Thinking of Starting a Design Firm? Here are 5 Things to Keep in Mind

The idea of starting a design firm is appealing to many designers who are drawn to the creative freedom and the feeling of prestige that can come from developing your own brand. Building your own brand from the ground up can be an exciting and fulfilling endeavor. You’ll get to choose your own clients and you’ll be able to take charge of the creative vision of the company. But running a design firm isn’t all about fun and creativity. In fact, when you’re running your own firm there’s less time to dedicate to creative work because much of your energy has to go to managing the business. As a business owner, you'll spend a majority of your time running your business instead of designing. 

Being a talented designer doesn’t necessarily mean you’ll be an effective business owner, just like being a skilled basketball player doesn't make you be a great coach. Of course, there’s no reason you can’t be both a talented designer and an effective business owner, but you need to develop the specific set of knowledge and skills required to run a business efficiently. Do you know how to handle a difficult client? A flaky employee? A bounced check? These are all scenarios that you’ll face as a business owner. 

If you’re thinking about going out on your own, here are 5 things you should keep in mind before you get started. 

1. Be aware of business complexities

Small business owners wear many hats. If you’re running a design firm you’ll be responsible not only for creative direction and ensure the quality of work being done for your clients, but also a whole host of managerial tasks. 

The most time consuming of these management responsibilities? Dealing with employees. It’s your job to recruit the right people for your team. Once you have a team in place, you’re responsible to maintain a good balance of projects across the team, being careful not to overload anyone or leave someone without enough work to keep them busy. No one has a perfect hiring record, and it’s inevitable that you’ll wind up with a problematic employee at some point. In those scenarios, you have to find ways to resolve the issues or if a resolution isn’t possible, it’s up to you to let the employee go. 

Business ownership requires strong organizational skills. You’re accountable to your employees and you’ll need to manage hours, payroll, and expenses. You can bring in human resources -- either by outsourcing to a third party or hiring your own internal person -- to help with personnel management. Human resources will alleviate the pressure on you, the business owner, by taking over responsibility for employee payroll and benefits administration. They can also help resolve interpersonal issues that come up. 

2. Remember that you’re the responsible party

Becoming a business owner means also becoming the person responsible for everything that goes on at your company. There are three key areas of responsibility that you’ll spend your time on employees, clients, and the design work itself.

Employees

You’re accountable to your employees, who work for you on the promise of payment. You have to deliver that payment according to your established payroll schedules, regardless of how well the business is doing. At a design firm, there’s always an ebb and flow of work. There will be times when you have a lot of projects and times when it will be very quiet. You’re responsible to pay your employees in either case. 

Clients

Managing clients is a major responsibility for small business owners. If clients are unhappy, they’re going to reach out to the person in charge, and that’s you. It’s up to you to manage their expectations, to ensure their satisfaction with your work, and to resolve client issues in order to salvage damaged relationships. 

Design work

You’re the ultimate authority responsible for ensuring the quality of work coming out of your firm. It’s your firm, after all, and it’s in your best interest to make sure the projects being produced under your name are absolutely solid. 

3. The process is paramount 

One thing you learn quickly when managing your own firm is that you need to have a documented process for everything. 

When you work for yourself, you already know exactly how you want something to be done so there’s no need for a process. The process lives in your head. Once you hire employees, you can’t take anything for granted anymore, and you can’t expect everyone to know what you know. You have to document the process for every team within your company so employees how to behave and what you expect from them. 

Process documentation should include best practices, concrete examples, clear instructions on how employees are expected to manage different types of projects and scenarios, and employee onboarding and training materials. Maintain process documentation in one centralized location, like a company intranet, so it’s always accessible. 

4. Pay attention to contracts 

Contracts are essential to protecting yourself, and not having them in order is guaranteed to cause headaches and lost revenues down the line. As a business owner, it’s down to you to negotiate mutually agreeable contracts with your clients. Spend the time to create good contract templates and make sure to have them reviewed by an attorney before sending them out to your clients. 

Contracts should be tied to a scope of work that clearly delineates the work to be done, the timeline, and the rounds of edits included. Set milestones and tie them to project payments, and don’t forget to include payment due dates as well as consequences of late payments. 

5. The right tools are essential 

Have you ever been self-employed and didn’t stay on top of invoices or expenses and found that at the end of the year your taxes became a complete nightmare? As a business owner, things get much more complex. It’s essential that you stay organized and keep close tabs on expenses and payments. A tool like QuickBooks can help you track expenses, invoice efficiently, and manage payroll tasks. 

For a project-based industry like web design, having a task management tool in place is a life-saver. Platforms like Basecamp and Asana can help keep your team on track and give you visibility into the status of projects. You’ll also need to keep close track of hours to ensure your projects don’t go over budget and that you stay within the margins of profitability. Using a tool like Toggl or Mavenlink will help keep hours in check. 

Finally, take the time to create a couple of sales and marketing presentations. Having these templates on hand will save you time and stress in future pitch cycles.

There’s a lot to consider when starting your own design firm. Are you prepared to take on the responsibility of running a business, even it means less time for creative work? Can you handle the highs as well as the lows that come with running a creative services firm? Keep the tips above in mind as you consider taking the next step to becoming your own brand.

Are you considering branching out on your own? Ask your questions in the comments below!

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