IntroductionWelcome| 00:00 |
(music playing)
| | 00:04 |
Maybe you've been freelancing, but you're
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too busy to do it all yourself.
Maybe you're ready to transition your
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freelance business into a more permanent
enterprise.
| | 00:15 |
This course will take you through the
next steps, including starting your own
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business for all the right reasons.
Building a solid foundation, options for
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the structure and form of your small
business and industry trends to be aware of.
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I cover the essentials of tax
requirements, hiring and general business
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principles, along with advice about
establishing long term business relationships.
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My goal is to share my experiences with
you so you can get the best start possible.
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And gain, the respect and admiration from
your clients creatively and professionally.
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So, let's get started with running a
design business, starting small.
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| Disclaimer| 00:01 |
Okay, so here's the disclaimer.
I'm a designer and a professor, not a CPA.
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I do however have many years of
experience as an employer, a creative
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director, and a small business owner.
I teach courses in creativity and
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professional practice to graphic
designers.
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The information I present in this course
is not a substitute for the personal
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advice you'd get from your accountant or
your attorney.
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If you have questions regarding legal or
financial issues, you should seek the
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services of an appropriate professional.
Use the ideas and samples you take away
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from this course as a basis for your
discussion with your advisors
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| About this course| 00:01 |
Much of the information in this course
overlaps my other lynda.com course on freelancing.
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It's because some of the information is
the same, whether you're a freelancer or
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a new business owner.
You may recognize some of it if you've
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viewed both the courses.
Know that it's important for each course
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to be self-contained.
Whatever your goals are, I've tried to
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cover what you'll need to know about
thriving independently in your new venture.
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As your business grows, and you may need
more information along the way.
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you can reference this course and all the
courses that my colleague Terry Lee Stone
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and I have offered in the lynda.com
series called Running a Design Business.
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| Exercise files| 00:01 |
I've included a number of great resources
for this course.
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These documents can be found in the
Exercise Files tab on the Course Details
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page for all Lynda.com subscribers.
Or if you're watching this tutorial on a
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DVD, the files have been included there.
I'll be calling them resource files, and
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these documents will be very helpful to
reference during the course.
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These files will include guidelines,
templates, and editable text files so you
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can copy and paste some of the key
information directly into your own documents.
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|
|
1. A Solid FoundationStarting for all the right reasons| 00:01 |
I'll begin with a bold statement.
The best reason to start your own design
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office shouldn't be to make a lot of
money.
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Or because you're dissatisfied working
for someone else.
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The best reason should be because you
want to create something valuable for
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your clients.
Something they desire, need, and come
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back to you for time and time again.
Something they don't mind paying top
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dollar for because they know it's being
done right.
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Success is not just about an end product,
it's about the process you use to ensure
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that the work you do exceeds a client's
expectations.
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It delights them and helps their business
or organization grow.
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Clients must know that you have their
best interests in mind, that you're in it
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for the long haul.
You gain their respect creatively and professionally.
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I recommend working for a couple of
design firms before branching out on your own.
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Pay close attention to what works and
what doesn't.
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In your first year of business, make a
special effort to minimize the work you
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do for other creative agencies and
increase your own client base.
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As your business grows, you might need
more help with design, production or
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administrative tasks.
Here's a graphic that illustrates the
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difference between what designers do
during their workday.
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Versus what design firm owners do during
their workday.
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It's obvious that if you want to grow as
a designer, you need to spend more time designing.
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Starting to run a business too soon in
your career can inhibit your creative
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growth because you're spending a lot more
time running a business than you are designing.
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It takes a lot longer than it should
because you're unfamiliar with how to so it.
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Statistically, 60% of design businesses
started solo or in partnership will fail
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within four years.
There are many reasons, but some can be
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anticipated and handled more wisely.
Understanding what's required to run a
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small business before you begin is
critical.
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Just taking the time to view this course
shows your commitment to your new venture.
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| Balancing accountability and creativity| 00:00 |
As a leader, the way you balance
accountability and creativity will be the
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key to your success.
Let's define these terms.
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Someone with accountability is obligated
to report, explain, or justify something.
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A creative person has the ability to
transcend traditional ideas, rules and
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patterns and creates meaningful new
ideas, forms, methods and interpretations.
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These terms may seem to be at opposite
ends of the spectrum.
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Let's look at them a different way in the
context of a design studio's four top
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business priorities.
It'll help us see this challenge more
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clearly, and see that the best solutions
incorporate both.
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If our clients value great design, and
they have the resources to get it done
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right, they'll land here, right in the
perfect sweet spot.
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A different scenario would be if the
client didn't need significant
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creativity, but compensated us well for
it.
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You may find that an employee is
terrifically creative but always late,
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and doesn't understand the importance of
deadlines, they'll go here.
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Or maybe you find an amazing designer
you'd like to work with, but you aren't
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yet billing enough to pay their salary.
Ideally you're looking for the best
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creativity you can afford so, they always
land in the sweet spot.
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You may be postponing a long overdue
equipment upgrade because of cost.
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But by not doing it, you and your staff
can't efficiently get the work done.
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You are now the leader, so you can be
evaluated here also.
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Strong teams are supported and enabled by
their leaders.
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When you're too busy in meetings, or
handling administrative issues to
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properly nurture and inspire a team, you
would end up here.
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If you make your studio a desirable place
to work by creating great design
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opportunities, and providing a terrific
environment.
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That puts you in the sweet spot.
You and your staff will enjoy being there
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every day.
A successful design firm requires a
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strong leader who maintains high creative
standards, and keeps relevant in the industry.
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You must be able to straddle internal and
external needs.
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You must show respect for your clients
and staff, even when tensions get high.
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And finally, evaluate projects creatively
and financially.
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When they're finished just to make sure
the work is the best that it can be.
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| Defining realities and roles| 00:00 |
The three best things about running a
design business are, being the boss.
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When things go well, you get all the
credit.
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Seeing your work make a difference in a
client's business, and learning so much
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about how different businesses and
organizations work.
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The three most challenging things about
running a design business are, being the boss.
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When things go wrong, you get all the
blame.
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There's a tendency to work all the time
because you're wearing too many hats.
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And dealing with employees.
The employment red tape, taxes, and
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insurance, and staff's personal dramas
can be very stressful at times.
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Running a design business is really hard
work, because design school doesn't train
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us to be employers, managers, sales
people or bookkeepers.
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These roles can bog us down.
You'll need to know the responsibilities
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of each role, and carve out enough time
to get things done.
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If you're going to hire others, you'll
need to carefully define the
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responsibilities of each role.
How to find the right people to help you.
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And lastly, how to make enough money to
afford their services.
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Here are the ideal characteristics of
each role necessary in running a small
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design business.
Business development responsibilities are
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marketing, research, sales strategy,
meeting with prospective clients, and
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generating proposals.
Also required are skills in negotiation
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and client service.
The creative responsibilities include a
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mastery of formal skills to translate
messages into visual form.
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Providing a variety of ideas and concepts
refinement and production.
| | 01:39 |
This role also includes research into new
methods of implementation and technology.
| | 01:45 |
Production expertise is needed in the
technology used in file preparation and coding.
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Knowledge in different forms of media
including print, digital, environmental,
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and or time based applications is
required.
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This role may also include managing
vendors, such as printers, developers,
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and fabricators.
The role of project or studio management
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includes facilitating communications
internally and externally, managing
| | 02:14 |
projects and schedules, personnel
management, organizational skills, and
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strong communication abilities are
crucial.
| | 02:23 |
Administrative roles like bookkeeping and
office work include preparing payroll,
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generating invoices, posting payments and
deposits, paying bills, and creating
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reports for accounting purposes.
In addition, each of these roles also
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requires time spent in meetings, and
correspondence.
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So, that's what's needed to keep a small
studio running.
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Working with others can be your greatest
asset.
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Or, your most challenging liability.
Sometimes, you have to experiment to see
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where your strengths and weaknesses are.
Time and expertise will tell you what's needed.
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But just knowing the requirements of your
small business up front will help you
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prepare for the responsibilities ahead.
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| Nine steps to developing a business plan| 00:00 |
Think of a Business Plan as an anchor, to
help you organize, prioritize, and strategize.
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By formalizing your ideas for your new
business, it's easier to objectively make
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both creative, and business decisions as
challenges arise.
| | 00:15 |
Developing a business plan is
surprisingly similar to developing a
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creative brief.
Here are the questions to be answered.
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What are you best at providing, and why
are you the best studio to provide it?
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Who are the clients that would find your
work most valuable?
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Where will your work be seen, and by
whom?
| | 00:34 |
How will success be measured?
To begin, you'll need to do some research.
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Find other designers that are doing that
kind of work you want to do.
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Research trends and projections in that
area.
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Create your own value proposition by
defining what you sell, and researching
| | 00:53 |
its market value.
Compare what you do to others with the
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same creative skills and technical savvy.
Can you do it better, cheaper, or faster?
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You'll need some trusted advisors.
Develop a list of inner circle colleagues
| | 01:09 |
that you can contact as difficult issues
arise.
| | 01:11 |
You'll also need some professional
support, including an accountant, and
| | 01:15 |
possibly an attorney.
Establish some creative goals, and
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develop your unique vision for creative
success.
| | 01:25 |
Your goal might be to win design awards
and recognition from colleagues.
| | 01:29 |
But you might be more valued for more
reasons other than design.
| | 01:33 |
Clients might choose you because of your
great client service, accountability, and professionalism.
| | 01:40 |
You'll need capital or cash to start this
business.
| | 01:43 |
Most small businesses need to have enough
cash flow to cover three to four months
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worth of expenses.
You'll also need to figure out where to
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find money if you come up short.
Starting out that may be a personal line
| | 01:55 |
of credit.
If you're fortunate enough to be
| | 01:58 |
profitable right away, decide how much
you keep for yourself, and how much you
| | 02:03 |
reinvest in your company.
Your venture may be appropriate for
| | 02:07 |
outside investment.
What are are you willing to give up in
| | 02:11 |
exchange for that investment?
You're going to need some equipment,
| | 02:14 |
primarily hardware, and software.
Research the cost for maintenance, and
| | 02:19 |
upgrading, and price those items.
Add them to your plan.
| | 02:22 |
Regarding creative resources, you may be
able to handle most of the work, and
| | 02:28 |
bring in specialists as needed.
Identify who they might be, and what they cost.
| | 02:34 |
Creating a method for ongoing evaluation
will help you know if you're on the right track.
| | 02:39 |
You need to make sure the final projects
accurately represent the best work you
| | 02:43 |
can do.
If not, you may need to self initiate
| | 02:47 |
some projects in order to represent what
you're capable of.
| | 02:49 |
Finally, have a documentation strategy.
Once you finish a terrific project figure
| | 02:56 |
out how to quickly get imagery and tell
the story.
| | 03:00 |
Make it simple for you to update your
website and add it to some of your social
| | 03:04 |
media outlets.
Prepare thorough case studies of your
| | 03:07 |
best projects to help prospective clients
understand your capabilities.
| | 03:13 |
Thorough evaluation is needed to write a
business plan.
| | 03:16 |
It's a great self-assessment exercise to
get organized, and ultimately ensure the
| | 03:21 |
success of your small business
| | 03:23 |
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|
|
2. Structure and FormUnderstanding your options for legal structure| 00:00 |
Your small business needs a legal
structure.
| | 00:03 |
It defines how profits will be taxed.
By default, you'll be a sole proprietor.
| | 00:09 |
A sole proprietor is a business that's
owned and managed by one person.
| | 00:14 |
You don't need to do anything in regards
to filing additional forms with any
| | 00:17 |
governmental agency.
Profits are reported on your personal
| | 00:21 |
income tax return using your social
security number.
| | 00:25 |
The advantage of a sole proprietorship is
that it's easy to set up.
| | 00:29 |
The process for filing income tax forms
is the same as if you were a freelancer.
| | 00:34 |
You may want to refer to my other
lynda.com course on freelancing, where I
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take you through the process of tracking
your business expenses, making quarterly
| | 00:42 |
payments, and preparing for your annual
tax return.
| | 00:47 |
The disadvantage to a sole proprietorship
structure is that you have unlimited
| | 00:52 |
personal liability for all of the
business debts.
| | 00:55 |
If something goes wrong, your personal
assets are at risk.
| | 01:00 |
For a young designer just starting out,
you may not have significant personal assets.
| | 01:05 |
You may owe more than you own.
So, this disadvantage isn't a significant consideration.
| | 01:11 |
But as the years go by, you start owning
more than you owe.
| | 01:15 |
You may want to protect yourself by
separating your personal and business liability.
| | 01:21 |
You may want to consider creating a
limited liability company, or LLC.
| | 01:25 |
Creating an LLC is probably the most
popular legal structure that designers
| | 01:30 |
choose to transition into.
It's a bit costly to set up, but it
| | 01:34 |
offers protection from personal
liability.
| | 01:37 |
You'll need to designate members of the
LLC and outline their rights and responsibilities.
| | 01:43 |
There are a number of requirements that
vary by state, but can include filing
| | 01:48 |
formal articles of organization, and
publishing notices of your intention to
| | 01:52 |
form the LLC.
In California, forming an LLC costs
| | 01:57 |
around $1000, and there's an $800 annual
fee.
| | 02:01 |
In addition, your tax preparation costs
increase because there are other state
| | 02:06 |
and federal filing requirements in
addition to your schedule c.
| | 02:10 |
There are other options for your
business's legal structure, such as a C
| | 02:15 |
Corporation, or an S Corporation.
Shareholders own the corporation and
| | 02:20 |
stock is issued.
These structures are complex to set up,
| | 02:24 |
but can create a separate legal entity
that can open bank accounts and conduct
| | 02:28 |
business under its own name.
This is probably much more complex than
| | 02:33 |
necessary when starting small.
My advice is that you begin simply.
| | 02:37 |
And as your commitment to your business
grows, and you begin to own more than you
| | 02:42 |
owe, you work closely with your
accountant and attorney to determine the
| | 02:45 |
best legal structure for you.
| | 02:47 |
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| Creating partnerships| 00:00 |
A partnership is when two or more people
co-own a business.
| | 00:04 |
In terms of legal structures, there are
two types.
| | 00:07 |
A general partnership and a limited
partnership.
| | 00:11 |
In terms of taxes, with a general
partnership, a similar rule applies as
| | 00:15 |
with a sole proprietorship.
If you don't file any additional
| | 00:18 |
paperwork It's automatically considered a
general partnership.
| | 00:23 |
Similarly, the business does not pay
taxes, the profits or losses are reported
| | 00:28 |
on each partner's individual tax return.
The main downside is that the partners
| | 00:33 |
are jointly bound to the debts incurred
by the business.
| | 00:35 |
For example, if your partner goes rogue
and make a $50,000 purchase, and your
| | 00:41 |
company can't pay for that debt, you are
liable.
| | 00:44 |
And creditors can come after your
personal assets for the entire amount.
| | 00:48 |
A limited partnership, like the
corporation is a bit more complex to set
| | 00:54 |
up, but it becomes a legally separate
entity outside of the partners themselves.
| | 01:00 |
I suggest that you start simply.
And as your partnership grows and
| | 01:03 |
evolves, you consult with your attorney
and accountant to see what legal
| | 01:07 |
structure is best.
The most important thing about a
| | 01:11 |
parntership is that you have a formal
agreement.
| | 01:14 |
It's not a legal requirement, but
creating one establishes the roles and
| | 01:18 |
responsibilities of each person.
It's much like a prenuptial agreement.
| | 01:23 |
It outlines what will happen when a
partner decides to leave or the business
| | 01:27 |
is dissolved.
Creating one enables each partner to
| | 01:31 |
define and discuss their long-term and
short-term expectations.
| | 01:36 |
Over time, our life and career goals
change.
| | 01:39 |
I've observed young people entering
partnerships because they've had similar
| | 01:42 |
creative goals and minimal financial
requirements.
| | 01:45 |
As their personal responsibilities
increase, their financial obligations increase.
| | 01:51 |
It may be that one partner decides that
making money is more important than
| | 01:54 |
creating the ultimate design solution.
Be careful about creating partnerships.
| | 01:59 |
Truly, a partnership is like a marriage.
So, choose wisely.
| | 02:04 |
It's best to work together for a while
before taking the leap.
| | 02:08 |
The challenge is defining each person's
contribution and creating a structure
| | 02:12 |
that lets roles change over time.
If both partners want to climb mountains,
| | 02:17 |
there's no one tending base camp.
In the resource files, you'll find a case
| | 02:22 |
study of Los Angeles design firm
AdamsMorioka.
| | 02:24 |
Both partners started in design roles,
but after ten plus years of working
| | 02:30 |
together, they completely shifted their
roles in the company.
| | 02:33 |
It was an important adjustment that's
improved their business relationship.
| | 02:38 |
And better prepare them for the next ten
years.
| | 02:40 |
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| Naming your design office| 00:00 |
What you call your small company says a
lot about you.
| | 00:03 |
Different designers use different
criteria for this.
| | 00:06 |
Some want it to be clever, like Digital
Kitchen, or Design Army.
| | 00:11 |
Some want it to be catchy, like Hello
Design, or Decoder Ring.
| | 00:15 |
Others decide to define what they do,
like fresh form interactive or moving brands.
| | 00:22 |
I decided my studio name should sound
legitimate and professional.
| | 00:25 |
So I called it Vrontikis Design Office.
Many designers just use their initials or
| | 00:30 |
a version of their name, or the name of
the partners like Studio Hendricks, VSA,
| | 00:35 |
or AdamsMorioka.
Or they use a combination of their name
| | 00:40 |
and what they do, such as Chin Design.
There's also the option of obscure yet
| | 00:45 |
memorable names like, Pentagram, Eleven,
or Volume.
| | 00:50 |
Obscure names usually have a story
attached to them and they can become a
| | 00:54 |
conversational ice breaker.
Generally, your name should be
| | 00:58 |
distinctive and appealing to respective
clients.
| | 01:01 |
But the main issue today is making sure
people can find your company on the internet.
| | 01:06 |
Significant research must be done in
regards to what people will find when
| | 01:10 |
they're looking.
You should also be aware of common
| | 01:13 |
misspellings and where they might lead a
search.
| | 01:15 |
Coming up with a number of options and
seeing whether they're available to you
| | 01:20 |
Is the best way too began.
A domain ending with .com is still a
| | 01:25 |
preferred top level domain and the most
difficult to secure.
| | 01:29 |
Some motion design firms that specialize
in broadcast design have cleverly used
| | 01:34 |
.TV, which is the internet country code
top level domain for the Islands of Tuvalu.
| | 01:41 |
.us meant to be read as the word us has
also cleverly been used.
| | 01:47 |
The business name and the domain name do
not need to be the same, just related.
| | 01:51 |
For example, San Francisco based design
studio Noon uses designatnoon.com as
| | 01:57 |
their domain.
If you use a name other than your legal
| | 02:01 |
name, you'll need to file for a DBA or
Doing Business As.
| | 02:05 |
It's also referred to as a fictitious
name statement.
| | 02:09 |
A DBA is needed to open a checking
account in the businesses name as opposed
| | 02:14 |
to your legal name.
It's often a four week process and costs
| | 02:18 |
around $100.
Search online for details for how to file
| | 02:22 |
in your area.
It's a ridiculously antiquated process.
| | 02:26 |
Most states require that the business
name be published in local newspapers for
| | 02:30 |
four consecutive weeks to inform the
public of your new business.
| | 02:35 |
After that time, you'll receive a form
from your county clerk to take to the
| | 02:39 |
bank to open a business account.
Filing for a DBA is not the same as
| | 02:44 |
registering your name.
Searching and registering are separate
| | 02:47 |
from this process.
Legally registering your business name
| | 02:51 |
will prevent others from using it and
insure that you're not using someone else's.
| | 02:56 |
It's possible to do this yourself, but I
recommend hiring an attorney to handle it.
| | 03:01 |
The requirements differ locally,
nationally, and internationally.
| | 03:05 |
Naming your new venture is a big
decision.
| | 03:08 |
Hopefully, this information will help you
be aware of the constraints as you
| | 03:11 |
explore the many creative possibilities.
| | 03:14 |
| | Collapse this transcript |
| Project management and workflow| 00:00 |
One of the main challenges designers face
when starting their own business is that
| | 00:05 |
their training and their passion is
design, not management.
| | 00:08 |
Many small design offices start as
one-person businesses.
| | 00:12 |
Designers are trained to be resourceful.
We're used to doing everything ourselves.
| | 00:17 |
Making the transition and commitment to
grow a business, hire staff and manage
| | 00:21 |
teams requires new tools, structure and
organization.
| | 00:26 |
You may find it fairly easy to handle one
project, maybe two.
| | 00:30 |
As soon as you get three, four, or five.
You have to start managing freelancers,
| | 00:34 |
communicating with clients, making
changes, and coordinating with your vendors.
| | 00:38 |
Your old management systems won't work in
your new busy office.
| | 00:43 |
As a designer, you'll be well served to
have some visual representation of all
| | 00:47 |
the projects, phases and deadlines
clearly visible in your office.
| | 00:51 |
Keeping notes in your smartphone just
won't be enough.
| | 00:54 |
Use a whiteboard or project management
software to show where each of the
| | 00:58 |
projects are in comparison to the others.
Show each project, the phase it's in, and
| | 01:04 |
who's responsible for what.
It will help you and those you work with
| | 01:08 |
understand and prioritize each day.
Keeping efficient means knowing what
| | 01:13 |
you're good at and what you're not.
If a task is necessary on an ongoing
| | 01:17 |
basis, say bookkeeping.
You need to decide whether it's more
| | 01:21 |
efficient for you to hire someone else to
do it Or to do it yourself.
| | 01:25 |
Most of the efficiency systems in place
in my studio were created by smart office
| | 01:30 |
managers and production people that I
hired over the years.
| | 01:34 |
Having streamlined systems in place kept
me from being bogged down every time I
| | 01:37 |
needed to generate an invoice or pay
bills.
| | 01:40 |
Being constantly distracted.
Disables deep creative thinking.
| | 01:45 |
The kind we need to do our best work.
Stefan Sagmeister once told me, he didn't
| | 01:50 |
look at email until 11:30 am.
He said that once he shifts into email
| | 01:55 |
mode, he shifts out of the pure creative
mindspace that's optimal for designing.
| | 02:02 |
You're selling good design so try and set
aside quiet time to create.
| | 02:06 |
Prioritize and organize, determine what
can be reviewed quickly and keep the ball rolling.
| | 02:13 |
You'll have to learn to delegate but,
you'll also have to learn to give others
| | 02:17 |
enough information and feedback so they
can do their best work for you.
| | 02:23 |
It's common for the inexperienced
business owner to become a bottleneck and
| | 02:26 |
a micromanager.
My business mantra has been listen,
| | 02:32 |
think, design, in that order.
My point is that it's a step by step process.
| | 02:38 |
The strongest foundation for a project
will be to clearly listen to the client.
| | 02:43 |
To hear what the problem is, and what the
constraints are.
| | 02:47 |
This step is required for us to have all
the information we need to think about
| | 02:52 |
what the possibilities are.
And how to approach the design in a
| | 02:55 |
powerfully focused way.
If design fails or falls short, it's
| | 03:01 |
usually because the designer didn't
clearly understand the problem or the
| | 03:05 |
parameters before he or she started
designing.
| | 03:09 |
I've seen great designs be rejected
because the designer painstakingly and
| | 03:13 |
passionately solved the wrong problem.
In the resource files, I've provided the
| | 03:19 |
common phases of a project, and the goals
for each one of those phases.
| | 03:25 |
See this almost as a checklist for the
many possibilities that could be part of
| | 03:29 |
your project.
My colleague Terry Stone has written
| | 03:33 |
extensively about workflow and project
management.
| | 03:36 |
She has two terrific books on managing
the design process.
| | 03:40 |
Creativity is hard to manage, but the
systems around creativity can support it.
| | 03:45 |
Promoting efficiency and profitability.
If projects and people are poorly
| | 03:50 |
managed, a business can't survive no
matter how great the design is.
| | 03:55 |
| | Collapse this transcript |
| Record keeping| 00:00 |
Establishing good systems and procedures
early on will save hours of time later.
| | 00:06 |
You're going to need three organizational
tools.
| | 00:08 |
The first is accounting software to use
as a check register.
| | 00:12 |
To plan your cash flow and categorize
business expenses.
| | 00:16 |
You can see past, present, and
anticipated deposits, and payments coming
| | 00:21 |
in and going out.
Starting out, Quicken Essentials is the
| | 00:25 |
most basic program I can recommend.
But as you transition into a larger
| | 00:29 |
business, you should get set up in
QuickBooks.
| | 00:32 |
The benefit of either program is that
each entry you make has a category, which
| | 00:37 |
is easily cross referenced in a report,
so you can find out exactly how much you
| | 00:41 |
spent on materials and supplies, what you
paid each subcontractor, or how much each
| | 00:46 |
client has paid you within a year.
It also allows you to track your expenses
| | 00:50 |
that can be deducted against your taxes.
Being able to deduct business expenses
| | 00:55 |
from your total income can really save
you a lot of money in taxes.
| | 00:59 |
The trade off is that you have to keep
track of them properly.
| | 01:04 |
If there are any inquiries by the IRS,
they require receipts to determine the
| | 01:08 |
validity of your deductions.
In addition to printed credit card and
| | 01:12 |
checking account statements, you should
keep the paper register receipts for
| | 01:16 |
everything you plan to deduct.
Inquiries and audits are costly, even if
| | 01:21 |
you don't end up owing any more money.
In the resource files, there's a iist of
| | 01:26 |
business deductions that designers
commonly use.
| | 01:29 |
Many of the business related expenses are
the same for a freelancer as for a small business.
| | 01:35 |
I recommend that you take a look at them
if you're unfamiliar with this process.
| | 01:39 |
In my other lynda.com course called
Running a Design Business, Freelancing, I
| | 01:44 |
review them in detail.
Tax laws change occasionally, but your
| | 01:48 |
accountant will know if there are any
clarifications or exemptions to this list.
| | 01:53 |
You'll need a database management tool to
organize client contacts and your job list.
| | 01:59 |
These are used to generate invoices and
track billing.
| | 02:02 |
Every time you get a new project, give it
its own job number.
| | 02:06 |
This number is used in your file naming
protocol, your time tracking software,
| | 02:10 |
and your invoices.
One of the best database management
| | 02:14 |
systems is FileMaker Pro.
Though it's difficult to set up, it's
| | 02:18 |
great and can be utilized to generate
letters, invoices, envelopes labels, and
| | 02:23 |
directories with ease and consistency.
Finally, you'll need something to record
| | 02:28 |
the time that you and your staff spend
working.
| | 02:31 |
By using this, you'll know exactly how
much time it took you to complete the
| | 02:35 |
same kind of job, so there's less
guessing when it comes to creating new proposals.
| | 02:40 |
There are new apps being developed all
the time to really make time tracking
| | 02:45 |
super easy.
Accounting software, database management
| | 02:49 |
and time tracking systems take a lot of
the headache out of running your business.
| | 02:54 |
Many project management software systems
integrate all three into one.
| | 02:58 |
Some programs designers prefer include
Function Fox, Harvest, and Copper.
| | 03:05 |
Set them up as soon as possible, and keep
up with them on a weekly basis.
| | 03:09 |
They are a necessary and non-negotiable
requirement of running your small business.
| | 03:14 |
| | Collapse this transcript |
| An overview of business licenses| 00:00 |
Some requirements, regulations, and
licenses are all part of establishing
| | 00:05 |
your small design office.
LLCs and corporations must file for an
| | 00:09 |
EIN, or Employer Identification Number
when they establish a business.
| | 00:13 |
Sole proprietors are permitted to use
their social security numbers on tax forms.
| | 00:19 |
But it's best to file for an EIN.
And you can apply for one online.
| | 00:22 |
You will need an EIN when you hire
subcontractors.
| | 00:26 |
And of course, when you start hiring
employees.
| | 00:29 |
Your small business needs a city business
license.
| | 00:32 |
In Los Angeles, my small design office is
required to get three different licenses
| | 00:36 |
as part of this process.
They're separate, because each is taxed
| | 00:40 |
at a different rate.
One is called wholesale sales, which
| | 00:44 |
means that my work is being resold
through other design firms and agencies.
| | 00:49 |
Another is called retail sales, where I
work directly with clients and sell them
| | 00:53 |
tangible property.
The last one's called professional
| | 00:57 |
services, which covers my work performed
directly with clients, where there's no
| | 01:01 |
tangible property transferred.
Just for visual reference, I've included
| | 01:05 |
these three licenses and resource files.
You'll need to investigate what business
| | 01:10 |
licenses your city requires for what you
do.
| | 01:13 |
If you're selling tangible property, you
will need a seller's permit, or a resale certificate.
| | 01:20 |
It enables you to purchase materials tax
free, that end up part of what you sell.
| | 01:25 |
It's issued by the state in which you do
business.
| | 01:29 |
In California, this tax board is called
the state board of equalization.
| | 01:33 |
You must go to your local sales tax
office, explain what you do, and find out
| | 01:38 |
if anything that you sell is taxable.
Take the opportunity to have them review
| | 01:43 |
the required forms with you, to make sure
that you know exactly how to charge sales
| | 01:48 |
tax, and file quarterly or yearly
returns.
| | 01:52 |
The transfer of tangible property
requires that your customer pays sales tax.
| | 01:58 |
Unless you're shipping it out of state or
out of the country, in which case it
| | 02:02 |
might be subject to use tax.
This can get confusing, so again, consult
| | 02:07 |
with your sales tax board.
To recap, you'll need a EIN, a city
| | 02:12 |
business lisence, and if you plan to sale
something tangible, you'll need a resale certificate.
| | 02:18 |
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|
|
3. Getting WorkBusiness development methods| 00:00 |
As a business owner, your time is
limited.
| | 00:03 |
It's important to know where to burn
calories to pursue more work.
| | 00:06 |
There are four basic ways to pursue new
business.
| | 00:09 |
Personal referrals, RFPs, networking,
events, and through social media.
| | 00:15 |
Most of your work will come from
referrals and word of mouth.
| | 00:20 |
Recently, I tracked where my business has
come from over the years.
| | 00:24 |
I created a client family tree and found
that more than 75% of my work over the
| | 00:29 |
last 20 years has come from an ongoing
relationship with one smart,
| | 00:33 |
well-connected marketing director.
She takes us with her when she makes
| | 00:38 |
career moves, and we often obtain work
from the organizations she's moved on from.
| | 00:43 |
She's referred us to her colleagues in
various industries.
| | 00:47 |
This was a symbiotic relationship.
She helped me understand what works for
| | 00:51 |
balancing creativity and client service.
I helped her understand the process we
| | 00:56 |
use, and the support we need to do our
best work.
| | 01:00 |
We established a rhythm of communication
that was clear and efficient.
| | 01:04 |
And made each other proud.
Our mutual respect and trust for each
| | 01:08 |
other made working together a pleasure.
Designers just starting out may find it
| | 01:14 |
more difficult to establish that kind of
trust.
| | 01:17 |
The anonymity of online business
correspondents disables the kind of
| | 01:20 |
interaction that develops a commitment.
It's the phase to phase meanings.
| | 01:25 |
The onsite presentations and the real
conversations that cultivate meaningful
| | 01:30 |
business relationships.
The ones that withstand the test of time.
| | 01:35 |
Responding to anonymous RFPs or requests
for proposals can be time wasted unless
| | 01:41 |
you're the cheapest vendor.
Those requesting the bids are often
| | 01:44 |
looking for the lowest price, not an
ongoing relationship.
| | 01:49 |
The reason is that you don't have the
opportunity to show your value.
| | 01:52 |
What they review is just an estimate.
And sample imagery somewhat out of context.
| | 01:58 |
Attending chamber of commerce, and other
business networking events is an option.
| | 02:03 |
But I found most participants were
looking for jobs and for some investment money.
| | 02:07 |
Not for well-compensated design services.
Contacting vendors and ongoing clients to
| | 02:13 |
ask for leads can be somewhat successful,
as you are at an advantage.
| | 02:18 |
Your track record has already been
established.
| | 02:22 |
Social media is invaluable as a PR and
self promotion tool.
| | 02:26 |
But it's rarely the best business
development, too.
| | 02:30 |
The return on investment of time spent in
social media forums as business
| | 02:34 |
development won't yield the same results
as personal referrals and word of mouth.
| | 02:40 |
The bottom line is doing good work for
smart well-connected clients is the best
| | 02:45 |
business development strategy for you.
Staying away from task-oriented anonymous
| | 02:50 |
online projects will ensure the potential
for more meaningful ongoing business relationships.
| | 02:56 |
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| Self-promotion: Overview| 00:01 |
Self promotion is a necessity, if you
want to succeed in the design business.
| | 00:05 |
You have to be able to stand out, show
evidence of your creative abilities,
| | 00:09 |
explain who you are, and what you do, and
cultivate your voice as a designer.
| | 00:15 |
The word sales can make some designers
cringe.
| | 00:18 |
If that's true for you, think of this as
documenting your body of work.
| | 00:21 |
Reknown dimensional typography designer,
Andrew Byrom, dedicates time every Friday
| | 00:28 |
afternoon, exclusively to his self
promotion.
| | 00:30 |
He updates his website, photographs his
projects, and researches what his
| | 00:35 |
colleagues are doing.
He takes time to connect with them
| | 00:38 |
through email.
Or, through comments on social media.
| | 00:42 |
He shares what he's doing in the
industry, and passes along interesting
| | 00:45 |
things he comes across in his research.
It opens up network connections that
| | 00:50 |
ultimately lead to more great projects.
Real self-promotion is something that
| | 00:56 |
builds over time, creating good content,
dedicating time to this process and
| | 01:01 |
developing your voice is the best
strategy.
| | 01:03 |
Start your own self-promotion as you
would begin any design problem, by
| | 01:09 |
determining who your audience is and what
the appropriate messages are for them to receive.
| | 01:15 |
Possible audiences would be prospective
clients.
| | 01:18 |
Ongoing clients that would refer you to
others.
| | 01:21 |
Your design and industry peers.
Or, potential employees.
| | 01:25 |
Specifically, young designers you may
want to hire.
| | 01:28 |
Develop your unique messaging by using
this self assessment exercise.
| | 01:33 |
Answer the following questions.
Why should a client hire you?
| | 01:37 |
If an existing client recommended you to
a colleague, what would they say?
| | 01:41 |
How would you describe your work and
philosophy?
| | 01:46 |
How would you describe working in your
studio to a young designer that you would
| | 01:50 |
like to hire?
What do you want to be known for
| | 01:54 |
professionally and personally.
Now, look at the work that you've done.
| | 01:59 |
Categorize your design work in two ways.
Start with depth.
| | 02:04 |
Select 2 to 3 of your most current,
authentic, creative, and innovative
| | 02:09 |
products as an introduction.
Then, identify older projects to show the
| | 02:14 |
breadth of your work and your versatility
as a designer.
| | 02:18 |
They way you document your projects using
photography or video, says a lot about
| | 02:23 |
your attention to detail and your
expertise in art direction.
| | 02:27 |
These images need to be top notch.
Most designers use professional
| | 02:32 |
photographers and videographers.
This can be expensive, so many trade
| | 02:36 |
design services as compensation.
An important side note.
| | 02:41 |
To use a client's work for your self
promotion, you need to obtain permission.
| | 02:46 |
If you didn't specify in the terms and
conditions section of your contract,
| | 02:49 |
language for this request can be found in
the resource files.
| | 02:53 |
So now you have your messages, and your
image is ready, to be put together, and
| | 02:58 |
the permission to use them.
In the next two movies, we'll look
| | 03:01 |
specifically at your self-promotion
strategies, for your website, and through
| | 03:05 |
social media.
| | 03:06 |
| | Collapse this transcript |
| Website considerations| 00:00 |
The main self promotion tool for a small
design office is still a website.
| | 00:05 |
Through careful of messages and visuals
you have the ability to choreograph the
| | 00:10 |
experience someone has with your work and
your ideas.
| | 00:14 |
If you do it well people will respond.
Use your website primarily for
| | 00:19 |
communicating with prospective and
ongoing clients.
| | 00:22 |
Use other forms of social media for your
personal voice.
| | 00:25 |
The visual and verbal language should be
professional and business oriented.
| | 00:30 |
It may seem slightly uncool to hip
colleagues, but they're not the ones
| | 00:34 |
hiring you.
Clients often complain that designer's
| | 00:38 |
websites are obscure or confusing,
difficult to navigate, and lack basic
| | 00:42 |
information like where they are located.
The client audience needs immediate
| | 00:47 |
access to great images of your projects.
Your approach, style, philosophy, your
| | 00:54 |
expertise or specialization, your
credentials including background,
| | 00:59 |
education and any community involvement.
And your full contact information.
| | 01:04 |
You'll get extra credit if you include
the following, a client list and recommendations.
| | 01:12 |
Some insight into your creative process
such as development sketches or formal
| | 01:17 |
case studies.
And how your work has been successful for
| | 01:21 |
the companies and organizations you've
worked with.
| | 01:25 |
Clients like to see designers attention
to detail.
| | 01:27 |
And their ability to succinctly
articulate what they do.
| | 01:32 |
It's a myth that the work speaks for
itself.
| | 01:36 |
Here are some trends I'm seeing in
designers websites.
| | 01:39 |
Motion graphics intros, splash pages, and
elaborate coding are a thing of the past.
| | 01:45 |
Designers are opting for website
structures that they can easily update
| | 01:48 |
and manage themselves.
Many use templates from web publishing
| | 01:52 |
platforms, like Cargo Collective, as a
foundation for their website structure.
| | 01:57 |
And customize them with their unique
visual approach.
| | 02:00 |
Another trend is having a number of
seperate websites for individual projects
| | 02:06 |
that link to each other.
Clever crossreferencing through keywords
| | 02:10 |
facillitates more web traffic, and
ultimately more attention.
| | 02:14 |
(SOUND), Designers are creating
documentary videos very much like a Demo
| | 02:20 |
Reel to show the breadth and energy of
their studio.
| | 02:24 |
They're using their brand storytelling
expertise to sell themselves.
| | 02:28 |
These videos appear both inside their
websites and in public view on YouTube or Vimeo.
| | 02:34 |
All of this of coarse is to get more
attention when a client is searching for you.
| | 02:39 |
Clients have lots of choices.
And it's harder to get the attention of
| | 02:43 |
the best ones.
You have to be inspiring, informative,
| | 02:46 |
and authentic.
A well crafted website shows the value of
| | 02:51 |
what you create.
It puts a premium on what you do.
| | 02:54 |
| | Collapse this transcript |
| Using social media| 00:00 |
I believe that when it comes to social
media, you should do only what you can do well.
| | 00:06 |
Used well, it ensures a public presence
and visibility.
| | 00:09 |
It remains debatable how much it actually
leads to new profitable work for a small
| | 00:14 |
design office.
It takes a lot of time, and as the
| | 00:18 |
business owner, you need to make sure
your time is used well.
| | 00:22 |
There are many social media outlets out
there and it's easy to spread yourself
| | 00:26 |
thin and not do any of them well.
Choose the media that works the best for you.
| | 00:30 |
Frankly, you don't need to do any of them
other than to provide a solid way for
| | 00:35 |
people to find and contact you.
You can use any one of them, or you can
| | 00:39 |
connect all of them together.
Here's the definition of doing social
| | 00:44 |
media well.
It's a genuine reflection of you and your
| | 00:48 |
design office.
It should seem organic, real, and
| | 00:52 |
something you want to do.
It shows if you're doing it just out of obligation.
| | 00:57 |
It feels authentic and natural.
It needs to be your own voice.
| | 01:02 |
It needs to demonstrate that you love
what you do.
| | 01:05 |
It provides things of interest.
I believe it should be about a 1 to 10 ratio.
| | 01:10 |
For every one self-promotion post, you
should have ten posts contributing to the
| | 01:15 |
larger conversation.
It recognizes the unique audience.
| | 01:20 |
Be aware of the demographic, and play to
it.
| | 01:23 |
It's consistent.
Set a reasonable pace and stick to it.
| | 01:27 |
Your voice is part of the conversation.
Let generosity and desire to engage.
| | 01:32 |
Inform those who choose to follow you.
Use this opportunity to show us the
| | 01:37 |
behind the scenes glimpse.
The secret stuff that people who see your
| | 01:41 |
finish work wouldn't know.
Show us your process.
| | 01:44 |
Pull back the curtain.
Show the machinery behind it.
| | 01:48 |
It takes a while to develop a following.
For people to retweet, to like, or to comment.
| | 01:54 |
It may feel like a long time, as if
you're speaking to an empty room.
| | 01:58 |
But stay with it.
Be patient and consistent.
| | 02:02 |
Posts and comments on all social media
come and go so quickly that you can't
| | 02:07 |
over think it or try to be perfect.
You just have to do it, and in doing it
| | 02:11 |
day after day, you'll find your rhythm
and your voice.
| | 02:14 |
In the resource files, I have assembled a
chart of current social media outlets and
| | 02:20 |
how they're best used by design firms.
I asked a few of my colleagues for their
| | 02:25 |
thoughts on who they think is doing great
work in online communities.
| | 02:29 |
Take a look.
Even if you're not active on all the top
| | 02:34 |
social media outlets, reserve your name
whenever possible for the future.
| | 02:39 |
Great uses of social media will keep you
top of the mind and allows you to show
| | 02:44 |
the communities how you think.
Also, sometimes clients do like to see
| | 02:48 |
that you're current, and continue to have
interesting things to say and show.
| | 02:54 |
Use it effectively.
And don't let it take time away from
| | 02:56 |
other elements in your marketing tool
box.
| | 02:59 |
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|
|
4. Developing ContractsEstimating basics| 00:00 |
I know that many of you would like me to
tell you exactly what you should charge
| | 00:04 |
for the specific types of projects that
you want to do.
| | 00:07 |
Unfortunately, I can't.
And it would be irresponsible for me to try.
| | 00:12 |
What I can give you are some basic
guidelines for estimating, in the
| | 00:15 |
beginning, and as your business matures.
When starting out, it's essential that
| | 00:20 |
you track your time and the time that
your staff spends on each project to give
| | 00:24 |
you a realistic view of how long it
takes.
| | 00:27 |
If you place a reasonable hourly rate on
that time, you'll find an easier way of
| | 00:31 |
knowing how to estimate new projects.
Once you get established as an expert in
| | 00:36 |
what you do, you'll transition from an
hourly based rate to a fixed fee
| | 00:40 |
structure of estimating.
This is because your level of expertise
| | 00:45 |
and years of experience are worth more
than just an hourly rate.
| | 00:49 |
There are significant variables that
determine the price we charge our clients.
| | 00:54 |
Each estimate is a combination of two
factors, the value of this work to your
| | 00:59 |
client, and what it will take in terms of
time and resources to do it.
| | 01:04 |
The variables are how profitable you want
it to be, your expertise in this kind of
| | 01:09 |
work, and its exposure.
You'll charge more to a client like
| | 01:14 |
Starbucks, than to a smaller client like
a neighborhood coffee shop.
| | 01:18 |
The more visibility and influence your
work has, the more its worth.
| | 01:21 |
Then, add a 10% cushion, just to make
sure you're covered.
| | 01:27 |
When estimating work, you and your client
determine the scope of project.
| | 01:31 |
There's a list of phases and options
available to you in the resource files.
| | 01:35 |
It inventories some of the possible tasks
you might need for your next project.
| | 01:40 |
In addition, my colleague, Terry Lee
Stone, offered a lynda.com course on
| | 01:45 |
designer client agreements.
I recommend her course for more details
| | 01:48 |
on many these points.
| | 01:49 |
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| An outline of contract structure| 00:00 |
Generally, a contract has six distinct
sections.
| | 00:04 |
You'll find the language I use not
legalese, just clear objective phrases in
| | 00:09 |
common terms.
The first section states basic
| | 00:13 |
information including the contract date.
The names of the companies entering into
| | 00:17 |
the contract and the name of the project.
This is a legal contract so the client's
| | 00:22 |
information should appear in standard
business format.
| | 00:25 |
It needs to include specifics about the
project size, production methods,
| | 00:30 |
deliverables, and number of components.
Is it something completely new, or does
| | 00:35 |
it need to adhere to existing materials?
An estimate of fees will be provided in
| | 00:41 |
task categories such as design,
production, programming, then a total
| | 00:46 |
amount is determined.
An area called notes clarifies
| | 00:50 |
stipulations unique to that project.
Such as, what happens if the scope of the
| | 00:54 |
project is larger or smaller, and what
are the costs associated with that change.
| | 01:00 |
Also, it should contain some details
about what is and is not covered in the
| | 01:04 |
revision phases of the project.
A clarification is needed, as to what the
| | 01:09 |
designer is not providing, such as
printing, proofreading, or image retouching.
| | 01:14 |
If additional work is needed, hourly
rates should be given for specific tasks.
| | 01:20 |
A payment schedule should be established.
Common schedules are in thirds or halves.
| | 01:24 |
The last but most important area is a
place where each party signs and dates
| | 01:29 |
the document, acknowledging the
agreement.
| | 01:32 |
You would be irresponsible, as a business
owner, to begin work without a signed contract.
| | 01:37 |
It may take the client a week or so to
give you the initial payment.
| | 01:41 |
So, it's common to start a project before
you receive any money.
| | 01:44 |
But never, ever begin without a
signature.
| | 01:47 |
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| Terms and conditions basics| 00:00 |
A standard conditions of agreement, or
terms and conditions document, should be
| | 00:05 |
called a dozen ways to keep things from
going wrong.
| | 00:09 |
It's a really great tool for
communication.
| | 00:11 |
If you and your client understand this
agreement, it's rare that there will be
| | 00:15 |
any dipute or misunderstanding.
Really, this agreement is necessary.
| | 00:20 |
Think of it as business relationship
prenup.
| | 00:24 |
It's signed once and doesn't need to be
sent with subsequent estimates, unless
| | 00:28 |
your contact with the company changes.
You must understand any document you give
| | 00:33 |
to your client.
Often, I'll go through it, point by point
| | 00:36 |
with a new client, just so there is no
confusion.
| | 00:39 |
Everyone knows what's expected.
I've included a template of this type of
| | 00:43 |
document in the resource files.
I will briefly explain each point.
| | 00:47 |
Here we go.
The first statement enables you to charge
| | 00:51 |
10% more, even if the project scope does
not change.
| | 00:55 |
It establishes a design office's
responsibility to notify the client if
| | 00:59 |
there are revisions and gives hourly
rates for different types of tasks.
| | 01:04 |
Statement two deals with outside costs.
If outside costs are paid by you, there
| | 01:10 |
will be a handling fee.
A common handling fee is 15%, and it
| | 01:14 |
should be included in the estimate
amount.
| | 01:16 |
In other words, if you plan to use $1,000
worth of stock photography the amount
| | 01:20 |
that appeared should be $1,150.
Statement three notifies the client that
| | 01:27 |
if tangible property is transferred
within the state, the client will be
| | 01:30 |
responsible for paying sales tax.
They pay it to you, and you pay it to the state.
| | 01:36 |
The fourth statement is extremely
important.
| | 01:40 |
It clarifies that clients own only the
design they select.
| | 01:44 |
The others are your to reuse, adapt, and
resell as you wish.
| | 01:49 |
The fifth statement lets the client know
that you're taking responsibility for
| | 01:53 |
proper backup for a specific period of
time, and that the files created may be
| | 01:58 |
in systems that are different from those
that they use.
| | 02:01 |
If you want to charge a client to
retrieve a project from a backup anytime
| | 02:06 |
in the future, this is where those fees
should appear.
| | 02:11 |
Statement 6 helps clients understand that
they don't own rights to any of the work
| | 02:15 |
until the final payment has been made.
They are in copyright violation if they
| | 02:20 |
use or publish the work without making
the final payment.
| | 02:23 |
Statement 7 is a courtesy reminder, that
even though the design copyright
| | 02:28 |
transfers, there may be other components
of the project that have different rights agreements.
| | 02:33 |
Such as illustration or photography.
Statement eight clarifies to the client
| | 02:39 |
the importance of proofreading.
If projects are published with a spelling
| | 02:44 |
or grammar error, and there's a cost
involved to correct them, it will be paid
| | 02:48 |
by the client even if it's your fault.
Statement nine allows you to bill for the
| | 02:53 |
work completed when the project is placed
on hold for more than 30 days.
| | 02:57 |
Statement ten deals with your
self-promotion.
| | 03:00 |
Because the copyright transfer to the
client upon final payment, you need to
| | 03:05 |
ask for permission to use it.
Without this permission, you're in
| | 03:09 |
copyright violation if it's used in your
digital or physical portfolio.
| | 03:13 |
Statement 11 insures that you'll be paid
for the work completed.
| | 03:17 |
And retain copyright if the project is
canceled.
| | 03:20 |
If a serious dispute arises, statement 12
secures the least expensive way to
| | 03:26 |
resolve it.
Having the location of the arbitration in
| | 03:30 |
the city where you do business, insures
that you won't incur travel costs.
| | 03:35 |
Both parties sign and date the document.
A more thorough version of a terms and
| | 03:39 |
conditions agreement exists on the
aiga.org site.
| | 03:43 |
It covers a wider scope of work.
It's a lot longer than this one and the
| | 03:48 |
work you may be doing might not be
covered by the one I've just presented.
| | 03:52 |
I recommend that you take a look.
The most important part of this agreement
| | 03:56 |
is that both parties review and sign it
before you start on anything.
| | 04:00 |
Get the stuff out of the way so you can
start designing.
| | 04:04 |
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| Tracking and billing revisions| 00:00 |
One of the best reasons to have a signed
contract and a terms and conditions
| | 00:04 |
agreement, is that it clarifies what will
happen when there are revisions.
| | 00:08 |
And there will be revisions.
Revisions and what they cost are where
| | 00:13 |
designers and clients have the most
disagreements.
| | 00:16 |
And often, the confusion is purely about
lack of timely communication on the
| | 00:19 |
designer's part.
Statement 1 in the terms and conditions
| | 00:23 |
agreement, declares your hourly rates and
that you'll get authorization before
| | 00:27 |
performing any additional work.
The areas of the contract that are most
| | 00:32 |
critical in regards to revisions, are
those that indicate what will happen when
| | 00:35 |
the project size increases, and what
tasks are excluded from the contract.
| | 00:41 |
You need to be aware of your
responsibility when you're being asked to
| | 00:44 |
do something that is beyond the scope,
and never make assumptions that it will
| | 00:48 |
be okay just to do the work, and bill for
it in the future.
| | 00:52 |
The assumption that clients make is that
if the designer didn't say anything, the
| | 00:56 |
additional work is free.
I suggest that you make the assumption
| | 01:01 |
that you won't be paid for any work you
do beyond the original scope unless
| | 01:04 |
you've received approval.
Otherwise, it sets a bad precedent.
| | 01:09 |
It tells the client that you're confused,
that you don't value time, or that you
| | 01:14 |
don't have boundaries.
There's a common quote that applies in
| | 01:17 |
this case.
If you give them an inch, they'll take a mile.
| | 01:20 |
Okay, so that sounds harsh, but I see
this injuring business relationships more
| | 01:25 |
than any other.
I think the problem here is that
| | 01:28 |
designers get very emotional and
uncomfortable about what should be a very
| | 01:32 |
objective business transaction.
All you're really doing is reminding the
| | 01:37 |
client of what was agreed to in the
contract.
| | 01:40 |
You can stay out of trouble by simply
drafting a quick email stating that
| | 01:44 |
something requested was not included in
you original fee.
| | 01:47 |
It's referred to in the industry as a
change order.
| | 01:50 |
Which means, it's an amendment to an
existing contract.
| | 01:54 |
You can give a quick estimate as to what
you think it will cost, and maybe some
| | 01:58 |
options for solutions the client may not
have thought about.
| | 02:02 |
Ask them to let you know how you should
proceed.
| | 02:04 |
Use email to keep records of verbal or
written approvals for additional work.
| | 02:09 |
You'll need to communicate clearly and
often, especially when the scope of the
| | 02:13 |
project changes.
A little diligence and clarity on your
| | 02:17 |
part will head off a mountain of billing
headaches later on.
| | 02:21 |
Your clients will appreciate your
directness and you'll avoid any awkward
| | 02:25 |
he said she said situations when it comes
to your invoices.
| | 02:29 |
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| The pitfalls of spec work| 00:00 |
Work on spec is common practice for
architectural firms and agencies.
| | 00:04 |
Speculative presentations are pitches
where a number of agencies compete by
| | 00:10 |
producing work for free, without any
promise for a return on time invested.
| | 00:15 |
Traditionally, designs are created
without much meaninful context, or
| | 00:19 |
collaboration with a client.
This shoot from the hip model is very risky.
| | 00:25 |
What the chosen agency wins is a
long-term contract lasting from two to
| | 00:29 |
four years.
So, the risk to do speculative work can
| | 00:32 |
be worthwhile because the return sustains
the firm over a long period of time.
| | 00:38 |
But, spec work is death to a small design
practice, as our work is project-based
| | 00:43 |
versus account-based.
The reward isn't a long term contract,
| | 00:47 |
but just a website or a brochure or a
logo.
| | 00:51 |
It's not enough pay off for the effort it
takes.
| | 00:53 |
Before starting my own business, I worked
for two other design firms.
| | 00:58 |
The first one did spec work and the
second just said no.
| | 01:01 |
I've adopted the just say no model
because I was able to observe how doing
| | 01:06 |
spec work cost the first company hours of
time, and created many disappointments.
| | 01:11 |
The theory is that the best agency wins
the contract.
| | 01:15 |
But that's usually not the case.
It's often a political decision, or a
| | 01:20 |
myriad of other crazy things that have
nothing to do with good design.
| | 01:24 |
Today, designers are being brought to the
table earlier in the project's life cycle.
| | 01:30 |
We're being compensated for our process
as well as the end result.
| | 01:34 |
Working on spec undermines the designer's
ability to have input into the early
| | 01:38 |
phases of a project.
It places the designer in the position of
| | 01:42 |
merely decorating a, a mostly formulated
idea.
| | 01:47 |
It diminishes collaboration and trust and
sets a poor precedent for a meaningful
| | 01:52 |
and respectful business relationship.
Working on spec has its place in larger agencies.
| | 01:58 |
But, from the small business perspective
it's the wrong tool for the job.
| | 02:03 |
You're not going to be able to establish
long-term profitable relationships in a
| | 02:08 |
work on spec model.
| | 02:09 |
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|
|
5. Keeping It RunningGetting a great start| 00:00 |
The best way to ensure that the project
will go smoothly and that everyone will
| | 00:04 |
be happy is to get a great start.
Here are a couple of strategies that may
| | 00:08 |
help you.
A thorough kick-off meeting is crucial.
| | 00:12 |
It's truly the barometer for how the
entire project will go.
| | 00:17 |
In this first meeting, you can make a
reasonable assessment of their needs
| | 00:21 |
their budget, their ability to make
decisions and their collaborative skills.
| | 00:27 |
In the resource files there's a sheet
entitled, Questions to ask at a Kickoff Meeting.
| | 00:31 |
Use it to make sure you're getting the
best start.
| | 00:35 |
This personal interaction gives you
valuable clues as to the political
| | 00:38 |
dynamic that will come into play as the
project progresses.
| | 00:43 |
Discuss at length to reach consensus on
the most important messages the design
| | 00:48 |
must communicate.
And make sure all the stakeholders agree
| | 00:52 |
on them.
These will become the criteria upon which
| | 00:55 |
the design ideas will be judged.
Everyone should be in agreement as to who
| | 01:00 |
the target market is, and what the
project goals are.
| | 01:03 |
If you're initial design phase falls
short or fails, it's usual because there
| | 01:09 |
was some confusion about the criterion
you were working with.
| | 01:14 |
For more complex projects, this meeting
should be followed up with a project
| | 01:18 |
brief that outline what was discussed and
agreed upon.
| | 01:22 |
And how you plan to proceed.
It has an inventory of assets, such as
| | 01:26 |
text and imagery, and a determination as
to how to get what's missing.
| | 01:31 |
It may also include schedules for
approval and details on the specific deliverables.
| | 01:37 |
This brief is given to the client to
review and comment.
| | 01:42 |
Insist on the decision maker's
involvement at critical phases.
| | 01:45 |
Primarily the kickoff meeting.
One of the most confusing situations
| | 01:50 |
designers find themselves in.
Is when people giving them feedback are
| | 01:54 |
just second guessing the one who's really
making the decision.
| | 01:57 |
The closer the designer is to the
visionary, leader or decision maker.
| | 02:03 |
The more efficient and effective the work
can be.
| | 02:05 |
The more points of separation from the
visionary to the designer, the less
| | 02:10 |
likely the levels of creativity and
efficiency are at 100%.
| | 02:14 |
I subtract 20% for each person in
between.
| | 02:19 |
I call it the 80% rule.
So having terrific kickoff meetings to
| | 02:24 |
establish consensus and playing to the
decision-maker, can help minimize the
| | 02:29 |
politics and communication breakdowns
that sometimes occur.
| | 02:33 |
This shows your importance to the process
and increases your value to the client.
| | 02:38 |
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| Effective correspondence methods| 00:00 |
Controlling the way you correspond with
your client says a lot about your professionalism.
| | 00:05 |
Clients will mirror the boundaries or
lack of boundaries that you set up.
| | 00:10 |
Today's demand for efficiency keeps us
away from in-person meetings and
| | 00:13 |
telephone conversations.
Even though email business communication
| | 00:18 |
is the new normal for designers, there
are drawbacks that strictly virtual
| | 00:22 |
correspondence can create.
Because there are so many ways for us to
| | 00:26 |
communicate with our clients.
I've made a chart that should help you
| | 00:29 |
know when each type is most effective.
Avoid texting clients, and only respond
| | 00:36 |
if a client sends one.
Save it for your friends and family, it's
| | 00:40 |
not an effective business correspondence
tool.
| | 00:42 |
E-mail is exceptionally efficient for a
few small questions.
| | 00:46 |
People just don't read long e-mails.
If there are a number of questions, a
| | 00:50 |
conversation may be more appropriate.
E-mail is the most effective way to
| | 00:56 |
communicate ongoing production revisions.
It's great when documentation is
| | 01:00 |
necessary, say if there's a change in the
project scope that requires client
| | 01:04 |
approval to proceed.
I suggest sending business e-mails during
| | 01:09 |
normal business hours, otherwise your
clients believe you're available to them
| | 01:13 |
24 hours a day, seven days a week.
E-mail is not great for collaboration.
| | 01:18 |
A phone call or a Skype session is
necessary, when there is a discussion
| | 01:22 |
that needs to take place.
Probably the biggest mistake a designer
| | 01:27 |
can make is presenting various design
options in a PDF and sending it by e-mail
| | 01:32 |
to a client.
You have no control over them.
| | 01:35 |
They're often forwarded to others without
any explanation of the goals, the
| | 01:39 |
process, and the criteria.
It becomes an exercise is subjectivity.
| | 01:44 |
Designers lose the ability to guild the
descussions in an objective,
| | 01:48 |
authoritative way.
Constructing a lengthy e-mail is a waste
| | 01:52 |
of time when you and your client need to
solve a complex problem.
| | 01:56 |
Don't underestimate the effectiveness
that conversation can provide.
| | 02:00 |
In-person meetings are crucial at the
beginning and at key phases of the project.
| | 02:06 |
This personal interaction gives the
designer a lot more respect and power in
| | 02:10 |
the process.
It creates a sagnificant investement in
| | 02:14 |
the relationship.
Clients will have a clearer idea of the
| | 02:17 |
value that the designer brings to a
project when you discuss it face to face.
| | 02:21 |
They gain an appreciation for your
thinking and your listening skills.
| | 02:25 |
When they know you understand their goals
and challenges, you can be much more influential.
| | 02:32 |
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| Learning to say no| 00:00 |
As the leader of your studio, many times
your job is to say no.
| | 00:05 |
Designers want to be the hero, and they
want to be loved.
| | 00:09 |
So they take on projects because people
need them, but can't afford to pay them.
| | 00:14 |
It seems like a good idea when you're not
busy.
| | 00:16 |
But as soon as you get busy, this work
gets put aside for real jobs, with real
| | 00:21 |
deadlines and real compensation.
The one's that are more aligned with your accountability.
| | 00:26 |
This may be very unpopular advice but do
whatever you can to keep from working on
| | 00:31 |
projects for your friends and family even
if they pay you.
| | 00:35 |
They are the worst clients ever.
Just say no, nicely of course.
| | 00:41 |
In the resource files I have some handy
verbiage for you to use.
| | 00:45 |
You may need to say no to a real client,
because something they're asking you to
| | 00:49 |
do, you're not interested in, you don't
have the time to do, or the budget is inadequate.
| | 00:55 |
You have a greater responsibility now to
pay your employees and consider the
| | 00:59 |
financial health of your business.
My litmus test is love, time, money.
| | 01:06 |
You need two of the three to have any
chance of success.
| | 01:09 |
By love, I mean your passion, desire.
Or the potential this project has to
| | 01:14 |
represent the best that you can do.
Time means how long you have to do this
| | 01:19 |
brilliant work.
And money means compensation.
| | 01:23 |
If there's only one of the three, the
odds are against you.
| | 01:27 |
When a client lacks enough money to pay
you for good design, they often lack
| | 01:32 |
enough money to implement it.
Diplomatic ways to say no to clients and
| | 01:37 |
an interesting article called, bad
clients are easy to find, are included in
| | 01:41 |
the resource files.
Sometimes we have to say no to a
| | 01:45 |
potentially great new client.
Because they need something we don't know
| | 01:49 |
how to do.
Focus on what you do best.
| | 01:52 |
For example, if you're a designer and a
client asks for a video project, refer
| | 01:57 |
them to someone in your professional
network.
| | 02:00 |
This will establish trust with this
prospective client and keep you top of
| | 02:04 |
the mind when projects come along that
are best suited for your capabilities.
| | 02:09 |
Evaluating a project's potential to be
both accountable and creative, along with
| | 02:14 |
learning to say, no, should be of great
help to keep your business on track.
| | 02:18 |
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| Getting paid| 00:00 |
It's really simple.
If you want to stay a floating in
| | 00:03 |
business, you need to be paid.
Invoices are the formal the formal
| | 00:06 |
request for payment.
They have 10 components.
| | 00:10 |
Omitting any one of these can create a
snag in the approval process, and could
| | 00:13 |
cause a delay.
First, the date the invoice was prepared.
| | 00:18 |
Then the name of your client contact in
proper business format, then your invoice number.
| | 00:23 |
The next item is the project name,
together with your job number.
| | 00:28 |
A purchase order or client requisition
number if needed, otherwise, just say verbal.
| | 00:34 |
It's good to list the date of the signed
contract, or the phase of the project.
| | 00:39 |
The invoice should include the terms of
payment such as due upon receipt, or due
| | 00:44 |
in 30 days.
And next, a clarification of how the work
| | 00:49 |
was transferred.
Examples include files transferred
| | 00:52 |
digitally, or shipped directly to the
client.
| | 00:56 |
This description will effect how sales
and business tax may be assessed.
| | 01:00 |
So be accurate here.
Include a note as to who the check should
| | 01:04 |
be made out to.
And lastly, where the payment is to be
| | 01:07 |
mailed, or to what account the funds
should be transfereed.
| | 01:12 |
When you're working for larger
corporations, you may be required to use
| | 01:15 |
a PO or Purchase Order.
If you've been given one, it must be
| | 01:19 |
included on your invoice.
Send invoices as a PDF attachment to an email.
| | 01:24 |
And in the body of the email, you can
clarify the timing of the invoice.
| | 01:29 |
And invite them to ask any questions if
the invoice is unclear, an example's in
| | 01:34 |
the resource files.
The over arching advice I have about
| | 01:38 |
preparing invoices is to ensure that
they're never a surprise to the client.
| | 01:43 |
You've already agreed upon the amounts,
the terms and the scope.
| | 01:46 |
If there were revisions, you've already
discussed the additional cost and
| | 01:50 |
received approval.
If you follow my advice about
| | 01:53 |
communicating with clients, there's a
good chance that invoices will not become
| | 01:57 |
past due.
But the reality is, problems can arise.
| | 02:01 |
If a payment has not been received after
30 days from the invoice date, you need
| | 02:06 |
to send a past due notice.
You can send it by email.
| | 02:09 |
Attach a PDF copy of the invoice that's
past due.
| | 02:13 |
See the resource files for language to
use in the body of the email.
| | 02:17 |
You must document all correspondence
regarding unpaid invoices, sent and received.
| | 02:23 |
Until the check is in your hand, every
promise to pay needs to be documented.
| | 02:29 |
Most of the time when invoices are late,
it can be resolved fairly quickly and
| | 02:33 |
easily by sending a notice.
If the payment continues to be late, I
| | 02:38 |
recommend sending a notice once a week
for another month.
| | 02:41 |
If it's not been been paid 60 days after
it was issued, this signals that there's
| | 02:46 |
a deeper problem.
Either the client questions that they owe
| | 02:49 |
you the money or they don't have the
money to pay you.
| | 02:51 |
It's important to figure out which one of
these is the problem, because the action
| | 02:57 |
you take will be different in each case.
The general philosophy for carding late
| | 03:02 |
payments is that the longer they remain
unpaid, the less chance you'll ever get paid.
| | 03:07 |
It's important to try and resolve these
issues within 30 to 60 days.
| | 03:12 |
After that, the odds are against you.
Balance tenacity and professionalism,
| | 03:16 |
keeping up with collections.
| | 03:18 |
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| Strategies for nonpayment situations| 00:00 |
Once in a great while, polite
correspondence between you and a client
| | 00:04 |
about an unpaid invoice stops being
productive.
| | 00:08 |
If you have a signed terms and conditions
agreement, your client has no right to
| | 00:12 |
use what you've created for them until
they've paid you in full.
| | 00:16 |
As you might imagine, this comes in very
handy in legal disputes.
| | 00:20 |
If things get really bad, threatening
letters from attorneys can be really helpful.
| | 00:24 |
Dun & Bradstreet's legal services are an
effective and affordable way to pressure
| | 00:29 |
nonpaying clients.
Depending on the amount you're owed, your
| | 00:33 |
best option may be going to small claims
court.
| | 00:36 |
You can get a judgement against your
client if you are able to prove that you
| | 00:39 |
performed according to the contract.
This may or may not help you.
| | 00:43 |
Small claims court may pass a judgment in
your favor, but that doesn't make cash
| | 00:48 |
magically appear.
It does give you the leeway though to
| | 00:52 |
garnish funds from their bank account.
Small claims court resolves disputes
| | 00:57 |
under $7,500.
Even if the client owes you $10,000, it's
| | 01:02 |
sometimes worth it to cut your losses and
get a judgement of $7,500 through small
| | 01:06 |
claims courts.
In regular courts, attorney's fees and
| | 01:11 |
legal costs can quickly mount up.
If you're owed more than 10,000, my
| | 01:17 |
recommendation is to resolve the issue
through binding arbitration in the city
| | 01:21 |
where you do business.
Problems rarely happen when you're
| | 01:24 |
conscientious about the language in your
contracts.
| | 01:27 |
But when they do, it takes persistence
and professionalism.
| | 01:31 |
There have been times when I've been
persistent, and after two years, was paid
| | 01:35 |
over $20,000 that I was owed.
But there have been a couple of cases
| | 01:39 |
where payments under $1,000 I just let go
away.
| | 01:42 |
Because it wasn't worth my time to
collect them.
| | 01:45 |
Being aware of your client's financial
health at the beginning of a project is
| | 01:49 |
one of the best to ways to determine
whether you'll be well served to work
| | 01:52 |
with them.
Following professional protocol and
| | 01:56 |
making sure that you have signed
contracts and approval for any revisions
| | 02:00 |
should keep you out of trouble.
| | 02:02 |
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| Hiring employees| 00:01 |
I can't say enough about how great it's
been to work with terrific people, and
| | 00:04 |
have them be part of my studio.
In a small firm, you're working very
| | 00:09 |
closely with your staff.
On a daily basis, they'll witness the
| | 00:12 |
inner workings of your company.
And in many cases, your personal life.
| | 00:17 |
You'll be spending more waking hours with
them than you will with your loved ones.
| | 00:21 |
To find great people, designers often
reach out to their colleagues for recommendations.
| | 00:26 |
Using this process, be very specific
about the qualities you look for
| | 00:30 |
creatively and professionally.
Occasionally, colleagues will send me
| | 00:35 |
requests like, I'm looking to hire
someone.
| | 00:37 |
Know any great designers out there?
I find these requests very difficult to
| | 00:42 |
respond to.
Making an effort to define your needs
| | 00:46 |
will help others help you.
You should look for attitude and talent
| | 00:51 |
which can be a little more difficult to
discern than skills.
| | 00:55 |
Trust your intuition, factor in
recommendations from colleagues.
| | 00:58 |
But ultimately, only time spent together,
determines a good fit.
| | 01:04 |
There is a significant amount of
paperwork that is needed when you hire someone.
| | 01:08 |
Employment taxes are complicated.
Setting this up will require the help of
| | 01:13 |
an accountant.
If you don't already work with one, this
| | 01:16 |
is the time to begin.
You have to set up a payroll system in
| | 01:20 |
order to make the appropriate tax
withholdings from the employee's salary.
| | 01:24 |
And make the corresponding contributions
to government tax boards.
| | 01:29 |
There are payroll services to assist you,
plus accounting software like QuickBooks
| | 01:33 |
have payroll packages that are useful.
How do you know if you can afford a
| | 01:38 |
full-time employee?
Use this calculation to determine when
| | 01:42 |
you have enough billings to actually hire
one.
| | 01:46 |
To remain profitable, for every full-time
employee, you need to bill an additional
| | 01:50 |
$90,000 a year.
I heard this simple formula over 20 years
| | 01:55 |
ago, and it's held true for my small
design office.
| | 02:00 |
Take a look at this table.
Tax rates change frequently, but just to
| | 02:04 |
give you a general picture.
If you agree to pay an employee $43,000 a
| | 02:09 |
year, it's going to cost you around
$50,000 a year, of which they'll take
| | 02:16 |
home a little over $32,000 a year.
This is why the subcontractor
| | 02:21 |
arrangement, can be much more financially
advantageous to both parties.
| | 02:25 |
Though, the IRS frowns upon it for an
extended period of time.
| | 02:30 |
In the resource files, you can see what
the IRS' 20 common law factors are.
| | 02:34 |
I've highlighted the ones that are
probably most common to a small design firm.
| | 02:39 |
If any one of these 20 factors is true,
the IRS says they should be an employee,
| | 02:46 |
not a freelancer.
So, now who gets into trouble?
| | 02:48 |
You.
The IRS will hold you financially
| | 02:54 |
responsible, and require specific taxes
and payments including penalties and interest.
| | 03:00 |
So, before commiting, it's not unusual
for a freelancer to be tested.
| | 03:04 |
At least, a couple of weeks before a
final decision is made.
| | 03:09 |
If you decide that this is the right
person to hire, share some of your goals
| | 03:13 |
so they know how they can be most
effective in your company.
| | 03:18 |
Take the opportunity to listen to what
their goals are.
| | 03:20 |
And try and create a meaningful dialog
about how this new position can be the
| | 03:25 |
best it can be.
As an employer, you'll need to establish
| | 03:30 |
a policy for the following, vacation
time, overtime and/or comp time.
| | 03:36 |
Sick time, including what happens if
those days are exceeded.
| | 03:41 |
Paid holidays and health insurance.
Establish some expectations, do you
| | 03:47 |
expect them to be available on weekends
and evenings?
| | 03:50 |
Do you expect to communicate with them
after hours by texting or email?
| | 03:55 |
On rare occasions you may have to let an
employee go.
| | 04:00 |
This is a process that you need to
clearly understand.
| | 04:02 |
Do research online about what's involved
in terms of labor laws in your state.
| | 04:08 |
Ask your advisors for guidance, including
an attorney, just to make sure you're
| | 04:12 |
clear about the ramifications of your
actions.
| | 04:16 |
If you're going to take the plunge and
hire an employee, you need to be clear
| | 04:21 |
about your expectations to yourself and
to the person you hire.
| | 04:25 |
You need to be able to bring in
significant extra income and be prepared
| | 04:30 |
to handle the extra paperwork.
It's not a step to be taken lightly.
| | 04:35 |
But it is one that will set the stage for
your small business to grow.
| | 04:38 |
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|
|
6. The TrendsNew business models| 00:01 |
There have been a number of significant
changes in the small business model for designers.
| | 00:05 |
In the past, a thriving business meant a
growing business.
| | 00:08 |
Now it means being small, nimble, and
agile.
| | 00:11 |
A number of factors have contributed to
this, most are in response to the
| | 00:16 |
changing economy.
I'm one of a number of designers that
| | 00:19 |
have downsized and chosen to work out of
a home office structure.
| | 00:23 |
It's not a compromise, we're doing it by
choice.
| | 00:27 |
Many of us discover that, by having a
larger company with higher overhead.
| | 00:30 |
It gave us a lot more responsibility.
But it didn't necessarily yield us a lot
| | 00:35 |
more personal income.
And it removed us from the hands on work
| | 00:39 |
that we really enjoyed.
Today, we're able to choose our projects
| | 00:43 |
for their potential to be meaningful and
lucrative.
| | 00:47 |
Many clients are looking for streamlined
management systems and closer
| | 00:51 |
relationships to the people who are
actually doing the work.
| | 00:55 |
They're demanding great creativity at a
reasonable cost.
| | 00:59 |
Smaller firms with less overhead can
expand and contract as needed.
| | 01:04 |
To be as efficient as possible, creating
a win-win for themselves, and for the client.
| | 01:09 |
This trend is a really good one for
younger designers.
| | 01:12 |
I believe that being nimble, agile, and
resourceful will be the key to success
| | 01:17 |
for the design firm of the future.
Younger designers are collaborating with
| | 01:21 |
each other.
In virtual partnerships for larger
| | 01:24 |
projects, just for the duration of the
project.
| | 01:28 |
This enables clients to utilize and
assemble dream team of experts in ways
| | 01:32 |
that would be impossible in the past.
Technologies like Skype and Google Docs
| | 01:37 |
are facilitating more effective virtual
collaberation.
| | 01:40 |
It's commonplace for designers to be
working in different time zones for
| | 01:44 |
different audiences, in different
countries, with multiple cultures.
| | 01:49 |
Fast company calls this group generation
flux, saying they have a mindset that
| | 01:54 |
embraces instability.
That tolerates and even enjoys
| | 01:58 |
recalibrating their careers, business
models, and assumptions.
| | 02:03 |
Design critic, Steven Heller recently
stated, it doesn't really matter where
| | 02:07 |
you live.
While the clients and the nature of local
| | 02:09 |
work may vary, styles no longer have
borders.
| | 02:12 |
Instead for the most part there are a
handful of ideas and approaches that ebb
| | 02:17 |
and flow all over.
The changing economy is demanding
| | 02:22 |
designers master new technologies at a
very fast pace.
| | 02:27 |
A common branding project of the past may
have involved the creation of a logo,
| | 02:30 |
stationery, business card, and a website.
Now, a branding project involves a
| | 02:36 |
mastery of technology and communication
and digital media.
| | 02:39 |
Beyond the web, mobile apps, interactive,
exhibition spaces, and social media.
| | 02:45 |
A logo design isn't complete without a
motion-graphics visualization.
| | 02:50 |
Young design firms will be required to
deliver a certain technological
| | 02:54 |
ambidexterity to be able to thrive.
If you're interested in knowing the
| | 02:58 |
history of business models for design
firms and agencies, there's a wonderful
| | 03:03 |
video by the digital agency RGA.
Principals Robert Greenberg and Barry
| | 03:08 |
Waxman call it the next nine years.
Parts one and two of that talk I find
| | 03:13 |
especially revealing and informative.
The traditional model of a large design
| | 03:19 |
office with a permanent staff working for
one big local client is quickly becoming
| | 03:24 |
a thing of the past.
The new face of design involves strategic
| | 03:28 |
collaborations across the globe.
And a leaner, meaner office management.
| | 03:34 |
As the economy pushes, and technology
pulls on the capabilities of designers.
| | 03:38 |
Successful design firms but be poised to
meet those challenges with innovation,
| | 03:44 |
efficiency, and versatility.
| | 03:47 |
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| The new designer-entrepreneur| 00:00 |
Back in 2011, design and business writer,
Bruce Nussbaum, predicted that designers
| | 00:05 |
are merging their ways of thinking with
startup culture.
| | 00:09 |
And will be, in his words, the new
drivers of American entrepreneurialism.
| | 00:14 |
As the years have gone by, Bruce's
prediction has proven true.
| | 00:17 |
There are a number of factors that have
enabled this trend.
| | 00:21 |
Easy access to complex technology along
with the accelerated internet marketplace
| | 00:26 |
is created a great environment for
designers to produce and distribute their
| | 00:30 |
own products and services.
Internet innovations, such as YouTube,
| | 00:35 |
flickr, tumblr., and vimeo were all
started by entrepreneurs with design
| | 00:39 |
degrees or backgrounds.
It's an incredible mash up of creativity
| | 00:43 |
and capitalism.
I see that our industry is in the middle
| | 00:47 |
of a transition from creating traditional
marketing communications to making
| | 00:52 |
content, developing products.
And inventing new ways to convey messages.
| | 00:58 |
Influential factors in this trend are
economic.
| | 01:00 |
Recent design school graduates are having
a harder time getting steady jobs in the
| | 01:05 |
first years of their careers.
They're often saddled with excessive
| | 01:09 |
educational debts.
Instead of trying to earn income the
| | 01:13 |
traditional way by working for
established design firms, they're being
| | 01:17 |
resourceful in their use of technology
and design thinking.
| | 01:21 |
They're doing this by creating products.
Everything from graphic heavy t-shirt
| | 01:25 |
lines, to handbags, to mobile apps.
And technology innovations in small run
| | 01:31 |
manufacturing have really changed the
landscape.
| | 01:35 |
Making and selling stuff is easy, fast
and affordable.
| | 01:39 |
Designers can sell their products
independently or through established companies.
| | 01:43 |
Successful entrepreneurs use their social
media savvy to promote and sell their products.
| | 01:49 |
They're collaborating with others in
their online communities to support each
| | 01:53 |
other's ventures.
Through posts, images and stories,
| | 01:56 |
spreading around communities, people
start to invest their time.
| | 02:00 |
And possibly money, to support them.
When capital is needed to start a new
| | 02:06 |
venture or expand a business, younger
designers can't qualify for loans, so
| | 02:11 |
they use crowd-sourced funding, like
Kickstarter.
| | 02:14 |
When they need guidance and mentorship,
they turn to global online sources that
| | 02:18 |
hold local events.
Take a look at what's happening with a
| | 02:21 |
movement called Startup Weekend.
Design school teaches us a number of
| | 02:26 |
things that prepare us for this new
environment, like our ability to
| | 02:30 |
conceptualize, prototype, and test.
We can create visually appealing branding
| | 02:35 |
and marketing programs for our products,
and master new technology very quickly.
| | 02:41 |
But what we don't have is a lot of
business or legal know how.
| | 02:43 |
If you're going to go down this road,
you're going to need to know a lot more
| | 02:48 |
about intellectual property.
Without that knowledge, your idea could
| | 02:52 |
be stolen or you could steal someone
else's.
| | 02:54 |
To get started, you'll need to understand
some basic legal tools, like copyrights,
| | 03:00 |
licensing agreements, fair use,
trademarks, and design patents.
| | 03:06 |
Familiarize yourself, then consult with
an attorney to advise you regarding your
| | 03:10 |
specific needs, to make sure everything's
covered.
| | 03:13 |
Design entrepreneurship, especially
developing your own branded products, is
| | 03:18 |
an exciting path to pursue.
It's something you can do in addition to
| | 03:22 |
having your own studio where you do
traditional design for clients.
| | 03:26 |
Doing both offers great creative
possibilities.
| | 03:30 |
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| Cross-disciplinary work| 00:01 |
Success today means mastering more than
just one type of creative work.
| | 00:06 |
Photographers are being asked to design
websites, graphic designers are creating
| | 00:10 |
products and illustrators are producing
motion graphics.
| | 00:14 |
There is an expectation that we'll either
have the skills ourselves or have
| | 00:18 |
immediate access to the right colleagues
to help us make it happen.
| | 00:22 |
It's just what the industry has demanded.
Staying relevant requires more than good design.
| | 00:26 |
It requires critical thinking that's
perceptive, imaginative, and skillful
| | 00:31 |
across all media.
2D, spatial, digital, and time based.
| | 00:37 |
It all goes between interactive,
environmental, social media, and data
| | 00:41 |
visualization methods to carry messages.
As a result, designers take on new roles
| | 00:46 |
as interpreters, aggregators, trend
spotters and producers.
| | 00:51 |
They're tasked with infusing value and
meaning into what they create.
| | 00:56 |
Harnessed with branding and media savvy,
designers are team members alongside
| | 01:00 |
architects, product designers, and
research experts to help entrepreneurs
| | 01:05 |
visualize, prototype, and implement their
ideas.
| | 01:09 |
Future designers are insightful, global
collaborators who understand their
| | 01:13 |
ability to influence and inspire.
The benefit to our industry is these
| | 01:18 |
teams are being engaged earlier on in a
client's decision making process to craft
| | 01:23 |
experiences and provide insight.
Adobe and the AIG call it a co-creation
| | 01:29 |
model in their report, Designer of 15
Trends.
| | 01:33 |
Like Adobe and the AIG, I predict an
increased demand for clients asking for
| | 01:38 |
cross-disciplinary solutions from
individuals or in collaborative teams.
| | 01:44 |
Here's a game plan for starting your
journey to becoming more cross disciplinary.
| | 01:48 |
Learning new technologies to think about
the work you design in a much broader way.
| | 01:53 |
For example, the next time you design a
logo, you'll know After Effects to think
| | 01:58 |
about how it'll work in motion.
Then tell an existing client of your new capabilities.
| | 02:04 |
Do a few jobs that implement that new
skill, and possibly branch out into that area.
| | 02:09 |
Focus on one expansion per year, at
least.
| | 02:14 |
This will keep your design practice
relevant and more interesting.
| | 02:18 |
Your clients will be impressed as your
able to help them in new ways.
| | 02:21 |
It's a win, win.
The potential is great for designers to
| | 02:25 |
become invaluable to our clients in a
challenging economy.
| | 02:28 |
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| A commitment to social and environmental causes| 00:01 |
Traditionally, design firms took on the
occasional pro bono project to support a
| | 00:05 |
local cause.
It used to be a rob Peter to pay Paul
| | 00:08 |
model, where the firm would charge a bit
more for its corporate work to offset its
| | 00:13 |
free work.
Today many graphic designers are framing
| | 00:16 |
their entire businesses around doing
exclusively social and environmental
| | 00:20 |
cause work.
These designers are more than passionate
| | 00:24 |
about their intentions.
They consider themselves advocates for
| | 00:27 |
design that can make a difference in the
world.
| | 00:30 |
To accomplish this, they find
compensation beyond the traditional
| | 00:33 |
reduced fee for service model.
Many apply, and receive grants for their endeavors.
| | 00:39 |
Instead of focusing on a website, or a
campaign, they use their media savvy to
| | 00:43 |
construct a framework for others to
collaborate, and initiate widespread action.
| | 00:49 |
Many of these committed individuals and
design offices are grant recipients, of
| | 00:52 |
the Sappy Ideas That Matter program.
Since 1999, Sappy has awarded over 12
| | 00:59 |
million dollars to over 500 non-profit
organizations to give designers the
| | 01:04 |
resources they need.
Detailed case studies of the awarded
| | 01:08 |
projects can be found in the link in the
resource files.
| | 01:11 |
It's a terrific collection of ideas and
information about how a grant request is
| | 01:15 |
put together.
I know a number of designers that have
| | 01:19 |
been able to craft meaningful careers by
following their hearts.
| | 01:22 |
Some have started design and art
mentorship programs in underserved
| | 01:26 |
communities in the cities where they
live.
| | 01:29 |
Others have created awareness of
important humanitarian issues around the globe.
| | 01:33 |
I'm finding this kind of commitment
common in the generation of designers now
| | 01:37 |
in their twenties and thirties.
It's a peace corp model backed up with a
| | 01:40 |
lot of design muscle.
Committing to cause oriented work doesn't
| | 01:45 |
mean that you don't make money.
Pro bono doesn't mean for free, it mean
| | 01:49 |
for the public good.
Matthew Manos of A Very Nice Design
| | 01:54 |
Studio, is a shining example of a young
designer leading this trend.
| | 01:58 |
Matt said he became fascinated by the
idea that there's an emerging space
| | 02:03 |
between the non-profit and for-profit
business models, which has been untapped
| | 02:07 |
by design.
At least 50% of his efforts, at any given
| | 02:11 |
time, on a volunteer basis, and the rest
are for paying clients.
| | 02:16 |
This model calls for a strategic division
of time.
| | 02:19 |
It allows his studio to stay afloat while
being able to do meaningful pro bono work.
| | 02:24 |
It's a unique crowdsourced model of
collaboration.
| | 02:28 |
These individuals are divers in culture,
education, profession, age and experience.
| | 02:33 |
They form a transdisciplinary team that's
always ready for a new approach.
| | 02:39 |
Lucrative work can be found in the
nonprofit world by creating communication
| | 02:43 |
and public awareness projects for larger
foundations or other public oriented organizations.
| | 02:50 |
The AIGA has a number of initiatives in
place to help provide designers with the
| | 02:53 |
information and resources and examples of
colleagues that make a difference while
| | 02:59 |
making a living.
I've included some examples of designers
| | 03:03 |
using social advocacy as a business model
in the resource files.
| | 03:07 |
| | Collapse this transcript |
|
|
7. Looking AheadCareer sustainability| 00:01 |
I see that most designers really love
what they do.
| | 00:05 |
We become fast learners and are quite
resilient.
| | 00:08 |
Our field changes frequently, especially
in terms of technology.
| | 00:11 |
We keep up, because otherwise our work
may become stale or our skills outdated.
| | 00:18 |
Our civilian and non-designer friends
think we have it made.
| | 00:21 |
We get to be creative for a living.
What they don't realize is the tough part
| | 00:27 |
is being creative for a living.
I use the term career sustainability,
| | 00:31 |
because as design firm owners, we are in
essence creating the ecosystems in which
| | 00:36 |
we live.
Those in the ecosystem need to survive in
| | 00:40 |
changing environment, and re-calibrate
when disturbances, internal or external,
| | 00:45 |
create an imbalance.
You're seeking symbiotic or mutually
| | 00:50 |
beneficial relationships with your
clients, employees, colleagues, the
| | 00:56 |
economy, your community, and finally
yourself.
| | 00:59 |
The opposite is a parasitic relationship
where one thing benefits at the expense
| | 01:05 |
of the other.
One of the challenges that small design
| | 01:09 |
offices face is becoming over dependent
on one client for their work.
| | 01:14 |
No single account should represent more
than 25% of your total billings.
| | 01:20 |
This imbalance creates a great risk if
they stop working with you.
| | 01:23 |
The opposite imbalance is having too many
small clients and having to reinvent the
| | 01:28 |
wheel every time you begin a new
relationship.
| | 01:31 |
For long-term success all relationships
must be mutually beneficial.
| | 01:37 |
This is true in all cases, in all
industries.
| | 01:42 |
A symbiotic relationship means that both
you and your client have a shared vision,
| | 01:47 |
professionalism, and most importantly,
trust.
| | 01:51 |
Good clients really trust designers with
the task of communicating their goals,
| | 01:56 |
aspiration and vision.
For me, that's been one of the best
| | 02:00 |
surprises about this career.
We are asked over and over again to go
| | 02:05 |
behind the curtains, and do a deep dive
into our client's world.
| | 02:09 |
You must quickly emerge as their visual
translation experts.
| | 02:14 |
It's very rewarding and very stressful.
Exercise and relaxation through yoga has
| | 02:21 |
helped me to balance strength and
flexibility.
| | 02:24 |
Whether it's on the computer, in a client
meeting or in the midst of life's
| | 02:28 |
inevitable ups and downs.
You'll need to find your own effective
| | 02:32 |
anecdote for being frozen behind a
monitor day after day.
| | 02:36 |
Ultimately, career sustainability
requires resilience on a personal level.
| | 02:41 |
Don't postpone cultivating happiness and
inspiration outside of the design world.
| | 02:46 |
Design is a good living, but it can't be
your life.
| | 02:49 |
The best designers continue to learn new
ways of expressing who they are inside
| | 02:54 |
and outside the world of design.
| | 02:56 |
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| Setting creative goals| 00:00 |
When Stefan Sagmeister was asked, what
success means in terms of being a graphic designer?
| | 00:06 |
He said, being able to do the kind of
work that I find enriching for the audience.
| | 00:11 |
The client, the people who work with me
and for myself.
| | 00:16 |
Being able to change directions so new
challenges and growth are possible.
| | 00:19 |
And utter boredom can be avoided.
If we charted Stefan's gauge for success,
| | 00:26 |
here's what it would look like.
What would yours look like?
| | 00:30 |
Would it be the same?
If not, what might you add or take away?
| | 00:35 |
I agree wholeheartedly with Stefan.
And would add that I want give clients
| | 00:41 |
something they didn't know they were
missing.
| | 00:44 |
Helping them discover more than they ever
thought possible.
| | 00:48 |
I asked some of my close designer friends
what their unique creative goals were.
| | 00:52 |
Their answers were varied and
enlightening.
| | 00:55 |
Here are a few of them.
Pushing esoteric boundaries of visual language.
| | 01:00 |
Collaborating with musicians and artists
to influence their local culture.
| | 01:05 |
To mentor young designers.
To be famous and have a following.
| | 01:11 |
To make things that delight.
To start a social movement.
| | 01:15 |
Or just to draw logos like a fiend.
What do you want to be known for?
| | 01:23 |
Here's an exercise that career coaches
sometimes use.
| | 01:26 |
Picture yourself ten years in the future
where you are receiving a major award for
| | 01:31 |
your design accomplishments.
Someones going to introduce you Write
| | 01:37 |
their introduction.
This will help you focus on what you
| | 01:40 |
desire from your work and the effect it
has on others.
| | 01:45 |
You'll have your list of aspirations.
So, each time a new project comes into
| | 01:49 |
your studio can evaluate whether or not
it has the potential to feed that desire.
| | 01:55 |
I like to use the analogy of a mountain
climber and his base camp.
| | 01:59 |
The mountain climber is your creativity
and base camp is the support you need to
| | 02:04 |
reach great heights.
Think of the business side of your
| | 02:07 |
venture as base camp.
If well maintained, it frees you to be
| | 02:11 |
primarily focused on your creativity.
Running a design business isn't for the
| | 02:17 |
faint of heart.
But committing to your goals and
| | 02:20 |
achieving them will make it a
fantastically rewarding career.
| | 02:23 |
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ConclusionNext steps| 00:01 |
Starting your own business can be scary.
There are so many unknowns.
| | 00:06 |
We as designers tend to fear the business
part of what we do.
| | 00:09 |
Because most of us are unfamiliar with
it.
| | 00:13 |
Be gentle on yourself as a new business
owner.
| | 00:15 |
There will be ups, and downs.
You will make mistakes, but dust yourself
| | 00:20 |
off, adjust as needed and move on.
We can't predict the future, but we can
| | 00:25 |
prepare for it.
You will find it to be one of the most
| | 00:29 |
rewarding things to do as a designer.
Just watching this course is a great beginning.
| | 00:36 |
Do great work and make your clients
proud.
| | 00:38 |
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