Matt Davies of Attitude Design takes us through what it takes to set up a graphic design business including the skills you’ll need, initial start up costs and how to develop a commercial awareness that allows you to pitch for and win the most lucrative contracts.
Why do it?
Many people getting into the creative design business are excited by great design and have an urge to sell their enthusiasm and skills. They also choose this industry for other positive reasons – here are a few of the most common ones:
Most graphic designers get into business by starting out as ‘freelance’ designers working on their own to sell their skills. Successful freelancers often find they have so much work that they need a team around them to help. This is how many creative design agencies start. Having a team around you is very beneficial as it means you can share out responsibilities, reducing the pressure. And with a more diverse skill base, you’re able to focus on the area of the business that suits you most.
Increased control over the creative process is another popular reason for starting a design agency. This is very close to the heart of most creative people. You can make the key decisions which will make or break a project. You are the one who pulls the punches.
All companies require some sort of graphic design and the market size is therefore considerable. Every business or person with a product or service is a potential customer. Whether it’s a startup company needing a logo design or a large corporate company looking for ongoing retainer work, your design skills can be utilised. Working in graphic design enables you to interact with companies in very diverse sectors - from healthcare to catering, retail to construction - making every day different. This keeps things very interesting on a day to day basis.
The graphic design industry is potentially very lucrative, especially if your designs are recognised as providing maximum value to clients. Most projects require considerable time and effort but this is worth it when the final payment comes in.
Seeing the designs your team have produced on a website, in a magazine, on a billboard - to be viewed by thousands of people – can be very rewarding. And seeing that smile on the client’s face when they tell you their website enquiries have increased over 300 percent after you have implemented a new design strategy is fantastic.
Quick and easy to set up
Like most businesses selling services it is fairly cheap and easy to set up a design business. If you are starting on your own there are no large initial fees, and very few products to buy. For more information on this see the below section entitled “start up costs.”
Looking for graphic design space?
Take a look at our studio space for graphic design businesses…
What skills will I need?
You do need to be pretty well rounded to start a design business. Most people who own a design company are outgoing and happy to take calculated risks. They are people who have experience in graphic design and in handling clients and design projects: they are ‘people people.’ There’s not a ‘right’ formula of skills required but generally setting up a business in graphic design involves two sets of skills – creative and business-orientated.
This is an essential skill as it can make or break your business reputation. If your work doesn’t meet the client’s brief, or doesn’t sell your client’s service or product effectively, then you will find it hard to win new repeat or new business.
Experience with the design process is important. Design is not just about making things look pretty. Design is about purpose. It is about meeting objectives visually. Creativity in this respect cannot really be taught - it has to come from experience and so it is advisable that before you start a design business you work within other creative teams to maximise your understanding of how to successfully fulfil briefs.
In practical terms you need to have a very good knowledge of the Adobe Creative Suite. Priority should be given to learning these programs inside out - the more at ease you are when using them, the more creative and at the same time productive you will be. You need to know about desktop publishing, typography, photo manipulation, composition and grid layouts to complete a project or to help manage a team to complete a project.
If you are seeking to provide web design services you’ll need experience of best practice web design, and a good grasp of how HTML and CSS work.
Number crunching is important. At the very least you should have a basic knowledge of accounting, and the ability to keep your business organised financially. You can pay an accountant to deal with book keeping - the cost of this may be worthwhile considering their expertise and potential to save you time.
If you are going to be facing clients then you will need to have a grasp of how to sell your services, what the unique selling points of your business are and your team’s design process. You will need to be well organised to ensure clients are given the attention they deserve and that projects are managed and delivered on time. These are all skills that you can potentially employ people with but really you need to have these skills in order to lead by example.
And on that note, you also need to know how to lead a team. You need to be able to make decisions under pressure and be comfortable with encouraging a team to work with enthusiasm and passion for what they do.
As mentioned above if you are going to be starting up on your own you need to be well versed in the Adobe Creative Suite set of programs. For print work you will need to know about Adobe Illustrator, Adobe Photoshop and Adobe Indesign. For web work you will need to understand how browsers read code and how to write code yourself. You can purchase software to help you with this (such as Adobe Dreamweaver) or write it from scratch using a text editor. You will also need to understand basic internet processes, particularly how to access servers via FTP and control panels.
There are a number of design courses and qualifications that you can take but in reality you will need experience. Preferably, you’ll want five years senior-level experience at a design company to ensure you’re equipped to deal with the day to day running of a studio, winning clients and fulfilling briefs.
Start up costs
Start up costs are minimal - another good reason for starting a business in graphic design. If you are starting up on your own then these are all the costs that need to be met. If you are seeking to employ a team then you will need to multiply these figures by the amount of people in your team.
The following rough estimate should give you an idea:
Programs (e.g. Adobe CS, MS Office, etc) £3000
On top of this initial set up costs you will have the usual ongoing business costs:
Professional Indemnity Insurance: £250+ (per year)
Telephone & internet: £50+ (per month)
Website domain name and hosting: £200 (per year)
Wages for your team (this depends on the skill level of your employee)
Other costs will be incurred if you rent or lease an office, however you can easily start off in your home.
Commercial awareness is essential in any business in order to develop a positive reputation and meet client’s expectations. Here are few items to consider related specifically to graphic design companies:
Service based companies, including graphic design businesses, supply time and expertise in exchange for money. You must decide how much your time is worth: this can be done using market research, for example analysing competitors, and seeing what’s affordable to your target audience.
You’ll naturally want to charge as much as possible but must reconcile this will the need to build a reputation. Successful, award-winning agencies – and those working on international brands – can command higher fees. You must recognise the fact you are newly formed, and at the same time know that if you don’t charge enough to turn a profit and pay the bills your business will fail quickly.
Once you have decided on your hourly rate this will enable you to quote on a design project. Some designers struggle with this as they naturally want to spend significant amounts of time on a design to ensure it is perfect. However, this is where the business side of things has to kick in to strike a balance.
You cannot have an open ended amount of time to spend on a project else you will not make any money. One way to get around this is to specify the number of amends a client can request. You can then approximate how many hours these will take, ensuring your project quote is as accurate as possible.
To win new projects you will sometimes be asked by potential clients to work for free and produce a mock up of a project. This is otherwise known as a tender process, which most large contracts require. Early on in your business strategy you need to decide if this is something you are going to do. There is a huge risk involved as these tenders demand a large amount of time and effort and there is – by the nature of the market – a good chance you won’t win.
Some people decide to not pitch work for free, for both moral and commercial reasons. Morally, companies may believe it isn’t right to ask businesses to work for free. From a business perspective, it can be untenable to dedicate significant time to a project when there’s no guarantee of financial remuneration. If you are not keen on producing speculative work, take a look at http://www.no-spec.com/ for more information.
Many companies do take part in the tender process, and the returns can be significant if your pitch is successful. Whether speculative work is right for you will depend on your business model and financial stability.
Smooth and professional processes are vital if projects are to run smoothly. The following outline is a suggestion for what to have in place for each project:
Agreement - this should outline what you will deliver to the client, broken down by stages and deadlines, to ensure both parties have the same expectations. It should establish how many amendments the client is permitted – this prevents multiple amendment requests that haven’t been quoted for. The agreement should also deal with the project’s payment schedule and include your terms and conditions. You may wish to obtain legal advice when drawing up your terms and conditions and agreement templates.
Up front payment - depending on the size of the project this should either be the full amount or a percentage of the total project cost.
Design Brief - this is a document which enables you to glean all the relevant information you need from the client to ensure you create an agreeable design. You will need information such as target audience, messaging, ‘look and feel’ etc. You should use this document to obtain as much in-depth information about your client’s business as possible - this will enable you to reflect what they are looking for in your designs. Asking the client to provide visual examples of what they like is also a good idea - a picture tells a thousand words.
Obviously it goes without saying that all your designs should be created from scratch by yourself or your team. If you copy or resell other designers’ work you open yourself up to legal action, which can be very expensive.
If your client wants you to source images, these should come from either:
Purchased from a stock library (ensure you check the terms and conditions of use for the image e.g. some images can’t be used for commercial use)
Taken and produced by yourself
You should always ascertain whether the client wants you to source images when quoting for a project, as you may need to factor these as additional costs.
If you are using freelancers or outside suppliers you need to have agreements with these third parties. For example, if your client wants you to produce ad copy, you might commission a copywriter, and would need to clarify who would own the final copyright for the text.
You also need to ensure that if the client is providing you with images and text themselves then all legal responsibility for copyright for that content rests with the client. Unless you are sure of the provenance of content, you should take steps to protect yourself.
Before a project commences you must agree with the client who will own the rights to the designs created. A common arrangement is to keep the copyright and allow the client to use it for a fee. Alternatively you can transfer copyright to the client. Never transfer copyright to a client before full payment has been made for the project.
You will also have to keep client information confidential and may have to sign confidentiality agreements with potential clients. Keeping your office network secure and your files in a safe place will be essential.
'How to be a graphic designer without losing your soul,' by Adrian Shaughnessy