Graphic design is an evolving field, and, thanks to the rise of online marketing, it’s in high demand. If you have graphic design skills, some knowledge of technology, and a bit of creativity, a career in graphic design could be for you. But rather than working for a design agency, you could start your own graphic design business, build up a client roster, and enjoy a career that you’re completely in charge of.
Graphic design businesses provide design services to businesses, publishers, nonprofits, and more. Design businesses can be operated on a part-time basis as a single designer or as large as an agency with dozens of designers on staff. These businesses often balance many clients with many individual projects at a time, and a single project may involve multiple meetings to discuss brainstorming, pin down an idea, assess rough drafts, and refine the design into a long-term finished product. While initial sketches may be made by hand on paper, design businesses today work almost entirely digitally.
The graphic design industry has undergone significant growth from 2014 to 2019, according to IBIS World. With increased profits, corporations are investing more in advertising, resulting in a projected 2.7 percent growth in the graphic design industry in 2019. In 2019, the graphic design industry should bring in a total of $14.8 billion. Thanks to this growth, more design businesses have been established, with 16,823 graphic design businesses in existence. The industry’s employment rate has also grown to 58,457.
Because graphic designers often work creating corporate advertisements, like designing catalogs, direct mail pieces, and sales publications, the graphic design industry fluctuates as corporate spending on advertisement creation fluctuates. With corporate spending on advertising expected to increase in 2019, we should see a similar increase in the graphic design industry, too. Small businesses also make up a significant portion of revenues through logo design, business cards, flyers,, and more.
The graphic design industry continues to evolve rapidly and today’s industry is vastly different from the industry just a decade or two ago. According to Forbes, as technology gives businesses the ability to interact with their customers online, this transformation has led to an increased demand for graphic design materials that facilitate customer communication.
The increased use of content marketing means that companies rely on graphic designers to create content, such as website headers, infographics, and other visuals, to enhance content. Many companies now use A/B testing to gauge how to get the best results from a piece of advertising or content, meaning that designers may be called on to produce multiple designs for these tests.
Evolving technology has also led to changes in the graphic designer’s lifestyle. Graphic design software is now accessible through laptops and tablets and phones, giving designers the ability to be more mobile. Companies are increasingly hiring freelancers and contractors in place of full-time in-house graphic designers, leading to plenty of opportunities for graphic design businesses, agencies, and independent freelancers.
Who is the target market for your graphic design business?
The target market for any graphic design business will depend on the business’s design style and areas of specialization. Some designers will specialize in one aspect of marketing, such as creating direct mail pieces. In contrast, others take a broader approach and offer a particular style that can be applied to a variety of materials.
In most cases, a graphic design company’s target market will consist of various businesses, but there’s also a market for designers who work with nonprofits, publishers, independent authors looking for book cover designers, and more. A graphic design business’ prices can help to define its target market, with some companies willing to work with smaller businesses while others may target only higher businesses with large projects and large budgets.
Skills, experience, and education useful in running a graphic design business
Starting a graphic design business doesn’t require a business degree, but certain skills and education can help make a business successful.
Graphic design experience. It goes without saying, but graphic design skills are an absolute must when starting a design business. While these skills can be self-taught, a degree in graphic design can help to prepare a business owner for the multiple challenges they’ll face in owning a business, from providing customer service to marketing their services.
Creativity. The graphic design field is highly competitive. Creativity in their design work and their marketing for their own business will help design business owners to stand out from their competitors.
Technology skills. Design businesses are dependent on technology, which means a business owner needs to be skilled at using different types of technology and design programs. Troubleshooting technological issues will certainly be a required skill, and the ability to troubleshoot some more minor issues can save businesses tech support and repair expenses.
Management experience. The ability to hire, train, and manage employees is important for any design business owner who plans to have staff.
Organizational skills. Graphic design businesses typically balance multiple projects with multiple clients, all with different deadlines and many different components. Organizational skills are necessary to keep projects progressing forward and to ensure that deadlines are met.
Amazon has some good books for starting a graphic design business, such as:
7 Steps to Making Money Online as a Freelance Graphic Designer (Free on Amazon Kindle Unlimited)
The Freelancer’s Guide To Upwork: Make More Money, Work From Home or Travel Anywhere (Free on Amazon Kindle Unlimited)
Costs to Start a Graphic Design Business
The specific startup costs of a graphic design business will vary according to a number of factors, such as if you’re starting the business with yourself as the only designer or if you plan to hire multiple designers and need to lease office space and acquire additional computers and other technology for each designer. Starting a graphic design business can be accomplished for as little as $2,000 on the smaller scale, while larger businesses with staff and an office can cost $60,000 or more to launch.
Common startup costs for a graphic design business include:
- Office renovations
- Computers, printers, scanners, and other equipment
- Design programs such as Adobe Photoshop, Illustrator. or Indesign
- Desks, chairs, and workstations for each designer
- Office signage
- Working capital to provide a few months worth of salary, rent, internet, utilities, etc.
These startup costs will vary according to the number of staff, the types of computers, and the types of design programs needed.
Steps to Starting a Graphic Design Business
Step 1: Write your Business Plan
After coming up with the idea, the next step in starting your business should be to write a business plan. Not only will a bank require you to have a business plan, but multiple studies have shown that a business plan helps increase the odds of starting a successful business.
Step 2: Form a Business Entity
A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
Related: Comparison of Business Entities
Step 3: Name the Business
Finding the perfect business name for a graphic design business can be challenging. Not only does the name have to resonate with your customers, it also has to be available to use.
Step 4: Select your Location
While many graphic design businesses start out of the owner’s home, having a location in a professional office park or similar setting may be beneficial. Not only will an office provide a more professional image, but it will also make meeting clients easier. Even if not meeting clients, a dedicated workspace outside of the home may be more conducive to getting work done.
If you are visibly operating out of your home, be sure to check local zoning laws in case a neighbor complains to the city.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
There is no licensing specific to a graphic design business, but some common local, state, and federal registrations most graphic design businesses need include a sales tax permit, Employer Identification Number, and Occupancy Permit, among others.
Step 6: Find Financing
Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a graphic design business is another. Fortunately, funding to start a graphic design business is really low but it can be difficult since most costs include computers and software. In order to get a loan, the borrower(s) will need to have good credit and be able to personally invest 15-25% towards the total start-up costs.
Step 7: Open a Business Bank Account
Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business.
Step 8: Get your Marketing Plan in Place
As the owner of a graphic design business, you can perform most of your company’s marketing on your own in order to keep expenses down. Expect to focus on marketing efforts like developing a professional portfolio and showcase on your website, social media platforms like Facebook, LinkedIn, Pinterest, and Instagram, exploring print and online advertising, and creating brochures and other printed materials for clients who visit the business in person.
While there are an almost unlimited number of services to offer, you may be better off starting off focusing on a specialty or niche. If possible, look for the type of work you like doing best and research whether there is a market for it. It is tempting to offer a wide range of services and not turn away any potential work, however, it’s really hard to market yourself against all of the other competitors who do it all too.
Step 9: Get Business Insurance
Budget for multiple types of insurance to keep a design business fully protected.
- General liability insurance helps to cover expenses like medical bills or lawsuit expenses if a client is ever injured while in the business’ office.
- Professional liability insurance offers additional coverage that protects a business if it is ever sued for causing financial harm to a client through omissions, negligence, copyright infringement, and other potential issues.
- Commercial property insurance helps cover an office and the equipment within it if an event like a fire or flood damages the property.
- Worker’s comp insurance covers expenses like an employee’s lost wages or medical bills if they’re ever injured while at work.
If you anticipate using a home office for your business, you may want to invest in in-home or home office insurance, which offers both business property and liability coverage. Most traditional home insurance policies will not cover expenses related to a home-based business.
Insurance policy costs will depend on many factors, from the location of an office to the value of the equipment that the office contains. To find the best policy for a business, request quotes from multiple insurance companies. Then, compare the coverage while paying attention to factors such as deductibles, coverage limits, and policy exclusions.
Step 10: Hire Employees
You may start out as the only person working in your graphic design business; however, there is only so much you can do in a day. Bringing in additional employees, even virtually, can help take some of the grunt work off your shoulders so you can focus your time on bigger impact items.
As a business grows and gains more clients, additional staff may be needed to keep up with the work. According to PayScale, graphic designers earn an average salary of $46,278, but they can earn as little as $31,000 and as much as $73,000. Salaries fluctuate depending on geographic location and a designer’s experience level and talent.
In addition to budgeting for salaries, there are additional expenses associated with having employees, such as paid time off, contributions to health insurance and unemployment insurance, and the cost of workman’s compensation insurance.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system for your graphic design business is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.
How much can you potentially make owning a graphic design business?
Data is not currently available on the annual income of graphic design businesses, but the industry continues to grow and evolve, meaning that a well-planned business could bring in significant income. Your profits will depend on the years that your business has been in operation, as well as the number of designers it employs. Graphic design businesses that target large corporations with significant project budgets will usually make higher profits than businesses that target smaller projects with smaller budgets.
It’s hard to determine how much a designer can make due to the many variables, however, most designers charge between $50 and $100, depending on the skill of the work and the number of billable hours. Most designers charge an hourly rate, though some will quote a flat-rate which can be tricky starting out as it’s easy to undercharge. It can be tempting starting out to charge a very low amount to get some customers in the door, but this can give the perception that your work isn’t well valued.
Things to consider before starting a graphic design business
Starting a graphic design business requires a comprehensive set of skills that goes beyond pure graphic design capabilities. Learning how to find the right clients for your business, how to price your work appropriately, and how to develop relationships with clients that allow you to do your best work all takes time.
The advantage of going into graphic design is that you can open a business with yourself as the only employee and build from there. This arrangement means that your business can operate on less income than would be needed with multiple employees, and because you won’t need to lease an office space, it can be a money-saving option that gives you time to grow.
One of the best strategies you can have is to develop your own unique design aesthetic when it comes to graphic design. Once you establish this aesthetic, it will be easier to identify your ideal clients and command higher pricing for your work.