Run a Business, don’t be a Freelancer
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Operate like a business
Over the past decade, I’ve learned a few things about the the digital design industry. The first is that everything is temporary. The second is that it is crucial to have all your ducks in a row before becoming a “freelance” designer or developer.
What does this mean?
Simply put, you need to have standard business protocol before doing any business. This includes contracts, estimates, structured price guides, terms & conditions, etc.
Often when entering the world as a digital design freelancer, clients will look at you more as a student trying to build your portfolio vs. a professional business owner.
Separate yourself from your business
I was lucky enough to start my career with my more experienced brother and business partner. He had 5 years of real world experience on me which helped streamline my way up the ladder.
He had already worked with a number of small businesses and large corporations which through trial and error helped him to put together his own process.
Already having a project flow from quoting, to final product was like having the text book for your exam. From the conception of our business to now, our process has changed and has been refined because as I mentioned in the beginning; Everything is temporary.
The biggest change is that we now operate as a business. General inquires are sent to an info email account, responses to general emails are now automated, and even the way we communicate with clients is business centered.
This helps to set boundaries. You would never go into a department store and talk to sales associate Jeff as if they can do you a favor and sell you a product at a lower price. A business has specific terms and as an individual working at that business (even if you are the owner) you have to abide by those terms. By separating yourself from the business you are able to manage expectations and gain some respect.
Working with other agencies
It is often easier to work with other agencies to start to build experience and your portfolio. A relationship with an established agency can help you understand best business practices and can help you refine and adapt your process based on industry standards.
However, it is important to establish terms and conditions while working with other agencies. To start, remember that you are not an employee — you are an established business with your own terms and interests.
When agencies see you as a freelancer their is a misconception that you are inexperienced. Break the stereotype and present yourself as an equally important part of the puzzle. Have your own set of agreements and contracts to be signed.
When invoicing make sure to be explicit on your payment structure. I can’t count the number of times that an agency has told me that their policy is to pay invoices between 60 and 90 days. Well, my policy is to get paid upon receipt, and invoices that are 30 days old incur late penalties. This is easily automated by using a tool like Wave.
In fact, setting up a Wave account would be one of the fist things I would do. It’s free, it helps establish a work flow through invoicing and estimates. The most useful part of using a tool like Wave is the automated reminders and approval function. Include your terms in all estimates and make sure clients hit that glorious “accept” button so you have a documented trail.
Make a business Plan
When we started, I wanted to make sure everything was documented and streamlined. The first thing we did was put together a business plan. Every year we revisit our plan and it is amazing to see how closely we have followed it. Most of the initial roadblocks identified in the plan which was written a decade ago have been broken through, and the ones that remain are on our radar.
So how did I write a business plan? I found a template online and started to fill out each section. The business plan covered the 5 W’s (Who, What, Where, When and Why)
Who
Who is your business? This is a big question. It’s difficult to dive deeper into the “who” without asking the “What” and “Why” but the “Who” is the foundation of your business. So who are we? We are “Experience Innovators”. Simple but accurate.
What
What does your business do? What don’t you do. Sometimes the things you don’t do is more important than what services you are offering. If you are a web designer and developer, where does your job end? Do you deploy the website? Do you offer hosting? What about future maintenance? Be as detailed as possible.
Where
Where will you be running your business? Will you rent a studio, or get a spot in a co-working space? Or will you be working out of your home office? Your business plan is a place where you can set goals. Most people dream of having their very own studio in a hip neighborhood with cool furniture and a dog-friendly environment… but is it necessary? Will having a trendy address make you a better designer? Maybe, and if you think that is important add it to your business plan and set a time-frame to reach that goal.
When
Probably one of the most important questions in your plan is the “When”. By setting a clear timeline and what you want to accomplish it can be the push you need to a successful career.
Why
Why are you doing this? Are you looking to be rich or are you doing it because you have a passion for design. There isn’t a wrong answer — everyone has their own reasons for being an independent designer, so it is important to keep your eyes on the prize.
Set your terms
Start with what is included – how many concepts, how many revisions, etc. Be clear in your wording. For example, make it clear that once a design is approved, any further changes will be billed accordingly.
Also, set your payment terms. A rookie mistake that we made when we started was that we never took deposits. Deposits are crucial. In most cases, delays are client-side. Let’s put this into a scenario.
You meet with client and discuss their needs and expectations. You put together an estimate and work back schedule with the final deliverables expected in one month. As the project moves forward, life gets in the way. You send designs for client approval but they take weeks to respond. Your one month project has now turned into an opened ended black hole that you are now three months deep.
You have expenses, and unless you have money to pay those expenses you are in big trouble. What would happen if you didn’t get a deposit? You would have to use credit for your day to day expenses which would start to accumulate interest. Life is expensive and while money is a difficult discussion to have with a client, it is probably the most important.
In addition to deposits, you should outline when to expect final payment. A term we have included with all estimates is:
“final payment is due upon completion of project or agreed upon deadline — which ever comes first”
This ensures that you don’t get held up. If the project is delayed by client, but you have been making every effort to hit your timelines and deliverables, then you need to be compensated based on your agreement.
In Conclusion
If you are going to take anything from this article, it is that you must be prepared for whatever the industry will throw at you. Set your boundaries. The best defense is a good offense.
