I learned a lot about myself as well. While I worked as a professional designer for other companies for 8 years before starting my own business, I rarely had the opportunity to manage another designer, and thereby was worried about my own skills as a “boss”. Would I be a good boss, or one that was hated and/or feared? Would I be too nice? Too hard? I’ve had a variety of managers over the years whom I either loved or hated, so I did a lot of reflecting on those experiences to try to find the best balance for me.

Look to the Past to Develop Your Future

I once had a boss who I was so frightened of… he was the President of the first company I had ever worked for as a professional designer. It wasn’t until my immediate Manager left the company about a year into my employment that I had to work directly with him. His demands were extremely high, and if he didn’t like what I showed him he would get this scowl on his face and make me go back and do it again… and again… and again… until I got it right. I started out fearing him, but he challenged me on a daily basis and I grew to respect him greatly. I spent over 5 years with that company (going through 8 Marketing Managers) and I remain friends with him to this day. In fact, he’s now a client (and still a tough one!). 

Of those 8 Marketing Managers I went through, there was one who was more focused on trying to be my friend than trying to be my boss. I’ve had a couple of those types of managers. While she was a nice person, upon reflection I found her flighty and somewhat weak. She didn’t challenge me as a designer – would simply say OK to just about anything I gave her. She didn’t help me grow as a designer, and later when she left, so did the friendship. I realized then that she was a pleaser, not a Manager.

Another of those 8 Marketing Managers was the biggest bitch I’ve ever had to work with. I’m being straight and honest here… she came from a division of Nike and thought she could turn the company around on the tip of her finger. But instead of growing or guiding her employees, she skuttled around like a rat, paranoid and making demands that couldn’t be met. She would micro-manage me (and the other designers in our department), then when it came time to make campaign presentations to the President and other Management, she’d turn on us immediately and verbally cut us down in front of everyone. I think just about everyone has had a manager like that, and I learned a lot about how NOT to treat people by working with her.

I’ve had managers who didn’t communicate at all, and managers who communicated too much. I’ve had clients who were indecisive, and clients who were so picky they were nearly impossible to please. Clients are almost like bosses, so it’s important to take them into consideration. And I’ve had managers or clients who seemed to know exactly what to do or say to help me get the job done with the best results. I love those people, who show just the right amount of criticism or praise exactly when it’s needed. I strive to be like them.

Be a boss, but don’t be bossy.

Overall, I learned a lot by working with so many different types of people, and realized that there’s a balance to be made. In my case, be friendly, but don’t be a friend. Be a boss, but don’t be bossy. Show emotion: disappointment,  concern, gratitude, excitement. I want to see my employee succeed not only for the sake of my business, but for her sake as well. I want her to be able to move on to the next company (or her own business) feeling like she had a good experience working for me, but at the same time feeling like she learned something too. And most of all, tell her when the work is bad and give her constructive guidance, then praise and reward her when the work is good. Oddly enough, this wasn’t much of a challenge for me. My personality is one that I don’t lie to people just to make them feel better, and my experience has always been that honest criticism is more helpful than hurtful… it always pushed me to get better, and I think it’ll do the same for my employees. I’ll fully admit that I can be bitchy at times, but only because I want the best out of my employee and I want the best for my clients. They hire me expecting a certain quality of work and I won’t send a design to them that doesn’t meet my own standards. So far, I think this strategy has worked very well. Kinks were worked out, expectations were made up front, and the working relationship between me and my Assistant appears to be cohesive and comfortable. I hope she feels the same, and I think she does.

My final bit of advise for all of you up-and-coming bosses and managers out there is to be good to your people. I often ask my Dad for advise – he’s the wisest person I know and has been a skilled businessman for over 40 years. Although I only hired my Assistant for part-time work, my Dad reminded me to show my appreciation and do things that aren’t “required” of me as an employer. I’m not required to give my employee any paid sick or vacation time and am not required to give her benefits of any kind. While I can’t afford to purchase a full benefits package for her, I have found creative ways to reward her service to the company. I surprised her this year with a full week off, paid, over the Thanksgiving holiday. I will be giving her Christmas and New Year’s Day off, paid as well, and gave her a nice Christmas gift as a sign of my appreciation. I’m flexible when she needs time off as long as it’s not excessive, and understanding when emergencies come up. Small acts of kindness do not hurt my company, and they won’t hurt yours. In turn she has shown me great respect, hard work and dedication when I most need it. She’s even gone as far as to skip a couple of lunches or breaks when we’re strained under deadline without me ever asking her to do so — and that’s the best gift she could give me. 

Goals

In 2013, I have set new goals for myself, my employee, and my business. It will be the year that I expand my company further by diving deeper into web development, and my first goal is to hire an experienced web designer. At some point next year I would also like to hire a salesperson or Account Rep to increase EPD’s local clientele and compete with some of the smaller agencies in town. Jenny and I are currently developing a logo and website for my parent corporation, Red Couch Creative, LLC that will be the local front office. Elle Phillips Design has become a global name for professional graphic design services, serving clients now in five different countries (crazy!), but Boise and much of the Northwest has a lot to offer in terms of small- to medium-sized businesses that need quality services at a more affordable price than the current Agencies can offer. That’s my target, and I think Red Couch Creative is the perfect company to do it. 

As of right now (and for the last 6 years), my business as a solo freelancer has continued to be successful. A lone wolf operation that has a solid list of clientele, both revolving as well as a steady stream of new client contacts, with an exceptional image and set of standards. I’ve been so busy for the last year (for the most part) that I spend more days wishing I had help than not. I did take on a freelancer out of state who has asked me to send him overflow work, which I do now and then, but I often find it easier to do the work myself rather than take an hour or two to explain the expectations and/or restrictions of the project. So I keep going at my same pace, often starting work early mornings just to keep up, though I never take on enough work or clients to justify hiring a part-time designer. At this point, I feel sort of… stuck.

So the other day, I received a phone call from an old high school friend who has her degree in Marketing/Communications. We chatted like we usually do, planned a time and day to meet up for beer and tacos, and then I asked her how the job search was going. She still hadn’t found her first marketing job, but in part, that’s why she wanted to talk to me, and she went on with what I found to be a very interesting proposal. She would like to work for me, part time, as a marketing person. She would be in charge of bringing in local clients and helping me expand my business, while in turn I would be giving her the experience she needs to put on her resumé that could later on be very valuable in getting her a more permanent marketing-type position. It actually made wonderful sense.

I had always thought my focus should be on hiring a graphic designer to help me with business, but it’s really (I suddenly realized) two people that I needed to hire… a marketing person to go out and get more clientele, and a graphic designer to take on the new work that person brings in as well as relieve me of some of my own overflow. My struggle was always the amount of time I would have to take to keep my designer busy, but if I have somebody doing that for me, as well as marketing my own business and doing all those things I just don’t have time to do, then now I have more time to Manage, and less time to stress about my own deadlines. Yes, this could work.

I’ve circled the idea to some close friends and family and have been getting a very good (and relieved) reaction. I have a very good friend and businessman who is just beginning to expand into his second local Restaurant here in Boise, and his initial reaction was “It’s about damn time.” He said something else too. He told me that, at my age and level of experience, I should be more than just a Graphic Designer. I should be running a team of designers to be doing my work for me. I should be in my office, checking work and directing my team, allowing them to work at their own comfort-level, but guiding them into my standards and helping them to expand their own skills. And eventually, I should be out playing golf a couple days a week while my business runs itself.

The thought of that excites me beyond my wildest dreams. Of course I had always dreamed of one day becoming a “Firm” or “Group” instead of just a freelance studio, but of course there’s always risk involved too. I’d have to put out the capital and pay my employees before I had enough work to support them. I eventually will need an office space and everything that comes with it… desks, computers, chairs, a conference table, etc. I’ve always preferred the slow and stead approach – it’s how I got this far – but eventually the time comes to make that jump, take that leap and propel your business forward. For Elle Phillips Design, that time is coming soon. I propose it will happen this year.

So a personal shout-out to my friend Amy, who’s out-of-the-box (and very forthright) proposal was actually the solution I was looking for. There’s still a lot of details to think about and work out, but if all goes well, by this time next year I’ll be Elle Phillips Design Group (or possibly operating solely under my parent company, Red Couch Creative, inc.?) instead of just Elle Phillips Design. Yes, that would be cool.

First off, let’s go over some basics. Any (and every) type of packaging must start with a dieline. What’s a dieline, you ask? You should have learned this in at least one of your graphic design classes at school, but if you’re self-taught or need a refresher, then I’ll give you a brief explanation: A dieline is basically a outline of the flat shape of your package. Sounds simple enough, but you’ll need to set up the dieline in a specific manner so it doesn’t print on the actual package and the printer has the ability to strip it and separate it from the file itself without hurting the integrity of the design. To “strip” in printing terms means separating a part of the file (in this case, a spot color) so the printer can process and create the die cut for the box. You see, all forms of printing, even in packaging, are printed on a square or rectangular piece of paper or cardboard, then later cut into the proper shape. That’s the die cut.

So now that you know some of the terminology, it’s time to get to work. For my example I’ll be using an actual file from an actual client. Meet RT Foods, Inc., makers and developers of TigerThai frozen foods. My assignment today is to take an existing box and resize it to new dimensions. They’ve decided to go with a smaller version of an existing product, so smaller packaging is required for a tighter fit and so more of that product can fit on the shelf (or in this case, the freezer). After they determined how much product they want to fit in the box, they supplied me with new dimensions: The box should be 185mm wide x 250mm high x 80mm deep. It’s VERY important to have accurate dimensions up front. Just guessing the proper size will only lead to wasted time and workflow in the future. I won’t even begin a package design until I know the proper dimensions, which should be supplied to you by the client or printer.

These new dimensions are not proportional from the original, so there will be no shortcuts with a massive “select all” and scale down. When it comes to packaging, you really should try to avoid that anyway. Doing such could mean fonts become too small to read, logos aren’t prominent enough and an overall unbalanced look for the size of the packaging. It’s always best to start with the dieline first, then reorganize content as needed to keep the quality and integrity of the product, while maintaining proper hierarchy.

File Setup: Utilize the Proper Programs for their Proper Functions

Now that we know our dimensions it’s time to edit our dieline, and I’m going to explain a few things here in regards to programs you should be using. So, because of their versatility and standard use in the industry of graphic design, I use the Adobe Suite, version CS5. You get a lot of programs with this suite, so utilize them! Vector objects should be made in Illustrator, raster object and photos should be edited in Photoshop and ALL layout should be done in InDesign. There’s nothing I hate more than getting a file from a designer who simply did everything in Illustrator or (someone please kill me now) Photoshop. If you have these three programs, you should be using all three, and for the reasons they were created. Take the time to use all of these programs for what they were intended, and you’ll find life is a lot easier.

On that note, your dieline could be created in InDesign, but you should use Illustrator for this piece. Why? First off, you have a wider array of tools that will make the development of the dieline much easier in the long run, plus you can save the file and simply import it into your InDesign document as a single graphic image, assuring that no lines are mistakingly moved or edited. You can lock it down on it’s own layer and never worry about it again. As with all Adobe programs, there are twenty different ways to do anything, but this is a widely accepted and used method, so that’s where I’m going first. Off to Illustrator to adjust my existing dieline to the new dimensions.

Upon opening my existing dieline it’s important to note that I already have it set up for overprinting stroke and spot color. These things are less for you and more for your ever pissed-off printer to keep him or her happy and prevent them from calling you later to bitch about the problems with your file. So before you even begin to resize your dieline, check these two things:

1. Select your entire dieline and set the stroke color to 100% cyan. In your swatch library create a new swatch, and by double-clicking that swatch, change the color from process to spot, then rename the swatch “Die Line”. This little step will convert your dieline so it has it’s own printing plate and allows the printer to pull it out of the file and use it for processing the eventual die cut. I’m using 100% cyan as an example, and you could actually use any color in the spectrum so long as it’s set as a spot color, but the general acceptance is to use either 100% cyan or 100% magenta.Those two colors stand out from just about any design and will give you a good view of where those lines are on any file. They’re industry standard, and printers keep an eye out for them.
2. With your entire dieline still selected, open up your Attributes panel. I have it as a part of my standard toolset in Illustrator, but you can access it through the “Window” file menu by selecting “Attributes.” When that’s open, activate the checkmark next to “Overprint Stroke.” What this does is it tells the selected strokes to print over any other color it may sit on top of, instead of knocking out the colors beneath it (creating a white line), and then printing on top of the white for a true color.

Let me see if I can explain a bit better. When you have a bunch of colors, objects, etc. on a page and overlapping each other (for example, let’s say blue type on top of a dark red background), your printable file will automatically adjust at press to separate the red from the blue and print them separately, so all of the red prints on white paper and all of the blue prints straight on white paper. It may look like the blue sits on top of the red, but truly it doesn’t. That part of the red background has been “knocked out” so the ink colors don’t blend – they print true color.

By setting your dieline stroke to overprint, you’re essentially telling the file you create NOT to knock out anything underneath that stroke. This is very important, because when you set up your file and have your dieline sitting on top of your package design, your printer will be separating that dieline from the rest of the file later on. So what would happen if you didn’t overprint the stroke and the printer removes the dieline? You’d have a white line knocking out of your design. You don’t want that. So overprint your stroke, and you’re safe for yet another day.

Now that we know our lines are the right color and set to overprint, it’s finally time to resize. This is the easiest part of the entire process. Starting from the middle and moving outward, just place guides and resize each panel to the new dimensions. If you can’t visually understand which panel goes with which dimension, simply print out a small version, cut it out and put it together. That should give you a better idea of what belongs where. In my first few years doing package design, I had mini-models spread out everywhere, so don’t be ashamed if you can’t visualize it right away.

Once you’ve resized all of your panels (don’t forget those pesky tabs), your dieline is finished and you can save it (give it a new name outlining the new dimensions for future reference and easy selection among your million other dielines).

Now it’s time to go back to our InDesign file where all of the elements of our package are put together, and get everything to fit within the new box areas.

When I set up any file in InDesign that requires a dieline, I prefer to keep the dieline on its own layer, set the preview settings to the highest quality so I can see the fine line of the die and not a thick, low-res rendering (allows for better precision on panel edges) and then lock the layer. All of my text and graphics go on a layer underneath the dieline, so I can see exactly where my elements need to go at all times, and it’s just a matter of turning off the visibility of the dieline layer to check and make sure there are no gaps or hairlines at the edges of my design elements underneath it.

On the image below, you’ll see my new dieline has been imported and centered on top of my old box. You’ll notice the new dieline areas are quite a bit smaller than the old box, but it’s all workable. We just need to resize most of the elements (making sure the most important elements are still readable and the less important elements are reduced further in size) and rearrange them to fit within the new areas.

In the case of my client and having worked with them for some time, I know the TigerThai logo must remain prominent on all panels and the name of the product is imperative to remain large and readable at a distance. The image of the product on the front is very important, but can be reduced drastically in size on the side panels since it’s notably less-important to see them on the sides and we need to make room for the more important product name, “Udon Noodle Soup with Tempura Shrimp & Vegetables”.

On the back, we need to make sure our cooking instructions are clearly readable, as they are the most important information on the back. That will require some resize of the product name and some major readjustments on the way the elements on the back panel are displayed. This portion will be the most challenging, but not impossible. The client expressed that they wanted the packaged soup image with callouts to remain somewhat prominent on the back, so after playing with it for a bit I was able to make enough room on the top edge to place the TigerThai logo and product name (keeping in mind they should be at least of equal proportion or making the product name a bit larger than the logo), and I was able to easily fit the product image and callouts on top of the red strip. Some adjustments to the cooking instructions allowed me to fit them nicely below the product image, and voila! we have achieved a nice balance of elements. Had we just done a mass-resize and kept these elements in the same place as before, we would have had some serious readability problems. This is much better and the client will be happy that all of the most important items in this section are properly displayed. You’ll see here as well that I laid out the side panel at the bottom of the folding box and will use this as my template for the rest of the side panels that display the same elements.

As I go through and finish adjusting the rest of my panels, you’ll notice that I’ve left room outside of the dieline for some bleed. Don’t forget to do this – the last thing you want is the cutter at the printer to be off slightly and give you a stark white line at the edge of the box where there should have been color. As with any printable layout, I’ve also left room inside the edges of my dieline so none of my elements risk getting cut off. Text should always remain at least 1/8″ or more inside the edges of any layout.

And as I mentioned before, I like to view my layout without the dieline once I get close to being finished. This allows me to zoom in and make sure I don’t have any mysterious gaps underneath that line which might show up as glaringly obvious on a folded edge of my finished box. I’ve got a nice textured image (created in Photoshop) that I use as a background on all of my panels, and I’m careful to make sure there’s some overlap on all of them. They dont have to come edge-to-edge and fit perfectly together, you’re allowed to overlap elements. That gives you the best chances of a nice, tight fit. And as you’ll see below, I have a clean, finished product.

You’ll see here that while I didn’t place a higher importance on the imagery on the panels, I was still able to keep them fairly large and consistent across the board. My nutrition panel is nicely centered, and don’t ever feel like you have to move an element or lose the integrity of your layout simply because of a barcode. You’ll see the barcode on this piece sits right on top of the noodle soup image. That’s okay, because first of all, it has to be there, and second, even though it’s there your imagination fills in the gaps. So will the consumer’s. They’ve seen enough packaging at the store that the image will still gain attention even though their mind his busy looking over the bar code. The rest of the box images will fill it in for them.

Final Output

I sent a PDF of this layout to the client (low-resolution of course) and they approved it, so now it’s time to set it up for press. The good news is that we’ve done most of the hard stuff already, by setting up our dieline correctly from the beginning. Now it’s just a matter of outputting the file as a press-ready PDF. In most cases you’ll want to talk to your printer about how they like their files, but Adobe Acrobat is a very widely accepted format and in most cases that’ll work with maybe some adjustment to settings, though sometimes your printer will ask for an outlined Illustrator file which is just as easy to export from InDesign. In our case, the printer is actually located in Thailand and although they can use Adobe Acrobat files, they have had problems in the past with outputting the type, so before I print as a PDF I’ll need to select all of my text in my InDesign document (command-A, making sure no layers are locked) and outline all the text in the file (command-shift-o). This assures that all of my text is treated as a vector graphic instead of embedded text. Not necessary for all printers, but a safe bet when you’re in doubt. This will increase your file size substantially, but we’re FTP’ing the file anyway, so not a big deal. It’s much more important to have an accurately printed file.

So after that’s done we output our PDF file from InDesign (File –> Adobe PDF Presets –> Press Quality)  and once the dialog box pops up we need to check some important settings. The Press Quality general setting usually has everything set up that we need, but under “Output” we’ll need to select the Ink Manager and make sure we have any random spot colors printing as CMYK except for our dieline. Since this is a 4-color job with die cut, the die cut should be on it’s own plate and separated out so the printer can pull it later. Once that’s fixed we can go ahead and output the file, and we can go into Acrobat and check the dieline. This is a good place to show you what overprinting does.

While your final file is open in Acrobat, click on your Output Preview (or sometimes called Separation Preview) tool. This tool is typically located under the Advanced menu, or you can make it a part of your standard Acrobat tool bar. Clicking this will open a dialog box where you can see your 4 separation colors (Cyan, Magenta, Yellow and Black) as well as any spot colors you have in your document. As you can see on the image here, I’ve clicked the checkmark next to my Die Line spot plate to turn it off, and you can see exactly how the file will be printed without the dieline. Had we not turned overprinting on in our dieline earlier, we would see a white line on our flat file where the blue dieline used to be. Easy as that, we’ve checked our file and we know it’s going to print successfully, our printer won’t hate our guts, the client won’t be paying any extra fees for changes later on (at least not due to us) and we get repeat work from all sides.

I hope this tutorial was helpful and please feel free to ask any questions that I may not have answered here!

Everything sounds perfect, right? Well… not really. Nearly every year since I started my business we’ve had some kind of surprise at tax time. I’ve tried talking to the Accountants a few times over the years and never got much response, if any, and too many times there’s been stress and wonder. Worst of all, I kept thinking it was my fault. Sure, I’ve made a few mistakes over the years to which I’ve corrected and become more aware of what I should and shouldn’t be doing… but to have something new come up every year which means more money out of pocket, well, that’s not right.

It was thanks to another member of my husband’s family who called me to tell me they’d be dropping the “family” Accountant, that my eyes were opened. Apparently they’d been having many of the same issues we had. And most of all I just never felt comfortable with them. I couldn’t call and ask for advise, and not knowing how much they charged the “family”, I didn’t want to risk creating undo expenses. So, it was time to start looking around for a new Accountant. Someone I could talk to, get tax advise from, and who would hopefully clean up and fix any mistakes that had been made in years past.

Holy shit have I learned a lot these past few weeks. I decided to interview a few different Accountants here in town and all three asked me the same question, “Why are you operating as a Sole Proprietor?”

That’s a great question, but not for someone who doesn’t know the answer. As a freelancer and (very) small business, my question back to them was “Why shouldn’t I be?”. Apparently, as a small business, once you reach a certain level of income there are some big tax advantages to becoming what’s called and S-Corporation. Huh? Let’s break it down a bit.

Sole Proprietor
Starting a business as a Sole Proprietor is pretty easy. Just file a DBA (Doing Business As), grab a Federal Tax ID number (also known as an EIN Number) and you’re pretty much in business. Just remember that as a Sole Proprietor you will pay (as of right now) 15.3% of your income (after deductions) in taxes. So if you have a taxable income of $50,000 per year, you’ll pay $7,650 in taxes. Also, should you ever get sued for any reason, your business is YOU. Meaning, your personal property can be seized to pay off a business debt. This is putting it in simple terms, but you get the idea.

S Corporation
Now I’m not a tax professional, and should you need any tax advise (blah blah blah) don’t come to me and don’t take anything I’m saying here as tax advise. Every business is different and your situation may differ greatly from mine. Now that I have that out of the way, here’s my understanding of the differences in an S Corporation. First off, legally, as an S Corp, the business is liable in itself for any debt and I, as an individual, am no longer personally liable. Meaning if something happens or if someone sues the corporation, they can’t seize my personal assets – only those of the corporation. Pretty cool.

Next, and this is the better part, the S Corporation would pay me a “Fair Salary” to which I would pay my normal taxes as usual, and anything earned beyond that salary would be considered profit… meaning it’s taxed differently (far less). I’m not gonna get into all the terminology because I still don’t even understand it all, but of course that’s why I (now) have a new Accountant.

So let’s use the previous example of a $50,000 a year income (this is just a round figure for easy math) and we’ll say you live in Lafayette, Louisiana. As a Graphic Designer in the town of Lafayette, Louisiana, the median salary is approximately $38,000 per year. The city or town you live in may be higher or lower, but we’ll use this as an example for now. That means your S Corporation will pay you a monthly salary of about $3,167, and you’ll pay taxes on that salary, equaling about $5,814 per year. The rest of that money is paid out as ordinary income (also known as profit sharing) and not subject to the same taxes (they’re only subject to the shareholder’s income tax rate), which in Louisiana is somewhere between 2% and 6%. If we round it out to 4%, then you’d only have to pay an additional $480 on the $12,000 in profit.

Confused yet? Well, here’s the bottom line: With a $50,000 per year income, as a Sole Proprietor you’d pay a total of $7,650 in taxes. As an S Corporation you’d pay a total of $6,294, saving you $1,356 in taxes to Uncle Sam. Maybe not too much of a difference now, but as your business grows and you make more money, the savings can become substantial. This is something my former Accounting firm neglected to tell me, and makes me all the happier that I’ve fired them and hired someone new.

So, if you’re in business for yourself, and you think you’re doing fairly well… I might advise that you talk to an Accountant and just have them look at your company. You might be surprised at some of the things you’ve been doing wrong, and some of the things you’ve been doing right. Most Accountants will give you a free consultation and I’m here to tell you that for me, hiring a professional that is easy to talk to and appears to know what they’re doing is by and far worth the money you pay them. I was also very surprised at how little the Accountant I hired charges. Funny things you find out when you actually look for them.

Getting started: Is a business plan necessary?

You may remember in your High School or College Business class some talk about a business plan. Or maybe you’ve read all the books that tell you how you can’t start a business without one. Well, in my experience, much of that is hogwash for freelancers and one-man businesses. Don’t get me wrong, I think having a business plan in place can really put things in perspective, but is it absolutely necessary for Freelance Design business? Not really, and I’ll tell you why.

First, the number one reason people write business plans is if they need to approach a bank for a loan. If you’re opening a retail shop and need an advance on store space and supplies, then a business plan becomes a necessity. The person who’s looking to open a new Widget Shop needs to show the bank forecasts, expense charts and all sorts of other numbers to prove their business will eventually be profitable. But that’s not what a freelancer needs. I should know – I wrote a 22-page business plan 3 years before it ever began and I might as well have thrown it out the window for all the good it did me. In fact, by the time I left my job for full-time freelance I had completely forgotten about the business plan and only later found it buried in a drawer, clean and pristine.One key to starting your own one-man show is taking it one step at a time while you continue to work for “The Man.” That will allow you to build your business from the ground up without taking a financial toll. Therefore, a business plan to show to your local banker isn’t all that necessary.

That doesn’t mean you shouldn’t write one, though.

Writing a business plan will indeed help you organize your wants, needs and establish your goals and opportunities. It will help you evaluate your current and future worth, show you what tools you need and which ones you can do without for a while, and guide you to where you’d like to take your business in the future. For me, this kind of information wasn’t necessary because I’d been thinking about it for nearly 10 years. For you, as someone who may not have been thinking about it for very long or who just decided yesterday that freelance writing is the coolest job on Earth and a better direction for you, a business plan may help you stay on the right track.

So if you prefer to create a business plan, then write it for yourself, not for anyone else and let it serve as a guide to get you where you want to be.

Taxes. Need I say more?

One thing I was not prepared for was the substantial difference in taxes when you have your own business, and the required “forms” and “ID’s” you need in order to keep your business legal via the Fed.
I never realized how easy I had it working for someone else… they just gave me my paycheck, I saw the different amounts of money being removed from my check every month, but never thought much of it other than my occasional groan about how much I would be making if they didn’t take out so much. Well, that was nothing compared to managing your OWN business and taxes.

First, get a Federal EIN number. It’s quick and easy to get one (visit: http://www.irs.gov/businesses/small/article/0,,id=102767,00.html), and for a sole proprietorship (aka. a one-person show), it’s just safter to use a Federal Tax ID number instead of your Social Security number. At this level there isn’t much difference between the two, but I personally like to keep my SS# close and, with the amount of forms you have to fill out that require such a number, better to fight against fraud with your EIN than your SS.

Next hurdle, the bank. Is your business under your legal name? If so, you can relax. For all others, prepare for a pain in the patooty. My name is (legally) Eleanor Phillips. My business name is Elle Phillips Design. Because I use my nickname, “Elle” instead of my full legal name, I was required to file for a DBA (Doing Business As) or also called a Trade Name Registration through the state and provide that paperwork to my bank in order to deposit and withdraw from my business account. Oh, and by the way, you WILL be required and SHOULD to open a “business” account if you’re self-employed. While you may not be required to open a separate account if you’re just doing business as yourself under your legal name, it would behoove you to have one anyone for tax and audit purposes. Keeping your accounts separate really will make life a whole lot easier later on. For example, come tax time, if I have any doubts on a receipt I might be missing or a check that was sent out for business purposes, I can simply go back to my bank account and get the record. The IRS will too, should you ever be audited.

Moving forward, you also need a business license if you’re running a business out of your home. Check with your local state or county office, and 99% of the time if you’re a freelancer, writer, designer of some sort, you’ll be granted a license, but you will want to make sure you have the proper permission to run your business from where you live. As far as I’ve heard, the only way you might be denied is if you run a business involving other people or chemicals or something of that nature… i.e., hair salon, daycare, etc. Get a business license to be on the safe side. The last thing you want is some kind of fine from the county because you’ve been discovered operating without one.

More money to be dished out! Register with your state tax commission. Most states are different, so really research what you need to do, but in more cases than not you will be required to pay some kind of state tax. Visit your local state government website for details. Some states require taxes be paid monthly, some quarterly, some yearly. Some require only income tax, others require sales tax.

And here’s the final doozie… self-employment tax. If you work for yourself and no one else, guess what? The Fed wants their money and by golly you’re going to pay it. If you earn more than $400 per year being self employed, prepare to dish out 15.3% (for current 2010) on income up to $106,000. This percentage covers your federal social security and medicare taxes. THIS IS VERY IMPORTANT TO REMEMBER! If you write a book and profits come in at $40,000, then you will owe $6,120 to the government. Put it aside or pay it right away – just don’t spend it!

Save on taxes you have to pay by deducting EVERYTHING.

So while the bad news is you don’t get to keep all the money you make, the good news is you only have to pay taxes on your profit, not your gross. What does that mean? It means if you made $50,000 Gross last year, but your expenses came to $15,000, then you only pay taxes on the profit amount of $35,000. That’s a savings of nearly $2300 in taxes. So if you buy anything that could be considered for your business, keep the receipt and deduct it! I use Quickbooks to help me keep track of my invoices, receipts, etc. but there are a lot of choices out there and I highly suggest you obtain one of them as soon as you start your business. Take the time to learn the basics of accounting and life will be much easier in the long run. I actually found it kind of fun. I can track who owes me money, how long my invoices have been out, what bills have been paid and when, and I can pull a report at any time on what my current profit and loss for the week, month and year is. I can even compare my income and expenses to the previous year, so I always have an idea of what my taxes will be.

Here’s a great little story for you:
My first full year as a freelancer was great. I was making great money, working my butt off, and I watched my savings account fill. Then tax-time came. At the time, I had no idea about the 15% self-employment tax and deductions didn’t really matter to me (after all, I’m a designer, not an accountant), so when my accountant came back to me saying I owed the Fed over $16,000 I about had a heart attack. WHAT????? How did that happen? Why didn’t anyone tell me I would owe that much??? It’s because I was stupid. I didn’t do my homework, and I failed to realize one of the most common parts of owning a business: deductions. So I’m telling you now, don’t let it happen to you. I nearly closed my doors that year because of it. But then I got smarter. So, to help keep you from making the same mistakes I did, here is a list of things you can (and should) deduct if you operate a small home-based business:
Office space and everything that goes with it (if you have dedicated 10% of your home to office space, you can also deduct 10% of all your utilities (water, garbage, sewer, etc.))
Food (you have to feed yourself while you’re working, right? So deduct your lunches for the entire year)
Office supplies (obviously, but be sure to enter the receipts for EVERYTHING that could be construed as office supplies. Buying tape to wrap Christmas gifts? No you’re not. It’s for your office. Get it?)
Computer programs and upgrades
Furniture for your office. This includes your desk, your speakers, the antique-lamp that sits on your desk, file cabinets – even a couch or laz-y-boy if you need a comfy place for your clients to sit when (and if) they come to visit
Car mileage (if you go to the grocery store to get stuff for dinner and you pick up a pack of pencils (say that 5 times fast) then you can deduct the mileage of the entire trip)
Travel to visit clients (if you have a client out of state, you deduct everything for that trip!! This means the flight or mileage, any clothing you may need to buy for the meeting, all meals (not just lunch), gifts, entertainment, hotel, car rental, EVERYTHING.)
Client gifts (if you send thank you cards or a bottle of wine to every client at the end of the year, deduction).
Charitable contributions (remember to get a receipt for every donation you give, including to the Salvation Army or Good Will)
Retirement account contributions (last I checked the max amount you can donate into a personal IRA each year is $4,000, and in some cases up to $10,000. That’s money you don’t have to pay taxes on until you retire.)
If I knew even half of this information when I first started my business I might not have had such a shock my first year, so if you’re reading this then you’re already further than I ever was.

Best of luck in your business and more articles will be coming. If you have suggestions or questions, feel free to contact me through my website at www.ellephillips.com.

Visit www.ellephillips.com for more information about Elle Phillips Design. Thanks for reading!

Let’s be honest and very realistic… If you don’t have a website, you can’t expect to stay in business as a freelance graphic designer. Period. There is absolutely NO reason in today’s world NOT to have a website. You can get hosting for less than $50/year, a domain will cost you $20 or less per year, and as a graphic designer you should be able to design a kick-ass-looking site. Not a web designer? Then buy a “template” site from someplace like Perfectory.com or TemplateMonster.com, customize a WordPress site, or better yet have one of your web-designer friends create a basic portfolio site for you and, in return, do some free work for them. No matter what the case, get it done or you’ll have no chance of competing with other designers, getting new clients, and staying in business no matter how good you think you are.

Now, there are rules you should abide buy when building your website:
Rule #1: Keep it clean and professional. That means no misspelled words, foul language, or declarations that you are so cool that everyone who visits your site should buy you a beer (I actually know someone who did this, and they truly wondered why they weren’t getting any clients).
Rule #2: You MUST include portfolio pieces. Don’t have any? Then you shouldn’t be freelancing yet. Get some real-life experience and some real-life portfolio pieces before you try freelancing. This is a very competitive industry and in order to give you the best chance at success, you HAVE to have a quality portfolio. This is what clients will look at first and ultimately make them decide whether or not to contact (or hire) you.
Rule #3: List the services you offer and make it clear to the client what you do and how you do it. If you are strictly a web developer who specializes in Cake PHP, JAVA, jquery and other specific types of development, then say so. If you’re strictly a Print designer and your specific strengths include logo design or catalog development, then say it. If you do it all, then say you do it all and make a list of everything you can do.

**TIP: If you say you can do it, then back up your claim by putting that particular piece in your portfolio!

ADVERTISE YOUR SERVICES

Once you’ve accomplished the phenomenal feat of building a quality website and getting it uploaded, it’s time to tell the world you’re open for business and accepting clients! And how do you do that? Well, there are many different ways to advertise your business – both for free as well as for a price – and just about all of them can be done online:

1. Your local Chamber of Commerce is a great place to start. The easiest way to become known locally is to get a membership to your local COC. Sometimes memberships are cheap, sometimes costly (depending on your area) but nearly all of them will have local networking events such as luncheons and business after hours, and will include your business listing on their website (often with a link back to your own site). Other benefits will sometimes include exclusive referrals, business card and literature displays, and admission to seminars and workshops. It’s always great to get involved in your local community, as well as get to know other local businesses who are also members. Your membership to a local COC will not only give you benefits from the Chamber itself, but also from other businesses who are associated.

2. Professional Graphic Design organizations such as the AIGA (American Institute of Graphic Arts) offer National as well as Local chapter memberships and, similar to the Chamber of Commerce, includes many benefits. Benefits to joining the AIGA include health insurance discounts (which can be very beneficial to those of us who need to purchase our own healthcare coverage), view full job listings, getting a listing in the AIGA Designer Directory and discounted rates to conferences, events, design competitions, books and more. The down-side to joining the AIGA is the expense – they expect a yearly investment of over $300 for those individuals who have practiced design for 4 years or more. Do the benefits outweigh the cost? Maybe, maybe not, but if your interest is in getting actual paying clients, a national organization as big as the AIGA probably won’t help much.
A better suggestion, in my opinion, is to join a smaller, local chapter of an Artist’s Guild or Advertising Federation. For example, there are a ton of local chapters of the American Advertising Federation (such as the “Boise Advertising Federation” in Idaho or “Ad 2 Phoenix” in Arizona, to give you a couple of examples) who offer memberships at less than a third of the cost the AIGA charges (I’ve seen them as little as $50/year and up to $95/year), and they offer the same benefits of online listings, seminars, luncheons, networking events, discounts and local exposure. I’ve found these smaller organizations to be more advantageous to getting new clients and businesses referrals. Whichever you prefer, just do an online search for different graphic design and advertising organizations in your area and join the ones that fit you, your business and your budget the best.

3. Freelance portfolio/graphic design listing websites are all over the web these days. These sites are becoming more and more popular as businesses search for freelancers in all specialties and mediums, and it can only benefit you to take the time to join, fill out all the necessary profile information, and upload samples of your portfolio. The more exposure you have on the web, the easier it will be for potential clients to find you and the higher your website will rank in major search engines. Here’s a list of some of the more popular and effective websites I’ve used:

– www.freelancedesigners.com: On first inspection, this website appears poorly designed, outdated and highly confusing, but don’t let this discourage you. I, personally, have received my best clients through this website and it’s very likely because a visit to any search engine under the words “Freelance Designer” will give you this website on the top of the first page. Freelancedesigners.com gives you a free listing when you sign up, and a free listing is all you’ll need to start with. You have the option of spending money and increasing your listing areas (they catalog all members by city/state), but test the waters and see how you do with a free listing first. You can decide from there if it’s in your budget and your better interest to increase your area.
When I started freelancing, this was the only site I was listed on (using their free listing services) and I received an average of 30 hits per month to my website. You may receive more or less depending on the area you’re listed in, but if you receive only one new client thanks to this service, it makes the time and effort you put into the listing very worth it. I have had a free listing on this website since 2005 and still, to this day, receive quality leads from it.

– www.creativeshake.com: Creative Shake (previously known as portfolios.com) is similar to the freelancedesigners.com listing service, but with some big differences. First, you can really show off your portfolio elegantly with a free listing on this site. It takes more time to fill out all the required listing information and you’ll have to spend some time creating portfolio images according to the upload specifications, but once it’s done you don’t have to go back unless you want to update your portfolio every now and then. CreativeShake also has an area specifically for job postings that you can browse through and apply for, as well as news feeds and creative awards competitions. The downside to this website is that it doesn’t seem to be well-known enough (or get high enough rankings from search engines) to get many quality leads. When I first joined this website I actually started out with a “Titanium” membership which is one you pay for, and you’re pretty much guaranteed to end up in the first 5 pages of results (often the first page, if you play by the rules and “update” your listing weekly). Unfortunately, after one year of my paid membership listing, I received only a small handful of contacts that came directly from CreativeShake… all of them just other designers with questions or comments.
Over time I suppose the website could gain popularity, but having received no quality leads that actually lead to a paycheck, I decided it was best to let the paid membership expire and downgrade to a free listing. Still, I advise you take the time and get your business listed – you never know where your next client will come from and, again, the more exposure you have, the better.
Similar to CreativeShake, you can get free portfolio listings on sites such as www.creativehub.com, www.myportfol.io, www.designtaxi.com, and www.behance.net. More of these portfolio networks are coming out by the handfuls, so join as many as you can.

– Freelance job listing websites are available to join as well. These websites focus less on the creative person’s listing and more on the connection between businesses searching for services and the service providers. The best example of this type of website is www.elance.com. Elance allows businesses to post exactly what type of job they need done, and then members who provide those types of services are encouraged to “bid” on those projects. The client then chooses the provider they feel meets the skills of the job required as well as the monetary compensation desired. Overall, it’s a great system for a graphic designer who’s looking to put a few bids out and get some extra work now and then, but there are some drawbacks. Because of its increasing popularity and international attention, there is a LOT of competition in the bidding process, and often with designers from other countries who are just as talented a designer as you, but charge far less. On top of those challenges, tack on the fact that companies who are seeking services from Elance are often looking for a deal – decent design at a cheap rate – and are not likely to be repeat clients unless they enjoy paying the added fees that go along with posting a job through Elance (which most do not).
Another Freelance listing website to check out is www.limeexchange.com. LimeExchange is very similar to Elance, but one feature I like in particular with this website is its “LimeStand” projects. Those are projects where designers are not bidding on projects – they’re designing to win the project – sort of like a mini-competition. Let’s say a new social networking site is coming out soon and the developer is looking for a logo. He has a budget of $100, so he posts a LimeStand project on LimeExchange, giving the specs for how he wants the logo to look. As a designer, you can spend an hour (or more) designing a logo, then upload it according to the LimeExchange network guidelines for the client, as well as other designers, to see. The project “closes” after a certain amount of time (could be a week, could be a month – it’s up to the client) and a winning logo is chosen, giving the winner the $100 award. Sometimes hundreds of entries can be made, but if your entry is chosen as the winner, you get paid. The downside, of course, is if your entry is not chosen… then, of course, you don’t get paid. Again, like Elance, companies are looking for good design at a cheap rate, so these types of sites are not great for long-term clientele and are at the very high end in terms of competition internationally, but okay if you’re in bind and need some work. Who knows? Maybe a client will like your design so much they hire you for additional work later on. This practice rides on the fine line of what’s commonly known as “spec work” – an evil cuss word in the design world and one that represents the worst of practices by companies small and large. But all I can say about it is that, when you’re just starting out and need to get your name out there, getting some of these types of jobs will ultimately benefit your portfolio.

– Networking sites are another great place to get the word out about your business. Business networking sites are an excellent way to do that, as well as get recommendations from past colleagues and join specialized groups who can send business your way. Some of the most valuable sites for our industry include:
a. LinkedIn.com: LinkedIn is a business-oriented social networking site that connects “trusted” contacts such as businesses, past/current colleagues and industry-specific groups. LinkedIn is a great way to get recommendations for your services published online for other businesses to see and has a very good reputation for professionals.
b. Ecademy.com: Another exclusively “business” social networking site, Ecademy prides itself connecting business people through its online network, blogs and message-board chats.
c. PixelGroovy.com: This is a pretty cool website that allows its members to write tutorials for other members to use. This site is mainly for web designers and developers, but provides a great resource for both learning as well as promoting your own company.
d. Facebook.com: Although Facebook is known more for its social-networking chatter, it has also become a place where you can create a page for your business and attract “fans”. Keep it professional and you’ll get a lot of exposure and maybe even a few referrals.
e. Craigslist.com: Desperate times can happen – they always do – so don’t feel ashamed if you have to advertise your services on Craigslist. Really. It’s free, it reaches thousands of people a day, and you never know – it could mean the difference between eating Mac ‘n Cheese or Steak that night.

– Something else you’ll want to look for are link-backs. A link-back is a link to your site from someone else’s. Web designers, it’s not uncommon at all to include a small link at the bottom of websites you’ve designed, so if that’s part of the deal when you make your contract with the client, I highly recommend you do it. It’s also great to get other companies to link their websites to yours – for instance, if you’re a print graphic designer and commonly work with one or two web developers, trade links. It’s more and more common now for companies who need one to be looking for the other, so it can mean more business for you and your “code-geek” buddy to post links to each other’s websites.

– Old Fashioned Print Ads & Public Relations: Some say print is dead. I say, in reality, print is not dead… nor will it be anytime soon… and advertising in local publications and newspapers can still create a valuable source for potential clients to find you. The biggest problem in print advertising is cost. When you compare the cost of purchasing a print ad that gives you minimal local exposure to doing any of the online advertising I’ve already outlined, you’ll see the value really isn’t there. But if you can get a write-up (that is, an article written about you or your business) through some public relations (PR) campaigning, then the value can be enormous. Local exposure among your community will be one of your biggest assets, because many companies prefer to hire freelancers who are local – even if you, the freelancer, work from home. Why is that? Well, think about it this way. If you own a company and you need some help with PR, where would YOU start looking? Chances are, you’ll start with a local search because local PR experts know the publishers, newspapers, editors, etc. that they work with on a daily basis. Just like a company who is out to hire YOU will look to you for local knowledge on printers and publications. Don’t get me wrong – you’ll very likely have people from out of state (or even out of country) contact you for work if you’ve advertised effectively online, but you can count on getting at least 50% of your business from local companies, so use it to your advantage. Tell your local newspaper that you’ve opened your doors for business and ask if they’ll do a write-up. If you know how to write a press-release or have a friend who can help (maybe barter some free graphic design work?), send out periodic press releases to your local papers. ANY kind of exposure will help you gain referrals and work, so tap all of your resources.

– Word of Mouth/Referrals: One of the easiest forms of advertising is word of mouth. TELL your friends and family you’re ready for work! The more people you tell, the more people they will tell, and it’s just a matter of time before one of them comes back to you with a referral. If you meet someone new – maybe a friend’s husband who’s a programmer or web developer – tell them what you do and “network” with each other. You never know when a casual meeting could turn into a huge client. Here’s an example. Your wife is getting her Master’s degree and makes a few friends while attending school. She brings you along to a barbeque where you meet the husband of another student who happens to spend his days working for a major web developer. You, as a freelance graphic designer, tell him what you do and you both compare/contrast job experiences as well as phone numbers in case any freelance work opens up for the other. A few weeks later you hear from him and he tells you he’s given your number to an associate who’s in desperate need of a freelance designer. You get a call from the associate, he hires you on the spot at your premium hourly rate, and you’re working 30 hours per week for the next 9 to 12 months. Sound far-fetched? Well, it isn’t. This actually happened to yours-truly and it could just as easily happen to you. Moral of the story: Be friendly, be outgoing and social about your job, and be willing to network with people even if it’s in a casual setting. If you’re unfriendly, standoffish, or simply don’t get out of the house once in a while you could see your clients and business drop. Always be on the lookout for potential networking, and take advantage when the opportunity arises.
TIP: When someone gives you a referral that leads to more actual business for you, it’s always a great idea to extend some kind of referral gift. Whether it’s a small floral bouquet or a deluxe basket from Harry & David, a bottle of local Wine or an engraved pen, think of a kind and creative way to send your thanks. It may or may not lead to more business, but it definitely shows an appreciation for the friendly word of mouth and will only increase your reputation as an honorable, respectable businessperson. Plus, it’s just a nice thing to do. A gift doesn’t have to be expensive – just enough to give a devoted “Thank You”.

COMPETITIONS

Another fantastic way to boost your reputation as well as your visibility is to enter, and ultimately win, design competitions. But don’t put your whole life and career on the line if you don’t win one immediately – there are so many types of design competitions out there with judges who are looking for certain aspects of design, that it can often be nearly impossible to win on a National or International scale. I’m sure you’ve seen what I’m talking about – Print and Howmagazines are notorious for their outlandish and non-real-world design winners, even though the magazines themselves are great to use for inspiration on your own designs – so if you do pay the $35 to $50 fees to enter one of those and don’t win, it’s nothing to fret over.

If you want like to enter some competitions, do your research and find competitions that seem to reflect your personal style, or better yet, competitions that are put on by your local chapters of the AAF (American Advertising Federation) or AIGA (American Institute of Graphic Arts). If you’re a member of these local chapters, they’ll keep you informed of what competitions are happening when, and you’ll very likely be given some sort of discount for entering.

My Dad once gave me some great advise about playing Slot machines in Las Vegas. He said, “Play the quarter or dollar machines with the smallest payout. They hit their jackpots more often, and you’re more likely to win something.” The same advice can be put to use regarding design competitions. Want to win a few? Of course you need to enter a quality design, but to increase your chances of winning then you should enter the smaller-scale competitions. You’re more likely to be chosen as a winner for competitions with fewer participants than the larger ones with tens of thousands of participants, so pump up your resume and gain the recognition you deserve! Once you’ve entered some of the smaller competitions and get a feel for what they look for in the winners, you can start entering the larger-scale International competitions.

To help you get started, here are some good online resources for open competitions that are nearly always accepting submissions of some sort:

www.graphiccompetitions.com: This site has a very easy-to-read list of open competitions in the US. Simply scroll down the list and review the latest contests, their deadlines, any submission costs that may be associated and of course, the prize.

www.allgraphicdesign.com: All Graphic Design is an excellent resource for articles, forums, blogs and open competitions for the graphic design community. Their competition list is long and includes contests for both graphic designers and web developers.

www.designerscontest.com: This site is relatively new compared to the first two, but is a very easy site to navigate and a great place to gain exposure. Simply click on the “Find a contest now!” link and you’ll be directed to a list of design contests (and corresponding prizes) to choose from. If you have some free time to submit some entries, this may be a good way to gain new clients as well as build up your portfolio.

Another great place to look for competitions is on major brand websites. For example, PepsiCo opened a competition over a year before they were going to roll out a new Pepsi Logo and Can design. The competition was open to anyone and everyone who wanted to design a Pepsi can. They gave users tools to use directly from the website, so those with no professional design software could still enter, as well as having the option of downloading a template for designers to come up with their own submissions. I followed this competition closely, and have seen very similar competitions for Mountain Dew, Glade and Hugo Boss. The Grand Prize winner of the Pepsi “Design-A-Can” competition was awarded $10,000 for their design. What wasn’t made so public until later was the fact that about 15 other submissions were chosen and used on various Pepsi cans and bottles for the following year before the final rollout of the new logo emerged. Those designers received $5,000 each – and it’s very likely they put less than 2 hours worth of work into their submissions. Pretty nice pay-day, and Pepsi was kind enough to include the designer’s initials and city/state on the back of the label.

My point is, keep your eyes and ears open. You never know when or where a competition will pop up, and a few hours of work is certainly worth it if you’re the winner of a good chunk of cash!

Visit www.ellephillips.com for more information about Elle Phillips Design. Thanks for reading!