January 23, 2004 | View Comments (16) | Category: Web Business
Summary: Setting reasonable financial goals.
When deciding to start your own business or go freelancing many people fall under the trap of thinking that they are on the road to financial freedom. After some time their hopes of becoming a millionaire are quickly dashed. It is important to set reasonable financial goals for yourself and have an understanding of how much work it will take to get there so that you are not disappointed in the end.
I never was the type of person who enjoyed working at companies. Maybe it was just the bad experiences I had. However, the one good thing (I am sure there are others) for being a web designer/developer within a company is that the company finds the work for you. When you are on your own, finding the clients who make you the money is all up to you.
Set reasonable goals that you are pretty sure you can achieve. Your first year out, don't go around thinking that you are going to make six figures. When you set reasonable, attainable goals for yourself you get much less discouraged and are willing to work harder to reach the next plateau. Your first year you may aim to make $25,000-$30,000 and once you have a steady stream of clients within a couple of years you might be looking at $60,000.
Being on your own can mean financial freedom, but it also could mean financial stress. There really is no easy way to make a lot of money so make sure you are willing to put in the work. If you are someone who needs to be making $50,000 right now, I wouldn't advise starting out on your own cold turkey. Take your time. The beautiful aspect of working for yourself is lots of times the work doesn't even feel like work. Keep things simple by keeping things reasonable.
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For anyone looking to go it on their own, I would highly recommend getting Ed Gold's "The Business of Graphic Design".
The copy I have is a few years old and I believe it has been updated for web design as well. It offers great insight into how to do such things as figure up an hourly rate based on overhead and salary, how to handle contracts, etc. Really helpful.
"Professional Practices in Graphic Design", published by the AIGA, is also a good resource.
Going freelance is a bold step. On the one hand, you have the possiblity of financial freedom by being your own boss. On the other hand, you have the possibility (some would say greater) of falling flat on your face, finding out that you may not be as good at dealing with clients as you thought you would be.
Jeremy Flint (http://www.jeremyflint.com)
Actually, I'm of the opposite bent. I've always imagined freelance work to be very financially unstable, with the obvious exception being if you are someone notorious in your field. I've heard a horror story too many (clients not paying, etc) that has made me shy away from immediately jumping into freelance. Plus it has been drilled into me that you need a network of people to get you started, which is best obtained in the workplace as you build a reputation for yourself and your work.
I have this whole big ball of things I would like to say about freelance work, because in many respects, I would find it to be perfection (your own hours, your own boss, working from home). But, currently, the cons outway the pros for me (dry spells between projects, financial unstability, and, horror of all horrors, searching out new work and marketing yourself constantly to possible clients - gah! - and then there is all the other grunt works of managing your business: accounting, paperwork).
I feel like something along the lines of Aquent http://www.aquent.com/ or The Creative Group http://www.creativegroup.com would be perfect for someone like me... but I feel like I still have a lot too learn, a lot of knowledge to attain, before I could do freelance full-time.
Alanna (http://www.virginmoistness.com)
I've just launched my web/graphic design career and I've set reasonable goals that I would like to achieve in the next few year; like to have my own company,office,house (im 18)ect.
But the thing Im having trouble with is how do I charge my client to reach those goals(off topic??)?.
I mean do I charge by the ammount of things I create or do I charge by the time it takes me to make them??
It might be off topic, but If one doesnt know the "basic rate" of what they should charge , how does he(me) set financial goals that are reasonable.
Steven
Steven: http://www.9rules.com/whitespace/web_business/setting_the_price.php
Already been discussed :)
Alanna: Nothing wrong with building experience at all, and it does take a certain type of individual to become a freelancer. "Starving artist" comes to mind too often.
Scrivs (http://www.9rules.com/whitespace/)
Another tip along the same vein, if you're looking to start your own business or freelance, but you're not quite ready (for any of the reasons mentioned), you can start building a strong portfolio by taking on pro-bono work in your spare time. The advantage of doing this is that you can truly "own" the results, whereas often in an employee situation, your work is restricted by co-workers, or limited in scope. Check your employment agreement to be sure, but in most cases non-paid work does not fall under non-compete agreements.
I can say from personal experience, be wary of agreeing to do too much, in order to get a good personal recommendation out of any pro-bono work you do, you need to make sure that in the end, your client is happy with the results and the time it took to produce them.
The "payoff" for donating your valuable time and experience is that you will have a portfolio piece, be sure to leverage what your offering so that you end up with something you can be proud of.
Also, make friends with the other folks at your current job, and try to avoid burning bridges. Keep in contact with all of these people, you might be surprised to see how much word-of-mouth referrals can help, even years after you've left your job.
I don't mean to sound preachy, I'm just thinking of all the things I would have liked to hear a few years ago.
Nate (http://web-graphics.com)
And as I mentioned in an earlier discussion on the topic here (trying to get scrivs to do a few of those), chicks really dig that volunteer stuff. lol
JC (http://thelionsweb.com/weblog)
I think it's funny that this topic always comes up because the concept of freedom from a company is generally misunderstood by many people. Those who are considering, or have made the venture into having their own firm often have little or no prior business experience. Everyone understands it's not a 'get rich quick' plan, but it's easy to overlook that it may not be the right answer to the problem.
For so many people you love to do something you are (probably) good at - in this case: web design. You start out with a lot of energy and excitement, because now you call the shots and give you customer the best site possible. Then you start dealing with customers. And sales. And bookkeeping. And contracts. What if the customer doesn't pay. The more time you spend following up on relationships, attending networking groups, the less time you get to do what you set out to in the first place: design websites. Because now you have to let someone else do it, and you hadn't planned for that and it's hard to let go.
The problem is that most people start because they want to focus on the job they liked, but then transform themselves into management. It's a curse and you become tied to your business. It's easy to become resentful because instead of finding freedom, you now work for a boss that makes you work longer hours, with more stress, doing the work you despise, and all of it for less money.
There are plenty of people who like the management role and have no trouble at all. Equally, there are folks who restrict themselves in a way that provides the balance they want.
It's not rocket science, but it's still easy to overlook.
There's a great book called the E-myth (ISBN: 0887307280), which is calls this concept the entrepreneurial myth. It's a very easy read with clear concepts and should be required reading for anyone who is considering going out on their own.
I can honestly say I know lots of local business owners who have become their own worst enemies, and miss substantial opportunities, because they are always trying to catch up and work 'in' their business, instead of growing and working 'on' their business. After all, going into business doesn't mean you hve have to join the 'starving artist' club.
Justin (http://bluealpha.com)
Starving artist... why not code weblogs on the street with the other artisans (jewelry and scarves and painters)? Haha.
Zelnox
One important difference is income vs salary. When freelancing your income should be substantially more as it needs to cover expenses - equipment / communications bills / travel / promotion etc.
The design work is only half the job, so for a 30k salary, you should be looking at ~60k of income!
Adam Bramwell (http://www.octapod.org/adam)
Not to mention insurance. Add another few thousand for that. Several of the freelancers I know in assorted fields keep part time jobs just so they can afford insurance.
JC (http://thelionsweb.com/weblog)
I am liking this article. Well, this is kinda hitting home for me right now because in the future, I would like to startup on my own once I have enough experience, but that is the kicker, I don't have any workplace experience in the field of webdesign/development. I am doing an internship right now (even though I am graduated) and I am doing web updates, site maintainence, basic stuff but I do get to use my creative juices on a couple of projects. However, over the past summer, I got in good with a president of a very established web development firm. My father happened to arrange a meeting with the president and we had an interview. He wasn't hiring at the time, but I impressed the living daylights out of him. I don't have an extensive portfolio and my actual development knowledge (like programming code) isn't very indepth either, I know a little coldfusion. What impressed him, though, is my character and personality. He knew he had a winner talking to me. I am an honest, hardworking individual who puts 100% into any project given, and he could see that from the way I talked, my experiences in life, etc.. Well, like I said, we had been in talks since July and up until recently, he didn't have any openings. Well, they are attemping to get a huge project right now and it required some coldfusion. He asked me if I had experience and I told him I did, but I was honest and said I am no expert, but I am not a beginner either. Why lie just to get the job, I don't want to screw up a HUGE project. Well, how I see things is he asked me because it was "his way" of pulling me into the company. I found out he wanted to hire me the day he met me, but couldn't since there were no positions available. Well, the other day, he made a formal offer and wants me to be a full time employee for his firm :)I will be making 32k a year and have benefits. Now, hopefully I gain a wide array of knowledge being at this job, and then sometime down the road start up myself. One bummer about freelancing is you have to pay for the health and medical insurance. Its always nicer having a company take care of the brunt of it.
jag5311 (http://www.gamecubecheats.info)
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#1
Doesn't hurt to have a stable of Russian or Indonesian coders who will work for less than minimum wage at your beck and call, either. :-)
JC (http://thelionsweb.com/weblog)