Several years ago, I launched a small web design company in a rural area of California. Market conditions couldn't have been better, my skill level was above average, and I had a large pool of aquaintences to which I could market.

Within 12 months I went broke.

My business failed because I made some very fundamental mistakes, and made them consistently.

I now work in the web hosting industry. I have had the opportunity to interact with numerous self-employed web designers and have found that the mistakes which I made are extremely common, and usually fatal.

If you are hoping to make a go of your business over the long term, you may want to memorize my top 5 mistakes, and avoid them like the plague.

If, on the other hand, you are determined to run your web design business into the ground, the following list may be used as an expeditious roadmap to failure.

1. Underprice your services

This is the most common mistake web designers make. The temptation is to break into the business by producing a few cheap websites in order to build a portfolio. Don't do it!

Remember that you will only be spending about 40% of your time designing sites. The other 60% will be spent hustling up the next client. If you think your time is worth $10.00 per hour, consider asking for $30.00. This will give you sufficient revenue to pay for all the non-paying time you spend marketing your business.

2. Fail to set and enforce boundaries

Everyone loves a nice guy, and the temptation to be one is a trap which many of us fall into. It's crucial to remember, though, that you are in business for one primary reason - to make money.

You will, doubtless, encounter clients who will pay you for a small website, then end up wasting all of your time with questions about how to remove spyware from their computer and requests to add "one small thing" to an already completed website.

You can avoid this, somewhat, by establishing clear boundaries with the client from the very start. A contract is useful here. Make sure that your client knows exactly what can be expected of you, and what you expect of them.

If your client asks for extras, and you're amenable to providing them, give them a quote. Never toss it in for free. The only thing you have to sell is your time and expertise. Don't give away either.

Remember, you're in business. Try asking a service station owner for a little free gasoline. They would be shocked by your question. Likewise, you should be shocked when someone asks you to provide free service.

3. View your clients as temporary

Many of us get into this business because we love creating something new. By the time we finish a website, we're tired of that site (and sometimes that client) and we're ready to start a new project, and put the old project well behind us.

This attitude can cut deeply into your potential gross.

Over time, your client will need numerous updates to his or her website. updates are sometimes bothersome, but can add a significant revenue stream to your business. More important, a satisfied client becomes one of the major links in your marketing network.

4. Ignore recurring revenue opportunities

During the best of times, web designers live from project to project. While finishing one project, you will be lining up the next.

Every business, however, has slow stretches.

Unfortunately, your own creditors will still expect payment, even when your own revenue slows down.

A wise web designer looks for ways to provide his business with some sources of recurring revenue. Even $400 a month which you can count on can get you through a dry spell.

There are numerous ways to set up some recurring revenue. Take a look at maintenence contracts with your clients, reselling webhosting, etc.

5. Build pretty websites which do nothing

Your best source of advertising is word of mouth. Nothing generates great word of mouth like a satisfied customer. You can build the flashiest, prettiest, most cutting edge websites on the net, but it's all for naught if your site doesn't perform.

Every website has a purpose. That purpose might be to sell goods, leverage an advertising budget, disseminate information, assist in personnel management, or one of a million other possibilites.

Your first job, as a web designer, is to ascertain what the web site is supposed to do. Once you find that "thing" - the thing it should do - make sure that the site you deliver does that particular thing like nobody's business! By doing so, you will ensure a client who will sing your praises at the Rotary Club, Chamber of Commerce meetings, and to his or her friends and family. A client like this is golden, and will bring a steady stream of customers to your door.