Starting a design business

Are you a designer looking to start your own business? Here's 20 things I did (and learned along the way) that helped me survive when first starting out.

Back in 2010, I decided it was time to start my own design business. I’d been working as a graphic designer for over a decade and had reached a point in my career where I wanted to work for myself. I knew my design skills were good enough. What I didn’t know is that my design skills didn’t matter. Or at least, didn’t matter nearly as much as my complete lack of business experience.

I made mistakes. Then I made some more. After a couple of painful years, I finally learned enough to get my business running smoothly. I learned these things by reading lots of books, talking to industry peers, attending HOW conferences, going to local AIGA and DSVC meetings, regularly working 90 hour weeks, and of course by fucking up a whole lot. So here are the 20 things I did (and learned along the way) that helped me survive when first starting out.

 

1. Freelance first

When I decided to quit my job and go into business for myself, the first thing I did was freelance for a solid year while I still had a job. I reached out to everyone I knew and let them know that I was available for freelance work and would be launching my own full time business in one year, and that I was willing to work at a reduced rate during the intervening year, but that I’d only be available nights and weekends. I set a goal of 20 hours of freelance work per week which, coupled with my 40 hour a week job meant I was working 60+ hours every week. That’s an important habit to get into because believe me, once you start working for yourself, you’ll be working at least 60 hours a week.

 

2. Plan ahead

Understand that your first year or two in business, you’re not going to make a lot of money. It takes time for any new business to get ramped up. I broke even my first year and made a small profit my second year, but I didn’t really start making money (meaning more than I earned as a salaried employee) until my 3rd year in business. The only reason I was able to make it through the first two lean years was because I planned ahead.

First, I saved every dollar I possibly could for an entire year, mostly from my freelance work, to build a substantial cushion. By the time I quit, I’d set enough aside that I wouldn’t have to worry about making a profit for at least a year.

Second, I cut household expenses down to the point that I could pay bills on my spouse’s income alone. We paid off one car to get down to just one car payment. We refinanced our home to lower our monthly mortgage payment. We started cooking at home and taking bagged lunches instead of going out to eat all the time. And cut our hobby and entertainment expenses to almost zero.

 

3. Design is a Job

Before you start your business, buy and read (and re-read) the book Design Is A Job by Mike Monteiro, published by A Book Apart. I wish the book would have been out when I first got started because it would have saved me countless mistakes. It covers how to get clients, what to charge, working with contracts, presenting your work, managing clients, and how to get paid. I’ve read a lot of design business books, but this is the one book that I consider a must-read.

 

4. Keep start up expenses in check

You don’t need a lot to start a design business. A computer, a $50/month Adobe Creative Cloud subscription, and business cards are the only must-haves. Worry about everything else later on, once you start making money. If you can work at home, do it. If you can’t, try a co-working space. If that doesn’t work, then get the smallest, most affordable office space you can find. My first office space was just 390 sqft and only cost $450/month including expenses. It wasn’t luxurious, but it was plenty to get my business started.

 

5. Find a great small business accountant

Business taxes are hell. You don’t have an employer withholding taxes, social security, and medicare, so you’ll be responsible for paying those yourself. I set aside 35¢ on every dollar I earn for taxes & withholding. I’m also responsible for collecting and paying state sales taxes. Find a great small business accountant, one who understands startups as well as creative business. They can help you get your taxes and withholdings set up properly and keep you in check throughout the year.

In addition, your accountant can help you make the best decision on your business entity structure (sole proprietor, LLC, S-corp, C-corp) and will save you far more money finding tax write-offs than you’ll ever pay them.

 

6. Develop three pitches

Any baseball pitcher who only throws fastballs, even if they’re blindingly fast, will fail in the Major Leagues. A pitcher needs three good pitches in their arsenal to be successful. And so do you. You need a 30-second pitch (simple yet intriguing business overview), a 2-minute pitch (what you do and how it helps their business make money), and a 5-minute pitch (how you’re a good designer but more importantly how you provide incredible service, are easy to work with, and can make their lives easier).

 

7. Work your network

100% of my work during my first two years in business came from my personal network of friends and former co-workers. The only reason I got any business at all was because I reached out to my network and let them know I was looking for work. It took over 2 years for new, out-of-my-network business to start coming in, and another year for new business to become my primary income producing segment. Sourcing new business takes time, so personal networking is crucial when starting out.

 

8. Work the crowd

Find every opportunity to network one-on-one, outside the constraints of corporate gate keepers, with people who hold the titles Director of Marketing and Marketing Manager because those are the people who buy graphic design. Even those who have in-house designers or established agency relationships are good candidates.

One of my clients has an agency of record, in-house branding team, and an in-house design department, but they still send work to me due to time constraints, workload overflow, and because they like what I do and find me easy to work with.

Another of my clients uses a large, prestigious advertising agency, but they send all of their small to midsize stuff to me. And when they decided to redesign their website, I landed the job—not their prestigious agency whom I bid against—because I was more affordable, provided better service, and they loved my work.

 

9. The secret to networking

I’ve learned the secret to successful networking: shut up and let them talk. The key is to not say a single word about yourself until they ask. Here’s how it works; Introduce yourself “Hi, I’m ____, what’s your name?” and follow up with “Where do you work?” and “What do you do?” and “Oh that must be fun, what’s it like?” and so on. Let them do all of the talking. If they stop talking, ask them another question. Everyone wants to talk about themselves, and no one wants to listen to your sales pitch. So don’t give one.

Eventually they’ll realize what an ass they’ve been talking about themselves and finally ask about you. Once they do, just give them your 30-second elevator pitch, no more. If they’re even remotely interested, they’ll ask a follow-up question. Expand to your 2 minute pitch, leaving hints that there’s even more. When they ask for more, then give them the full 5 minute pitch – and immediately follow up by asking for their business card, telling them you’ll contact them soon, and excuse yourself. Don’t let the conversation drag on beyond your three carefully crafted and well executed pitches.

 

10. Expect long hours

I mentioned this earlier, but once you’re working for yourself full time, you’ll discover that a lot of your time will be spent doing non-billable work. I spent well over half my time doing client service and business operations. That means working 60 or 70 hours a week just to complete a decent amount of billable work. It will take you a long time to figure out how and where to improve your business efficiency, so understand that you’re going to be working the equivalent of two jobs. Remember, you’re not just the designer – you’re the designer and the business manager.

 

11. Be the expert

When a client is thinking about hiring you, they’re not just hiring a designer – they’re hiring a business consultant. The client wants you to solve a business problem, and they believe they’re hiring an expert. So be the expert. Talk convincingly, and with confidence. If they’ve got a bad idea, tell them it’s a bad idea, and tell them why.

Side note: “I don’t know, but I can find out and get back to you” is always a better answer than pulling something out of your ass. Experts never pull anything out of their ass.

 

12. Over-estimate everything

If there’s one thing that bit me in the ass repeatedly at first, it was underestimating the level of effort required to complete all aspects of a job. I was basing my estimates on my experience working in agencies and in-house, where I had the luxury of account executives and business managers and HR departments and executives. I’ve since learned that 10 hours of billable-time also includes 5-10 hours of non-work time (emails, phone calls, meetings, interruptions, etc) that I wasn’t accounting for.

 

13. Everyone always has a budget

Even if they say they don’t, they still have a ballpark range. When a client asks about pricing, always reply with a range. For example, if they ask, “How much does a website cost?” answer with, “Websites can range anywhere from $5000 to $150,000 depending on your needs. Of course, it’s rare for a website to hit six figures. We can narrow the range down once we establish the project scope, but in order to do that, let’s try to optimize it for your budget. Are you thinking something basic in the $5,000 to $15,000 range? Or Perhaps something more full-featured in the $15,000 to $30,000 range?”

 

14. Use Project Pricing

Clients prefer knowing exactly what something’s going to cost up-front. And I prefer not being treated like an external hourly employee. So that’s why I mostly stick to project pricing. The key to successful project pricing is specificity. Be specific in defining the project scope. Be specific in the number of allowable revisions. And be specific in stating that expansion of scope or additional revisions will cost extra.

 

15. Use big, round numbers

When providing a project price, use big, round numbers. Doing so puts the value on the project where it belongs, not your hourly rate. For example, if you say your design will cost $4,375.00 then the client starts doing the math to determine your hourly rate, and suddenly you’re a hired hand, not a business consultant. And odds are, they’ll figure out your hourly rate and try to negotiate it down. But if you use big, round numbers and say your design will cost $5,000 then they will understand that your price reflects the level of effort required to complete a project of that scope, and will treat you like the consultant you are.

 

16. Avoid providing multiple price points

Narrow down a client’s budget and the project scope, and then provide one flat project price in a proposal that meets their exact requirements. It’s as simple as that.

Of course, there will be occasionally times when a client simply doesn’t know or understand what they want, or has to sell it internally to others. In those cases, I provide multiple price points, all with big, round numbers (e.g. $5,000 – $10,000 – $15,000) each with a well defined scope so they know what the different price points offer. And make the highest offering the best recommended solution to their problem, never as a pie-in-the-sky, in-a-dream-world, wish-we-could-but-probably-can’t solution. You’re not trying to gouge clients with unnecessary add-ons, you’re trying to meet their exact needs and then offer smaller, cheaper solutions that are still viable.

 

17. You do the job, and you get paid

The only way to absolutely positively ensure you get paid is to demand payment in full, up front. Of course, that’s almost impossible to demand from large corporate clients as they expect to be invoiced only after the completion of work, and on Net 30 terms.

If you can’t get paid up 100% front, require a 50% deposit. If you can’t do that, then (A) ask they send an email reply of “Approved” to your proposal; (B) have them sign a contract, even if it’s a simple one-pager, and to specify that they are responsible for any legal fees for collections; (C) do the job you said you’d do; (D) once completed, send an email stating the project is complete and have them reply with a confirmation in order to receive the deliverables; (E) send your deliverables and an invoice; (F) remind them later if they haven’t paid the invoice. If at that point they refuse to pay, call your lawyer. Personally, I’ve never had to invoke my lawyer, and hopefully I never will, but with approvals and contracts, I’m prepared to do so if necessary.

 

18. Avoid contact outside of normal work hours

Boy did I screw this up for too long. Since I was working nights and weekends, I would send out proofs on nights and weekends. And as soon as a client gets an email from you on Sunday afternoon, they expect you to reply to emails they send on Sunday afternoons. So don’t open that can of worms. Only make and reply to emails and phone calls Monday through Friday, 9 to 5. If you finish something late at night, send it out the morning of the next business day.

 

19. Make your website sell what you do

Designers far too often put up the old “Hi! I’m ____ and I’m a Designer!” as the headline on their websites, and then just trot out their portfolio. Can you imagine if BMW said, “Hi! We’re BMW, we make cars, here’s some pictures of them!” on their website? Dammit, you’re in marketing, act like it. Write a headline that says what you do (hint: you help clients make money). Then, make sure your content supports that headline (hint: I can solve your problems and make your life easier, which makes you money). Let them know you’re an expert. That you’re a professional. That you’ve got a proven track record of success. Make them want to hire you before they’ve even talked to you. And be sure to have a clear call to action.

 

20. Make big mistakes

Face it, kid — you’re gonna make mistakes. Balls get dropped. Vendors will flake. Unforeseen circumstances happen. Sometimes, you’re gonna eat shit. Don’t beat yourself up over your mistakes. Go ahead and make them. Hell, make big mistakes. And when you fail, learn from your big mistakes so you don’t repeat them. Fail big now, and someday you may win big. Because the only way to hit a home run is to swing for the fences.

. . .

During my first two years in business, I did more things wrong than I did right. I survived because I planned ahead, and then I worked my ass off, and when I screwed everything up, I took it as a learning experience. So sock away some money, quit your job, work your ass off, make big mistakes, and learn from them.