Starting a creative business: 10 notes from my first year

Starting a creative business: 10 notes from my first year

Jon Dodd

Jon Dodd
16th April 2018

A couple of weeks ago, an important date in my business, Alloneword, snuck up on me. Alloneword had reached the ripe old age of one. Not a massive duration, but a very critical time in a new company, and sadly a milestone a lot of businesses don’t ever hit. While in some of my other articles on The UK Domain I’ve tried to remain impartial and logical, I wanted to mark the occasion of turning one with a slightly more personal piece, and hopefully some useful notes for anyone else about to launch a new creative business endeavour.

Back at the start of March last year I wasn’t in a great place professionally, and one weekend I’d decided enough was enough and it was time to move on. I’d always wanted to work at that company, and was so proud to have worked up to being invited to join the board of directors as their Creative Director for the agency. The pressure was huge, the company was financially struggling at the time, and my family had just expanded by one with the arrival of baby Poppy. Issue was, the thing I’d enjoyed most during my time there was not having a boss, so I didn’t want to move on to somewhere else where I’d have a boss again, and to move to another Creative Director position would presumably just lead to a similar amount of stress and hours in the studio.

It was clear, I needed to start out on my own. It was something I’d toyed with in my head for a few years, as I loved the idea of working from home and having full autonomy, but I thought maybe it was something I’d be doing in 20 years or so as I was winding down in my career. Yet here I was on the Sunday night, having only decided all of this that afternoon, making plans to wrap up work on the Monday (I must add I didn’t leave abruptly to leave them in the lurch, as the business was going through changes anyway which gave me an out), and start full-time with Alloneword on the Tuesday.

This was going to happen, and I was going to have to work quickly and smartly, as it wasn’t just me I needed to think of. I wasn’t fresh out of uni and living at home where I could give entrepreneurship a go. There was a mortgage due in a couple of weeks, kids’ swimming lessons, and the general/relentless expenditure of modern life.

I’m pleased to say I managed to start working with some amazing clients, got great referrals, and one year later I’m still here, and have enjoyed the most professionally rewarding and productive year (and a bit) of my career. I’d been keeping a mental note of some of the processes I found useful, as I have had a few people approach me asking for advice. What a better time to reflect on the lessons learned and the key points I feel helped make a creative services business to year one…

1. Solve the most important challenges first

This was probably the first thing I decided on that Sunday night as I was jotting down my ‘to-do’ list. As the list grew and grew I could see I’d need to prioritise, as while everything was important, some were more than others. I needed some clients in order to do work, in order to invoice for said work, so while working out how I was going to brand a nice template for an invoice was important, it wasn’t first on the list, finding work to do most definitely was.

2. Branding yourself

While it wasn’t as critical when setting up my enterprise initially, how a business presents itself and the confidence it potentially instills in a prospective client is important in any new business, especially one where you’re offering a creative service.

I must add at this point I have issue with the use of the word ‘creative’ as a noun, such as a job title. It’s not, it’s an adjective, and I believe that in every job, career, and way of working you need to be creative, from developers to HR teams.

I worked out what my main brand values were, and worked up a colour palette, logo, and typography choices around that.

The deeper branding task could wait until later, as all I needed was something polished I could start using for communications. The other important point (and bugbear of mine) is I wanted to be transparent that it was just me, as I’m not a massive fan of making your business seem more than it is. If you refer to yourself as ‘we’ in all your literature, and then during a pitch you’re asked about your team, you’re going to look silly. I decided to be open about that, but also label my business as a ‘design practice’. I felt I wanted to offer more than just a graphic design ‘freelancer’ (such as development, consultancy etc), but I definitely didn’t want to be perceived as an ‘agency’.

3. Get an accountant

Seriously, get an accountant. Unless your business is accountancy, or you do it as a hobby, or your whole family are accountants, you’ll find this extremely valuable. It might seem like an added expense for something you can technically do yourself, but to learn everything takes time, and a mistake can be costly. Before I started out, I used to work with a programmer who was going contract, and when he mentioned about using an accountant and the costs, I was surprised he went for it. It was only when he shared his realisation that if he was to charge himself for doing it on his hourly/day rate, he’d charge more than his accountant as he’d be slower. Why take up time doing it yourself when by paying someone you free up that time for billable work? Which leads me nicely onto my next point of…

4. Time IS money

I hate clichéd sayings, but there is a reason this one is popular. When I started into the world of work, and really up to the point I helped to run my last agency, I never really made the connection between billable time and the amount of time in the month, and therefore between the more billable work done in a set amount of time and more profit. I used to just trundle through tasks at the pace I was motivated, and then get paid at the end of the month. When I started to be opened up to this world and managed designers, I’d sometimes see the lack of urgency or blasé way they’d overrun by a longshot.

Now, I’m not saying quality needs to go out of the window as soon as the time is up, and it’s all about the money (I’ve worked at agencies where it was like that and it was hell on earth), but be mindful of this, as if there isn’t a profit or enough money to keep you going, you won’t be doing it for long. When you start setting your hourly, daily, and weekly rates, work out how much that will earn you if you’re 50%, 75%, and 100% productive a month. You’re likely not going to hit 100% with the admin, chasing new work, meetings, and general unavoidable non-billable stuff. Make sure that even at 50% efficiency (which sometimes happens) you’ll still make what you need.

5. Know your price

Pricing is a hard one with a plethora of variants to consider with each job, so it’s an important one to work out, and you’ll want to be consistent in your approach. As my business offers consultancy where clients can book on time and materials, I have an hourly, daily, and weekly rate, for both remote (what I do most of) and on-site (meetings, workshops, presentations etc) time. My remote is less than my hourly rate and I work on a working day being 7.5 hours, and a working week being 5 days. I first worked out my hourly rates, then multiplied the cost per hour by the hours in the day. I then take a bit off for the fact that it’s obviously preferable to get booked for a full day as opposed to an hour, and it gives an incentive. I then repeated this for the day into one week.

Once I had that, I did a sanity check that it worked against different efficiency (see previous section), and simply made a rates card that I can share. I found it’s useful to then use this to work out your fixed rate cost, by first taking the job or stage and estimating the time you think it will take. Start to evaluate how long those tasks actually take you as a running log, especially for the ones which you find yourself doing a lot. If you estimate writing the design brief to take you an hour, but you actually find it takes you two, you need to raise your price, or try and offset the cost at another point in the project, as otherwise what you’re effectively doing is cutting your hourly rate in half on that task and lowering your efficiency.

Last note is that it’s important to bear in mind that some jobs you’ll really want, some you know won’t be able to afford your price but they might be an amazing case study, and others you’ll just want to help them out because you believe in their product, and so you should also factor that into your costing. While you want to be profitable, you want to enjoy the work you’re doing too.

6. Documentation, documentation, documentation

For those who work in the ‘creative’ industries as ‘creatives’, they might see anything outside of design as stifling the creative process. But keeping thorough internal and client facing documentation ultimately means things run a lot smoother, takes time away from constantly looking for old emails or notes, and gives more time to the creative process.

My most important tool these days is my finance spreadsheet, which over the course of the year has turned into a bit of a beast, and serves me well.

When an itemised quote of stages to go through gets approved, it goes into my spreadsheet for each stage, along with its quote number, which month I see that stage happening in and the client. I can then also mark it with a status, such as “confirmed”, “invoiced” or “paid”. This means I can easily scan through where I am financially in a month, how much work I’ve currently got estimated out there, and jobs I can rejig if a space becomes free. I started with just the one page, but once I had a bit more time I opened it out into expenses; amounts to save per month for tax; and amount available for salary. That all took a while to get my head around in terms of formulas and data validation, but I got my very spreadsheet knowledgeable father-in-law to help, and from doing this it’s saved an unimaginable amount of time in calculations and thinking along the way.

With regard to other documentation, I tend to use Google Drive to store everything, from client feedback notes to the editable files themselves, as it’s all backed up, secure, and doesn’t exist on one computer, so in theory I can work anywhere. Try to also think about client documentation, and what would be useful for the client to know (and more importantly agree to) along the way. For all projects, I have a design brief template I use, where I can add specific information about target markets, competitors and deliverable work, and for websites and other technical work I have a technical specification template where I can put things such as supported browsers, custom developments, and third-party integrations. Again, they took a bit of time to set up, so I only made the templates as I needed them, and they’ve saved countless hours over the year in terms of scope creep or goalposts changing, which does sometimes happen.

Review every bit of new documentation you write like a possible template that could be reused, and write it that way first, from project timelines, to long emails explaining the benefit of a certain methodology or service. Keeping documentation reusable means your process is solid and considered, without creating so much of an admin overhead you don’t have time to do the work.

7. Multiple channels for income

I realised the hard and stressful way with my last few positions at other companies, that having one big client, targeted industry, or service is a risky game. If the client looks like they are going to move on, or that industry starts to tank, or the service becomes less popular, you suddenly experience a massive financial dip as a result, which is never good.

Setting up shop, I knew I wanted to focus on UX/web, branding, and general art/creative direction, which is still the core of my business. As I got going, I made sure I was getting an even spread over different industries, from fashion to insurance, to cover myself, with a range of size of the client.

I set myself a target to land a couple of larger national clients as I knew they’d want to spend money and have work done every month.

Having just one client is risky, and having too many means the work would likely be too demanding and I’d start disappointing them or missing deadlines. As I found my rhythm over the first few months, I also started to think about the other skills I had and if there were smaller revenue streams I could offer and grow. I now do a small bit of animation and from time to time run creative workshops with larger companies or agencies needing some internal training or guidance. These fringe services aren’t necessarily regular or consistent work, but it’s something else that can drop in on a certain month, and is much welcomed if I’m light on my core services. For example, I found in the run up to Christmas, people weren’t commissioning new design work so much, but they were looking at activities such as training while their own work slowed down.

8. Technical partners

It really depends on the nature of your work, but for small studios or freelance graphic designers, more often than not, web is going to play a part of your work as the demand is always high. I’m really fortunate that I had some jobs early in my career where they saw the value of a designer learning code, and that I naturally took to it. It has the massive benefit these days that I am able to sell a full end-to-end website service, which wins me a lot of work. Everything is under one roof, and my smaller non-technical clients don’t then have to go through the time of finding a developer and connecting me with them or having the project managed.

Not all people are wired in this way, and that’s totally fine, as you’ll be able to dedicate time to skills you are passionate about. Like I say though, website design requests will come thick and fast, so it’s good to have something in place so you can get your hands on the design part of it. Try and find a good development agency, or another freelancer who is in it for the long haul, and ask if you can send them work. They probably can then offer to do the same back to you, which is always a bonus. Some businesses choose to then quote the development work themselves and sub-contract, which does have benefits such as adding a small markup to help manage, but is risky in terms of anything going wrong and who foots the bill to fix it. I prefer to be honest when I have had to bring in a third party, and put the client and developer in contact, which helps me then win the work and opens me up to design work with a larger scope or bespoke functionality.

9. Learning the ebb and flow

Don’t get me wrong, working for yourself and starting a new business is exciting and can be the best move you ever make, but there will be stressful times.

There will be times where you’ve not got much booked in the calendar at all, times where there’s so much work you’ll feel like you want to implode under the sheer amount, and times where you start to question it all.

Again, I was fortunate enough (although it didn’t feel like it at the time) to be exposed to this side of a business before starting my own, so I at least went in mentally prepared. Getting going is tough, but if you’re good, know your stuff, and work hard (not too hard to burn out though), you’ll start to build a pool of clients and get referrals for previous work, which in turn leads to more clients, more work, and more referrals. I’m now (starting to be) able to suppress those pangs of worry if the next month looks low, as work naturally drops in; current clients always need work doing, new business leads come in, and normally there’s a few quotes already floating around in the ether where one could land.

If I find I’m getting close to running out of work, which thankfully doesn’t really happen now, I have a list of smaller tasks I can then start approaching current clients (as the lead time for a new/potential client is normally too long for a quick win) to see if they’d be interested, offering things like UX audits of their site, email template design, or social media assets. You’d be surprised at how much work you can generate in a day when you’ve got a list of smaller services and a pool of clients. Overall, it’s about learning to cope with those times and not crumbling under the pressure, and when you’re having a good month, putting away money in a rainy day pot.

10. The work life balance

My reasons for starting my own business were mainly due to family, and my career to that point not giving me as much physical time to be at home or mental capacity to be fully involved in things outside of work, so the main goal was always to strike a much healthier work life balance, which is something I’m now incredibly proud to say I’ve achieved.

Even if your reasons for starting your own business aren’t for this, it’s still massively important to keep these values. Burnout is real. I’ve seen it happen to others and I’ve had it happen to me, and when it’s your own company the stakes are a lot higher. I’ve built my business, pricing, and project work around this principle, to be adaptable and allow for time spent with my family, which in turn gives me so much more energy for my working time. Go swimming, get distracted, and go downstairs. Seek out creativity, but also let it come to you.