped with projects right off the bat. Start up your company and maybe create your company website yourself and then see how it goes as far as getting clients, how much they are paying, how much time it takes for one band site, etc. After you know all this you can hire someone if you need them based off all the knowledge you have gained from doing a few yourself. You can determine how much it is worth to have someone else do certain parts of the work.

On a side note, just for reference, we did a small joint venture with this company http://bands.disc2day.com creating pre-made band websites using the Joomla CMS system that are fully social media enabled and they are pretty inexpensive. Granted these are pre-designed so custom band designs would be more expensive but this just goes to show what kind of competition you are up against because there are alot of companies that offer this type of service like they/we do.
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Old 07-08-2008, 05:59 PM Re: Splitting profits in a design startup - how much to charge?
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Originally Posted by randomharp View Post
How do most businesses split profits?
You say split - pay might be a better word. It usually depends how you structure your business. If the designer is your partner, with an equal stake in the company, then a split is usually appropriate, or close to it. Revenue or profit sharing are other ways to describe an arrangement like that, when it might not be 50 % for each person. Now, consider how things change if the designer is your employee.

The biggest expenses for any business are finding new customers, and labor. You're going to take on the work and the risk of the first of these, so in capitalism, that's used to justify a break down of revenue that isn't 50 % and 50 %. On the other hand, if your designer won't be paid until you've collected from the client, then they're taking on a risk, too, and will demand compensation for it.

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Does it make sense to have a team of 2-3 designers?
That depends on the workload.
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Old 07-08-2008, 08:55 PM Re: Splitting profits in a design startup - how much to charge?
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You have to start with low prices and build a portfolio
Then you can charge more.
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Old 07-09-2008, 12:14 AM Re: Splitting profits in a design startup - how much to charge?
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You have to start with low prices and build a portfolio
Then you can charge more.
Agreed. Until you have a portfolio, you really can't expect to sell $1000 sites.

Right now I could hit Template Monster and find a quality starting point for a musician website for under $100. Quality premium Mambo and Joomla Musician templates can be had for free... if you know where to look.
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Old 07-09-2008, 04:09 AM Re: Splitting profits in a design startup - how much to charge?
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I would say dont start with lower prices... its harder to raise your prices than to lower them... if you dont have a portfolio... offer a "discount".. dont start with low prices.

If you have the abilities, I would start by yourself.. if you are stuck or dont have the time, then outsource your work... find someone who is looking for outsourced work and make sure they are up to your standards. I would do it as sub contract work and actually write up a contract... try to find some one local.. its a little safer that way
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Old 07-09-2008, 04:13 AM Re: Splitting profits in a design startup - how much to charge?
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Originally Posted by Johnnie Walker View Post
Agreed. Until you have a portfolio, you really can't expect to sell $1000 sites.

Right now I could hit Template Monster and find a quality starting point for a musician website for under $100. Quality premium Mambo and Joomla Musician templates can be had for free... if you know where to look.
And dont lower the industry standard by trying to compete with template prices.. base your prices on the quality of your work. People who make templates make their money in quantity... you make yours in quality... If you think your time is worth $1000 a site.. then charge it... if it really is, then serious clients will pay that much or even more for it.
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Old 07-09-2008, 05:12 AM Re: Splitting profits in a design startup - how much to charge?
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Thanks for all the replies!

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Originally Posted by Johnnie Walker View Post
Right now I could hit Template Monster and find a quality starting point for a musician website for under $100. Quality premium Mambo and Joomla Musician templates can be had for free... if you know where to look.
You have a good point, but not all musicians have the technical knowledge (or time) to learn a CMS system, a little coding, and launch their own site. Some do, and manage quite well. I have a few sites for composers where they have no problem making simple updates to the html on their own. But believe me, I've also dealt with clients who don't even know what FTP is, and need help uploading their own audio files.

(That's why Dynamod Portals became so popular with musicians these past few years - they're easy to update Flash/static html templates...hugely successful idea and the perfect solution for many, but they do look a little "generic" if you're looking for a site that will stand out)

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Until you have a portfolio, you really can't expect to sell $1000 sites.
Sorry if I wasn't clear at first, I do have sites online. I've been a freelance designer since 2000 - it's just that all my work has come in through word of mouth, referrals, and directly contacting potential clients. I've run into cases before where a talented, well established performer has a really HORRIBLE website - and I'll contact them and suggest ways how it could be improved, and show them a potential redesign...and it works.

I mean, people on these boards are techies anyway so we follow the trends, but trust me, there are still a lot of people out there producing sh*tty layouts! One chick's site was composed entirely of jpegs. NO indexable text, impossible to update, and ugly to boot. She had no idea how big of a "no no" this was.


Quote:
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...if you dont have a portfolio... offer a "discount".. dont start with low prices.
Yeah my plan was to contact the first 5-7 people I know who need sites for a discount in order to build the portfolio. I'd also give a discount to currently enrolled students.

The $1000+ price was what other people told me they were going to be charged...which isn't so bad, if it's a great site, but one opera singer I know was quoted $3500 for a site (and that's without flash or ecommerce)...I mean, WHY?? Ridiculous.
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