There are a number of different ways to earn a living as a designer or developer. Of course, you could work as an employee for a design studio, you could work as an in-house designer for a company, you could freelance, or you could start your own studio or agency. While those are the most common approaches, they are not the only options. With loads of competition for client work, a growing number of designers are actually using a combination of a few different sources of income in order to earn a living.
You may have heard or read about earning passive income as a designer. In this article we’ll take a detailed look at the opportunities to use your design skills for passive or recurring income.
What is passive income for designers? Well, there are a lot of varying opinions and different definitions out there. For the purposes of this article, we’ll be looking at things aside from client work or work that you would do as an employee.
With client projects, whether you are charging an hourly rate or a flat fee for the project, you are essentially exchanging your time for money. The amount of money that you can make will be limited by your rates and the amount of time that you can work. The approaches that we’ll be looking at in this article are not passive in the sense that they require no work, but the amount of money that you can make is not limited to the number of hours that you are able to work. In most cases you’ll be putting in the majority of the work upfront, and then you’ll (hopefully) be able to continue to make money from that work well into the future. And you may be able to make money repeatedly for the same work, which is where the recurring aspect comes into play.
If you’re looking for an easy way to make money as a designer, this is not really the answer. However, if you’re looking to use your skills in a smart way that may pay off quite well over a period of time, read on.
Why Recurring/Passive Income is Great for Designers
So if passive income for designers isn’t 100% passive, what’s the point? Well, these options do require some work, but there are still plenty of benefits of these types of personal projects.
Reduces Your Dependency on Clients
Most of the freelance designers that I know would love to be able to reduce their dependency on client work. Sure, client work can be extremely rewarding, but there are some significant benefits in not being 100% dependent on it.
One of the frustrating things about being a freelance designer is the need to constantly find new clients and new projects. You’ll need to dedicate time to communicating with potential clients and drafting proposals or quotes. If you go through a spell where it is difficult to find potential clients or to secure the work, your income can suffer. If you have some other income aside from client work, it can make these times more manageable.
Some designers choose to pursue streams of passive income to provide some extra stability for times when client work may be slow, and others choose to work towards getting away from client work altogether.
It Works Well as a Supplement to Client Work
Although the potential to earn a living from passive and/or recurring methods does exist, what is more realistic for most designers is to simply use it to supplement their client work. As I mentioned in the intro, many designers are earning a living from a combination of different sources of income. You may make half of your income working on client projects, and the other half could come from things like stock graphic sales and freelance blogging. Earning a living strictly from client work is a real challenge for many freelancers because there is so much competition out there, but earning a living from a combination of several different sources makes it a lot more achievable.
Diversifies Your Income
By establishing some alternate sources of income, you’ll add some diversity, which should provide a little more stability. That stability could become important if your client work slows down or if you need to take an extended amount of time away from work.
High Income Potential
Not every designer who pursues the types of projects that we’ll cover in this article will make huge amounts of money, but some designers are able to earn much more with these approaches than they would be able to achieve with client work. If you write an e-book that becomes a top seller or if you achieve a great deal of success with designing and selling stock graphics, you’re likely to make a lot more money for the time that you invested as compared to what you would have been able to make by investing the same amount of time into a client project. It’s certainly not the case that every designer can make more money this way, but the potential is higher.
When you’re working on client projects or working as an employed designer for that matter, you won’t usually have the privilege to work on things of your choice. You’ll be working on whatever the client or your employer wants. It may or may not be something that interests you.
One of the great things about these side projects for passive income is that you can choose what you work on so you can focus on something that you will enjoy. Not only will that make your work more enjoyable, but many designers also find it to be a lot of fun to work on their own projects knowing that the sky is the limit and what they get out of it is totally up to them.
Develop New Skills
These types of side projects are also a great way to develop new skills or to improve your existing skills. You can work on things that you wouldn’t normally get the opportunity to work on otherwise, and if there is a new skill that you want to develop, it’s likely that you can find a way to incorporate it into your project. The skills that you develop on these side projects could come in handy for future client projects or in your own projects.
You Can Work on These Projects in Your Down Time
Another major benefit to side projects is that you can typically fit them into your schedule when you have some down time between client projects. For example, imagine that you have a client lined up for a new project, but they have been slow at making the upfront payment and signing the contract. Rather than wasting the time while your waiting for them, you can use that time productively to design some new stock graphics to sell. Or if you have a slow period between clients, you can use that time to work on designing some templates to sell. Whenever the client work picks up again, you can put your side projects on hold until you have more time available.
May Offer a Flexible Schedule
If you’re working toward the point of getting away from client work altogether or at least primarily relying on these passive sources for the majority of your income, you may find that your work schedule offers more flexibility. Instead of needing to be reachable during normal business hours, you’ll have the option to work evenings and/or weekends instead, and it also may be easier to travel and work on the move.
Photo credit: Portrait/Wedding Photographer
Different Ways to Earn Recurring/Passive Income as a Designer
Okay so we’ve looked at some of the reasons why you might want to pursue passive income as a designer, but how do you do it? Here are a number of options that many designers are having success with right now.
Hosting Reseller or Affiliate
All of your web design clients will need hosting of some kind. It’s possible that they could be hosting the site on their own server, but if you’re working with small or medium sized businesses, this is pretty rare. And for you, it can be easier if all, or at least most of your clients are using the same web host. One of the easiest ways to make some passive income is to sign up as a hosting reseller or affiliate. Almost every hosting company has an affiliate program, and as an affiliate you’ll earn a referral commission every time you refer someone who signs up for hosting. With most hosting companies, you’ll earn an upfront payment of $50 – $100 just for referring a client who signs up for a simple shared hosting account.
If you’re looking to make some recurring income from hosting, consider signing up as a reseller. Many hosts offer reseller accounts. Typically, you’ll purchase the reseller hosting, pay a monthly fee like you would for any other hosting account, and then you’ll be able to sell hosting to your clients. As a reseller you will usually have control over some of the details, like the price you’ll charge the clients. If you have a number of clients purchasing hosting through you, this can add up to a significant amount of money each month. The down side is that resellers are typically responsible for supporting their own clients, so you’ll probably need to factor in some time for providing that customer support to your clients.
CMS Reseller or Affiliate
Many hosted content management systems (CMSs) will also offer options for affiliates or resellers. In some cases it will be private labeled so you would be able to use your own branding and sell it to your client as if it were your own product. This will typically include hosting, so it would work as an alternative to being a hosting reseller or affiliate.
Write an E-Book
Many designers turn to books and/or e-books when they want to learn something new. Creating your own e-book is not that complicated or costly, and so it can be a great option for the designer who wants to make some money by teaching others. There are countless e-books available on topics related to design and development, and there are always opportunities to capitalize on current trends or hot topics in the industry by writing your own e-book.
You don’t need to have an established audience or strong name recognition in the industry in order to have success at selling your e-book, although that certainly wouldn’t hurt. You can publish guest posts at various design blogs and promote your e-book in the author bio, offer an affiliate program so others can promote your e-book for you, or run promos at deal sites targeted at designers (see the Resources section at the end of the article for some helpful links).
Design Stock Graphics
Stock photography sites typically sell graphics and illustrations in addition to photos, and you can apply to sell your own designs at these stock marketplaces. In addition, there are some stock graphic marketplaces (see the Resources section) that are also great places to sell your work.
Things like logos, vector illustrations, UI sets, textures, icons, print templates, and PSD files are all possibilities. Getting started with stock can be challenging because most of the marketplace sites present stiff competition, but there are plenty of examples of designers who are making good money with this approach.
HTML/CSS website templates are in high demand. There are plenty of designers and websites offering them for sale, and those that appeal to buyers produce a lot of revenue for the designers. You could design and sell templates at your own website, or you could sell your templates at a stock marketplace (see the Resources section).
There are a lot of benefits of creating and selling templates aside from the high income potential. First, you could use your templates in client projects, so they can potentially help to speed up your workflow and allow you to offer lower-priced options to clients with limited budgets. Also, working on templates will allow you to continually improve your skills by staying on top of the latest developments in the industry. You can choose to create a template for something that you would like to work on, rather than only for the type of client that you currently have.
In addition to HTML/CSS templates, you can also design/develop templates for specific content management systems. WordPress themes are the most popular, but you could also develop for another CMS or e-commerce platform. Top WordPress themes bring in huge amounts of money for their developers. The down side to both HTML/CSS templates and WordPress themes is that this is likely to require more time from you for customer service as compared to selling stock graphics or e-books.
Starting a blog is also another option. There are already countless blogs in the design/development industry, but new ones are still able to have success if they can stand out. With a successful blog, you can make money from things like advertising sales, affiliate programs, and creating and selling your own products. The down side to building a blog is that it is very likely to take a considerable amount of time before it is making any kind of significant revenue. Also, with so many blogs already existing, it is possible that you’ll never reach the level of traffic or income that you would like.
Creating and running a membership website is another option that some designers choose to pursue. Your site will need to offer some type of content that people are willing to pay for on a monthly or yearly basis. Some options in the design industry include tutorial sites, online courses, stock graphics, template/theme clubs, etc. Much like blogging, starting a membership site will require that you’re willing to put in a lot of work up front, and you may need some patience before it starts to produce much revenue.
Now that we’ve taken a look at some of the options for earning passive/recurring income as a designer, here is a list of resources that can be extremely helpful in your own pursuit.
Bluehost – Bluehost is a leading web hosting provider that offers reseller plans as well as an affiliate program.
HostGator – HostGator is another leading hosting company that you can promote as an affiliate or reseller.
MediaTemple – MediaTemple hosting is especially popular with designers. They don’t offer a specific reseller hosting plan, but you could use one of the DV plans and resell it to your clients. They also offer an affiliate program.
Shopify – If you create e-commerce websites for your clients, Shopify can be a great option. They offer a partner program that allows you to make recurring income by referring your clients to Shopify.
Highwire – Highwire is another hosted e-commerce platform that also offers a partner program where you can earn recurring income.
BigCommerce – Like Shopify and Highwire, BigCommerce can be used to power e-commerce sites for your clients and you can make money as a partner.
Creative Market – Creative Market is a great place to sell your stock graphics. You can sign up to create a store, upload your products, and set your own prices.
Envato Marketplaces – Envato runs a network of popular marketplace sites including ThemeForest, GraphicRiver, and CodeCanyon. These sites are all great places to sell your templates, themes, graphics, and plugins.
Now that you know where you can make some extra income with your side projects, we’ll take a look at six keys or tips that will hopefully help to make your own efforts with side projects more beneficial.
1. Know Your Purpose
There are any number of different reasons why you could start a side project. Maybe you are just looking for a project that will allow you to do the things you enjoy, but with more creative freedom than your full-time work. Or it could be that you want to learn some new skill and you’re using the side project to gain experience. For many designers the motivation is at least partially motivated by the opportunity for income. You could be looking for a little extra money on top of your full-time income, or it could be that you’re a freelancer and you’re trying to make more productive use of your time between client projects.
It’s important to know your purpose and your motivation because it should dictate how you go about managing the side project. There is no right or wrong motivation. If your main purpose is to have fun and enjoy your creative freedom, you can pretty much work on whatever you want whenever you feel like it. On the other hand, if your purpose is to supplement your freelancing income you will want to approach the side project with a more organized and business-like mindset.
Your purpose will also have a big influence on the specific side project you choose to follow. If you’re looking to make money you’ll obviously need to choose something with the potential for creating that income. If you’re looking for something that will simply supplement your existing income you may want to choose something that offers the potential to start making a small amount of money pretty quickly. If your goal is to ultimately use the side-project to replace your full-time income, you’ll want to consider the long-term income potential of any projects that you evaluate.
2. Be Realistic About Time Limitations
One of the biggest challenges with side projects is the inevitable time limitation. Take a look at your schedule and try to be as realistic as possible about how much time you really can dedicate to a side project. Do you have a few hours that you can dedicate each week? Is your available time more sporadic and not as frequent? It’s easy to get caught up in the excitement of an idea for a side project only to realize pretty quickly that you simply don’t have the time needed to make it work. It’s better to consider those time limitations before getting started and chose a side project that will fit with the amount of time that you have available.
3. Consider On-Going Requirements
Along with the previous point, on-going time requirements should also be considered. For example, you may have time available right now to create a WordPress theme or plugin to sell, but will you have the time for on-going support and updates that will be required? The more limitations that exist on your time, the more you should consider projects with a reduced need for on-going time commitments.
Anything that is likely to involve a considerable amount of customer service or support will require that you always have some time available to deal with these issues. This doesn’t mean that you can’t sell any items or products, because some items require much less support than others. For example, designing and selling an icon set will lead to a small amount of customer service emails, and most of the requests you do receive will be things like answering basic questions or helping people who may have issues with downloads or payments. Selling website templates, WordPress themes, or plugins will likely bring far more customer service requests, and many of them will involve more time and effort on your part to research and solve.
In general, things like stock graphics and e-books are good for designers who don’t expect to have much time available for ongoing support and service. And things like templates, plugins, blogs, community websites, an online courses are good opportunities if the need for on-going support is not a problem. Also keep in mind that income potential is not equal for all projects. So while top selling WordPress themes will require support from the designer/developer, they also provide a high potential income.
4. Set Aside Time Each Week
Setting aside the time needed for your side project is important. If you’re working a full-time job or freelancing full-time you’ll probably need to set aside some time during evenings or weekends to focus on the side project. Most people, myself included, struggle to get things done on side projects if time is not designated specifically for that purpose.
Each project will have it’s own time requirements, so you’ll need to consider your own situation. If you’re working on something like a book that will take a lot of time to complete, try to find a time in your schedule that you can dedicate on a weekly basis.
5. Start Small and Build
From my own experience, one of the most challenging aspects of side projects is limiting the scope. In most situations it’s easy to try to do too much all at once, and with a limited amount of time available it can reduce the quality and success of the project. If you’re working on a blog or a website as your side project you may have big ideas and plans that you want to implement with the site. In most cases you’ll be better off if you can keep it basic to get started, focus on doing things well, and then expand and add new features or sections of the site later.
If your goal is to create a template or theme club as your side project, focus at first on just creating your first template or theme and doing the best job possible. Then later you can focus on adding more templates and themes, but don’t try to do too much right away.
Time limitations are something that you’ll always have to deal with on side projects. By recognizing the limitation and appropriately focusing on starting small you can build success over a period of time, and you’ll do it on a solid foundation. If you’re trying to do too much all at once it’s easy to get frustrated and give up before you achieve that success that you’re looking for.
6. Consider Sustainability or an Exit Plan
While you’re thinking about how much time your side project will require on an on-going basis, think not only about the time that you will have available, but also about whether it is something that you will still want to be working on a year from now. Also consider if it is possible for the time requirements of the project to grow faster than the income from the project. For example, you could start some type of community website for designers. It’s possible that the site could grow quickly and require more effort on your part to keep it running smoothly. It’s also possible that the site doesn’t produce significant income for you despite growth in traffic and the amount of time you spend working on the site. If this happens, how will you sustain the site? Will you be able to use the income from the site to outsource the maintenance to someone else? Will you be able to quit your full-time job or scale back on client projects to allow for more time on the project?
In addition to sustainability, you can also consider if the project is something that you may be able to sell. If the side project is a website or a blog, chances are you would be able to find a buyer when you are ready to move on to something else (of course, it’s possible that you may not be able to find a buyer that is willing to pay the amount that you want to get for the site). Obviously, the details of the project’s sustainability and your exit plan can change and evolve throughout the life of the project, but it helps to consider these details early on and at least start to develop a plan.
The unlimited possibility for side projects is one of the things I love about the design and development industry. There are always ways to have fun and experiment on your own, and making money with side projects is also possible. However, in order for the project to truly be successful you’ll need to make the best use of your time, and I hope the tips and opportunities covered in this article can help with your own projects.