It’s not deliberately that I’ve decided to shift my topics from the nitty-gritty of coding to running a business. I think it have be a free-flowing natural progression as I’ve proceeded from beginning my semester o’coding to finishing up and realizing that I do in fact want to take this venture of mine beyond classroom to real world career. (See previous posts regarding weird enjoyment of freelancing.)
Today I came across two articles on the website A List Apart (alistapart.com), both written by the same gentleman, and focusing on the business aspects of design. Jason Blumer, chief innovation officer of Blumer & Associates, offers tips for developing a business and pricing services by that company.
In “Growing Your Design Business” in this month’s issue, Blumer offers tips he has learned as a business consultant for creatives.
Business owners learn their trade the same way: by taking general business wisdom, applying it to their specific niche, and working diligently until they get it right.
According to Blumer, there are four most common issues faced by growing design firms.
1. Working with the wrong clients. Finding the right clients is the key to respect and fulfillment, because they understand a designer’s value and allows the designer to remain in control of the design process, they bring enjoyment, and they are profitable. Working for bad clients, saps the relationship and taxes the entire process.
2. Hiring just to hire with the misconception that bigger is better. The process should be guided by the desire to retain those good clients – hire to serve great clients, but don’t take on any clients just to pay employees.
3. Growing too quickly. All aspects of the business need to be able to accommodate growth – from a reliable project management system to effective account managers.
4. Low margins. To me, this made a lot of sense and touched on one of the aspects of freelancing that the nay-sayers I’ve met hate. Talking money makes a creative uncomfortable, and it shouldn’t. It is business, after all.
In the next article I read, though it was published last year, advised newer business owners on pricing policies – and they make a lot of sense.
Pricing is a great branding control.
The most valuable piece of advice I took from this is to price by the service, not by the hour. In the past, hourly pricing has been the most common practice, but I always felt judged by how I accounted for that time. Also, it was difficult to establish the profit margin because I was not pricing according to the resources needed, but how long I took or didn’t take. Pricing by the service allows for specificity and consistency, which I am all about.
Blumer recommends slowing down the sales process. He says that clients in a hurry are going to be problem clients, and I agree. It would appear that clients in a hurry trivialize the design and creative process and undervalue the time spent understanding the client you will be representing. In fact, he recommends developing a client in-take process that includes determining the purpose of the project, investigating the expected result, discussing value, and creating engagement. By laying it all out up front, both sides are clear on expectations throughout the process.
He ends with another great tip: Provide three pricing options – always. The top option should include those things that the client didn’t asked for, probably because they didn’t think to. Three option offers a choice and further establishes expectations.
As I begin to process this eminent transition, these are the resources in which I will invest my time to help me clarify the environment I will reinsert myself into, hopefully as painlessly (insert chuckle here) as possible.