Can you imagine anything better than doing something you enjoy while in the comfort of one of your favourite places - your home - and making money while doing it?
Starting a home-based design business is the dream of many designers. The idea of giving up the daily commute, of no longer sitting through rush hour traffic, and nobody looking over your shoulder while you work sounds desirable. Plus you get to choose your hours, dress however you want and be there for your family whenever they need you. It’s very tempting.
These and many other perks sound very appealing to designers dredging away at their daily 9-5 job. It’s a perfect life. Or is it?
Before you take steps towards setting up your own home-based design business, you should first do a self-assessment of yourself and your situation to determine if the solopreneur life is for you.
When it comes to running a home-based design business, there are three options; casual, part-time and full-time.
A casual business is one where you spend less than 10 hours per month on your venture. Perhaps it’s doing small odd projects for only one or two clients. The income you make while working casually gives you a little bit of extra spending money or helps pay a bill or two as it supplements your other full or part-time income.
A part-time design business is one where you dedicate between 10 to 40 hours per month. You might have a hand full of clients, and the money you earn adds nicely to your overall household income. You can run a part-time business while working another part-time job or even a full-time job if you’re devoted.
Many designers start a part-time business while on maternity or paternity leave. It’s a great way to stay mentally active and socialize with other adults while caring for your new bundle of joy.
A full-time design business requires your full attention daily. You should be spending as much time on your full-time business as you would if you worked 9-5 for someone else.
As your main source of income, you should be working with several clients, and when you’re not designing for clients, you should be devoting your time to acquiring more clients.
Those are your three choices for running a home-based design business.
But before you jump in, you need to determine if you have the self-discipline to work in an unstructured environment. You also need to determine if you are willing to take on the financial and personal risk of starting a venture that may not work out, especially if your new design business is your only source of income.
If you’re on your own, this might not matter as much. However, if you have a family, you must realize that starting a home-based business is not only a significant adjustment for you but them as well.
You need to speak with your family members about your need to dedicate yourself to starting, growing and eventually succeeding in this venture. If you don’t discuss this with them beforehand, they may believe that since you are at home, you have the time to do extra little tasks around the house.
This “added benefit of working from home” may seem harmless, but these things tend to add up and take time away from your business and impede your success.
Anyone who works from home will tell you that it’s easy to get distracted. The lawn needs mowing; the dishwasher needs emptying, the new season of that great show just dropped on Netflix. Do you have the confidence and self-discipline to devote your time to work in the face of all the distractions you’ll face daily?
Also, if you’re a workaholic, do you have the self-discipline to say “enough’s enough” and stop working? Working day and night may seem like a great way to grow a business, but it’s no way to live your life. It’s great to hustle, but not if it leads to increased stress, health issues and self-neglect.
If you’re working casual or part-time, you may be able to get away with working from the kitchen table. But that’s no way to run a full-time business. It’s impossible to concentrate on your work if family members and other distractions are constantly hindering you.
By dedicating a designated work area in your home, you make a statement saying you take your undertaking seriously. A dedicated work area provides the atmosphere needed for you to fully concentrate on your work and have the quiet and privacy necessary for important business calls.
If a dedicated work area isn’t possible, you must explain and make arrangements with your family to not disturb you while you are working. This may mean keeping the volume low on music and the TV or even moving their activities to other areas of your home while you are working.
Resourceful Designer is aimed at graphic and web design business, but I also know there are plenty of other types of creative endeavours you may want to start.
If your creativity revolves around other creative arts, such as pottery, sculpting, stain glass creations, sign making, T-shirt printing or vehicle wraps, you may want to consider operating your business in a venue other than your home.
Yes, there will be other things to consider, but not all creative businesses are suited to be home-based businesses.
Most home-based designers I know, myself included, chose to meet clients at their own offices or some other location such as a coffee shop. However, if for some reason you must meet clients in your home office, you need to consider if your home is set up to receive clients.
If your office is in the basement, will the client need to navigate through a cluttered kitchen or areas strewn with children’s toys to reach your work area? It doesn’t create a professional image and could impede your growth.
If meeting in your own home is your only choice, such as for moms or dads on parental leave, try to find a neutral area in your home that you can keep clean and clutter-free to meet with clients.
A desk in the corner of your bedroom may be all you need for now. But what about a year or two years from now? Do you have the room to grow should you need to add filing cabinets or scanners and printers to your mix?
Humans are naturally social creatures. Even introverts need some time around other people. Most people satisfy this itch through their work environment, but not so with people who work from home.
When you run a home-based business, there’s nobody stopping at your desk to chat about their weekend or the new movie that just came out. There’s nobody to take your coffee or lunch breaks with, and nobody organizing after hour staff get-togethers.
If you are the type of person that craves regular social contact, you may quickly find the isolation of working from home too much. If this sounds like you, consider joining social and professional organizations or take part in other social activities outside your home to keep you in touch with other people.
Something often overlooked when contemplating working from home is the outside world. There’s no gossip or industry news to hear when you’re working by yourself. So how will you stay on top of new tools, resources and developments in the industry?
You need to make an effort on your own to seek these things out. Subscribe to newsletters, magazines, blogs and YouTube channels. Make friends with other designers and keep in contact with past co-workers.
Just because you’re working all by yourself doesn’t mean you need to isolate yourself from the world.
There are so many benefits to starting a home-based design business.
And although I continuously push this endeavour. I know that it’s not for everyone.
You’re the only person that can answer the question. “Is running a home-based design business for me?”
In Part 2 of this series, I discuss writing a business plan and dive deeper into planning your workspace.
Tip of the week Identify yourself when answering the phone.
If you want to sound professional, you should always answer your business phone by naming your business and then who you are.
For example, you could say: Acme Design Studio, John speaking. This eliminates any potential confusion clients may have as to who they are calling. They may not realize you are a one-person business working from home.
Newcomers to the freelance life often believe that the success of a graphic or web design business lives or dies with their design skills. This is partially true. After all, if you are not a good designer, you’re going to have a hard time being successful on your own.
But the truth of the matter is, your skills as a designer are second to how good a salesperson you are. Because if you cannot sell, you might as well give up your freelance dreams. Get hired somewhere and earn an hourly salary to design all day, while someone else handled the selling part.
There’s nothing wrong with that scenario. Many designers spend their entire career working for someone else, and they’re delighted doing so. Running a home-based design business is not for everyone. However, if you do give it a go, you better feel comfortable selling because your business will depend on your skills as a salesperson.
Have you ever heard the saying, “Good marketing can sell a bad product, but bad marketing cannot sell a good product?” The same applies to home-based or freelance design businesses.
Someone good at selling, but a mediocre designer can still make a living as a freelancer. However, a fantastic designer that has no sales skills will have a difficult time staying afloat.
So how do you become a good seller? Like with everything else, it comes with practice and experience. Although being a people person does help. Let’s break it down.
First, you need to get the notion out of your head that selling is about making a sale. It’s not. The sooner you realize this, the better you’ll be at sales. Selling is not about the exchange of money for services, it’s about giving a client relief and lowering their anxiety when it comes to spending their money.
Clients come to you because they need something. It’s that “problem” that your job as a designer is to provide a “solution.”
However, even though the client realizes they need something from you, they feel a reluctance to part with their hard-earned money to get it. If you can put them at ease with that notion and make them realize what their money is buying, they’ll be more willing to spend what is necessary.
How do you put a client at ease? The core principle of successful selling is making the client feel cared for and appreciated. When someone feels cared for and appreciated, they let their guard down and open up, and become much more receptive to ideas.
If you offer a client a solution to their problem, and you make them feel cared for and appreciated in the process, it becomes much easier to lead them through the sales process.
Let’s break the sales process into basic components.
Imagine the sales process as a video game. In a video game, you can’t just turn on the game, jump to the final level and expect to win. Video games are designed, so every level along the way equips and better prepares you for that final level and victory. The same principle applies to the selling process. You can’t win over a client by jumping to the final level of the sales process (which is price by the way).
Before you discuss price, you need to lead the client through the various levels of the sales process. Think of these levels as objection points. Obstacles to overcome before moving on to the next level of the “video game sales process”.
If you cannot get a client to trust you, there’s no point moving forward because you’ll never make the sale.
Think about it. What was the last thing you purchased from someone you didn’t trust? I can’t think of anything. However, I can think of several things I did not buy because I didn’t fully trust the person doing the selling. It’s the stereotypical used car salesman. No matter how much they smile and say the right things, you always wonder what they are not telling you.
So the first level of the sales process is getting the client to trust you. How do you do that?
There are many, many ways to get someone to trust you. Here are the two most important ones, especially when pressed for time, such as on a phone call.
Trust is about focusing on what is important to the client and less on what’s important to you. If you can prove to the client that you care about their concerns and genuinely want to help them, they’ll trust you more.
When a client comes to you with a design project, they imagine it will fix the overarching problem they’re facing. However, there may be many pain points to that overarching problem you need to address.
A client may say they need a website to promote and sell their services. But there’s sure to be some underlying issues they may not be talking about. Things like.
As you’re listening to the client, try to pinpoint their various pain points and be sure to acknowledge and comment on them. Clients will appreciate the added attention and quickly realize you care about them, and not just the sale.
Once you’ve established trust, it’s time to move to the second level and see if partnering with this client is a good fit.
Just because you’ve helped other clients with similar problems doesn’t mean you are the right person for this particular client, or that this client is the right fit for you. Establishing your compatibility continues the trust-building process.
Tell the client that before you proceed any further, you need to determine if you are the right people to work together to solve their problem. Ask them questions in a mini discovery process sort of way, learn more about them and their business. Find out what results they are expecting from you and from the services you are to provide. How will they deem the project successful?
A great question to ask is, what might prevent them from seeing the results they expect if you provide them exactly what they’re asking for? This sort of question forces them to look internally. What happens if you design the perfect logo, website, poster, etc. and yet they still don’t see the expected results?
Asking this question shows them you care, and are more interested in their success than you are about making the sale. Questions like these help both of you determine if you’re a good fit to work together. If you can show you’re a good fit, they will be more open to whatever you propose going forward.
Level three and beyond is where things get a bit more challenging to explain. Once trust is established by showing the client you care for and appreciate them, and you’ve proven that you are a good fit to work together, It’s time to dive into the project itself.
Up until this point, your conversation was mostly about the client and their business and a tiny bit about the services you can offer them.
If you followed the sales process correctly, you should find it much easier to discuss the design project because you’ve established a level of trust and a connection with the client through levels one and two.
Your job is to now lead the client through whatever “objections” they may have regarding their project and your services and putting them at ease for each one.
Because every client and every design project is different, I can’t guide you through level three. Sticking to the video game analogy, there are no “cheat codes” for this part.
But by openly listening to your client, determining their pain points, and their concerns, you should be able to address any objections they may have as you discuss how you can help them achieve their desired goals.
That brings us to the final level, price. This is where the video game analogy falls apart because, unlike a video game, this last level is the easiest.
By this point, the client should be fully engaged and ready to work with you.
Price is now just a formality.
Provide the client with a reasonable quote for their project and chances are they won’t hesitate to accept because you’ve shown them the value of your partnership.
That’s the power of the sales process.
What have we learned?
People have been conditioned not to trust salespeople. So the trick to good selling, it to not sound like you’re selling. If you can establish yourself as an asset to the client, an investment and not just an expense, you’ll have a much higher chance of closing the sale.
I read this quote on an article written by Scott Hoover, he credits it to someone named Steve: “Sales is leading people to a solution favourable to you, via a solution that is favourable to them.” And that translates to a successful sale is a win for both parties involved.
You complete the sale by building trust and showing the client you appreciate and care for them and their success. And they return the favour by accepting the price you present them.
As a bonus, when done correctly, these selling tips can help transition you to a value-based pricing strategy because the client will see the value in hiring you and will be willing to pay for the investment.
Let me know by leaving a comment for this episode.
Tip of the week Matching addresses
If you pair a website with a Google My Busines listing, make sure the address is written exactly the same way on both platforms.
If the address is 123 North Main Streeton Google my Business, don't write it 123 N. Main St.on the website. The two need to be identical in order to take advantage of Google's ranking algorithm and place higher in the search results.
If you ever created a business plan, you’re probably familiar with the term SWOT Analysis, but here’s how designers can use it for their projects.
SWOT stands for Strengths, Weaknesses, Opportunities, & Threats. It’s a process first developed at Harvard Business School in the early 1950s. To run a SWOT Analysis requires four “areas,” such as four pads of paper or perhaps a board divided into four quadrants, each labelled Strengths, Weaknesses, Opportunities, & Threats. Regardless of the medium you use, the process goes like this.
By asking questions, you place the answers under one of the four categories. The first two categories, Strengths and Weaknesses, are internal matters you can control. The second two, Opportunities and Threats are external matters that are out of your control.
Here are some example questions and answers you might use when doing a SWOT Analysis for a home-based web design business.
Of course, this is a very simplified SWOT Analysis of a freelance web design business. If you were doing this for your own business, I would expect many more items listed under each section, but you get the idea.
Once you’ve filled out the four categories, you can then use the information to form a strategy for your business to grow and succeed. And who knows, your SWOT Analysis may inspire a change in direction you might not have considered before. That’s the power of performing a SWOT Analysis.
But a SWOT analysis isn’t just used for business plans. You can apply it to products, services, design strategies, and so much more.
As a designer, you can use SWOT Analysis for many things, such as.
Let’s look further into how a SWOT Analysis can help with design strategy sessions.
Let’s say a new startup company hires you to develop their branding. Your first step is to hold a discovery meeting and ask questionsto get to know the client and their new company. Compose your questions in a way that allows you to place the answers in one of the four SWOT categories. For example:
Once you have this information divided into the four categories, it becomes easier to figure out a strategy or direction to take when it comes to designing. You want to build upon the strengths, address the weaknesses, seek out and explore the opportunities, and monitor and defend against the treats.
As a designer, a SWOT Analysis of a design project allows you to dig deeper and uncover opportunities for your clients. With the information you gather, you’ll be able to highlight your client’s needs and create an effective design campaign that takes their strengths, weaknesses, opportunities and threats into mind. This is an added value your clients will appreciate and pay more for.
Maybe your thinking to yourself, this all sound good, but all my client wants is a website. I don’t need to know any of this stuff. You’d be wrong in thinking that way.
No matter how big or small, or what the design project is, you should perform a SWOT Analysis to help you with your decisions. Get your client and their team involved — the more people who participate in a SWOT Analysis, the better the results. But even if you do it on your own, you’ll appreciate the insight it offers you.
A great experiment is to run a SWOT Analysis of your competition. You’ve should have already done one for your own design business to help you position yourself. But doing one of your competition can help you even further as you learn new ways to improve your business.
Run a SWOT Analysis and then ask yourself.
I hope you see why a SWOT Analysis can be relevant to everything you do. Including your own business and every design project, you take on. It helps you develop new strategies for your designs to tackle. It increases your value, allowing you to charge more for your services. And It saves you time on future projects for the same client.
A proper SWOT Analysis should take anywhere between 1 to several hours and should be performed with multiple people when possible, especially those higher up in a company.
Plus, it looks great on a proposal when presenting your idea to a client. They’ll be impressed by your effort, which will increase their opinion of you, and allow you to charge higher rates.
Have you ever performed a SWOT analysis before? Let me know by leaving a comment at https://resourcefuldesigner.com/episode202.
Let me know by leaving a comment for this episode.
Submit your question to be featured in a future episode of the podcast by visiting the feedback page.
This week’s question comes from Kat
After listening to the episode about raising your prices, I wondered how you get local price comparisons? I was just doing a local competition survey and only one person listed anything pricing related on their website
To find out what I told Kat you’ll have to listen to the podcast.
Tip of the week Join Groups
You’ve heard it time and again, as designers, we’re problem solvers. And that doesn’t just apply to design. It also applies to the processes we use while creating those designs. If we can’t figure something out, we tend to want to tinker with it and try to find a solution.
While this is a great way to learn. Sometimes, it’s a waste of time. When faced with a problem, it's always more beneficial for you to seek help in order to find the solution quicker.
Many home-based designers don't charge high enough for their services. They undervalue their work and struggle to find meaningful relationships with great clients. And although it might sound counterintuitive, when you find yourself in this situation, the solution is to raise your prices.
It's been proven time and again that the more you charge, the better and more appreciative your clients will be. But when should you raise your design prices? Below are ten indicators to let you know it's time to increase yours.
But before we get to them, here's a quick way to determine your hourly rate. For the record, I don't believe you should be charging by the hour. The following just gives you an idea of where you stand.
Say you want to make $60,000 per year, a realistic number for a freelance designer that allows for comfortable living. As an employee working 9-5 for someone else, you would need an hourly rate of $28.85 to make $60K annually. But you're not an employee getting paid for an 8 hour day, five days per week. You're a home-based designer, a freelancer if you want to use that term, and there's nothing steady about a freelancer's income.
To make $60,000 as a home-based designer, how much do you need to charge as an hourly rate? Let's do the math.
There are 260 weekdays per year. Let's eliminate 25 days for vacation and other miscellaneous days. (3 weeks vacation plus sick days, medical appointments, children's activities, etc.)
That leaves us with 235 working days per year.
During an 8 hour workday, freelancers average 4.5 billable hours. This adds up to 1057.5 billable hours per year.
So $60,000 per year, divided by 1057.5 billable hours, equals $56.74/hour (let's round it up to $57.)
$60,000 ÷ 1057.5 hours = $57/hour (rounded up)
Although you shouldn't be charging hourly for your design services, knowing your hourly rate helps you figure out if you are charging enough per design project.
All the big business sites (Forbes, Entrepreneur, Inc., Business Weekly) all say the same thing, having a back-log of projects or a waiting list of clients or just being super busy all the time is a sign that you are not charging enough for your services.
The strategy here is that raising your rates, and being more selective in who you work with, will lessen the fell of overwhelm, but the higher prices you're charging will make up for any loss incurred from having fewer clients.
Are you attracting the type of client that doesn't put much value in what you do? Clients that want it all but are not willing to pay much for it? Clients, that micro-manage you complain and criticize your work, or tell you how to do your job? Clients that would leave you in a heartbeat for a competitor to save a buck?
If this sounds like the type of client you're currently working with, raising your rates should fix the problem. Those clients will stop bothering you and go looking for a less expensive solution.
Your new rates will attract new clients who are willing to pay higher prices. Plus, they'll trust and value your services and are likely to stay loyal, even if a lower cost option presents itself.
If clients are reaching out to you but not hiring you, it might be because your prices are too low.
When someone is expecting to pay a certain amount for a project, and you quote a price lower than they expected, red flags go up, and they start wondering if perhaps you're qualified or experienced enough for what they need. They'll imagine all sorts of deficiencies to justify your low prices.
So if you're losing more clients than you're landing, consider raising your prices.
Have you learnt a new skill such as video editing or 3D animation and have added it to your services? New skills and services make you more valuable to clients, and your rates should reflect it.
The convenience of getting more services from you instead of needing to hire additional people is worth the extra expense to clients.
A strategy used by many freelancers is to price-match their competition or even undercut them. This only works if the service you offer is equal to, or inferior to what your competition offers.
If you believe you are a better designer than your local competition, then indicate it with higher prices.
From a client's perspective, a designer charging $3,000 for a website must be a better web designer than one charging $2,000. Many clients want to work with the best and won't hesitate about the price.
On the flip side of #5, if your prices are much lower than your competitions' prices, then you'll develop a reputation as the cheapest designer around, which is not a good thing. If you're viewed as the cheapest design, clients will never take you seriously.
Face it; inflation is as sure a thing as death and taxes. To remain profitable, you must match the inflation rate with the money you bring in.
Keep track of your business expenses year over year, and if you notice your expense costs going up, make sure to compensate for them with a price increase.
The best strategy you can employ is to raise your price a little bit every year. If you wait too long before increasing your rates, your clients will feel the impact.
It's much easier for a client to accept a small 5% yearly increase in your price than to accept a 25% price increase after five years of paying the same rate.
By choosing a niche, you're establishing yourself as an expert in that area. And as an expert, you deserve to be paid more for your expertise. It's the reason doctors with a specialty make more money than general practitioners. It's their expertise and perceived value.
Clients are willing to spend more to hire someone who understands them.
A perfect way to see if a rate increase is to test it out. If you usually charge $600 for a logo design, try charging $800 the next time someone asks. If the client agrees, it's a good indication that a price increase is in order.
What it comes down to is this. If you are not charging what you are truly worth, you are doing your clients a disservice. Being the lowest or second-lowest designer in your market has no advantages to you. It's great for the cheap clients looking to hire from the bottom of the barrel, but that does you no good. In fact, it could dig you into a hole that will be very difficult to get out of.
You should be pricing yourself above average if not closer to the top when it comes to your local competition. If you're not there now, do something about it.
Don't worry about increasing your prices; everybody does it. In fact, if you don't increase your prices, you'll be falling behind as the price of things like fuel for your car, utility bills, groceries, clothing and all your day to day necessities go up.
It's a case of "you get what you pay for," and some clients are willing to invest in the best.
Lower priced designers are simply a body for hire, easily replaceable. When you charge premium prices, clients will treat you with respect and trust your authority.
Designers who charge more tend to work with fewer clients, allowing them to devote more time and energy to each project, producing better results for their clients.
With fewer clients who better value your work, and who see better results from dealing with you, it's inevitable that you'll build better relationships. And better relationships mean more recurring work and more referrals.
Once you start charging premium prices and start landing new clients, you'll feel great about yourself. That confidence and self-worth will be evident when it comes to networking, promoting and marketing your services. People will take note and want to work with you.
What are you waiting for? Raise your rates today.
Let me know by leaving a comment for this episode.
Aliases are an often overlooked feature of the MacOS. Aliases act as a link or portal to its original counterpart on your computer. Opening an Alias of a file will open the original file, Opening an Alias of a folder will take you to the original folder.
To create an Alias, Right-Click on a file or folder and select "Make Alias" (Create Shortcut on Windows). You can place your Alias files anywhere on your computer for easier access to the original file/folder.
Listen to the podcast episode to hear how I use Aliases to help with file management and to improve my productivity.