Presentation: Business of Design
“The goal should be to find enough good clients to support the business you enjoy.” ~Nathan Peretic, Full Stop Interactive
You do that by setting good rates, getting better clients, and having more stable income.
For the past 9 years, I’ve worked as a freelancer, both as a side job, and full time. For the last 5 years I’ve supported my family on my income alone. In the last two years, I’ve increased my income by 50% each year.
I’ve learned a lot about freelancing in that time and it can be summed up in a few words.
“As a successful freelancer, you need to be first a business person, and second an artist”.
The trouble arises when we as creative types just want to do our craft. As indicated by my first slide, that’s only about 40% of what it takes. In order to be successful you need to become an crafts-person with your business.
So today, I’m hoping to teach you how to bring the same care and attention to your business, as you do your craft.
So how do we look at our business?
A great way to get an overview of your business is thinking of it like a franchise. Pretend you are preparing to sell it and its processes. This enables you to look at it from all angles more effectively. What is your process for getting clients, for on-boarding clients, for tracking time, invoicing, etc. Each of these activities should have a consistent, repeatable process in place, that allows you to focus on the places where you can produce the most value for your business with your unique offering.
(All links: http://bitly.com/bundles/benklocek/3.)
Before the work
Before you actually connect with clients and start working, there are a few things that you should consider.
Decide what you actually do
Be clear about what you actually want to do. A developer might be better off contracting with agencies, instead of courting his own clients. A manager/owner looks to hire others to do the work she finds. A designer might pass the work off to a developer or do the development themselves. The service changes the business model.
- Business owner
- Creative …
How you position your services should be a direct reflection of the following:
- Assets (what you do well/what you have now: knowledge, skills, connections)
- Aspirations & Values (what you want to do)
- Market Realities (what you can be paid to do)
Your unique advantage as an independent is you. By highlighting with clear reasons why you are different, unique, better, etc., you differentiate yourself from others and strengthen your authority in your chosen niche. Your personality/quirks/values can be your strengths. Use those strengths to tell potential clients what they get when working with you.
(Also see: How the Web Pro Gets Work: Marketing for Online Professionals.)
Who is your customer?
For you to answer
- Who do you do it for? Be very specific.
- Bad example: Websites for local spas.
- Good example: Promotional sites for high-end spa & massage businesses which specialize in organic & natural treatments.
- Two questions to answer when you think you have it.
- Do they have the ability to pay?
- Do they have the willingness to pay?
- Think long term
- Think of it as a relationship
- Think of projects/clients in terms of building your brand identity. How will this project/client help build my business?
- Who DON’T you want to work with? Review past clients and decide who or what type of client was not enjoyable/profitable. Avoid them in the future.
- They don’t care about your specific skills, they care about how you can help them hit their business goals.
- Figure out what they want, then pitch it to them.
- Clients choose you because they like you, feel comfortable with you, or trust you.
- Don’t waste time with social media when small.
- Do your homework, and speak to their problems.
- The Plan: Marketing Doc
- #1 way to get things going? Ask for referrals
- Attribution links on sites/work you have done: Link to specific landing pages that speak to the audience of the website you built, not your home page.
- 80% of your business should be repeat business.
Winning the Work
- We are all in sales. It’s part of being a a business owner. Come to terms with it and read To Sell is Human by Daniel Pink.
- Aligning their needs with your services
- Make the connection with them personal & purposeful
What to charge
- Figure out your cost of living rate
- Profit margin should be included in your hourly rate (above what you need to live). It enables you to grow or save.
- Only work for free when:
- Building portfolio
- Working for a connector (let them know you expect referrals/recommendations up front)
Value pricing is about asking “What is this worth to my client”? You would not do a similar project for the same amount for Adobe and your local ice-cream shop. Adobe will get much more value ($) from your services than the ice-cream shop. Your rate should reflect that.
Here are a few ways you can add value to your services:
- Learn to solve your client’s problems, don’t just deliver designs/code.
- Don’t just talk about your services, put the client at the center.
- Try calling yourself a “consultant”, even just to yourself. Words have power.
- Charge for great customer service. Clients are not only looking to save money, they also value their time and mental energy. Make yourself easy to work with.
- Be a businessperson too. Learn about business so you can know how best to leverage your skills for them.
- Ask what success looks like for them. Be goal oriented.
- Know what to sell your client: it may be money, time, or mental energy savings.
- Focus on selling to their problem, not cost or features.
- Don’t get stuck in the “Which technology” debate.
As an outside player in the projects you take on, you are in a unique position to have a more strategic view on things.
Done right, you can save a client huge amounts of time and money by thinking strategically. The huge benefit is that they start to think of you as a business partner, instead of just a hired hand. This leads to long term relationships which are very good for stability.
What exactly is strategy? It’s having an intention, which indicates an action, and leads to an intended result.
Intention > Action > Result
It means having a better why and how for the what a client is asking for.
- Why the need to change/create/remove?
- What to design/build based on Why insight.
- How will the What be done.
One of the best ways to help with strategy is to clarify goals.
In order to measure the success of a project it is important to define focused, quantifiable goals.
- specific increase in sales (10% more sales per month in Q1)
- website visits (although conversions would be a better metric)
- leads, etc.
Make sure to understand what the client will use as a metric when determining the success of the project. Their reasons may be “feel-good” types of reasons, but make sure you satisfy those and you will see repeat business.
Finally, understand the problem you are trying to solve. If the client is not sure what they expect at the end of the project, help them figure it out. Not knowing the goal is like playing basketball without a hoop. What’s the point of all this running around?
Creating stable income
To a freelancer, irregular income is part of the package, but there are some things you can do to make it more stable.
- Retainer contracts, just be sure to work out the details beforehand.
- Higher-value clients leads to longer term relationships.
- Project minimums means less time switching between projects or searching out new work. A project minimum is a dollar amount below which you won’t take on a project.
To lessen the (unpaid) time required to get a new client onboard, develop an automated, repeatable process that makes them feel taken care of and informed.
- First Contact > Form letter: include project minimum, schedule, request for more info.
- Delay getting on the phone until it’s clear there is a good fit.
- Details from potential client > Verbal proposal/estimate based on similar past work.
- “Do you want to move forward?” Get verbal approval
- Then send a detailed project definition + estimate + timeline
This whole process should not take more than 3% of the estimated project total,and is not charged to the client.
- Estimating gets easier over time, as you collect data.
- You do collect data don’t you?
- ALWAYS track time.
- Your internal estimating system, should match task for task, what you input for your time tracking.
- Time/money budgets on each task in your time tracker. I use Harvest.
- +15% of total for project management
- +10-25% risk/contingency
- Don’t forget to mark up pass-through services. You are extending credit if you pay, then charge your clients.
- Bracia internal estimate generator.
A contract is to protect you in case of misunderstandings. Yes, it should be legally sound, but more important, it should clearly outline what the expectations are for you and the client.
- Don’t work without a proposal/contract. I use Bidsketch.
- Be specific about deliverables, they are what protect you from scope creep.
- Include maintenance & hosting costs.
- I add an Attribution Link clause, which allows me to put a “Site by Bracia:.” in the footer. It they don’t want it, the site costs more.
- A List Part on Contracts for the 21st century
- I use parts of the Contract Killer from Andy Clark.
Doing the Work
Get more done
- Set a weekly/monthly schedule. This is probably the biggest contributor to making more per year. The less time you spend figuring out what you should be doing each day, the more billable hours you can complete.
- Batch tasks like email. Take time twice a day to process email, not all day long. Avoid multi-tasking, humans are bad at it.
- Outsource tasks like accounting, scheduling.
- Get yourself an admin assistant.
“Most designers/devs/agencies are hired for their skills, and fired for their lack of project management skills”.
- What it is:
- Finances (Budget, Estimating)
- Client services
- Get good at it, and you will have very happy clients.
- Charge for it.
Your “process” is the repeat-able phases and steps you go through on each project. If you write it down and follow it, you can refine it. Otherwise, you won’t know why a particular project went smoothly (or cost you money).
- Set client expectations early, even in the proposal.
- List steps and deliverables.
- “A Website Designed”
- Automate and document.
- Plan how you handle scope-creep into your process.
After the work
Once the project is finished you have several opportunities to give great service and learn from your successes and mistakes.
- Make them feel excited about the project. Have a launch party. Send them a certificate. At the very least send them a congratulations email.
- Ask for a testimonial (now and in several months when they have data on the success of the project).
- Ask for referrals.
- Follow up (maintenance, additional services).
- Include them in your newsletter, or send high-value clients personal notes with links to relevant articles.
- Track everything: time, budget, vendors, successes, failures
- Run reports
- Annual review
- what worked, what didn’t
- which were good, high-value clients
- Network with your client and their associates.
- Lead generation happens in all phases, that’s how you keep the project schedule full.
There’s a lot to running your own business, but taking it one piece at a time and focusing on building a solid process pays huge dividends. Once the business side of things is running smoothly, it frees up your mental energy and time to be more creative. Set aside a little time each week to put on your business hat and look at your data. Your clients, your business, and your bottom line will thank you.
Questions, other ideas, concerns? Please leave a comment below. I’m still learning as well and love feedback.
Leave a Comment