How To Start A Graphic Design Business

Scam Risk is here to help you protect yourself and fight back
By: Scam Risk - Expert Reviewer

How To Start A Graphic Design Business In 2021 And Beyond

Graphic design professionals can create or maintain a visual style for signage, letterheads, ads, sales collateral material, websites, digital content, and any other internal or external communication. This can include logo design, fonts and typesetting, color and imagery selection, and layout.

The owner of a graphics design studio may work alone or with several employees to generate new business or help with existing projects.

Towards the end of this article, you’ll find answers to some of the most frequently asked questions on how to start a graphic design business…

But most importantly, you’ll see the exact system many others have used to build their own internet marketing business to over $40,000 a month in mostly passive income.

Table of Contents

Start Your Own Graphic Design Business By Following These 10 Steps:

The steps below will help ensure that your business is adequately planned, registered, and legally compliant. It’s the ultimate guide on how to successfully start your own business in graphic design.

Step 1: Plan Your Business.

To be a successful entrepreneur in the graphic design industry, you would need a clear business plan. It will help to map out your goals and identify potential problems. The following are essential points to be aware of if you want to know how to start a graphic design business:

What Are The Startup Costs Involved In Opening A Graphic Design Business?

Many graphic design companies start from home as freelance graphic designers and have no employees. The computer and the design software required to complete the job will be your main business expenses. These programs could include Adobe’s family of design tools, including Photoshop, Illustrator, InDesign, and others.

Adobe can be purchased on the cloud at a $40/50 monthly fee, depending on which bundle you choose. There might be additional charges for developing your website or printing promotional materials, such as brochures, business cards, etc.

It’s possible to open a business with less than $2,000. Remember, you need to have enough money to sustain yourself until you generate a steady income.

What Are The Ongoing Expenses For A Graphic Design Business?

You’ll likely work from home at first as a freelance graphic designer. You might have ongoing costs related to renting for the studio and employees, including taxes and health benefits.

Your monthly subscription cost for graphic design software could be less than $100. You’ll also have to pay freelance designers, photographers, and illustrators.

These expenses are added to your invoice. However, vendors may need to be paid before you spend for your graphic design clients. It’s a brilliant idea to pay a portion of your project fee in advance.

Who Is The Target Market?

While some graphic design studios receive most of their work through advertising agencies, others market their services directly to clients.

Many studios work with both types of clients. Some studios may specialize in one type of client, such as business-to-business or non-profit organizations.

Some studios might be focused on one particular practice, such as logo design or packaging design.

How Does A Graphic Design Business Make Money?

The graphic design studio owner may charge an hourly rate to their clients or a flat fee depending on the hourly rate. They might offer a monthly retainer if there are ongoing assignments.

How Much Can You Charge Your Customers?

First, establish an hourly rate. You’ll keep track and charge an hourly rate for some client relationships. Clients will feel more secure knowing the cost will be upfront, and you can avoid any arguments after you invoice. Instead, you may want to charge a flat fee per project based on how long it will take.

Most studio owners and graphic designers charge between $75 and $100 an hour. If you have many hours to bill, you won’t be able to lower your hourly rate by $75. If the market allows, you may be able to get a better rate.

How Much Profit Can A Graphic Design Business Make?

Experts recommend that graphic design studios have a minimum of a 15% profit margin and that the preferred rate be at least 50%. This is the rate that you charge clients, minus any out-of-pocket expenses to do the job: the hourly rate of your employees or the cost to hire freelancers to do the job.

How Can You Make Your Business More Profitable?

Sometimes, owners of graphic design studios start side businesses that use their artistic talents. These could include jewelry design, art, jewelry, t-shirts, and book jacket design. Web development, photography, and other areas are all possible expansions. A partnership with a copywriter might be an option to create an advertising agency.

What Will You Name Your Business?

It’s important and challenging to choose the right name for a business.

If you own a sole proprietorship, it is possible to open a business under another name than your personal name.

when registering a business identity, check out these resources to help you find the right business name for you:

  • Business records for your state
  • Federal and state trademark records
  • Social media platforms
  • Web domain availability

It is vital to protect your domain name before others do.

Step 2: Form A Legal Entity.

Some of the business structures that are commonly used include sole proprietorships, partnerships, limited liability companies (LLC), and corporations.

If your graphic design business is sued, you can avoid personally being liable by forming a business entity, such as an LLC or business corporation.

You can create an LLC independently and only pay the state filing fees or hire an LLC Service provider. Additional fees may apply.

Step 3: Register For Taxes.

As new business owners, you must register with multiple federal and state tax authorities. To register for taxes, you must have an EIN.

Small Business Taxes

There are many options available for taxation, depending on what business structure you choose. An example of this is an LLC that could be taxed as an S Corp.

Below are a few guides to help small business owners learn more about taxes:

  • LLC Taxes
  • Sole Proprietorship vs. LLC
  • LLC vs. Corporation
  • S Corp vs. LLC
  • How to Start an S Corp

Step 4: Open A Business Bank Account & Credit Cards.

It is crucial to protect your personal assets by opening dedicated credit and bank accounts for business purposes.

Mixing personal and business accounts places your home, car, and other assets at risk. This is known in business law as piercing your corporate veil.

Furthermore, learning how to build credit for your business can help you get credit cards. You can finance your business with other funding in your company’s name (instead of your own), higher interest rates, better credit lines, and many more.

Step 5: Set Up Business Accounting.

It is essential to record all expenses and income sources to understand your business’ financial performance. Your annual tax filings will be much easier if you keep accurate and detailed records.

Step 6: Obtain Necessary Permits And Licenses.

Failure to obtain necessary permits and licenses can lead to heavy penalties or even the termination of your business.

State & Local Business Licensing Requirements

Some licenses and permits required by certain states may be necessary to legally operate a business in graphic design. You may visit the SBA’s guide to state licenses, permits, and information for more information.

Some local licensing or regulatory requirements might also apply. To learn more about local permits or licenses:

  • You can check with your local city or county clerk’s department.
  • Find local assistance through one of the US Small Business Association’s directory listings of resources for small businesses.

Service Contract

Many businesses offer services on an extended basis. A service contract outlines the terms, conditions, and fees.

A service agreement is required by graphic design companies before a client can start a new project. The agreements define client expectations and limit legal risks by clarifying their expectations.

They also set out payment terms and conditions, expected service levels, and intellectual rights ownership (who will ultimately own the design).

One example of such service agreement is the AIGA Standard Form of Agreement Design Services.

Certificate Of Occupancy

Often, businesses that work from a physical location need a Certificate of Occupancy (CO). A CO verifies that all building codes and zoning laws are met.

If you want to lease a site:

  • It is usually the landlord’s responsibility to obtain a CO.
  • Before leasing, confirm with your landlord that you have or can obtain a valid CO.
  • A new CO is required for major renovations. A valid CO must be issued first before lease payments begin, as stated in your lease agreement.

If you want to buy or remodel a place:

  • You will need to get a valid CO issued by a local authority.
  • For graphic design businesses, it is essential to check all relevant building codes and regulations for the area where they are located.

Step 7: Get Business Insurance.

Insurance is essential for your business to operate legally and safely. Your company’s financial security is protected in the case of a covered event.

Many insurance policies can be used to protect different types of businesses and various risks. General Liability Insurance can help you determine the risks your business faces. This coverage is what small businesses most commonly need. It’s an excellent place for you to start.

Another crucial insurance policy that businesses require is Workers’ Compensation Insurance. In most states, workers’ compensation insurance is required.

Step 8: Define Your Brand.

Your brand is your company’s identity. Your business image also depends on how the public perceives it. A strong brand can help you distinguish yourself from other companies.

How To Promote & Market Graphic Design Businesses

Your best way to promote yourself is by highlighting the quality of your work. Your logo, signage, website, and studio interior design speak volumes about you.

Many graphic designers who want to open their own studios start out working in advertising agencies. If this is your path, keep electronic copies of your best work to promote your business. A website should reflect your personality and serve as your portfolio when you are pitching for your business.

You can build a relationship with several advertising agencies and branding firms to get assignments that you won’t get on your own.

This can help you secure work from clients you cannot reach until you have a better creative reputation. Working with a senior graphic designer can open up doors to work you wouldn’t have otherwise.

Finally, build excellent working relationships with your clients and keep track of their career developments.

If you leave one job to be promoted, you might have access to new clients while maintaining good relationships with your former employers.

Step 9: Create Your Graphic Design Business Website.

Once you have defined your brand and designed your logo, you will need to make at least a basic website for your business as a start.

Some people may be afraid of creating a website, even though it is an important step. Although this was a reasonable concern back in 2015, it has become much less common in recent years.

These are the main reasons to build your website now:

  • Websites are a must for all legitimate businesses. It doesn’t matter what industry you’re in or what your business is when you launch online.
  • Facebook pages, LinkedIn business profiles, and social media accounts are not meant to replace your business website.
  • Websites can be created in minutes via website builder tools like the GoDaddy Website Builder.

STEP 10: Set Up Your Business Phone System.

Having your own company phone line helps keep your personal and business lives separate.

Aside from helping you automate your business, it also gives it credibility, and it makes finding and contacting potential customers easier.

Entrepreneurs can choose from a variety of services to set up your business phone system, i.e., a virtual call center.

Is This Business Right For You?

If you are artistically inclined and able to manage the aesthetics of your clients and their businesses, communicate creative ideas and execute design projects independently or through staff or vendors, owning a graphic designing studio is an ideal option.

It is crucial to work both independently and in a group setting as you learn to collaborate with clients. Because your work spans business and creative expression, you need to feel confident in both.

What Is Our #1 Recommendation For How To Make Money In 2021?

Our review team has come across a program in the real estate industry that is next level!

Although it’s not real estate in the traditional sense, it’s all digital.

Yup, Digital Real Estate!

With this digital real estate program, you can have the ability to completely walk away from manual labor!

Sound too good to be true?

Of course it does!

But it isn’t…in fact, business owners wish they had this skill!

All you have to do is build and rank a website and forward the jobs off to a business owner in town, you could even email it to them!

This works for literally any service based business, tree service, plumbing, towing, etc. 

How Do You Get Paid And How Much?

Simple, after you forward the jobs off to a business owner and he makes some money off of them, you simply ask to make the deal beneficial for each other.

A fair price to charge per lead, depending on the industry is 10-20%…let’s just use the tree service industry for example and go by worst case scenario.

Let’s say you build and rank the site and only 20 jobs a month come in. The average tree service job is anywhere from $500-$2000!

That means at bare minimum you have an asset worth $1000 a month!

See why they call it digital real estate now?

That’s a rent payment. 

The great thing is how easy it is to scale. You don’t have to answer the phone…all you have to do is get the phone to ring.

Unlike the passive income ideas I mentioned earlier…

This one actually allows you to collect that without working in a brick and mortar business all day.

Truly passive income!

The training program takes making money online to a whole other level. The owner of the program walks you through how to build and rank a site hand in hand, with the occasional voice over when he is sharing his screen.

You will learn the importance of keywords, website name, how to send call notifications via email, backlinking, etc.

Once the training program is completed you will also have access to a Facebook group where you can ask questions and be in a community with others on the same journey as you.

Digital real estate allows you to have passive income with most of your day being spent OUT of the brick and mortar landscape.

Now, I know you probably have tons of questions… So, check this out to learn more.

Share This Article:
We will be happy to hear your thoughts

Leave a reply

ScamRisk's #1 Online
Business Recommendation:
You know deep down what you're meant for. Now they will show you how to go get it.
Scam Risk

Be first in line to read all the new Scam Risk Reports as they're published!

Select the categories that interest you the most

We don't share your information with any 3rd parties and we will never spam you.