Starting Your Own Graphic Design Business
Upcoming SlideShare
Loading in...5
×
 

Starting Your Own Graphic Design Business

on

  • 4,317 views

 

Statistics

Views

Total Views
4,317
Views on SlideShare
4,313
Embed Views
4

Actions

Likes
1
Downloads
78
Comments
0

2 Embeds 4

http://www.pinterest.com 3
http://pinterest.com 1

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Starting Your Own Graphic Design Business Starting Your Own Graphic Design Business Document Transcript

  • A PUBLICATION OF THE GRAPHIC ARTISTS GUILD Starting Your OwnCommunication Design Business WEBINAR SERIES: Part 1: Wednesday, July 25 Part 2: Wednesday, August 8 www.graphicartistsguild.org LARA J. KISIELEWSKA
  • Starting Your OwnCommunication DesignBusinessby Lara J. KisielewskaA Publication of the Graphic Artists Guild OUR MISSION STATEMENT The purpose of the Graphic Artists Guild is to promote and protect the social, economic and professional interests of its members. The Guild is committed to improving condItions for all graphic artists (including, but not limited to: photographers, designers, illustrators, and digital artists) and raising standards for the entire industry. The Guild embraces graphic artists at all skill levels.All content © Lara J. Kisielewska unless otherwise stated.Graphic Artists Guild32 Broadway, Suite 1114 | New York, NY | 10004 | (212) 791-3400 | membership@gag.orgwww.graphicartistsguild.org | Like us on Facebook. | Follow us on Twitter. | Join us on LinkedIn.
  • Contents Introduction...........................................................................................4 The Business Plan: Always Necessary, Even If You’re A One-Man Band..............................5 Financing Your Business: Even More Important Than Your Logo!..................................................9 Business Relationships: It’s All In Who You Know......................................................................11 More Numbers To Memorize: Your EIN And Duns Numbers..............................................................13 Buyer’s Remorse Is No Fun At All: Acquiring The Right Equipment...........................................................14 Who Needs Headhunters?: Attracting Top Talent............................................................................16 Nuts & Bolts: Pricing, Contracts, and Other Paperwork............................................19 If You Build It They Will Come: Actually, It Doesn’t Really Work That Way…........................................24
  • Introduction I never had dreams of owning my own business, growing up. And I didn’t even plan on it, while at school. Yet it happened, as a side venture grew into a career, almost as I wasn’t looking. Since I had no formal training I made every mistake in the book, and my errors followed me around for more than a decade. For this reason I remain passionate about sharing what I have learned along the way, in hopes that I can prevent other designers from making the same mistakes and paying as high a price as I did to get where I am today. A bit of background on my company: Optimum Design & Consulting is a midtown Manhattan firm with a playful, energetic staff that specializes in graphic design for print and web, with a niche in technologically complex websites. I started the business in 1992 and we initially also offered pre- press services for other graphic designers as well as Macintosh tech support and database custom- ization for other creative firms, but we stopped servicing those markets in 2003. Our staffing levels have varied through the years between four and 16, and currently we’re at six. This article is based on a workshop I teach called “How to Start a Graphic Design Business,” which is offered periodi- cally through the Graphic Artists Guild, among other venues. |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 4
  • The Business Plan:ALWAYS NECESSARY, EVEN IT YOU’RE AONE-MAN BAND As much as we artists might enjoy dreamy conceptualization, real world providers of capital and services often want to know that we have a concrete plan for building and managing our business- es. Potential partners and advisers will also feel more comfortable coming aboard when they know a well-thought out plan exists. But the most important reason of all for having a business plan is that it is the very first step you can take down the path that defines you as a small business owner rather than just a freelancer. It forces you to think things through and answer tough questions at the out- set, which will help you better position yourself in the marketplace before you invest much time into creating a corporate identity. A business plan should always come before starting a business. There are many tools available to help you write your business plan, from books to software programs to people you can hire to write it for you. A good resource for sample business plans (and marketing plans, too!) is www.bplans.com. Make sure you follow some sort of guide, rather than winging it on your own. Typical business plans usually include the following six sections: 1. Executive Summary: The Executive Summary defines who you are, what you do, and why you should exist. What about your studio is different than all the other design firms out there? It should have a succinct mis- sion statement defining the purpose of the business and a positioning statement, just as succinct, which defines the special assets of your business, and why you are unique in your field. This section should never be more than one page. It is the snapshot of your business, and can also function as your sales pitch. 2. Company Strategy/Management Team: How are you going to get your business to where you want it to be? Are you qualified to get it there? This section speaks to the credentials of you and your management team. For start-ups without staff, this section can include a team of qualified business associates or advisors (which would ac- tually really impress whoever is looking at your plan). Business associates can be your accountant, your lawyer, your banker, and your insurance agent (yes, you need these people right from the start, even if you don’t think so — more on this later). Business advisors can be a small group of industry experts and other business owners who you can meet with every six months to pick their brains. You can discuss your challenges and get invaluable feedback and suggestions from them, even if it means treating them at a dinner meeting in exchange for their time. Don’t be afraid to ask ques- tions — that’s what they’re there for! A good mentor early on would have prevented me from having significant heartache… |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 5
  • 3. Product/Service: What are you going to sell, and who will you be you selling it to? Be specific about what you are go- ing to design. Are you going to be a logo specialist? Do you like editorial design, posters, websites, product packaging? Know what you are really good at. Although you may capable of doing all of the above, there are surely some areas in which you really excel. Identify them and be prepared to focus on these services. Most successful companies develop “niche” markets. Niches can be defined by company size, type of company, or design focus (ie, annual reports). Develop materials for a dozen law firms, educate yourself on their needs, and you may suddenly develop a reputation as the go-to person for law firm marketing materials. Learn the industry, learn their needs and think of creative ways to fill them. One friend of mine specialized in websites for not-for-profits. As she was adding bells and whistles to her sites she discovered that her clients needed faster computers to be able to properly view them. She knew a colleague who was updating his own equipment, and when she arranged for him to donate it to her not-for-profit client it sparked an idea — she would offer another line of services, helping her not-for-profit clients obtain used equipment for a broker’s fee. Although this might be too much of a stretch for you, this is a good example of how to create additional revenue streams for your business. Diversifying your income sources will help you survive during the lean years — I’m speaking from experience here! Other ancillary services you could provide might in- clude creating branding guidelines in addition to just delivering a logo, providing copywriting or retouching services, or doing market research to support your design work. 4. Your Market and Your Competition: Guess what? There are other people out there doing what you do. Find out how many and who they are. Do a scouting report. Learn about their customer service and pricing. Get copies of their mar- keting materials. Believe it or not, the best way to do this is either to pretend to be a student doing research for a class project, or to pretend to be a potential client. Ask five other design firms for an estimate on the same set of specs, and see what you can learn — how do they treat potential cli- ents? How quickly do they turn around a quote? How high or low is their pricing? How detail-orient- ed is their estimate? What was the customer experience itself like? Use this information to figure out how you can do better. Then, restate your unique selling proposition in more detail — what makes you different among all of your competition? 5. Sales and Promotion: If you don’t already have one, you’ll need to create a marketing plan for your company. The sales and promotion section of your business plan is a synopsis of the marketing strategy that you’ll out- line in more detail in your marketing plan, which should also include specific implementation steps, target goals, a timetable, and a budget. There are many books, websites, coaches, and seminars on marketing, including events offered by the Guild. Start thinking about how you are going to get busi- ness and how long it is going to take you (this will also figure into your cash projections, the next section of a business plan). At least 10% of your time should be spent marketing, or you’ll get distracted trying to meet client deadlines and be taken by surprise when your current project ends and there is no new project ready to start. Remember that each new contact is a marketing opportunity, and develop your “30-second elevator pitch,” which should summarize what your company does and why it is unique in one or two sentences — roughly the length of time available to tell someone you meet on the elevator about |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 6
  • your business before the door opens on your floor. The elevator pitch is designed to pique FINANCIAL CONSIDERATIONS interest and spur others to ask questions that You’ll need to include the following financial documents might generate potential leads. It is important to with your business plan. Check with your accountant to realize that word of mouth alone cannot sustain be sure you’ve covered all bases. In general, you’ll need your business in the early years, and that busi- to include: ness is not going to magically fall into your lap. PROFIT AND LOSS STATEMENT You are going to have to actually market to make things happen! CASH FLOW PROJECTION TAX RETURNS FROM PREVIOUS YEARS 6. Financial Considerations: There are several financial documents that ACCOUNTS PAYABLE LIST you’ll have to submit along with the narrative ACCOUNTS RECEIVABLE LIST part of your business plan, including a profit and loss statement (P&L), cash flow projections, LIST OF ASSETS tax returns from prior years, an accounts pay- MONTHLY BUDGET able list (AP), an accounts receivable list (AR), a list of assets, and a monthly budget. There isn’t THREE YEAR FINANCIAL PROJECTIONS space here for me to go into detail on how to prepare all of these, it’s best to work with your accountant. But I figured I could touch on the basics of how to put together a monthly budget and prepare your projections — often considered the most difficult financial statements to create. First, list your monthly expenses. This means that you’ll also have to look at annual and quar- terly expenses and divide by 12 or four in order to get the average monthly amount due. Some expenses are obvious, such as rent, insurance, and supplies, but take some time to think about the hidden costs, such as life insurance and occasional legal expenses, and make sure that you leave yourself a marketing budget too. Don’t forget to take a salary for yourself, and include not only the salary, but also all appropriate payroll taxes in your expense list. Employee payroll taxes are differ- ent than self-employed taxes, so be sure to consult your accountant. I can’t overem- phasize the importance of taking a regular CALCULATING YOUR MINIMUM salary rather than just dipping into your BILLABLE RATE. business account whenever you need to 1) List your monthly expenses: rent, business insurance, pay your personal bills — you’ll never have supplies, life insurance, health insurance, legal expens- a clear handle on the profitability of your es, marketing budget, salary, taxes, legal fees, etc. business if you don’t include your salary. (Note: if you have employees, you’ll need to include their payroll taxes. Self employed taxes are different Even if you can’t afford to pay yourself than payroll taxes.) during the lean months you should always 2) Estimate your billable hours per day. Be realistic, and write that cheque anyway, and just put it in take into account the number of hours you’ll spend a drawer until you have the funds to de- on non-billable duties, such as invoicing, paying bills, marketing, etc. Multiply this number by 23 to calculate posit it. your billable hours per month. Secondly, you’ll need to estimate 3) Divide your monthly expenses by your billable hours your billable hours. Ask yourself how many per month. This will give you the billable rate you’ll hours a day you think you will be able to need to charge to just break even. bill, given that a large portion of your time monthly exp ÷ (billable hours/day x 23) = min. billable rate will necessarily be involved in a myriad of |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 7
  • unbillable activities such as marketing, invoicing, dealing with correspondence, paying bills, travel- ing, etc. Multiply that number by 23 (the number of working days in an average month) to get your billable hours per month. Theoretically, your monthly expenses divided by your billable hours per month should give you your billable rate (or at least the minimum rate you should be billing at in order to break even). You may find that you will have to work more hours than you’d like to in order to bill at a rate that feels comfortable to you. Or, you can aim only for top tier clients who can afford to pay those rates. Unless you are very lucky, you will probably have to make choices between time and money, or commit to working more hours initially to get the business off the ground, and then look to hire an assistant to help with the workload once it’s feasible. Congratulations, you’ve just completed your monthly budget. To create financial projections, make a spreadsheet that lists costs down the left-hand side, and the next three years across the top. Fill out your Year One column to be the annual version of the monthly budget you just created (meaning, multiply your monthly figures for each expense by 12). Then start with a copy and paste for your Year Two. Next, examine your costs one by one and figure out which ones will increase in the second year of your business. For example, will you need to spend more on salary because you’re planning on hiring a part-time assistant in your second year? If so, then alter that line item in your spreadsheet and annotate it with a footnote at the bot- tom that explains why this particular number is changing from Year One to Year Two. If you antici- pate increasing marketing in Year Two, assign a higher dollar amount, and then explain why in a footnote. Do this with each expense, and you will have a collection of footnotes at the bottom of your projections. These are called your assumptions. Now you will need to estimate your growth, and assign a rate of growth — 10%, for example — to your income projections. Hopefully, after plugging in all of the numbers you will end up with more revenue than expenses in Year Two, but if not, go back and readjust your assumptions and/or your projected rate of growth until you do. Just make sure your anticipated growth rate is believable! Repeat the process with Year Two to obtain projections for Year Three. Generally, three years of projections are considered standard. Financial Projections 2012-2014 2012 2013 2014 expenses rent 1 $ 24,000.00 $ 24,000.00 $ 26,400.00 health insurance2 $ 4,200.00 $ 4,830.00 $ 5,500.00 salary3 $ 48,000.00 $ 50,400.00 $ 52,800.00 payroll tax4 $ 12,000.00 $ 12,600.00 $ 13,200.00 business insurance5 $ 1,440.00 $ 1,440.00 $ 1,680.00 telephone & utilities $ 1,800.00 $ 1,800.00 $ 1,800.00 office supplies $ 600.00 $ 600.00 $ 600.00 computer equipment6 $ 1,000.00 $ 1,000.00 $ 7,000.00 software upgrades6 $ - $ - $ 3,000.00 marketing & advertising7 $ 2,400.00 $ 2,800.00 $ 3,200.00 TOTAL $ 95,440.00 $ 99,470.00 $ 115,180.00 1 lease agreement includes 10% increase in rent in third year 2 projected increase in health insurance based on previous history 3 projected 5% increase in salaries per year FIG 1: 4 reflects increase in payroll Financial projection 5 reflects increase in insurance due purchase of new computers in third year spreadsheet 6 projected purchase of new computers and software in third year 7 marketing plan projects increase in outreach to growing prospective client base |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 8
  • Financing Your Business:EVEN MORE IMPORTANT THAN YOUR LOGO! So now you’ve got your business plan, including impressive financials. Now what? Well, you have to make sure that you’re properly funded from the start (not doing this for my own business was one of the biggest mistakes I ever made!). From your cash flow projections determine how much money you’d need to maintain operations for three to six months if you didn’t have a single client. This amount is called your working capital, and ideally you want at least three months’ operating expenses in the bank before you even open the doors, even if you have to borrow money to do this! Drumming up new business while providing excellent service to your clients is hard enough without also needing to worry about keeping the lights on due to slow-paying clients or jobs that take six months to finish (and bill!). The best time to seek money is when you have money. That may sound crazy, but most loans need to be collateralized by existing assets — CDs, homes, pension plans, etc. — on a one-to-one ratio, meaning that if you want a $25,000 loan, you’ll need to have $25,000 worth of collateral to secure it with. There are exceptions, of course, such as an SBA loan (more on that below), but let’s examine the traditional bank loan first and foremost. The Five Cs of Credit will help determine how your loan application will be reviewed: > Character: Who are you, are you reliable, and do you pay your bills on time? Do you know what you’re talking about when it comes to your business (ie, can you speak intelligently about your business plan?) The best way to make this asset work for you is to is to find a decision-maker in the application ap- proval process who you can get to know and who will go to bat for you. I have been able to obtain financing with less than stellar financials on multiple occasions due to the relationships I developed with the loan officers, and how collaborative I pushed for the process to be. If the person you are dealing with doesn’t believe in you, find someone else. FUNDING OPTIONS BANK LOAN > Cash Flow: Lenders will look at historical and projected SELLING ASSETS (SECOND CAR, STOCKS, BONDS) cash flow to make sure that you will have HOME EQUITY LOAN enough money to keep the business afloat GRANT and still make your loan payments. FACTORING: SELLING YOUR ACCOUNTS RECEIVABLE SMALL BUSINESS ADMINISTRATION (SBA) LOAN > Collateral: If the business itself does not have enough LINE OF CREDIT collateral, the bank will look to personal as- CREDIT CARD (USE ONLY AS A LAST RESORT) sets (see above). |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 9
  • > Capitalization: This refers to the basic resources of the business, including owner’s equity and fixed assets. > Conditions: Outside factors will also be taken into consideration, such as government regulations, industry trends, and economic predictions. Know your industry! Unless you’re looking for $250,000 or more you’ll have better luck trying to get loans from smaller, independent banks rather than larger, national banks. But what do you do if you just can’t swing a loan? Sell assets (stocks, bonds, a second automobile). Take out a home equity loan – still a vi- able means of financing if not abused. Try for a grant, although typically they are given to qualified not-for-profits or to for-profit companies doing something worthwhile (such as developing envi- ronmentally friendly business practices). If you have outstanding invoices from regular clients you can pursue factoring — selling your accounts receivable for immediate cash less a percentage fee — with a firm such as Prestige Capital (www.prestigecapital.com). Go for an SBA loan. Many banks offer loans backed by the Small Business Administration (SBA) for 80–90% of the value of the loan, which makes the loans less risky for the bank and therefore allows the bank to grant loans to higher- risk candidates. In addition to backing loans, the SBA provides a wealth of business start-up infor- mation on their website: www.sba.gov. Another option — and one set up specifically to help manage unforeseen cash flow glitches — is to obtain a line of credit. A line of credit is a set amount of cash that you can use part or all of if and when you need to, and you only have to pay interest on the portion that you use. For example, if a bank extends a $15,000 line of credit you may use only $5,000 over the course of five months before you are able to repay it, so you would only have to pay interest on $5,000 over the five- month period. Most lines of credit do have to be fully repaid for at least one day per calendar year, but if you can manage this, they are very helpful for immediate and unpredictable expenses, in addi- tion to being interest-free when you’re not dipping into them. So are you confused yet, with all these funding options? If you need help thinking through your business plan or deciphering the maze of funding opportunities, there are several free sources of aid. Service Corps of Retired Executives (SCORE) is a 11,000-member volunteer association com- posed of retired businesspeople who donate their experience to assist entrepreneurs with business problem solving. There are SCORE offices throughout the country, and you can find the one near- est you at www.score.org. Like SCORE, Small Business Development Centers (SBDCs) are funded by the SBA and offer free managerial and technical assistance to small businesses. FREE RESOURCES Located primarily within college campuses, SBDCs combine MBA-qualified consultants SERVICE CORPS OF RETIRED EXECUTIVES: with a wealth of governmental programs Volunteer association of retired business people who donate their business problem solving experience to and services. SBDCs are particularly adept entrepreneurs. at helping clients seek out and apply for www.score.org non-traditional funding options (meaning that you need access to capital but don’t SMALL BUSINESS DEVELOPMENT CENTERS: Centers funded by the SBA which offer free managerial qualify for traditional bank loans). Check and technical assistance to small businesses. them out at www.sba.gov/content/small- www.sba.gov/content/small-business-development- businessdevelopment- centers-sbdcs centers-sbdcs. |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 10
  • Business Relationships:IT’S ALL IN WHO YOU KNOW Carefully set up your business relationships at the outset, and you will be rewarded by years of good advice down the road. Lawyer: You may not think you need one until you get in trouble, but a little bit of wise counsel before you make certain business decisions can go a long way towards business security. Look for a lawyer or a boutique firm that specializes in small business law and see them at the outset to obtain advice on the best method of structuring your business. The Graphic Artists Guild has a lawyer referral resource for members. Another resource is The American Bar Association (www.abanet.org), which offers information for those who want to handle part or all of their legal situation on their own, infor- mation on hiring a lawyer — including a legal referral service — and a pro-bono service for certain qualifying applicants. Legal Shield (www.legalshield.com) is an interesting alternative, supplying plans offering various amounts of legal advice for less than $100 per month — although you will not be able to maintain a relationship with any one particular individual in the organization as a “person- al” counsel. Another low-cost online alternative is Legal Zoom, which offers legal services a la carte (www.legalzoom.com). A great source of legal self-help can be found at Wise Counsel Press (www. wisecounselpress.com). Accountant: Find one who doesn’t charge you to call with questions between visits, so that you are free to utilize their expertise whenever needed. A good accountant can be invaluable in recommending legal ways to distribute your income to lighten your tax load. The Professional Association of Small Business Accountants (www.smallbizaccountants.com) provides a wealth of resources including a small busi- ness toolkit, and can help you find a local accountant from their database. It is perfectly acceptable to meet with and interview several accoun- tants before settling on one. Draw up a list of interview questions and call their referrals, as WHERE TO FIND WHO YOU NEED if you were hiring an employee. In many ways, LAWYER: your relationship with your accountant is the •  raphic Artists Guild Legal Referral Service (for Guild G single most important business relationship members) you will have. •  merican Bar Association – www.abanet.org A •  re-Paid Legal Services – www.legalshield.com P Banker: This may seem like a less important relation- ACCOUNTANT: •  rofessional Association of Small Business P ship at the outset, but try to form a good Accountants – www.smallbizaccountants.com relationship with your banker when you set up your business account. Inevitably, you will INSURANCE AGENT: face a cash flow problem, hit a glitch, or need • ndependent Insurance Agents & Brokers of America – I www.iiaba.org a special favor. Bankers can do a lot more |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 11
  • than tellers can to resolve issues favorably, especially if a pre-existing relationship exists. They can also advise of new products or services offered by the bank that might be a good fit for your account activity, but again, only if they know you and your business fairly well. And when it comes to seeking financing, although your banker may not be the same person who handles your loan, they can direct you to a proactive loan officer and will certainly provide a good character reference for you. Insurance Agent: Finding the right broker can help you negotiate the arcane world of insurance. You may be aware of the need for life insurance, health benefits, disability insurance, and Worker’s Comp., but have you thought about employment practices liability insurance or key employee insurance, and do you know the difference between property and casualty insurance? Unless you are in the business, it is easy to make incorrect assumptions about which types of insurance are required vs. suggested. A broker can not only advise on what types of insurance are needed by your small business, but can also help find you the best coverage for your budget. The Insurance Information Institute provides some good basic information at www2.iii.org/business-insurance-general. The Independent Insur- ance Agents & Brokers of America (www.iiaba.org) is a good place to locate independent agents, who each represent many insurance companies and compare those companies’ products to find you the best combination of price, coverage, and service. FIG 2: The Professional Association of Small Business Accountants website includes valuable resources through their Small Business Toolkit. |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 12
  • More Numbers To Memorize:YOUR EIN AND DUNS NUMBERS An Employer Identification Number (EIN), also commonly referred to as a Federal Tax Identification Number, is a nine-digit number that the IRS assigns to business entities. It is your business’ social security number, and will be required on all legal, tax-related, and financial paperwork. Getting an EIN takes about five minutes and is free, so there is absolutely no reason to use your own social security number for your business, especially in these days of identity theft when you’d rather not have that number on every form you need to fill out. Simply call 800-829-4933 or visit the the IRS’s Apply for an Employer Identification Number (EIN) Online webpage to obtain your EIN. Dun & Bradstreet (D&B) is the TRW/Experian/Equifax of the business world. They will establish a credit report on your business regardless of whether or not you seek them out, so you might as well contact them and make sure that they’re reporting accurate information about your company to the outside world (www.dnb.com). Additionally, when you initiate your D&B report you get to choose which vendors D&B uses to check your payment history (once you supply them always make sure they are paid on time!), whereas otherwise D&B chooses their own vendors to consult. When you open up a credit report with D&B they assign you a unique DUNS number to track you by, and after they establish your credit report, they assign you a credit ranking. The DUNS number and D&B credit ranking can be requested when applying for credit at banks or with larger vendors. FIG 3: The IRS’s EIN Assistant prompts you through apply- ing for an EIN number online. |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 13
  • Buyer’s Remorse Is No Fun At All:ACQUIRING THE RIGHT EQUIPMENT One of the most exciting aspects of starting a business is the new top-of-the-line computer you now need to buy for work, right? Well, if you can afford it, sure. But why not start out in a more mod- est way and keep that capital for a cash-flow glitch? Trust me, someday you’ll be glad that you did. Think about what you’ll be using your computer for, and what your employees will be using them for as well. If your work is primarily in InDesign and you rarely use multiple applications, you might not need as much RAM as you drool over. If your office manager is only working in MS Word and Excel, chances are he won’t need a dual-processor machine. Be sensible about what you need vs. what you want. And it never hurts to comparison shop, you can check for bargains at www.dealcatcher. com and www.pricegrabber.com. You might consider purchasing used equipment as well — I have been doing this for years with great results. Although eBay is certainly a popular method these days, other sources you might want to check out are Mac of All Trades (www.macofalltrades.com), Midtown Digital (www. midtowndigital.com – formerly CPUsed), and Pre-Owned Electronics (www.pre-ownedelectronics. com), which all have warrantee periods for equipment and parts purchase. Other popular sources are www.buy.com and www.amazon.com. Guild members have access to discounts from Apple and other software and hardware companies, and you can always check your local Mac repair shop for Apple upgrade trade-in programs for your older equipment. Another option is to lease your equipment, especially if you need to purchase multiple desk- tops, a server, and printers all at once, which can be quite an expensive proposition. As well, some leases allow you to upgrade every few years so that you’re always able to use the latest equip- ment without constant significant capital outlay. Apple’s own financing program is a good one, but if you’re interested in integrating third-party peripherals into your lease, you’ll need to either find a third-party equipment lease from a company such as Rent a Computer (www.rentacomputer.com), or locate a company which provides equip- ment financing from any vendor, such as Fi- GETTING WHAT YOU NEED delity Capital (www.fidelitycapitalonline.com). Like any type of lease, computer leasing REFURBISHED COMPUTERS: terms are often negotiable, and you should •  he Apple Store – http://store.apple.com/us/browse/ T home/specialdeals/mac compare a variety of computer leasing •  ac of All Trades – www.macofalltrades.com M vendors to determine which offers the best pricing and terms. Be sure to watch for any COMPUTER RENTALS: hidden costs that some vendors may attempt Apple: •  pple – http://www.apple.com/financing/business.html A to add in, such as end of term computer dis- •  heck with your local certified Apple repair shop. C posal fees, for example. Regardless of where Many offer either rentals or trade-ins on old Macs. you lease from, however, Apple’s website is Non-Apple or third-party peripherals: handy for educating yourself on various com- • Rent a Computer – www.rentacomputer.com • Fidelity Capital – www.fidelitycapitalonline.com mercial lease options. Apple compares the Fair Market Value lease, the 10% Purchase |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 14
  • Option, and the $1 Purchase Option, each of which is best suited for a specific mix of technology strategies and tax advantages (www.apple.com/financing/business.html). Office supplies will often cost more than you think they will, especially once you factor in all the ongoing disposables, such as toner or ink. Take your time to set up business accounts at places where you get freebies or credits for bulk purchases. Staples, for example, offers free delivery on or- ders over $20. Business accounts for supplies, services — even local eateries — save a lot of time, allow the bill to be paid when it’s convenient, and make it less necessary to keep massive amounts of petty cash lying around. Always look for time-saving options, even though they might cost a little more. Chances are if you do the math, your hourly rate — or even your assistant’s hourly rate — is higher than the cost of using a messenger service, or leasing a scale so that you can weigh small packages in the office and not have to stand on line at the post office just to find out how many stamps are needed. Pitney Bowes leases postage machines, scales, and all sorts of neat postal equipment on a quarterly basis. Automation is a wonderful time-saver for the understaffed small office — any kind of automatic debit or online bill-pay, for example, should always be utilized, and might just qualify you for a lower interest rate on a loan payment. FIG 4: Apple’s Commercial Credit webpage includes information on different leasing options: Fair Market Use Value, 10% Purchase Option Lease, and $1 Purchase Option Lease. Apple also offers a Reuse and Recycling program, which may entitle you to compensation for your outdated hardware. |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 15
  • Who Needs Headhunters?:ATTRACTING TOP TALENT Even more important than your hard assets, however, are your soft assets, or your employees and contract freelancers. I’m sure you’ve heard the saying that you’re only as good as your weakest link, and never is that more true than in a small business. Chances are that you won’t be able to do everything yourself, there just aren’t enough hours in the day unless you plan to regularly work 80-hour weeks. So the first decision you need to make is what role you will play as your business grows. Will you be the lead creative, and hire others to cover your administrative functions? Will you spend most of your time in business development, and hire a top creative director you trust? Will you grow to the point where you oversee everything, and rely on department heads that each head up the different segments of your business? Think about the role that you want to play in the future, and start building that infrastructure now. Keep in mind that each position has advantages and dis- advantages, and consider how each would fit into the lifestyle you wish to develop for yourself. For example, being the main client contact will make it hard to have a flexible work schedule. Spending lots of time in sales and marketing probably means a certain amount of travel. It might help to write job descriptions of each of the positions you would like your company to someday have, paying attention to division of duties and the reporting structure. Although you might need to start out by wearing several hats and hiring one or two others with similar talents, it is important to establish clear paths for both yourself and your staff that progress towards your ideal employee structure. Plan salary increases and title upgrades accordingly, right from the beginning. Attach revenue goals for adding staff (make sure that the revenue is sustainable and not simply peaking due to one particularly large project) and establish a regular system for employee review and raises. When thinking about adding your first employee, don’t fall into the trap of thinking that part- time is a better way to start because it will be cheaper. At a part-time rate of $25 per hour, you’re paying $500 per week for a 20-hour week, or about $26,000 per year. You could probably hire a full- time worker for less than $52,000, and get not only double the amount of hours worked, but also a lot more stability. There are certainly times where part-time help is appropriate, but think it through and do the math! Look first within your own networking circle for potential hires…circulate your job description and see if anyone you know knows someone looking for a job. This is often the best route, BEFORE YOU HIRE... since the hire will feel obligated to live up to their billing since it came through a mutual •  etermine what role you will continue to play in your D company. acquaintance. Another option that allows •  reate job descriptions for future employees – the one C you to “try before you buy” when looking for you’re about to hire, and the ones you’ll have when entry-level help is to offer unpaid or stipend- you’ve achieved your dream company. based internships, and make a job offer to •  lan out future salary increases and title upgrades. P •  ttach revenue goals for adding new staff. A a particularly wonderful candidate. Creative •  stablish a regular system for employee review and E internships can be posted at city art schools, raises. and administrative internships at city busi- |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 16
  • ness schools or programs that help displaced workers return to the workforce. Two such THINGS TO ASK DURING THE examples are Global Employment Solutions INTERVIEW PROCESS (www.gesnetwork.com – formerly Career •  ow does the interviewee see his/her career growing, H Blazers) and Welfare to Work (www.opm. and does it match with the growth path you’ve set for gov/wtw), which can provide tax credits and your company. free training as well. Outside of that, a great •  here does the interviewee see him/herself in three W source of creative talent is Creative Hot- years? Five years? •  hat did the interview like the most about his/her last W list (www.creativehotlist.com), and you can job? The least? always post in Craig’s List or the Graphic Art- •  oes the interviewee have outside interests? D ists Guild’s own JOBline News, a job listing for creatives (www.graphicartistsguild.org/ join/member-benefits/member-benefits-professional). What should you look for in an employee? Well, to a certain extent, if they’re going to be doing design work, your decision rests on talent. But for production folk or administrative personnel, con- sider hiring on basis of work ethic rather than skill level. Sharp, driven, trustworthy self-starters can easily learn new skills. Talented, lazy, unfocused scatterbrains always need to be managed carefully and kept in line. Look for candidates with outside interests, who see their job as simply a part of their life rather than those who define themselves by their job. These people are much more likely to play well with others, as they are probably far less possessive about things needing to be done “their” way. And besides, multi-dimensional people are so much more interesting to work with! During your interview process, make sure that the growth path you have set for your company intersects favorably with the individual growth paths of your hires. If a stint as your Junior Designer helps them achieve a job as Cre- ative Director somewhere else someday, that’s great for both of you…as long as you didn’t mis- takenly assume they’d be with you forever, or as long as they didn’t mistakenly assume that they’d automatically become your Cre- ative Director someday — if you had actually intended to hold that title for yourself. When interview- ing, both parties should outline their 3–5 year goals to establish the best fit. Be clear about the role you are looking to fill, the responsibilities of that role, and its growth path. Make FIG 5: JOBline News, run by the Guild’s New York Chapter, is a job listing emailed to Guild members, and is a good resource for find- ing creative professionals. |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 17
  • sure to ask questions of your candidates before you reveal anything about what you’re looking PERKS TO LURE & KEEP TALENT for yourself. Many people know how to parrot •  lexible hours F back what they think you’re looking for if you •  acation days or time off V start by defining it for them. If you first ask them •  raining, continuing education, or reimbursement for T open-ended questions about their ideal job and skills-related workshops and seminars what they liked most and least about their last •  embership in a trade association M •  ommission on projects completed for new clients C few jobs and their answers match your mindset, recruited by the employee then you know a match is made. At the moment, you have the luxury of hir- ing in an employer’s market. But in case that changes, you need to think about what you can offer to attract and retain prime talent. If you can’t afford top-shelf salaries, can you offer flexible hours? Plenty of vacation? Money towards continuing education with a bonus upon course completion, or more modestly, an annual budget for workshops and seminars? Options for unpaid additional time off? Can you fund and encourage employee participation in a trade association? A commission on work done for new clients harvested by your employee? Although these are all good up-front incen- tives, keep in mind how important it is to maintain a good work environment on a daily basis as well. Read some books on management, if this is a new area for you. Your corporate culture starts the moment you open your doors and well before you hire your first employee, so make sure you start it right. First and foremost, look at your own work habits, and ask yourself what kind of vibe your workplace gives off to the clients and vendors who come in contact with it. Then, once you have that first employee, ask yourself the following questions: How structured or easy-going do you want to be? Are there clearly-established policies and procedures for getting things done, or does the wheel need to be reinvented each time? On the flip side, are your employ- ees doing paperwork just for the sake of doing paperwork, or are they really allowed to focus on their creative skills? Are your meetings affective? How much micromanagement is necessary? Are there opportunities for recognition of a job well done? Is everyone clear on their responsibilities and the responsibilities of others? What happens when you have too much work in one month, and not enough work the next? And in terms of environment, what is your dress code, your policy on music, and your feelings about personal phone calls? Do people clock in and clock out on a timecard, or is it more important to maintain flexibility so that the job always gets done? The more attention you pay to establishing a good work environment, the more loyal and productive your employees will be. Another (often-overlooked) component of work environment is the relationships that your em- ployees have with each other. Make sure to have regular staff meetings where everyone can provide input in a safe setting, and issues can be discussed in depth. Encourage opportunities for employ- ees to gather outside of the workplace, so that they can form bonds that will transcend the difficul- ties of the stressful office during deadlines. Colleagues who understand each other more completely than simply as in-office co-workers bring an incredible amount of tolerance to the workplace. |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 18
  • Nuts & Bolts:PRICING, CONTRACTS, AND OTHER PAPERWORK As artists, we all hate paperwork. It would certainly be nice if we could just concentrate on doing beautiful work and allow the money end of things to take care of itself, but unfortunately, life doesn’t work that way. Design firm owners will probably need to spend as least as much time on estimates, contracts, invoices, and marketing as they will on actual design work. Let’s look at pricing first, as the primary component of an estimate. There are two ways to price your work, on an hourly basis or on a per-project basis. An hourly basis is always more fair for both you and the client, unless you are really, really good at estimating the amount of time it will take you to complete a job and have clear clauses for price increases for out-of-scope work. The difficult thing about billing hourly is knowing what to do when the hours start to add up and the job remains far from finished, but in this section I will give you some tips on how to handle that scenario. You’ll find it easier to bill hourly once you get comfortable with monitoring both time and budget, and practice keeping an open dialogue with your client about the same, throughout the life of the job. When I first started out I found that I frequently forgot to bill for little things, for example, the amount of time it took to deal with the printer on the phone throughout the job (now part of our standard “consulting and tracking” fee), or the shipping from the printer’s plant to my office, which would show up when the printer’s bill arrived on my desk — usually a few weeks after I’d billed the client. To compensate for forgetting to bill certain items, I made a master list of all possible things that I could (and should remember to) bill for, and when I prepare my estimates I run down this checklist each and every time. It even CALCULATING AN ESTIMATE BASED reminds me to build an hour into each job to ON AN HOURLY RATE compensate for the time it takes to deal with 1)  alculate your billable hourly rate (see page 5) C the associated paperwork, and to ask myself how difficult a client is to work with, which 2)  stimate the number of hours you will need to com- E plete a project impacts the number of revisions that par- ticular client would most likely need to see, 3)  ultiply your hourly rate by the number of hours to M get your labor portion of the estimate as well as how long meetings with that client would take. billable hourly rate x # hours required = labor portion When you’ve determined the total num- ber of hours you will need to spend in order 4)  otal up the outside costs for the job (photography, T illustration, copywriting, font purchase, supplies, etc.) to complete a job, multiply it by your billable hourly rate (see page seven), and you’ve got 5)  alculate a mark-up on the outside costs – typically C 10-20% – and add it to your totaled outside costs the labor portion of the estimate. Then total all outside costs for the job and add a mark- costs + (% markup x costs) = outside costs portion up for yourself, generally between 10–20%. When you add the two figures together, you’ll 6)  dd the labor portion of the estimate to the outside A costs portion of the estimate. get your total fee, which should be similar whether billed hourly or per project. labor portion + outside costs portion = estimate |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 19
  • ESTIMATE NUMBER: 31-1-C.2631 Each job is identified by a unique estimate number... DATE: 13 April 2012 DESIGNER: Rebecca Blake for Optimum Design & Consulting I.D. No. 26-3437659 CLIENT: SmartChoice Communications OF: 16 West 45th Street, 7th floor New York, New York 10036 CONTACT: Elisa Caro JOB: Folder/brochure + inserts ... as well as a simple job name. ACCOUNT NUMBER: 22SCC.1466P The Assignment Description ASSIGNMENT DESCRIPTION: Design and produce a 9x12” folder with two inside pockets and seven 8.5x11” outlines the specs of the job and insert sheets (two single-sided and two double-sided), all in four-color and describes the look and feel the consisting of client-supplied logo, text, and images. Design should be bright, client is searching for. colorful, and eye-catching, and match branding set by new website. Optimum prefers to itemize costs, ITEMIZED EXPENSES but it is equally valid to provide a DATA ENTRY OR COPYWRITING $360.00 PROOFS $0.00 simple flat fee. ILLUSTRATION $0.00 MATERIALS AND SUPPLIES $0.00 PHOTOGRAPHY $120.00 PRINTING AND FINISHING $2,672.00 SCANS $0.00 SHIPPING AND MESSENGERS $50.00 Outsourced costs such as copy- IMAGE MANIPULATION $0.00 MAILING PREP AND POSTAGE $0.00 writing are included with markup. DESIGN $1,020.00 TRAVEL $0.00 MANUAL OR ELECTRONIC PRODUCTION $170.00 CONSULTING AND TRACKING $255.00 In-house costs for design, STATS, FILM AND SLIDES $0.00 SALE OF RIGHTS $0.00 production, etc. are based on an hourly rate. The client is not DESIGN AND PRODUCTION FEE INCLUDES: apprised of either the rate nor the Creation of folder and seven inserts based on client-supplied logo, text, and photographs; length of time estimated. presentation of up to three comprehensive layouts showing format; production of final digital files; and coordination with chosen printer. The “...Includes” field lists the specs PRINTING FEE INCLUDES: in detail, including the number 500 9x12” folders with two inside pockets (card slit in front) plus 250 sets of seven 8.5x11” inserts (two of comps and coordination with single-sided and two double-sided), all printing in full color on 16pt CS2 white gloss stock. outside vendors. “Printing includes” lists the final printed product specs. DESIGN AND PRODUCTION FEE: $1,975.00 PRINTING FEE: $2,672.00 Printing cost includes Optimum’s markup. PLEASE MAKE CHEQUE PAYABLE TO: OPTIMUM DESIGN & CONSULTING Please sign both copies of this estimate and return one to Optimum Design & Consulting. Half of this fee is to be paid upon signing this document, the remainder upon delivery. The contract is printed on the back THANK YOU. of each estimate, and the client is instructed to sign and return a FOR OFFICE USE ONLY: MC V AE ACCT.#: EXP.: SWIPE copy. Payment terms are listed on T.E. CASH CHEQUE DEPOSIT: DATE: CHEQUE #: both the contract and the estimate. FIG 6: Example of an estimate for the design and printing of a marketing folder with insert sheets. |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 20
  • The plus side in billing per project is that once the client agrees to the fee, you won’t GET IT IN WRITING need to revisit the pricing again and again. •  ut in as many details of the project in writing as you P On the minus side, you do have to be able to can in your estimate. accurately anticipate many future scenarios •  e sure you’ve anticipated and included all the time B or else risk giving up an opportunity to bill you’ll need for the project, and all outside costs. for additional revisions or unexpected new •  ave your client sign a contract which defines the H scope of the project and fee, and establishes owner- directions that the project may take. With an ship of the final artwork and payment terms. hourly situation you have more leeway to bill •  ave your clients sign off on the final project, indicat- H for the amount of time you actually spend, ing their approval. but you also have to be aware of how close or far off you are from your original estimate, and be able to have an interim conversation (or two!) along the way to explain that the additional four pages your client added are going to add $X to their final fee. Always make sure to have this conversation and get their permission to alter the estimate before the additional work is done. This brings me to a critical piece of advice concerning creating your estimates and proposals: put as many details of the job in writing as you possibly can. If you’ve detailed that the job entails an eight-page website based on five digitally-supplied photos and final text, and you end up with a 12- page website with ten photos that you have to scan yourself, text that you’re expected to copy-edit, and hey, eCommerce functionality (where did that come from?), having the original scope of the job spelled out in writing right on your estimate makes it very easy to turn to the client and ask for more money to complete the job. In fact, depending on your relationship with that client, if the specs of a job change so drastically you may want to get them to sign off on a whole new estimate, or at least a printout detailing the expected change in fee based on the stated change in specs. Which brings me to the importance of signatures and contracts (see how all this paperwork stuff is interrelated?). Once you and your client agree on a fee, it’s imperative that the client sign a contract which not only defines the scope of the job and includes the fee, but also stipulates who owns the finished work, states the expected payment terms for the job, and provides protection in the event of a dispute. Once you have a long-term relationship with a client you can choose whether or not you always want to have a signed contract before you start any job. Some designers will waive this procedure for longer-term clients and just bill jobs after they are completed, or strike a balance and invoice smaller jobs but require a signature on jobs over a certain dollar amount. It’s up to you what makes you feel most comfortable. Whenever possible use your own contract rather than sign your client’s contract, but if you must sign theirs, read it carefully and know that it’s okay to ask them to alter clauses that make you uncomfortable, especially anything COMMON PAYMENT SCENARIOS: that resembles work for hire or work on spec. a)  50% up front • The best guideline to either writing your own •  50% billed net 30 contract or understanding someone else’s b)  33% up front • is The Graphic Artists Guild Handbook of • 33% at completion of job and before file is released Pricing & Ethical Guidelines, published by the • 33% billed net 30 Guild. It is included with Guild membership or c) •  0% of labor up front 5 can be purchased in bookstores for approxi- •  00% of outside costs at completion of job and 1 mately $40, and includes sample contracts. before file is released • remainder billed net 30 |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 21
  • The contract protects the client from any unauthorized increase in fees or expenses. A link to Optimum as the website creator, and usage of the website in } Optimum’s portfolio are stipulated. Ownership of original artwork and usage are defined. Modifications to the estimated cost or specs must be written, unless given orally to expedite a job. How- ever, Optimum prefers to have all changes requested in writing. If original artwork is to be created, the transfer of rights is outlined here. The 50% deposit or “advance” of } the estimate total is listed here. The estimate number and job description are repeated. The client is asked to sign the “Consented and Agreed To’ line and date the signature below. The contract is signed by both Optimum’s web developer as well as Lara, as the firm’s founder. These clauses outline the time for payment, cancellation notice (with kill fee), and notice that the client shall be responsible for attorney’s fees, should a default in payment neces- sitate a court case. FIG 7: Example of a contract for a website design. Contracts are coded back to the estimate by the estimate number. When given in hard copy, contracts are printed on the back of the corresponding estimate. Optimum’s contracts were developed from the standard contract provided to Guild members, and printed in The Graphic Artists Guild Handbook: Pricing & Ethical Guidelines. |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 22
  • Most importantly, when negotiating contracts don’t be afraid to stand up for yourself and your rights as an artist. Don’t fall into the trap of thinking how lucky you are to land this particular job, and that you don’t want to make a fuss about contracts because you don’t want to lose the client. If you’re a Guild member, remember that it’s not just you against a mammoth corporation, but that the Guild stands behind you, and that your membership empowers you to negotiate from a position of strength. Likewise, even though you are a small business, you are still entitled to be paid in a timely fashion, and there are several steps you can take to protect yourself. Figure out what credit terms make the most sense for you and ask for a deposit before you start the job. Three common pay- ment scenarios are: a) 50% up front/50% billed net 30; b) 33% up front/33% at completion of job and before file is released/ 33% billed net 30; and c) 50% of labor up front/100% of outside costs at completion of job and before file is released/remainder billed net 30. Additionally, you can decide if you’re willing to extend credit to a client in the first place. If you end up needing to twist a corporate arm to get a deposit, you can inform your client that the bal- ance has to be paid COD for their first three jobs with you. Or you can have your client fill out a credit report (yes, you can create one yourself) and you can check their D&B ranking and credit ref- erences. Sometimes just asking a client to fill out a credit report will underscore that you’re serious about getting paid on time. Another option is to open a credit card processing account, take your client’s card number, and obtain a signature that allows you to run the balance due on the card if the bill isn’t paid within allotted terms. Another important signature to collect is the one that a client should provide once they deem the job completed to their satisfaction. This signature is every bit as important as the signature on the contract, because it provides proof that the client accepted the job, in case the client should later try and claim fault with the work in order to avoid payment. Ideally, a “job approval form” should be attached to a hard copy printout or enclosed along with a PDF of the final file, and should include an approximate invoice price (which may be different than the estimate price, if the scope of the job changed at all along the way). Getting a signature of acceptance not only for the design work but also on the anticipated amount due provides as foolproof a way as possible to be able to collect on the invoice after it is billed. Make sure to get this signature before the job is sent to the printer or released electronically to the client — otherwise you’ll have no leverage to collect the sig- nature at a later date. Job ApprovAl 330 W. 38th Street #801 • New York, NY 10018 telephone: 212.221. 7559 • fax: 212.221.1413 www.optimumdc.com Date aCCouNt # FAX SHEET Customer Name estimate/iNVoiCe # VersioN # estimate PriCe DesCriPtioN of Job aPProximate iNVoiCe PriCe FIG 8: To: Replace Copy Replace Art Notes A job approval form establishes Company: Replace Font Replace Color that your client has signed off on a Improve Quality of Art Date: Other Time: project and was made aware of the Fax: Phone: This job is complete to my satisfaction. I authorize Optimum Design & Consulting to bill me for the full design, production, and printing costs approximate invoiced price. of the job as listed above, and I will submit payment within net terms.Pages From: # of (including cover): sigNature Comments: |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 23
  • If You Build It They Will Come:ACTUALLY, IT DOESN’T REALLY WORK THAT WAY… It would be nice if it did work that way, wouldn’t it? But honestly, just because you’ve put the fin- ishing touches on your brilliant website and have a clever company name, why would your phone suddenly start ringing? Just like every other small business in the world, you’re going to have to continuously market your business in order to obtain and maintain a robust client base. But don’t despair…you have a leg up on the competition already simply because you already know how the value of good design. Think about how you can apply your corporate image across every piece of communication that reaches a client…obviously your website should match your print brochure and your letterhead, but the same look and feel should also apply to your estimates, invoices, contracts, 9x12” envelope labels, eNewsletters, postcard mailers, and even to an extent, your holiday cards. Identify a cor- porate font set and corporate colors and use them always. Be as strict with your own logo usage guidelines as you are with your clients’. Every opportunity to touch your client is a marketing oppor- tunity. God, that’s a lot of work, isn’t it? Good thing you can print things out as you need them, right? No!! Make a deadline for yourself to complete your print marketing materials, and send them off to a professional printer. Too many designers are always working on their website or brochure, never willing to call them complete because they can always be made better. Or perhaps unwilling to spend the money for professional printing and justifying the delay by thinking that leave-behinds printed from an inkjet can always be updated. This is a crucial error in judgement — find a way to finish your internal projects! If you’re stuck on the words because you’re a visual person, find a copywriter and barter working on each other’s marketing materials. Find the budget FORMULATING A MARKETING PLAN to pay for offset or even digital printing on good quality paper because the difference is •  rainstorm with your employees or colleagues on B creative marketing tactics. noticeable, and potential clients will expect •  apture the ideas in a list. (Give it some time, and C the quality of your own materials to reflect come back to it if you feel tapped out.) the quality of theirs. Commit to an annual •  rganize the lists into short-term (implemented in one O review of your materials and the budget to month or less), long-term (six months or less), and ongoing projects. update them as necessary, send those files •  rioritize each list in terms of potential return for time P off to the printer or sign off on your website, invested. and move on. •  reak down the top few ideas in each category into B Okay, now that you have all these great specific step. •  ssign the number of hours required to complete each A materials, how exactly are you going to use task, and the budget for non-labor costs. them? First and foremost, you need a self- •  alculate the number of hours you’ll need to dedicate C promotion plan. Some may call this a Mar- each week to your marketing plan, and schedule them keting Plan, but if that sounds too scary and on your calendar. •  ssess your progress each week. If you fall behind A out of your league because you never took schedule, adjust your plan. a marketing course, you can think of it as a •  tay committed! S self-promotion plan. Start with a brainstorm- |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 24
  • ing session with everyone in your company, or with several other small business owners (including at least one seasoned design firm owner). Commit to two hours of free thinking, and keep going, even when you think you’ve thought of everything already. Capture the thoughts in lists. Narrow the lists down into short-term (can be implemented in one month or less), long-term (six months or less), and ongoing. Ongoing? Yes, you need to be prepared to devote a percent- age of your time each week — not less than 10–15% — to marketing. Prioritize each list in terms of potential return for the time invested, and break down the top few tasks in each category into the specific steps (action items) necessary to complete them. Assign a number of hours required to implement each task, as well as a budget for outside (non-labor) costs. In general, you should be spending 5–10% of gross income on marketing, including labor costs at the same hourly rate you charge your clients. Think about how many hours per week or per month you plan to spend on marketing, and grab a blank calendar. Slot in the ongoing activities, see how much time you have left, and try to work on one short-term idea each month, as well as at least one long-term idea. Put each of your action items down separately, on a week-by-week basis. Mark down when funds will need to be spent and keep that in mind as you manage your cashflow. Sit with that calendar every Monday morning and look at what needs to be done over the week, and make sure that everything that was scheduled to happen the prior week did, or can get included in this week’s activities as well. And if you fall off track don’t get frustrated, just adjust your plan and alter your expected outcomes to accommodate the extra week or two. But without looking at your plan on a weekly basis and holding yourself ac- countable for its implementation, it will never happen. Half the battle is actually being committed to a long-term plan. Keep in mind that you need to get your name across a prospect’s desk at least six times before it will start to sink in and become memorable. Being top of mind at the exact moment when they need to purchase your services is key; sending an annual mailing and leaving it at that isn’t going to cut it unless the mailing is just so amazing that they’ve pinned it up to their bulletin board and haven’t covered it up all year with something else. A mix of methods and media is best. Plan quarterly postcards, a bi-monthly eNewlsetter, and two phone calls per year, for example. Or, an annual direct mail piece, a monthly eNewsletter, a clev- er “Thank You” card at thanksgiving, and one phone call per year. Spice that up with a few speaking events, a semi-regular column in a trade publication, unique and inexpensive gifts at the holidays, a referral bonus program, walking the floor at a trade show where your clients will be exhibiting, join- ing a leads group (a networking group of noncompetitive businesses), sending your best client each year a customized MIX YOUR METHODS AND MEDIA plaque, or anything unusual that cap- Get your name across your prospect’s desk in a number of tures attention, if only briefly. You’re a ways. Ideas include: creative person…you can do this! •  ostcards p •  Newsletters e A key component of your market- •  hone calls to touch base p ing should be participation in trade •  nnual direct mail pieces, such as a holiday card a associations and networking events. I •  peaking events for local business networking groups or s can’t emphasize this enough: people trade associations •  column in a trade publication a do business with people they know, • eferral business program r and people they like. It doesn’t happen •  ttending trade shows where your clients are exhibiting a because you handed your business card • oining a leads or business networking group j out to 20 folks at a networking event. But •  ttending trade shows where your prospects are exhibiting a |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 25
  • it might happen if you pay more attention to the cards you collect than those you NETWORKING: STANDING OUT FROM give out, and follow up with each person THE CROWD you meet on an individual basis. Send •  sk open-ended questions of the people you meet about A your networking contacts a note saying their business and any problems they might have. how nice it was to meet them. Give them •  ave your elevator pitch prepared. H a follow-up call and inquire after a prob- •  end to anyone whose card you’ve collected a note or S lem they mentioned they were struggling email saying it was nice to meet them. •  ake follow up calls. M with when you spoke (which means, of •  ake a date for coffee. M course, that you should be spending more time listening than talking about yourself, and that you probably took notes on the back of their business card once you stepped away). Make a date for coffee with three people who might have networking circles that are compli- mentary with yours. Many people dislike or feel uncomfortable with the idea of hard sales. But if you attend net- working events looking for the opportunity to help everyone you meet, you’ll be surprised how much easier and more comfortable a role that is. Introduce yourself but shift the conversation to the per- son you are speaking with, and ask them some open-ended questions about their business and the Corporate Design • Client: Intercap M&A LOGO DESIGN WEBSITE • Industry: Financial – The logo was designed Home Page: Mergers and Acquisitions contemporary fonts using The home page was designed as a graphical paired with an old-style ampersand. A lined pattern introduction to the website, with little content. superimposed on the “M&A” evokes engraved currency notes. The color palette — forest green and soft grey — is conservative, solid and soothing, and again evokes money. Logo Variations: 2 • Solid grey and grey tint • Reversed “M&A”, for printing on 1 330 West 38th Street #801 light colors • Pale grey, for printing on dark colors New York, New York 10018 • Grey “M&A” and reversed company name, for printing on dark colors 3 1: Home page leads to three subsections: • For Sellers • For Buyers and Investors • For Attorneys, CPAs, and Financial Consultants 2: Page features a simple animation of key words – strategies, Resources, and Education – fading up. 3: Quotes are introduced as a key design feature. Spot Logos: FIG 9: Low cost marketing: A booklet created for a networking meeting presentation was designed to reinforce Optimum’s ID, and was printed in-house, creating a low-cost leave-behind. |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 26
  • specific problem(s) they are grappling with at the moment. Perhaps they’ve been dying CURRENT AND PREVIOUS CLIENTS: to pitch their product to Chase Bank and SHOWING APPRECIATION your cousin is a branch manager there. Or •  efer your clients when you come across someone R they’ve been looking for a good real estate who could use their services. broker and you know just the right person. •  eturn calls promptly. R Or they haven’t been able to figure out how •  roofread comps carefully before presenting them. P to choose an ISP and you can help. •  e realistic with estimates; don’t get in the habit of B invoicing higher than the estimate. Practicing this method of networking •  e polite and responsive. B doesn’t mean that you won’t take advan- •  end thank you cards when a project is completed and S tage of opportunities to promote your own paid for. business at all; in any networking conver- •  end a special gift – a creative plaque, or something S you’ve created – to your best client. sation it is expected that you provide an appropriate introduction to your business as well, so learn to make the most of it. Prepare your 30-second “elevator pitch” — how you would describe your business in the 30 seconds it might take to ride an elevator down to the ground floor before your captive audience disperses — and practice it until your pitch rolls off your tongue and you sound confident. Make sure you focus on the benefits you provide your clients rather than the services you provide (i.e., “I help my clients attain their dream jobs” versus “I create resumes”). Arm yourself with one or two 60-second stories of how you did something outstanding for a client, and tell it in terms of results the client realized or customer service above and beyond the call of duty. But keep in mind that meeting people once at a networking event is only the beginning of your relationship with them, and that you’ll be able to promote your business to them in subtle ways over the course of the coming years. Did you figure it out yet? The people you meet at these events are the ones you’ll be adding to your database and marketing to in all those inventive ways you identi- fied in your self-promotion plan. Another group of prospects that should not be forgotten are your current and previous clients. It’s so much easier to keep a client than to go out and find new ones all the time. So don’t forget to keep reaching out to your current clients as well. You can even ask them for help in building your business. When you’ve completed a job for them and they are raving about how wonderful you are, that is the perfect time to ask them if they know anyone else who could benefit from your services. People love to be helpful, and will appreciate the opportunity to help their colleagues be just as ecstatic with your work as they are. Many times, the only reason a referral isn’t given is because nobody asked for it. One last word on keeping clients: customer service is key. At least once a quarter take some time to think about the experience your clients receive from working with your company. Do their calls get returned in a timely fashion? Is their work proof-read and accurate before it is presented? Do their estimates end up realistic, or are their invoices always significantly higher? Are they satis- fied with their conversations with you? Every little thing you can do to deliver great service with a smile will go a long way towards client retention, which is key to building client base. Lara J. Kisielewska is a past President of the NY Chapter of the Graphic Artists Guild (2000–2004) and the NYC Chapter of the National Association of Women Business Owners (2004–2005). She founded Optimum Design & Consulting in 1992, and has been National Guild Secretary since 2005. |© L ar a J . K i si e l e w s k ap u b lis h e d b y G r a p h i c A r t is ts Gui l d | VIS IT | LIKE | FOLLOW | JOI N STARTING YOUR OWN COMMUNICATION DESIGN BUSINESS 27