Start & Run a Graphic Design Business

By Michael Huggins

There are minimal costs involved in starting a graphic design business which makes it an attractive opportunity for anyone with an artistic eye. All that is required is a computer, an Internet connection, and design skills. It’s the kind of business that can easily be run from your home! The graphic design business has changed significantly over the past few years. The popularity of photo- and art-sharing websites and social networking sites, and the low barriers to setting up websites have driven a demand for fresh new graphics and provided numerous opportunities for graphic artists to reach new markets and customers. This book will show you how to capitalize on these opportunities, market your business, find clients, and stay organized. Like all books in the Start & Run series, this book is written in an easy, step-by-step format. The included download kit has forms and worksheets that will help you develop a successful business.

• Language: English
• Publisher: Self-Counsel Press
• Release date: Feb 24, 2012
• ISBN: 9781770408425

Michael Huggins

Michael Huggins is president of Mindwalk Marketing & Design, and a business and marketing coach to self-employed designers and creative professionals. He publishes the popular online newsletter and podcast called For Graphic Designers Only.

Book preview

START & RUN A GRAPHIC DESIGN BUSINESS

Michael Huggins

Self-Counsel Press

(a division of)

International Self-Counsel Press Ltd.

USA Canada

Copyright © 2012

International Self-Counsel Press

All rights reserved.

Introduction

Being a self-employed graphic designer has been quite a journey for me. It’s been challenging, stressful, tough, rewarding, exciting, invigorating, lucrative, and hugely satisfying. One thing it hasn’t been is dull. In fact, it stands as one of those big events in my life, right next to marrying my wife, Anita, and having children. Just like those events, it’s been an eye-opening and life-changing experience. I’m sure it’s going to be one for you, too. I’d like to help you make it fun, rewarding, and lucrative as you go.

If you’re holding this book in your hands right now, you probably find yourself in one of the following positions:

• You have just entered the exciting world of graphic design and you are about to go solo and do business on your own. Or you are thinking about it and are getting a lay of the land before you jump (you’re a person who likes all your ducks in a row).

• You’re currently working in the industry as a designer, but you’re working for another firm, and you think you can do the work yourself. After all, how hard could it be?

• Maybe you are already in business and have been for some time. You’ve been pretty much making things up as you go, and you wouldn’t mind a little help at pulling this whole thing together just a little better than you’re doing right now. You think that you need help to achieve a better focus, a greater sense of purpose, and a little more profitability.

This really leads to the big question: Can you make money by running your own graphic design business? The short answer is, yes, you can make a lot of money. It will take some work, and chances are it will have to be in other areas beyond that of your artistic talents.

Running a successful graphic design business uses and needs a set of skills you may not possess right now, which is okay. In fact, when I started my graphic design business many years ago all I really knew was the design portion of the business. I soon found that I was going to need a lot more than just design skills, and it was going to be a bumpy road for my business until I learned.

Don’t get scared away from pursuing your heart’s desire just because of a few things you may not know right now. You see, you have something I didn’t — another graphic designer who has been where you are and is ready to help you. That’s really what this book is all about.

Running the Business

I’ve written this book from the perspective of starting a business. That means I’ve made one very specific distinction between working on your own and working for yourself. I’ve written this for those who have an entrepreneurial mind-set, not just a freelance mentality.

Freelance has a lot of different definitions in this business. I define freelance as working for other design firms, marketing agencies, advertising firms, and similar competing services to your own. As a freelancer you predominantly work for other firms. The firms get the clients and you do the work. There’s nothing wrong with this. It’s a viable way of doing business. It can keep you happy and satisfied for years to come. However, this book isn’t written specifically for those taking that path. That said, even as a freelancer you’ll still pull plenty out of this book. This book is for the individual who wants to own and operate a graphic design business. You will predominantly work for the end-user. The client is someone who is using the design product you create, not reselling it.

That doesn’t mean you can’t be a one-person show and choose to stay that way. You absolutely can. Whether you want to stay a solo design firm or grow into a 20-person company, this book will give you a clear understanding of the requirements in order to be successful.

This book is designed to help you see your design business as a way to create a unique lifestyle and career for yourself. It will be a lifestyle that pays you while you live it and a career that provides you with a healthy income for the years ahead.

This book is divided into four parts.

Part I: Your New Business Adventure

The first part of the book is about understanding the basics of graphic design. You’ll see the great opportunities a design business can offer. You’ll get a basic understanding of how the marketplace at large uses design and the great value that is placed on it. This means more work and more opportunity for you. Knowing what it’s used for, and why, is covered in detail, as well as answering the who uses it question.

We’ll also discuss what it means to be an entrepreneur and the pros and cons of starting your business with a partner.

Part II: Setting up Shop

Part II helps you make your first big decision, which is what type of business structure you will choose for your business. I discuss the different structures such as sole proprietorship, partnership, and incorporation.

The next important decision you will need to make is to create an identity and find a good location for your company. This section also covers the basic things you’ll need to get started in your business. I’ll explain the essentials such as hardware, software, and equipment you need to do great work.

Part III: Marketing Your Business

This section begins with helping you find your niche in the graphic design industry. Once you have found an area to focus on, you can begin to create your marketing plan and target your market. This section also covers the marketing tools you will need to help promote your business. The important marketing tools include your website, cold calling, sales letters, portfolio, and capabilities kit.

Part IV: Doing the Work

Working with clients and keeping them satisfied takes more than just designing. There are meetings, briefings, the design process, and so much more. You’ll need to know the process to use to get the work done. You’ll learn how to create proposals and contracts as well as how to get repeat work and referrals from current clients. You’ll also learn how to deal with common client problems as well as how to find good photographers and illustrators.

I also cover the important topic of pricing your services and how to adopt a pricing structure that is profitable for your business. Nothing matters in your business if you don’t get paid for what you do. This section is all about making money; how you discuss what you do; how you deal with it; and how you make sure you get money into your business and into your bank account.

Appendixes

I interviewed many professional graphic designers when I wrote this book and I have included some of my interviews to help give you a view of what other designers had to say about their beginnings in the graphic design industry.

Now, let’s get started on one of the most exciting stages of your life — the big transition from designer to graphic design entrepreneur.

Part I

YOUR NEW BUSINESS ADVENTURE

1

Getting Started: Understanding the Basics of the Graphic Design Business

I love the graphic design business. It’s been a playground of endless stimulation for my overly active (and often distracted) mind for more than 20 years. It’s always full of variety and the challenge of new and different work. One day I am designing a package for an electronics product, the next day I am creating a complete brand and identity for a large corporation.

The graphic design industry is a great place to apply your creative talents and get paid for doing what you love to do. I have never ever thought of what I do as work. In fact, I’m still nervous that somebody will discover how much fun I’ve been having for the past 20-plus years!

Owning your own graphic design firm is one of those dreams that can come true. If you are a person who enjoys solving problems creatively by applying your talents, you’re in the right business. If you like to do it your way, and get highly rewarded for it, then you’re reading the right book!

1. What Is Graphic Design?

Graphic design as a profession is often misunderstood. People are unaware of the impact it has on both business and society, because it’s so diverse and ubiquitous. Graphic design can incorporate many things; from T-shirt design to annual reports; from movie posters and book design to street signs and beer coasters. Still, many people are unsure of what it is. Is it the ability to draw a picture? Is it creating a caricature of someone at an amusement park? Is it creating poster graphics, or is it graffiti on a wall? The short answer to all those questions is, yes, it’s all of these things and more.

The simplest way to understand graphic design is to think of it as art applied to commerce. Graphic design is most often applied to marketing, advertising, and commercial communications. Graphic design is a creative process that involves developing ideas, creating visuals, and organizing content for the purpose of selling, marketing, or advertising.

The art and business combination is what makes graphic design so unique. You may be a very creative person. Maybe you’re someone who is able to paint, draw, design, and conceptualize all sorts of fantastic images and ideas on the computer, but if you aren’t able to apply it so that others can use it to their advantage in their businesses — it probably isn’t graphic design.

Design is valuable because of what it does for the businesses it serves. Companies use it to help draw attention to their products and services by making them stand apart from their competitors. In a nutshell, graphic design helps them sell their stuff quicker and more easily than their competitors.

Graphic design includes print ads, websites, logos, stationery, sell sheets, TV graphics, multimedia presentations, billboards, trade show displays, packaging, Point-of-Purchase (POP) displays, direct mail, and so much more. In fact, the list is almost endless. If you can see it, then graphic design most likely played some part in it. The big point of differentiation between art and graphic design is its purpose: Graphic design is used to promote somebody’s business, product, or service.

Graphic design has some big uses in the business world:

• To communicate important messages: Graphic design is commonly used to make information easier to understand and digest. It’s often used to bring clarity to complex or convoluted content, or to help communicate important messages.

• To make something more appealing or more valuable: This is commonly used on items such as books, magazines, and product packaging. In fact, sometimes the only real difference between products or services is the way they are packaged or presented! Graphic design can make one service or product seem more valuable simply by the way it looks on the outside. Manufacturers know that products can experience new growth by receiving a graphic design overhaul without any real modification of the product. This means graphic design can help increase sales.

• To sell something: This can be in the form of attracting attention or helping someone through a sales message as he or she reads a brochure. It can be used in an advertisement or billboard, or it can help someone navigate information on a website more effectively.

• To get attention: Design is a key tool for attracting attention. Having an important message is worthless today if no one takes notice of it and reads it! Businesses know this. They spend millions of dollars annually just to get their message out to an overly stimulated market. They need communication that cuts through the clutter, and diverts attention from their competitors to their own products.

2. Understanding the Three Forms of Media

Graphic design uses media to promote, inform, persuade, or sell to prospects and customers. Media is simply the device or vehicle that is used to deliver the message to the person reading it. Generally, you can group media into three basic categories that designers most commonly use.

• Print media: This category includes brochures, flyers, books, and booklets — basically anything that requires traditional printing. Often print media has other speciality subset categories that make these media even more complex such as outdoor media, advertising media, and magazines.

• Digital media: Surf the Internet for 30 seconds and you are bombarded with graphic imagery. It’s everywhere on the Internet and the demand is only getting higher. In fact, the Internet is one of the biggest consumers of graphic design. Businesses and people use design to get and keep a person’s attention. Digital media applies to any type of presentation that appears on your computer. It could be a PowerPoint presentation, a slide show, or some other computer-related imagery.

• Film media: The use of traditional film has changed dramatically, and actual film is not used as it once was. Film media covers both traditional film and digital film, including video. This could include graphics for television advertising, sports, titles for movies, or short video spots.

3. Who Buys Graphic Design Services?

Graphic design services can be targeted to a wide variety of clients such as marketing managers, business owners, CEOs, PR departments, and just about anyone who uses visual media to communicate, persuade, or sell to others.

Some of the largest buyers of design services are big corporations with marketing departments who create many programs and have substantial budgets. In these types of companies you often deal with a marketing professional of some sort; for example, the VP of marketing or a marketing manager. In fact, many large companies may have more than one division with more than one marketing manager. It’s like having many clients in one location. These businesses can represent a one-stop shop for your business. As a result, some designers never have to market or advertise to individuals outside of one company.

Many midsized businesses also have marketing managers who use design services. These individuals often don’t have the internal staff to help support their departments so they regularly use the services of outside designers. They are constantly on the lookout for new talent and fresh thinking.

Another big market for design services is the entrepreneur. Depending on the size and structure of the company you service, you may never deal with a marketing person. Instead, you might deal with the actual owner, a business partner, or even the VP of sales. It all depends on the type of company it is and the business structure they have. Most often you will be dealing with someone who is directly responsible for business development (i.e., growing the business).

This only covers those who use design to advertise and market. There are many other buyers of design services who use graphic design as part of their final product; for example, book publishing companies, magazine publishers, and manufacturers of products are also great potential customers for your graphic design business.

4. Graphic Design Specialties

Many people you deal with may not have any experience in purchasing design — they just know that they need something. For example, website design. Almost all businesses today need a website — from super large corporations to the mom-and-pop shops down the street. When a designer specializes in one particular design discipline he or she can attract clients from many different markets. You’ll practically find a market for any type of design discipline. If you can do it, and specialize in it, then you can bet that someone is probably looking for it. Here are just a few graphic design specialties:

• Packaging

• Web

• Trade show

• Marketing and promotions

• Point-of-purchase (POP) display

• Signs

• Business-to-business (B2B) communications

• Business-to-consumer (B2C) or retail design

• Advertising

• Direct response

• Corporate identity and branding

5. Can You Make a Living in the Graphic Design Business?

The answer is yes, you can make a living in the graphic design business, but first you’ll have to get your left-brain working a little for you. You’ll need to learn new skills and abilities that you probably never imagined you would need. You’ll need business and people skills that will not only make your design talents far more attractive but more profitable as well.

One of the neat things about starting your own design business is that almost anyone can give it a whirl, with very little risk. Starting your design business can happen with just a little overhead and relatively small start-up costs. You can literally start your business tomorrow with a computer, a basic printer, some business cards, and a desk to work on. Of course you’ll need a little talent, a computer program or two, a few interpersonal skills, a little practice, and the desire to keep learning. That stuff won’t be hard to pick up and before you know it, you’ll be all set!

With the current overcrowded communications environment it’s no wonder that effective visuals are always in high demand. Graphic design is everywhere. It impacts our lives moment by moment, and most of us just accept it as part of our culture. We see evidence of it every day. In fact, thousands of businesses use graphic design in one form or another. It attracts our attention and gains our mind share, which is consumer awareness of a brand or product. Businesses all over the world want to stand out and be remembered by people so it’s no surprise that good design communication is always in demand.

Graphic design thrives in a competitive marketplace, and that’s where we find ourselves today. We’re not just talking about local competition! Thanks to technology, almost any company is able to do business and compete globally. In fact more competition has made the need to be seen and heard a must. It’s the designer’s job to combine image, offer, and message in an unforgettable way that impacts people and increases sales. It’s the graphic designer that plays an important role in helping get those messages to the world in a way that gets people to stop and take notice.

5.1 What can you expect to earn?

A graphic design business owner can expect to be paid well for his or her services. Depending on what type of structure you choose for your business — a solo design firm, a small firm of five or six people, or a big company consisting of many people — you can choose how much you want to make and what type of role and responsibility you want to have in your business.

With a solo design firm you can make anywhere from $40,000 to $90,000 a year working from home. If you choose to grow your business and hire employees, you can increase your revenue to more than six figures.

In a recent poll of design entrepreneurs on ForGraphicDesignersOnly.com I asked how much other design business owners make each year. The answer was that 47.7 percent said their salary ranged between $50,000 and $129,000 yearly.

In the US, the AIGA (American Institute of Graphic Arts, the professional association for design) reports graphic design business owners’ salaries ranged from $65,000 to $140,000 per year in 2008, with the median salary at $95,000. These salary ranges don’t include other compensation such as benefits, bonuses, and various business write-offs you can include in order to be extremely profitable.

In Canada, the RGD (Registered Graphic Designers) 2007–2008 Ontario survey reports solo entrepreneurs making between $47,000 and $50,000, and owners of small firms making a median of $65,000.

The opportunity to create a lucrative business is a good one. You can find out more about salaries and rate surveys by contacting the AIGA in the US or the Ontario RGD in Canada. Both of these organizations provide surveys to their members and are great organizations to join.

It’s important to keep in mind that these numbers are based on national averages and that there are many factors that will affect what you are able to make. For instance, some regions will be able to demand more than others and some markets will be more lucrative than others. There’s also the matter of your experience. Obviously the more experience and knowledge you have, the more likely you’ll be able to demand more for your services.

The beauty of the graphic design field is that it is your ability to perform and create that helps determine your success. It’s not your years in the business or your design degree. Even a newbie has the chance to make a lucrative business for himself or herself. Depending on how big you want to grow your business, and the type of markets you sell to, the sky’s the limit.

2

I love Understanding What It Means to Be a Design Entrepreneur

Success in any design business has to do with many factors: a lucrative marketplace, the ability to reach your market, your salesmanship, and the level of service you give your clients, to name just a few. It isn’t wholly dependent on your design and creativity.

Being creative is important to your business, but it’s only one component of your service offering. It isn’t as simple as creating artwork and collecting a check for it. In fact, if you’re just interested in creating art all day then maybe a design business isn’t for you. To have a successful design business you need to develop a business mind-set. That means you change from thinking of yourself as a designer in business, to a businessperson who just happens to be a designer.

If you own a design business, it’s very important to think like an entrepreneur. Yes, your clients will look to you for creativity, but they will also look to you for professional business guidance. This means that they’ll expect you to understand basic business concepts, values, and goals. You will need to put the needs of their business ahead of your own creative desires and love of design. What you do creatively has to benefit their business.

1. Working on Your Own or with Others

Having your own graphic design business can be a real thrill and nothing less than a real challenge. There are decisions to be made constantly and you need to make them! One decision you’ll need to make right away is the type of business structure you will ultimately have. Do you want a business in which you will always work on your own? Or do you plan to hire others to work with you and for you?

There are many designers who stay a one-person shop their entire business career and they do very well at it. Conversely, there are some great things about building a business in which there are others around to help you. Whichever path you choose you should start with some idea of where you plan to go with your business.

1.1 Working on your own: The solo entrepreneur

Being a solo entrepreneur has its own unique set of challenges. The biggest and most obvious is that you will always be the business. No you equals no business. If you’re going to choose a one-person business model, you’ll need to consider what happens if you aren’t able to work. How will you generate income? If it becomes necessary, you may need to have a way of outsourcing your work to others.

You’ll also need to consider the type of work you will go after. How will you generate sales for your business? You’ll need to create a marketing plan that works with minimum effort, or choose a niche where the work is always available to you. It will all be up to you to get the work, do the work, and collect the check.

Being a one-man show could mean choosing work that makes it easier to do what you like to do (design), while minimizing the things you don’t like to do (the business stuff). It’s tough to run a business and look for work at the same time. A friend of mine owns his own design business that caters specifically to other design firms and agencies. His work comes exclusively from these companies. They get the clients, and he does the work. This makes it easy for him in a lot of ways.

Mainly, he doesn’t have to market his business very much. It did take some effort at the beginning to make his initial connections in these agencies, but once he made them the hard work was done. His clients are always calling him, and that’s the beauty of his situation. His clients don’t require a lot of maintenance because they understand design and the creative process. He can keep his meeting times short and his productivity high.

The downside for him is the rushed timelines and excess work that can happen from time to time. Sometimes he’s pressured to work well into the night to get a project done. He says turning work down is always a struggle for fear his clients will find another designer to do the work. He wants to keep his competitors far away from his lucrative work source. As a result, there are some stressful weeks. For the most part it’s the perfect balance. The clients do the stuff he doesn’t like and he does what he likes to do: the design.

Working on your own can be great for productivity. You can get a lot done without the normal workplace interruptions. The other side of that is the lack of input and stimulation from other designers and coworkers. This also means that when you face a difficult challenge, you’re on your own. So, it’s good to create a network of other designers and professionals that you can call or get together with on short notice for help and support.

Having a solo business also means you’ll need to learn and do most (if not all) of the grunt work too. You’ll be responsible for everything from garbage detail to preparing and mailing invoices. Some days can be a real challenge, especially when you are trying to get your design projects completed. I’d recommend that you delegate where possible, or hire specific help for certain tasks to make doing the work easier.

Lastly, holidays can be difficult to schedule and take when it’s just you. In fact, a big struggle for the solo entrepreneur is to take time off and just relax. Many solo entrepreneurs find it difficult to unplug and take a vacation. Often they will blend free time with work time, but even that’s not so bad when you have a laptop or PDA. You live in a world where technology can easily keep you connected to your business from almost any location. That is, as long as you can manage the mental gymnastics it takes to keep it all balanced.

1.2 Having other people work for you

The other possibility for your business is to eventually have others working for you. Hiring people gives you the support you need in areas in which your skills are weak, need more support, or you have no interest in doing certain work. This leaves you with another decision. How will you bring on new people? Will you hire full-time employees or will you hire freelancers? Should you hire freelancers by the hour or on contract? The choice is up to you depending on the flexibility and security you want. Hiring freelancers hour by hour can be cheaper, but you won’t always be able to access the people you need when you need them. Contracting gives you a little more security, but may cost you if your business suddenly slows, because you will still need to pay them.

Whichever way you choose to hire someone, it’s a great way to lighten the load. However, don’t overlook the responsibility you will have of managing the people you hire. Very few people you hire will be plug-and-play. Even an experienced freelancer will need your direction, guidance, and supervision. As the business owner, you are responsible for delegating work and outlining the roles of others within your company. This can be time consuming and challenging, but the payoffs are huge. Building a team of highly qualified people is not only a rewarding experience, it’s liberating to you and your lifestyle. Once your team is working well, you will have more freedom to pursue other things without being tied to your desk.

Still, having employees can carry with it the stress of the additional income that’s required to pay your new people. If they’re doing the work in the office, you’ll need to make sure you’re connecting with clients to keep the work flowing. That pales by comparison to the bright side — now you have the capacity to do more work and make more money. (For more information on hiring freelancers and in-house employees, see the Appendixes.)

I decided very early that I would eventually hire people to help with the workload. I like the freedom and flexibility I get from having others contribute work. Some days it can be a little challenging to manage, but it’s worth it.

2. The First Step to Becoming a Design Entrepreneur

What’s the best way to start your graphic design business? Should you ease into it or jump into it with both feet? Again, that depends on what you want, and what your pocketbook can take.

You may be working for a firm right now and have a desire to go out on your own. In this case, you may want to start with freelance work on the side and build a portfolio of clients first. Or perhaps you’re ready to just make a go of it right now. Whatever the case let’s look at your options.

Making the leap from employment to self-employed can be stressful. Freelancing before you quit your day job can help ease the stress, especially since you’ve been conditioned to get that nice little paycheck every two weeks. When you are on your own you’ll have no way of knowing if you’ll have the clients and workload you need to compensate you for what you are now earning. Freelancing to build a client list might be the way to go for you, but keep in mind you will be stretched and your part-time freelance work could start to have an impact on your day job.

Most of your clients will work in the day and they will often want access to you when they are working. This can make it difficult when you still work for another employer. Be careful of stealing time from your current employer. Subtle things such as taking your freelance phone calls and emails while working at your full-time job can expand to large proportions and become overwhelming.

Be ethical and honest when you freelance. Do it on your own time, not on your current employer’s time. Talk to your employer in advance to make sure the company doesn’t have an issue with freelancing while you work for them. Be sure that there are no agreements such as noncompete agreements that prevent you from doing so.

In some cases your current employer can even be an excellent source of work when you start your business. You can talk to your employer about switching to freelance and moving into a contract position as you build your client base.

Even if you don’t choose to freelance while you work full time, you can still build your business by making connections with other people in the industry now. Build your relationship with other support businesses such as print suppliers, illustrators, photographers, web programmers, and production houses. Make sure to keep good records on these people. Chances are you’ll need their help when you’re ready to go out on your own.

3. Your Start-up Costs

Maybe you’re ready to just jump in and get started. If this is the case, then you’ll need to ask yourself this question: Do you have enough money to make it through the early months in your new business? If you are

Reviews for Start & Run a Graphic Design Business

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Must read this book gives it all awaya, great book