Last week I was asked to give my thoughts on a young designer's pricing guide that they were preparing in order to launch their business as an independent designer. We'll call him Marcus. If you're a young designer like Marcus then I bet that nothing sounds as glamorous as starting out your career as an independent designer. Dozens of popular designers have made this the new "it" thing that every designer looks forward to doing. I get why it's attractive. You appear to have total control over your career trajectory, there's the allure of setting your own hours, and there's even the opportunity for so-called creative freedom.
I'm not here to discourage you from any of that. It's great to have an entrepreneurial spirit. Maybe you'll get lucky and everything will go right for your independent design business, but I think you need to be warned. Working as an independent designer is definitely not going to be the dream job you think it is, and you'll probably set yourself up for suffering and failure right from the start. I say that, having been there and realized mistakes I'd made which I hadn't even thought were issues. So here are a few points to consider before you decide that working independently is the life for you.
Here's your gut check. Millions of people know how to use design software, and companies like Canva are making it easier for "non-creatives" to do their own passable design work without spending weeks to learn Photoshop. Thousands of other designers are also out there in the market looking for work. So ask yourself: Are you actually good enough to command the attention of enough clients to support your lifestyle? If you're honest, the answer is no. Why? Because the best designers are like the best athletes. They get recruited by major companies. Even worse, those designers eventually strike out on their own after a number of years in agency work, even better than they were before. That means you're going to be up against older, established designers making that jump who were already better than you from day 1.
So we know you aren't the best... at least not right now. You're somewhere in the middle of the pack and you want to work your way up. That means competition, competition, competition and you aren't even competing for the best clients. My recommendation is to take a hard and sober look at how you stand compared to your peers. If you're in the top 5 of all the designers you know in your cohort or area, then you could consider independent work. If you're only just breaking the top 10, then you ought to go work for a company who could use your skills for at least a year before considering independent work full-time. You'll build your expertise and refine your skills, as well as build a good financial grounding for when you finally strike out on your own.
If your answer is "Yeah, I'm really into the design industry!" then please don't try to work independently, because none of your clients are going to feel cared for. The best thing you can do when starting your independent business is to target an industry where your skills or enthusiasm might be best applied. Design isn't that industry because, shocking though it may be, designers don't usually hire other designers. Even when they do, wasn't the idea here to design for clients, not to get hired as another design hand? So pick something you know a bit about aside from design and start there.
When I started out I catered to Private K-12 schools in Orange County. "But I'm a one-stop shop for any design needs," you say. No you aren't. You're a one-stop shop for confusing potential customers who don't really know how design might help them. "Anything you need" is a horrible motto in business. Why spend your time explaining how the packaging design you made for a donut shop demonstrates the right skills for a dentist's web design needs? It's just too confusing for your clients. It's also stupid. I don't know if you realize this, but the reason that dude is a dentist is that he didn't want to learn about design. Not then, not now.
Since I had targeted a single industry, I had several K-12 schools hiring me because they had seen brochures, web banners, and other school-related design work I had done for their competitors. Three became regular clients, and one had me working on a daily basis. I didn't need to explain to them how my skills would be useful, nor did I want to have to do that. Every second you spend explaining and "selling" your credit as a designer to a client is lost revenue because, oh right: you haven't even closed the sale yet!
Make it efficient for yourself. Pick an industry, and hunt for clients in that space. Once you catch a couple, you will be able to build a reputation as a designer who knows how to solve their problems. They will recommend you to others and send more business your way. Whether it's donut packaging, private schools, or dentistry websites, your work for one client will set relevant examples for why future clients ought to hire your services.
Maybe you're something like 22 years old or even younger. Maybe you feel like you have all the energy in the world and so it doesn't matter that you may pull 3 all-nighters for a client as long as you get paid. Well I'm only 29 years old, and I was like that (I'm still a bit like that), but I can feel that my ability to rebound from lack of sleep is diminishing. You may not believe it but the reason that you're working like that is you don't know the value of your work or how to price it. Low pricing leads to overworking because asking too little for what you've offered is the same as offering too much for what you're getting. The only good reason to be burning the midnight oil is that an urgent, extremely lucrative project landed on your plate. Usually that's not the case. You're just desperate for the money and you're overbooked by a bunch of clients who you aren't charging enough.
Knowing the value of your service isn't even enough on its own. How you get paid is super important too, and the manner of payment reflects your value to the client. First off, never work for an hourly rate as an independent business, and dump clients quickly if they will only pay you by the hour. These clients don't see the value of your service, and they are frankly-speaking, the worst to work with. They'll grind you over taking 4 hours rather than 3 to do a project that should rightly have required 8. Kick these miserly gumps to the curb.
There are two payment methods you can use which tell a client you're serious, and which can be lucrative for you. One is price-per-project, which means that you negotiate a rate with the client every time they hire you, along with a timeline and exact deliverables. Everything added on along the way is accounted for by a change order, which you charge them for making. However, the best model is to draft and enter into a retainer agreement with your client. This is where the client guarantees to pay you a fixed rate every month for a preset term no matter how much or how little work they request of you. In return, you agree to be available to them for anything they need. The retainer model is for clients with whom you have a strong work history. This is a little risky, because if you underprice then you may have signed up for a stint in the gulag. Do it right though, and you've got a guaranteed income as well as a solid platform from which to grow your business.
No I don't mean "environmentally sustainable," because I'm not an idiot who wastes my time on nonsense. I mean, do you know how much revenue you will need to cover your expenses, make a target amount of profit, and how many clients or projects it will take to achieve that revenue? When I was giving my thoughts on Marcus's pricing guide, I did some quick math and realized - uh oh - that there was no way he would be profitable. He was offering multiple social media posts per day at a rate of just a few thousand dollars per month. For those of you who don't know, even one social media posts per day can be a big commitment, let alone two or three. So Marcus was essentially offering to fully-commit himself to just one client with this offering, and it turned out that his Gross Income would only come out to $45 thousand.
If this sounds like gravy to you then watch how fast $45 thousand can go down the drain, particularly if you live in Los Angeles which I think Marcus does. First, set aside 15% for Social Security Insurance (yup, you have to pay 15% as a sole proprietor business, compared to the 7.5% you pay as an employee) and another 13% for California income taxes. So now Marcus was left with $32 thousand Gross Income. Now since he lives in Los Angeles, where the average rent is $2,000 per month (give or take a few hundred... mostly give...), that's another $24 thousand gone and he's left with just $8 thousand to cover his business expenses. Maybe we're super generous and he can run everything on just a $600 Adobe annual subscription. That leaves him with a pitiful $6,400 to cover his savings, necessities, and disposable income. Oh right, and whatever happened to that Profit he was supposed to be making? Can you imagine being in Marcus's shoes - working nonstop for just one client - all to walk away with less than $500 per month in savings? This is what it really means to talk about a sustainable business model.
Ok, so I'd bet that the biggest thing keeping you from a job at a company is that you think the work will be boring. You don't want to make company presentations, dull brochures, and super-merpy promotional materials. Working independently, you'll get opportunities to do really awesome, creative, unique and expressive designs for cool clients. Wrong. So wrong. Take it from me, you'll still be making presentations, dull brochures, and super-merpy promotional materials. It's just that you'll be doing it from your home office which, maybe you haven't checked recently, is not exactly the chic design studio of your dreams either. Art schools do a terrible job of conveying this message, but most client work in the real world are really uninspiring. If you really want to do fantastic work, then expect to put in the hours on dull stuff before any client is willing to bet on your fantastic never-before-seen concepts.
You can't know for certain if you want to work independently if you don't know the other side. First off, a full-time employed position at a company is guaranteed income. I just don't think that people graduating from art school really get the value of a steady income. They are too spoiled. Secondly, companies offer benefits like health insurance, 401K programs, and you pay less in Social Security Insurance. That's a boon to your personal expense accounts which independent work can't match (at least early on). Thirdly, you underestimate how much you can learn by working in a company. You're in close contact with people whose insights will make you a better designer, especially business insights. I regularly learn new things from my boss, who is not a designer, and whose three favorite phrases are "I don't get it," "this isn't rocket science," and the always sarcastic, "design is easy." Working for him I've learned about email marketing, fundraising funnels, public relations, and received tangible insight into how valuable those things can be. The difference between working at a company and working independently is that when you're on your own you don't even know how much there is that you don't know.
A track record at established companies will give you street credit when you start your independent business. There's nothing like being able to tell a client that you've "worked with some of the biggest names in the business," or that you've got "a track record of success on large design initiatives" which only happen at a company. When you say to clients that you've worked 5 or 10 years at a series of companies whose names they recognize, you're really telling them: You can trust me, thousands have and I've come through. You may not know me well, but you've seen my work already. I'm giving you a shot at what the big boys have. I'm a big opportunity for your business.
Companies offer better chances for you to grow. Remember how you aren't the best designer? Well that's not set in stone. Maybe you start out at a small company, build your portfolio a bit, and then move to a more prestigious, and then yet another more prestigious company. Maybe that's a place like Adobe, and when you go solo you might actually be one of the best in the market. You may even have some management experience under your belt by the time you are ready to leave - which you will need as a sole proprietor. This progression can happen much faster and more smoothly than working it up from the bottom on your own.
Like I said in the opening paragraph, my goal here isn't to discourage anyone. However, if you are serious about business then you'll be thinking about these points and a whole host of other ones before pulling the trigger. If this article changed your mind about independent work, look, that's not a failure for you. It just means that you are better informed to make the right career decision. I hate the idea that there are hopeful conservative designers out there discouraged from the field because they got into it independently and became disillusioned. You can make it there through hard work and smart decisions, which means addressing these tough issues from the start.