Let’s build on a few of our past articles. In the past, I’ve written guides on how to rent a studio and whether graphic designers should freelance or take a 9-5. Combining both, Caitlin Zorzini’s written on how to freelance while you work a 9-5. Now, let’s talk about how to start a design business with the potential to pay your bills.
First of all, it won’t be easy. In addition to being a good enough designer to sustain a business, you’ll need to learn as much as possible about finances, accounting, management, and marketing. I put that first because it should clear out the readers who aren’t willing to put the work into those parts. It’s a tall order.
In fact, it’s so much to learn that just summing it up is hard – each of these sections could be a separate article, but we’re going to try to cover them as well as possible in around 1,600 words — which is why I recommend you do a lot more research before even committing to it.
Are You Designing for Yourself or Others?
First, are you starting a studio to work for clients, or on your passion projects?
If it’s the former, great, that’s what we’ll focus on. If it’s the latter, and you need advice on how to monetize them, that’s outside the scope of this article – just make sure you take the time to figure it out while you’re in the “business plan†stage.
If it’s both, it’s still doable, but you’re going to be in for a rough time. “Investing time in a project you really want to make means compromising on commercial projects,†says From Form co-founder Wouter Keijzer. However, the studio asserts that the risk was worth it, and their passion projects won them a number of industry awards and attracted more than enough new clients to pay for them.
Vinh disagrees, though. “If I were to start a new studio, I would square with myself – and my partners – that we’d be in the business of providing services to our clients, period,†says Vinh. “I wouldn’t want the creative and emotional distraction of trying to build products of our own, too.
Creating a Business Plan
From Reynermedia“Your business plan should be the first thing you do; before your website wireframes, before thinking about your studio space,†says Rob Carney. For those of you who’ve never written one before, the linked article does an excellent job laying out what you need to know, but here’s the short list of what it should contain:
- Your business’s name and location
- Your Unique Selling Proposition: what you specialize in and how it sets you apart from the competition
- How you’ll make money
- Who you’re aiming to make your clients, how you’ll find them, and why they’ll buy from you
- How you’ll market your business
- How many clients and projects you’re aiming to take on per week/month/year
- How much you’ll charge, and how much you hope to earn
- Your intended hours
- Your expenses, both starting and recurring
- Other ways your studio can make money if Plan A doesn’t work out
Here’s a real design studio’s business plan, for those wondering what it would look like. The spelling and grammar aren’t so great, but it’s a good look into all the elements needed to pull one off.
Assembling a Team
“Almost nothing matters more than people,†says Adobe design exec Khoi Vinh. “How well a team works together … is a bigger determining factor than the contracts you win, the work that you do, the press coverage you get or even the money you make.â€
Take both skills and how you get along into consideration. In terms of skills, if you can find one person to specialize in each part of the business you need, that works out the best. One graphic art director, one web designer, one programmer, one videographer, one marketer, etc. If you don’t have an expert in each of these in your circle of friends, a motivated amateur will do. And perhaps even more important than their skill set is how well they get along with the other team members. Thankfully, you can usually judge this pretty quickly: I’ve learned the hard way that if you start out not getting along with a business partner that well, you should probably cut your losses because it won’t improve with time.
I also recommend that you decide on a leader. It’s been my experience going into business that equal partnerships don’t work very well. Almost-equal partnerships, sure, but someone has to be able to pull rank in the end.
Funding
Are you a young designer struggling to find a career path? Have you cracked open a design mag lately? Have you seen the kinds of studios they always feature? Have you noticed how they’re all located in neighborhoods where you couldn’t even afford a studio apartment in and filled with furniture that costs more than your net worth? Have you ever torn your hair out wondering how someone could ever afford a place like that making pictures?
Well, wonder no more. The truth might be disappointing, though. According to Patricia van den Akker, Director of The Design Trust, most design businesses, like businesses of any stripe, get started on savings or loans from family and friends. “Start small, get some clients, and work your way up from there,†she says, but adds, “you might be surprised how little you actually need to get your business off the ground.†For more advice on starting a business on a tight budget, she recommends Chris Guillebeau’s “The $100 Startup.â€
Finding Investors
What about those “angel investors“ you hear so much about? Well, some of them are willing to invest in design, but you’ll need to have a ton of experience in the industry, a rock-solid business plan, and preferably several successful projects like this under your belt already. Investors are thorough, and tend to make decisions by committee, so expect to be subjected to a thorough look-over, and meetings with a lot of different parties, before any money comes your way. And be wary that investor money always comes with strings attached, too. They’ll own a part of your company, so they’ll want a say in major decisions, projects, and the overall direction of the studio.
Finding Clients
From Got CreditDo you want to take anyone who’ll pay, or only locally-sourced, organic, indie, artisanal, fair trade vegan cupcake shops whose politics align exactly with yours? Actually, for the purposes of this article, it doesn’t matter. Determine how workable your restrictions are, put them in your business plan, and move on.
The important part is, you’ll need to spend between 10% and a quarter of your time aggressively marketing to your target audience. Network with people outside your industry, send out pitch letters and emails as well as social networking, start building an email list, and when you have the budget for it, design some slick ads and start sending them out via targeted mail and online campaigns.
As van den Akker said, start small, then use the portfolio you accumulate to find new clients. “Stefan Sagmeister, from Manhattan design firm Sagmeister & Walsh, agrees. “[Our] first music client was… a band where I was friends with the singer. We got paid the equivalent of $ 8.00 per hour. But the CD packaging was nominated for a Grammy and got us a real foot in the door with the record labels.â€
When you do land clients, focus on keeping in touch with them to find out their ongoing needs and resell to them. Remember, 80% of your income will come from 20% of your clients. You don’t just need any clients, you need ones who can bring you regular enough work to pay you and your team’s salaries.
At What Point Do You Quit Your Job?
From Quinn DombrowskiWe’ve set up the parade route, let’s rain on it.
In the words of Industrial Brand’s Mark Busse, “Rushing into starting your own design business can turn a dream into a nightmare.†The article from where that quote comes is a fantastic breakdown on the subject, and required reading for entrepreneurs of all stripes who want to quit their jobs, but the basics are that without experience, enough financial backing, and a unique feature that sets them apart from the competition, most small businesses will fail.
“There are few choices more self-indulgent than starting a business because you don’t want to put in the time to earn a position at an established company and invest the time to learn from experienced experts.†He adds.
No matter how exciting the idea of chasing your dreams, in reality, design is still a saturated market, and the costs of running one of those flashy studios from the design mags is still astronomical.
It’s not just Busse who thinks that way. When asked to advise someone who wanted to start his own studio right out of college, Mule Design’s Mike Monteiro instead suggested: “If you are serious about a career in design, the absolute best thing you can do right now is to get yourself a job at a studio working for experienced designers who are willing to teach you the parts of the trade you didn’t get in school.â€
“It’s called work for a reason, and if you got into the design field because you thought it was going to be fun and easy, you’re in for a bumpy ride with a nasty ending.â€
In short, stay in your job until you no longer have time for it, and until you’re consistently making enough to cover all your bills.
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C.S. Jones is a freelance writer, artist, and photographer.\r\n\r\nIn the past, he co-founded an art gallery and worked at a product photography studio. These days, he does photo tutorials (and gigs), online copy, and content marketing for a living. He also writes about webcomics at Webcomicry.com…
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