How to Start a Graphic Design Business
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Starting a graphic design business from home can be a great option for those with a passion for design. While clients in many industries prefer the safety of large and established companies, small businesses, freelancers and contractors are common in the graphic design world. With a strong skill set, creativity, and the right tools, a graphic designer can successfully take on projects big and small from the comfort of home.
Below, we’ve done the legwork for you to provide a free guide to starting a home-based graphic design business today.
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What Does a Graphic Design Business Do?
Graphic design businesses manipulate text (typography) and images (photos and illustrations) to communicate the messages of their clients. Graphic designers often focus on a specific area of design, such as company logos and branding, website design, product packaging, advertising or book jacket design.
Steps to Starting a Graphic Design Business
Create a Business Plan for Your Graphic Design Business
Before you get started, you’ll need an idea of what resources you’ll need—and how to monetize your business in a practical way. We’ve answered the biggest questions about clients, costs, and profits below.
How do I get clients?
Maintaining a steady stream of clients can be one of the most challenging aspects of starting your own graphic design business. Most designers will tell you they get work from “word of mouth.” But how do you build a reputation when you’re just starting out? Below is a list of specific actions you can take to start landing projects.
- Put your portfolio out there: Potential clients often reach out to designers after viewing their portfolios on one the major design portfolio websites, such as Dribbble or Behance. Some designers also offer prints or digital designs for sale on sites like Etsy or Artrepreneur to make a little extra money and expand their audience.
- Post regularly on social media: While it’s tempting to only post your biggest, most beautiful projects, regular posts are critical for keeping you on people’s radars. Creating regular posts can be a challenge, particularly since illustrations and other design work can be very time-consuming. There are ways to simplify, however. For example, some graphic designers we’ve seen highlight small illustrations or typography designs, posting a single letter, small image, or piece of a larger project each day on Instagram (each with plenty of relevant hashtags to help people find them).
- Approach agencies for contract work: While some agencies work only with their in-house staff, it’s very common for agencies to contract work out as well. You can contact the agencies in your area and check out agency postings for contract work on sites like Coroflot.
- Visit graphic design job boards: Job boards aren’t just for staff positions—they usually include freelance and contract work as well. There are job boards geared specifically toward graphic designers, like Krop and plenty of boards aimed more generally at artists or digital creatives, like Authentic Jobs.
How does a graphic design business make money?
A graphic design business typically accepts work on a project-to-project basis. Some designers work with numerous clients, especially when they are just starting out. Other designers develop strong relationships with repeat clients and focus on providing work for one or two big clients that need regular design work.
What should be included in a graphic design project contract?
For each project, designers normally either accept a contract or receive a project request. The designer then carefully reviews or drafts the contract, focusing on the following:
- Deliverables – A detailed description of what the client will receive
- Deadlines – When the deliverables are expected
- Payment – The payment due dates and method of payment
- Copyright – The rights you are and aren’t transferring, and whether you can use the work for promotional purposes
- Cancellation – The conditions under which the project can be canceled (For example, what if the client doesn’t like your initial designs? How many changes and how many hours are you willing to put into redesigns?)
How do I protect my designs?
There’s nothing worse than completing weeks or months of work only for someone else to profit. There are a few steps you can take to decrease the odds of plagiarism or theft:
- Watermark any work sent to clients until full payment is received
- Include copyright information on all client contracts
- Watermark or digitally sign any work uploaded online
- Read the terms of service before uploading work to online portfolios, boards or other sites
- Include disclaimers on online work, such as “all rights reserved”
And if someone does use your work without appropriate payment or credit? Often, simply reaching out with a polite request can fix the problem. It’s also a good idea to familiarize yourself with social media takedown policies.
How much money will it take to get started?
At least $3,000 in basic equipment—although you may have much of it already. Digital designers, at a minimum, need appropriate technology and software to produce work. This commonly includes a laptop ($1,000+)and a tablet capable of illustrations, such as an iPad Pro ($799+). You’ll also need to pay for regular printing or invest in a high-quality printer. It’s also a good idea to back up work on flash drives or an external hard drive.
Additionally, you’ll need licenses for popular design software. Adobe Illustrator, for example, is only available by subscription (starting at $19.99/month). Subscribing to the entire Adobe “creative” package (which includes Photoshop, InDesign and many other programs) starts at $49.99/month.
For self-marketing, designers will also benefit from a website and business cards, which can be as little as $100 if you do the bulk of the website-building yourself. If you hire a professional to build your website, you could easily spend hundreds more.
How do much graphic designers make each year?
On average, a graphic designer makes just over $50,000 a year across the US, but it varies widely state to state.
According to Forbes, graphic designers in Washington DC average the most at $71,180. New York and Massachusetts have the next highest average salaries at just above $64k. On the low end, designers in South Dakota and Wyoming average less than $40k a year. Hawaii, Alaska and Arizona have seen significant salary growth over the last few years, making these states more competitive. These states now average more than $50k a year.
How much money you make also varies depending on your area of design. The market for traditional print work like newspapers and magazines is slowing, but the demand for digital designers is holding strong. Digital designers proficient in a range of design programs and with a basic knowledge of coding and developing can often command higher prices for their skill set.
How much should I charge?
While it depends largely on your experience, portfolio, location, and competition, novice graphic designers may start out on the low end at $25 an hour. However, hourly rates are frequently much higher, ranging from $50-$200 an hour.
Select a Name for Your Graphic Design Business
Have a great name idea? Before you start marketing and branding your business, you’ll need to ensure your name is available. Most states prohibit or restrict businesses from adopting names that are already in use. Even if it’s legally allowed, a copycat name puts your business at risk of a lawsuit.
See if your business name is available in your state with our Free Business Name Search.
Trademarks and Domain Names
Plan to trademark your business name? You can see if the trademark is available on a website like Trademarkia. It’s also a good idea to see if the domain name is available, which you can do on websites like Network Solutions and GoDaddy. Even if you don’t plan on putting together a website right away, you can buy the domain name to make sure no one takes it in the meantime.
Choose a Business Structure
Should you form an LLC? A sole proprietorship? Your choice of business structure will affect many aspects of your business, from liability to taxes.
Sole Proprietorships & General Partnerships
If you don’t file any paperwork to legally form a different kind of business—you have a sole proprietorship or general partnership. Essentially, these are “default” business structures. A sole proprietorship has one owner, and a partnership has multiple owners.
These structures have a few initial benefits. They’re easy, fast and cheap to start and maintain. However, the limitations and risks of these business structures quickly become more apparent as your business grows. In both of these business types, you are your business, legally speaking. Your company’s legal business name is YOUR name—so you’ll need a DBA to operate under any other name. Any business debt is YOUR personal debt. If anyone sues your business, they are suing YOU personally.
LLCs & Corporations
Limited liability companies (LLCs) and corporations are business entities formed at the state level. The entity is legally separate from its owners, meaning the owners are not personally liable for the debts and obligations of the business. As a separate entity, the business also has multiple tax election options. For example, both LLCs and corporations can choose to be taxed as S-corps if they meet the requirements.
LLCs and corporations are not quite as simple and inexpensive as default structures. LLCs and corporations come with formal requirements like state reports. They also have more fees than default structures, such as formation and annual report fees. However, the benefits of an LLC or corporation—especially liability protection and tax flexibility—are significant.
Legally Form Your Graphic Design Business
If you opt for a sole proprietorship or general partnership, there’s no formal paperwork to file to legally create your entity—you just start selling your product or service. However, you will not have any liability protections or tax flexibility.
LLCs and corporations are formed by filing paperwork with a state agency, typically the Secretary of State. To start an LLC, you file articles of organization. To start a corporation, you file articles of incorporation. In most states ,you can file these forms online or download a paper form from the state’s website.
Whether you’re forming an LLC or corporation, your articles will require certain basic information about your business, such as your company’s:
- business address
- registered agent and office
- business purpose
- names and addresses of members/managers or directors/officers
- number of authorized shares (for stock corporations)
You’ll also need the signature of someone authorized to sign on behalf of the business, along with the state’s filing fee. Fees vary by state but are typically between $100 and $200. If you hire Northwest to form your LLC or corporation, we complete and submit your formation paperwork on your behalf for just $100 plus state fees.
Create Internal Policies and Procedures
It’s important to put your company’s internal policies and procedures in a written document, especially if you’re starting your business with others. Partnerships have partnership agreements. LLCs have operating agreements. Corporations have bylaws.
These documents look a bit different for each kind of business, but they serve the same general purpose. They ensure there’s a clear path forward for any major issue that may arise, from changes in ownership to closing the business. LLCs and corporations also typically need an operating agreement or bylaws in order to open a bank account.
Get an EIN and Register for Taxes
Nearly all LLCs and corporations will need to request a federal employer identification number (EIN) from the IRS. The IRS uses the number to help identify your business on tax filings. If you file corporate income taxes, have employees, or file certain franchise taxes, you must have an EIN. An EIN is also a common requirement for opening a business bank account. Most businesses can request an EIN by filling out the IRS’s online form.
Your EIN is for federal taxes—but you’ll likely have state and local tax obligations as well. You will most likely need to set up an account with the state’s Department of Revenue, and you may need to apply for a state tax ID or a sales tax license as well.
Learn more about how to Get an EIN for your business.
Open a Bank Account
A business bank account keeps your personal finances separate from your business finances. For LLCs and corporations, keeping separate finances is essential for maintaining liability protection. To open an account, LLCs and corporations typically need to bring a copy of their articles, their operating agreement or bylaws, and their EIN.
Obtain Required Licenses and Permits
Many businesses will need a business license to operate. Licensing information—as well as any zoning requirements or other permits—can usually be found on the city or county website.
If your home is part of a homeowner’s association, you’ll also be subject to any of their restrictions for home-based businesses. Some areas may also require home-based businesses to obtain a Certificate of Occupancy (a document certifying the property owner has given the business permission to operate).
Next Steps for Your Graphic Design Business
After your business is up and running, there are a few additional steps you may want to take as you grow:
- Get online: With your domain name, you can create a business website. If your graphic design background includes coding experience, this may be a fun and easy project. If not, you can hire a professional or use a website-builder like Wix, Squarespace, or WordPress. You may also want to invest in online ads through a program like Google Ads.
- Hire employees: Hiring employees requires quite a few steps. You’ll need to get an EIN, have employees fill out a W-4 and I-9, report the new hires to the state, set up withholding, pay for unemployment insurance, distribute any required documents and notices to employees, and display wage and safety info in the workplace. Employer.gov is a good place to start, followed by your state’s tax or labor office.
- Get business insurance: While LLCs and corporations protect you from personal liability, you don’t want your business to go bankrupt in the face of an accident, injury or other disaster. At minimum, it’s a good idea to look into general liability insurance. Home-based businesses can sometimes add insurance onto their homeowner’s policy.
How Do I Know if a Graphic Design Business is for Me?
What’s it really like to work in a graphic design business?
Many people think that running a graphic design business is just drawing all day. While drawing is a part of the job, graphic design is much more—it’s typography, marketing and branding. And a large amount of time isn’t spent on designing at all. It’s answering client emails, arranging meetings, pitching ideas, trying to figure out why a vector isn’t working right, learning new programs, maintaining your portfolios and social media accounts, and more.
The best parts are producing beautiful designs that you love and your clients love. Not every day is a slam dunk, however. You’ll produce work you love but isn’t right for the client. You’ll also produce work you’re less passionate about to meet your clients’ wishes. But if you love design, there’s much to love about running your own graphic design business.
What does it take to succeed in the world of graphic design?
No matter how skilled you are at graphic design, if you want to run your own business, you absolutely must be able to communicate well with clients. Clients often don’t have design backgrounds, and they may have trouble expressing what they are really looking for. Designers need to be able to ask the right questions to identify the goals of the project and the aesthetics of the client. They also need to be prepared to translate design concepts into layman’s terms.
Also, running a successful graphic design business requires self-discipline. You may not always feel inspired, but deadlines are deadlines.
Ready to Form an LLC or Corporation?
Northwest Registered Agent is here to help with all your small business ideas and needs. Answer a few simple questions about your business, and we’ll prepare and submit your formation paperwork to the state. We also provide your new business registered agent service, free business forms and guides, and much more.