For any entrepreneur, deciding to establish a firm is a significant step. However, there are many more procedures to do to properly begin and expand your company. If the costs are more than you can afford on your own, you may want to consider a business loan or other kind of financing from PaydayChampion.
This tutorial will break down all of the steps you’ll need to know to turn your graphic design business idea into a reality.
Decide on a name and legal entity.
The first step in launching a graphic design company is deciding on a name and legal structure. When picking a business name, make sure it reflects your personality while also indicating what type of business you run to potential consumers. Once you’ve come up with a few ideas, double-check that they’re feasible. Start by looking through your secretary of state’s company portal, Google, and the US Patent and Trademark Office.
You should also check if any domains or social media accounts for your company name are available. After you’ve decided on a business name, you’ll need to decide on a legal entity for your company.
This is an essential stage since the business entity you choose will determine how you pay taxes, how much personal liability you have, and how you organize your company.
If you’re unsure what to do, we recommend speaking with a business attorney at this point.
The following are some frequent choices:
- A sole proprietorship: This is a business that is owned and operated by one person. It is the most basic type of business form. While they’re simple to set up, you won’t have any personal safeguards if your company gets into legal or financial trouble—you and your company are treated as one thing. On your return, you will also file business taxes.
- LLC: An LLC is a popular choice because it’s straightforward to set up and provides personal protection to business owners. You can be taxed as a corporation or a pass-through organization.
- Corporation: You have the option of forming your company as a corporation. S-corporations and C-corporations are the two most prevalent varieties, and the one you choose will determine how your firm is taxed and structured.
You can register your business with your state once you’ve decided on a name and business entity. Your secretary of state’s office will most likely handle this. Keep in mind that a sole proprietorship doesn’t need to be registered, but if you wish to operate under a business name other than your legal name, you’ll need to submit a DBA or “doing business.”
Decide on a niche.
You can specialize as a graphic designer in a variety of ways. While it may be tempting to undertake everything—and you may need to be open to taking various jobs as your customer base grows—focusing on a niche industry can be a wise move.
- Brochure design
- Logo design
- Web design
- Poster design
You most likely have specialized knowledge in one area, or you may prefer one aspect of graphic design over another. In any case, once you’ve demonstrated that this type of labor is in demand, keep this specialty in mind when you make subsequent business decisions.
Draft a business plan
You should always prepare a business plan no matter what type of business you’re establishing.
Your business plan will serve as a road map to keep you on track during your company’s launch and crucial early years, even if no one else sees it. However, if you ever need to seek outside finance or an investor, you’ll need to present your business plan to show that your company is worth investing in.
You will include a market study and competition research in your business plan and an outline of the services you’ll offer, financial predictions, and more.
You should figure out how much money you’ll need to start your business and where you’ll get it (i.e. your own savings, friends, and family, or business loans).
This is also an excellent opportunity to compare your costs to similar graphic artists’ charges.
You’ll also need to determine whether you want to charge by the hour or the job.
You can find an appropriate rate by researching your market, but our Bonsai rate finder can also help.
Gather your marketing materials and organize them.
You’ll want to start formalizing your firm through marketing materials to develop your business and find additional clients. Marketing materials may help spread the word about your company, highlight your portfolio, and provide a mechanism for potential clients to contact you and learn more about your experience. Consider the following marketing materials.
A website is one of the most crucial marketing tools a small business owner can have. Your website is a terrific approach for displaying what you’re capable of producing for your clients as a graphic designer. Include a portfolio of your previous work, whether for clients, an agency, or your passion projects, the types of projects you’re interested in working on, contact information, and positive customer testimonials, among other things.
Thanks to your graphic design expertise, designing a website will be simple, but don’t get too caught up in the minutiae. All you need is a simple website that displays your work to begin recruiting clients.
Use of social media
You’ll also want to create social media profiles for your company in addition to a website.
Because graphic design is such a visual medium, you’ll want to select networks that favor images over text, like Instagram. You should also consider setting up a LinkedIn profile to connect with your network, display your work, and identify potential clients.
Develop a clientele
You’re ready to start looking for work now that your company has been formally registered, your niche has been defined, and your business website has been created. Sign up for job boards, join freelance graphic design groups on Facebook, and register for a freelancing site like Upwork or Fiverr to help you get your first clients.
All of these strategies can assist you in obtaining your initial few clients, and your business will most likely grow organically from there. You’ll quietly but steadily create a name by completing jobs on schedule and according to your client’s demands.
Never undervalue the power of word-of-mouth advertising. Make sure everyone in your network knows you’ve gone into business for yourself, even if they aren’t in your field, so they can refer you to their networks and help you grow.
Keep your personal and business finances separate.
You’ll need a place to keep your business income once you start taking on clients. You might be tempted to utilize your bank account, but this is a bad idea. Separating your business and personal funds provides several critical advantages. To begin with, not having to comb through every credit card charge or bank transaction to determine which were for your business will make filing your taxes much easier. Second, maintaining this separation will protect your assets if your company runs into financial difficulties.
Examine your business bank account alternatives to choose the perfect one for you, paying particular attention to maintenance costs, transaction limits, account minimums, and other factors. Then, look for a business credit card that will reward you for your expenditure (whether in miles, cash back, or other compensation).
Accounting software can also assist you in managing your money and invoicing clients.
These software alternatives for self-employed accountants are a fantastic place to start.
Think about your funding alternatives.
As your business expands and you take on additional clients, you may need to grow significantly to stay up with demand. Perhaps you need to hire more personnel to take on more jobs, or maybe you need to invest in some expensive equipment so that you can keep up with the latest technology.
Traditional company loans are difficult to qualify for when you’re just starting, but once you’ve been in business for a year or more and have solid financials to show for it, you’ll have more possibilities. Here are some possibilities to consider:
Business credit line
Any business owner can benefit from a business line of credit as a funding source.
Even if you don’t have immediate funding demands, it’s good to have it on hand in case of an unexpected cash flow problem or a time-sensitive opportunity. A line of credit will give you a predetermined amount of money that you can use for any company purpose.
You’ll only be charged interest on the amount you spend, and once you’ve paid it off, your balance will usually return to its original value, allowing you to use it whenever you choose.
Equipment financing could be a good option if your graphic design company needs new computers or other equipment to perform your work. You’ll give a lender a price for the equipment you want to buy, and if it’s accepted, you’ll get the money to buy it. The equipment will also serve as collateral, which means that if you don’t pay back the loan, the lender can seize and liquidate it to recuperate their losses.
As a graphic designer, you may choose to work on an invoice basis, in which you send your client an invoice whenever you’ve completed the work they requested. Waiting for those bills to get paid can burden your cash flow if this is the case. A lender can advance you a percentage of your unpaid invoices (usually up to 85 percent) with invoice finance, so you may access cash when you need it. After your consumer pays, you refund the loan plus lender fees.
All of the steps you need to take to establish a graphic design business can seem intimidating while you’re learning how to do so. Taking the time to finish each phase, on the other hand, can assist ensure that you’re actually prepared—financially and otherwise—to begin a firm in the first place. You’ll be sure to start a graphic design business that can turn into a profitable enterprise if you take your time and do your homework.