I’ve been searching on these forums for insight into how people got their first ID job.
Lots of posts have parts of peoples stories (like this, this, this and this) but I’m particularly interested in those who have taken the leap and done their own thing (either freelance or founded a business).
I’d really appreciate if people would like to share their stories.
The most important part of the designer-client relationship is the relationship.
Put yourself into the shoes of the client. Why are they using you? Because you are “better” than the next? Hardly. It’s because there is less risk with you. They know what to expect when they put out $xxxx. They know it is easier to use you instead of going to something unknown. They know they won’t need to spend time getting the “new” guy up to speed. Their comfort with you is directly attributed to you having put in the time to create that relationship.
This is the reason why cold-calling rarely works. Sure you may hook someone by low-balling on price, but that relationship isn’t sustainable because they will dump you for the next low ball. Sometimes you get lucky and have a client coming out of a bad relationship and you can get them on the rebound. But that is pretty rare.
My firm was hit hard by the dot bomb and my boss was getting his most profitable business from the front-end research. So much so he didn’t want to design much. While I love the research part, I like doing the full monty of product development. I left and took all of the “design” clients with me.
And they left with me because of the relationship I created with them. There was no relationship with my boss.
Growing your client base is mostly by networking your relationships. You meet new people on new projects. People move from one company to another but they hold on to your relationship. I think the largest problem, at least for me, is the amount of work required to maintain that relationship. There is a lot of salesmanship involved. I prefer to spend my time on the nuts and bolts of product development.
At least half the designers I’ve worked with have small-medium sized personal client projects going on the side. Like Cameron said below, it’s not a stretch to jump into that full time if there’s a layoff.
Getting clients can be tricky, but doing good work can bring you recommendation work from happy clients friends - if your doing side projects and you get popular, it can be hard to turn down work. Another good jumping off point
Here’s my working-for-myself story. I personally lived off freelance design from 2007 to 2008, then again for a half year in 2009.
Back in 2004, good friends I was working with at a startup had encouraged me to start a S-Corp ( I recommend all designers consider this). Doing taxes/books every year for small projects helped prepare me for book-keeping with bigger money later. I did smallish $3-5k projects back then, and sometimes contracted myself to companies (rather than use an agency) for the tax benefits.
Years later, when they closed a satellite design office in SJ where I worked, I was getting together with the girl who’s now my wife who was living in TX. I had enough side work interest that I went rouge, planning to work independently full time and move there to be with her. I took on a big project with a friend from my apartment in SF and all of a sudden I was making 40% more and working about 40% less (those were the good times). I worked with companies that worked with my main client, and they gave me work. Old companies I worked with heard and came to me even more little projects. It was going well, just by word of mouth, and I moved to Houston to set up shop there.
Then my main client in Austin ran out of funds and disbanded (after producing product) but the side work kept up. I started teaching at a local university to get me out of the house and find student helpers, but mostly because I was working all alone. I did LOTs of business development trips to California Austin and Colorado trying to strum up new business, which was sometimes successful. I rented out my old place in SF so I had a crash pad couch, some tools, and a bike out there - sometimes I’d be dressed up for a meeting and on my bike with my presentation case, riding ‘the last mile’ to a meetings around the bay! It was wild, but started to get a little stressful.
Eventually I missed working with a team and doing all the bookkeeping, so I joined the designers at NASA full time (and because space ships are awesome!). When the horizon looked gloomy there with budget cuts, and the wife got a transfer back to SF - we jumped on it and I started back up right where I left off. I’ve been full time at a firm for several years now and prefer it at the moment, but still keep my business alive just in case + I am slowly learning about international business.
I don’t think I’d do things exactly the same if I did it again and would make sure I had a more social environment wherever I worked. I’d also try to focus on exactly what I wanted to be designing, rather than accepting just any project that came in (this is why I went for an MA in Branding Strategy and interviewed firms worldwide to see how they did it). Anyway, hope this is in-line with what you’re looking for
BTW, another way people do their own thing is as a manufacturer
I know of a few guys, like Rob Law of Trunki here in Bristol, who built solid skills as a consultant while developing his own product on the side. When he went for funding and got it, he quit and did it full time. The story and designer is impressive, check these videos if you’re interested link
Layoff forced me into it. Stoking the fires in my contacts got me through. Developed enough reputation to gain some good clients, one of which has recently approached me about exclusivity. That’s the market today. It works pretty well and gives you and your clients the chance to “kick the tires” to see if the relationship will blossom.
I had heard of the Dragons Den Trunki story. That show really pissed me off when I watched one episode where one of the ‘dragons’ threaten a contestant with stealing their work and knocking it off in a chinese factory, so I took great joy in his success in the face of the dragons shabby treatment of him.
There are different classifications of companies in the US, from “Sole Proprietorship” (easy) to 'Partnership" to “Limited Liability” to the different corps. My friends (and parents) recommended S-Corp for the tax reasons… my company pays me via dividends + a small salary, allowing for a smaller tax amount per year. It’s more work to manage however.
Trunki is a great design entrepreneurial story, and Rob is a good designer - I’ve dug up his work in KD’s archives.
related, there are examples of independant designers going rouge successfully: Yves Behar of FuseProjest was a frog designer at first, Scot Wilson of MMNL was at Nike & IDEO I believe, Hartmut of frog design, Jacques Gagné of Gecko Design in San Jose was a frog too, founders of inCase were ex IDEO, Whipsaw, etc etc… probably all the firms really.
I’ve been freelancing since graduating in 2009. I was really struggling to find any graduate design jobs, never mind get interviewed.
I chanced upon some technical drawing through an agency and went freelance because I could make more money. The drawing work led to a bit of furniture design, and even teaching design to inmates of a prison.
Unfortunately 2 years later this all dried up and I moved back home to Bristol where I eventually got a job at an engineering company and hated it. 6 months later, a company contacted me to work on a very big project that should last over a year, maybe into 2, and hopefully supply with more projects.
I’m always on the lookout for opportunities and new clients whilst I’ve got this big job. I’m not making lots of money but am generally enjoying the lifestyle. I think the one thing you need to freelance is patience as things don’t happen quickly, especially in this economy and if your young. It also helps to be opportunistic, determined, and driven.
Have any of you taken out small business loans to freelance? I need to update all my junk as my current setup isn’t cutting it at all. After looking into prices and whatnot about $10,000 is what I need for a new computer, software, and getting personal marketing things together (cards, website, photos for website, etc.). I don’t really know what I need to do to get a loan, or how a small business loan works.
This is a great question for a thread, hopefully we get a lot more responses. It looks like the biggest thing is connections and happenstance, which seems obvious, but it’s always nice to have it reiterated with the unique details of each situation. Also being determined, hardworking and reliable seem to help. Keep 'em coming inde-pros!
Just started a Limited Company in the UK… seems very similar to the US system with a couple of exceptions.
Accountants are MUCH more expensive here, and just as critical to have for filings, etc. Like double the US rates I pay.
There are not as many tax advantages (from what I understand now). The US gives more breaks to promote small business.
The government watches you much more closely here, monitoring your bank account even.
If you have a non-public company, any person can still get a look at your books - unlike the privacy of US companies.
Filings and working with the UK Government is MUCH easier than the US. very user friendly websites and modern ways to file.
One last thing - Wave Accounting has been a great find for doing the books. You can do you accounts in the cloud with a good software for FREE. Just like Quicken online, but no monthly fee. There’s even an OCR app for receipts that you can run from your phone. Downside, Cloud means you can’t use offline.
Small business loans can be hard to get unless you are an established business. Credit cards, however, are not. If you only need $10k, that’s usually the easiest way, unless you can get it from family and friends. Also, almost every business loan at this scale will require your personal guaranty and have pretty onerous repayment terms, so it’s basically a personal loan anyway. You can’t shut the business and walk away from repayment. Once you have existing cash flow there are better financing options.
That’s how my business was started- less than $10k credit card debt to start (materials, initial manufacturing run), fulfilled out of my garage. Then just bootstrapped it up with sales proceeds and small loans, until I could setup my own manufacturing facility. Takes a long time that way, and you’re constantly scraping by, but the risk of spectacular failure is much lower.
I agree with Scott, you will not get a sbl if your company does not have any income. The loans are not designed for startups.
About 2 weeks after I started my business, my computer crapped out an I needed to spend $2K on a workstation. Luckily for me I had just landed a large project where the 50% up front covered that expense.
Prioritize the required and desired and use the up front money to finance the startup costs and use the final payment for day to day costs. Granted, that is an over-simplified budgeting/accounting system, but my point it to manage all of the costs as you are building the business.
What is the best way to handle tools/equipment, etc?
Through curiosity, hobbies, etc. I have something like 70-80% of a small design studio in my living room. Much of which has been purchased used, or perhaps a long time ago and I have no receipts or records or anything. If I go forward with a product I’ve been working on and start a business (I’ve been advised an LLC would be optimal for a one-man show), am I best off leaving these as personally owned things or do you ‘sell’ them to yourself?
I just made the jump a month ago to freelance. I had been working at a design consultancy for 5 years and started to feel the itch to see what else was out there. I also wanted to free up more time for myself for side projects and personal interests such as brazing and building bicycle frames.
Being involved in the design community helps create a broad network. I had talked about freelancing for a while and it was other friends in design that encouraged me to take the leap. The final decision came when someone reached out and said their firm could use help. I’ve been working for them on a contract basis and love it.
Great post, being new to freelancing the advice and stories are much appreciated!
Well, sort of. My arsenal includes a laser cutter, 3D printer, stout desktop and a couple machine-running computers, Cintiq, tons of hand tools, materials, etc etc. that I’ve purchased over the years for personal use. Nothing crazy but a pretty solid “prosumer” setup that could feasibly be used to get something off the ground.
I just wasn’t sure if it would be worth while, or even possible, to transfer the ownership of these things to a business for tax purposes (thinking if not purchase price then depreciation?), or if it would even be worth it on a relatively small, yet not insignificant amount of capital. I’m not counting on making much if anything the first year so it may not even do me any good! Conversely, would there be any perks to leaving things privately owned?
I am no accountant and you should talk to an accountant for a definitive answer, but yes, your business can use those as an asset and get a deduction from your taxes as the asset depreciates. You can’t get full value for them as your business “acquired” used assets.
The questions for the accountant is how you assign a value to the assets and what depreciation schedule to use for each asset. Some assets you can write off entirely the first year, others, no.
iirc, all of this is handled through your schedule C.