How to Create Recurring Revenue as a Web Developer

Posted on May 7, 2020
Last updated on Jun 9, 2020
4 minute read

Getting web development work can be a challenge, so when you do win a new project you need to make it worth your while.

Because as a business owner, whether you have staff or work freelance, cash is king. Without a steady income stream, we risk stress and burnout, as well as the very real impact that not having money brings, such as not being able to make rent.

But what if, with each client win, we added an extra recurring revenue stream to our business? What if, instead of saying “bu-bye!” to a client once you launch their website, they continue to pay you money?

That’d be nice, wouldn’t it?

It’s not as hard to do as you might thing! In this post I’m going to teach you how to get recurring revenue for web agencies and freelancers, helping you to steady the boat and build a more sustainable business.

What is recurring revenue?

First off, let me explain what I mean by “recurring revenue”.

The idea here is to create product offerings that enable you to service your clients with minimal input. By recurring revenue I don’t mean fully passive income, but I do mean predictable, constant streams of cash entering your business from multiple locations.

Think of it like this: with each new client you take on, you will do a chunk of work up-front which will account for most of the project budget (and time). But once that website is launched, you’ll drop down to spending hardly any time working with the client, but still charge a fee. The fee will be small, but it will be recurring.

Do you see where I’m going with this?

One client, two clients, three clients, four … 17 clients, 18 clients … 30 clients more!

It all adds up.

This is why web designers want recurring income from their clients: because it builds a truly sustainable business model.

How to earn recurring income from web design clients

Use any combination of the following methods to add value to your freelance business with each and every new client you get.

Affiliate partnerships

As a web developer you probably have a preferred set of products that you use on most projects. Think about web hosting providers, SaaS tools, WordPress themes and plugins… the usual.

Many of the companies you use will run affiliate programs, and this presents a fantastic opportunity for you, as a service provider, to generate recurring revenue by introducing your clients to new products as an affiliate!

It works like this: you ask your client to sign up to a service, like one of those mentioned above, via a special affiliate link that the software company provides you. Once the client has registered and starts paying, you receive a small cut each month.

On a small scale this doesn’t really feel worth the time, but scale this up across your client base, and you’ll start seeing a compound increase in recurring revenue.

Web hosting and maintenance

In every web proposal I write I offer website hosting and maintenance. The maintenance is basic but critical, covering all WordPress core and plugin upgrades.

Clients love it because they get the peace of mind that their website is being looked after. I love it because upgrades are easy (unless it goes wrong, which thankfully hardly ever happens) and I can charge a modest monthly rate for it. Imagine doing this on top of earning your monthly affiliate commission, and the income starts to stack up.

If you design websites for clients but don’t offer web hosting, you’re literally leaving money on the table.

Membership platform

This might be less applicable to freelancers but over time, your client base will grow. You might take on staff to help support customers. This is where a membership solution can come in handy.

Imagine if, instead of letting clients email you every time they have a question or problem, they could log in to an online portal and submit a support request. Imagine also, that you load genuinely helpful resource articles and videos into this space. Maybe you even plug software recommendations (with affiliate links 😉) in the same area. This would add a lot of value to your customer by offering a more robust support system — and they’d pay a premium for it.

By setting up a private membership website for your web design clients you could charge a minimal monthly fee and help build recurring revenue.

Design/development retainer

When you work with a client to launch a new project, it’s almost certain that they will come back to you with future work. For most freelancers, hourly rates are hard to work out and generally quite high (hint: don’t charge hourly rates). Therefore, it can make economic sense to place your clients on a retainer.

A retainer is essentially pre-paid hours that the client can dip into every month.

And because the hours are pre-paid, you can instead quote a set monthly fee (typically at a slightly reduced rate). It’s good for clients, because they get a better-value service, and it’s good for you, because you get guaranteed monthly income.

Which of your clients keep returning, and how might a retainer make the relationship more fruitful for the both of you?

Crowdfunding platforms

This idea is a little different.

For creative people who love running side projects or making things for the fun of it, it’s not too challenging to establish an audience and earn their support.

Platforms like Patreon and Indiegogo exist for this very purpose.

Perhaps alongside your web design business you make novelty greetings cards? Or customised beauty products? I’m not suggesting for one moment that you throw the towel in building websites for clients, but dabbling with crowdfunding platforms could be a wonderful way to create some recurring revenue as a web designer.

Creating recurring revenue is good business sense

Wanting to build a passive income stream by adding recurring revenue to your business is not just a savvy way to do business, it’s also a great way to serve your clients.

The truth is that customers won’t buy more from you if they don’t want to, but if you can suggest products and services that solve their problems they absolutely will.

So take the time to uncover those complementary solutions that sit nicely alongside your service, and take the opportunity to sell it to your clients. Then, when they buy, enjoy the compound recurring revenue that this brings to your business 📈