Web designers speak out: What I wish I knew about managing my business & finances
You’ve got some pretty serious design skills (if you do say so yourself) 💅.
But when it comes to running a successful design biz, it’s going to take a lot more than building pretty websites to make the dream work!
Feeling a tad overwhelmed in your new role as the one who calls all the shots?
It’s 100% normal to feel completely in over your head when you’re first getting started with the biz side of things!
It was honestly the #1 thing I was hearing from past students of my first course, Square Secrets!
“Ummmmmm….so like, now what?” 🤷♀️
They had totally mastered Squarespace as a platform, and knew how to build completely killer custom Squarespace websites, but were left scratching their heads a bit (read: a lot) when it came to:
managing their clients & inquiries
marketing their business
juggling projects
creating a legit-looking design process
understanding & managing their finances
and figuring out all the tax mumbo jumbo & legal stuff that goes along with working for yourself!
After hearing the same design biz related questions over and over in my inbox, I decided it was high time for a new course to help aspiring designers get answers to alllll their burning Q’s about biz!
(Yep! My second course, Square Secrets Business basically wrote itself! So if you’re currently standing at the edge of the pond, wondering where the best place to dip your toe in is, that’s a pretty safe place to start!)
In the meantime…have I got a treat for you!
In post #4 of our web designer round-up series, we are talking to a whole tribe of successful designers who not so long ago found themselves in your shoes!
These crazy-talented ladies have generously stepped in to share their best bits of business-building advice to save you the trial and error, and hopefully make you feel a little less alone on the journey!
Web designers speak out:
What I wish I knew about managing my business & finances
“I hid from managing my business and finances for way too long with my business.
It's not the most enjoyable part of running a business, but wow has it made a difference since I faced my fears and started taking it seriously!
If you don't track your finances, it's so easy for your expenses to get out of hand.
Plus, when you see your income going up and how close you get to your goals, it's a great push to do even better with it.
I only started making money in my business when I started treating my business as a business, not a hobby, and started being strategic in the investments that I made.”
“I wish I wasn't too afraid of spending money to make money.
Once I learned that investing in my business was inevitable and ESSENTIAL, I scaled my business a lot faster.
If I am not willing to invest in my business, how can I expect my clients to invest?”
“I wish I knew that managing my business also meant managing my time off as well.
Because when you make your own schedule, there's no one to give you holidays off or tell you to use your PTO.
It's been so challenging to learn how to schedule projects, follow a timeline, and figure out how to take a day off without feeling like I'm leaving my clients high and dry sometimes.
But over the years I've realized that I can't control other people and if I'm doing everything in my power to keep things on track, but the client flakes then I can't take responsibility for that.
I have an "accountability clause" in my contracts now that say if I haven't been able to move forward on a project for a week then I'm able to put the project on hold and charge a restart fee.
It helps me feel like I'm allowed to set boundaries and stick to them.”
“If it's something that excites you, take the course!
I know Paige offers some incredible online courses; if you feel called it's for a reason.
This year alone I've spent $4,400 on online courses and made $22,000 from implementing what I learned.
Do your research, follow your gut, and don't be afraid to make the investment in continuing your education.”
“You 100% need a plan. And you need to expect that plan to change!
Adaptability is an entrepreneurs greatest asset, but you need systems to keep the machine running smoothly!
I learned about Dubsado early on and I still use it for proposals, contracts and invoices, as well as scheduled canned emails. Trust me, it’s a lifesaver!!!!
The book Profit First (affiliate link!) has helped me analyze and understand my finances and financial needs like never before! It’s a quick, easy read and so so worth it!
As far as time management, I personally work best slightly under pressure.
I set a time limit for tasks such as checking email and even design.
Of course, sometimes more time is needed for great design, but I’ve found that if I give myself a week to complete a design project, it will take every bit of one week to do it!!
Give yourself a limit time to see if you can create a beautiful solution in far less time.
Less time means more possible projects, which ultimately means more money!”
“Using an invoicing software is so worth the price!
It makes you look like a professional, helps keep you organized and allows you to Bill Like a Boss.
Also, use a contract. Always.
Women especially are always so afraid to offend or seem aggressive, but your clients WANT you to take the lead by telling them exactly how to pay you and what to expect.”
“There are great free accounting solutions like Wave that you can use with Zapier (also free) to connect to Stripe and Square, or connect directly to your bank account, so you don’t have to manually enter in income or expenses.
(Or keep them in a spreadsheet, like I did for years.)
This alone has taken hours off my plate each month. In general, I wish I’d automated more of my business earlier.”
“Hire professionals to help you!
I realize that it can be hard to invest back in the "boring stuff" (aka lawyers, accountants, etc).
But having solid contracts and accounting practices will save you SO MUCH time and headache in the future.
Get it right in the beginning, and your life will be infinitely easier moving forward.
“I want to touch on two points here: taxes & charging clients for project-related-expenses.
1. Taxes are overwhelming AF!
If you're US-based, did you know that you're *supposed* to make a tax payment FOUR TIME per year??
They're called quarterly tax payments. Not only do you have to pay the IRS, but you also may have to pay income tax your state as well.
If you can, I highly recommend hiring a tax professional to take it allll off your hands.
A good tax professional will send you a voucher 4x per year, so you know exactly how much you owe, who to pay it to, and when it's due.
Talk about peace of mind!
2. This one's important!! If you are billing expenses to your client as part of a project (for example, if you're a website designer and your client wants to purchase stock photos, so you purchase them and are having the client reimburse you for them), you must, must, MUST up-charge your client for these.
You have to!
Not because you're a slime ball who wants to be opportunist, but because when you add that $50 for stock photos to your final invoice, that $50 is now taxable income.
Which means that you OWE TAXES on that money.
So that $50 only ends up being $40 or so, meaning you're actually *losing money*.
To figure out how much to up-charge your clients for project expense reimbursements (font licenses, stock photos, assets from Creative Market, etc.) you need to add in money to cover taxes.
So if your tax rate is approximately 30%, you would charge someone $50 + 30%, also known as 130% of $50.
So a little bit of math: $50 x 1.30 = $65. Therefore you should charge them $65 for their $50 worth of images.
(This also doesn't take into account the amount of time you spent sourcing the images). Alternatively they can just purchase them on their own to avoid the up-charge.”
“Pay yourself a set wage.
It might be tempting to withdraw larger amounts when you land a big project, but you’ll be glad you have that money set aside if there are quiet seasons in your business.
I pay myself a set wage bimonthly, have 6 months of savings set aside and then pay myself a quarterly bonus if there’s any extra.
Things might be financially tight to do this right from the start, but start building up a reserve as soon as possible.
It makes it super easy to make sure you always have enough to make ends meet plus a little (or a lot extra!) for those big business investments like new tech or a nice bonus for you!.
The hardest thing for me is letting go and not trying to do it all - hiring out the tasks you don’t like, bringing on collaborators that have the skills you’re lacking, or paying extra for an expert that will get the results you need - these are all really good reasons to bring others into your business.
And these relationships that at first might seem very transactional might turn out to be the greatest thing for your business. There is often so much more to gain than just the initial service you’ve paid for.”
“Running a design studio made me a full-time designer - but also manager, customer service, marketing department, accountant, and social media creator…
Having so many roles it was overwhelming and sometimes was leading to not coping or missing important things.
Here are a few habits I developed so far:
First, a very important step was creating a business bank account and separate business finances from the personal, collecting all receipts and keeping in the file.
I have outsourced all the tasks I haven't been feeling strong at or good were too time-consuming for me.
Creating an action plan.
In the past, I was sacrificing all days for design only and abandoning my social media platforms or my own branding development.
With the time I've learned how to keep an eye on all parts of my business at the same time.
I have a "big picture" poster on my wall and day to day tasks in my calendar. I still use a traditional handwritten calendar.
Investing in my business and self-education.
A good desk lamp, a set of fonts, advertisement, online course, a book - everything that will level up the business is an investment.
Be good to me .
Eat and exercise regularly, take a full day off, don't start a day with the checking email/SM as the first thing, meditate - all these things are crucial to charge the battery and release stress.”
“Systems are your best friend.
Invest your time early on in creating strong systems and you’ll be good to go!
(Also know that your client process will shift in the first few months! That does NOT mean you’ve wasted your time. It means you’re learning and getting better).
There are systems experts that can help you, or you can do a lot of research and figure out what works for you.
I pulled out a TON of post it notes and went to town thinking of every email I’d want to send, every document, every touch point with my clients.
It helped to see it all laid out before I worked with a single person.”
“OHHH, how I wish someone had told me that I didn't have to do ALL the things.
From day one until about year seven, I tried to do anything & everything myself. I was burning the candle at both ends and felt so incredibly burnt out.
It wasn't until my husband quit his job to help me run the business that I realized how important it is to delegate tasks.
It's sometimes hard to admit that other people are more equipped to do certain things, like bookkeeping, taxes, payroll, etc.
If someone else is an expert in finance and you love to do creative work, for the love of all things productive, HIRE THEM to take on that role.
Time is money, and it's the one asset you can never make more of...”
“Like many new entrepreneurs, I tried to do everything myself (in part to save money) and it got really exhausting!
I wish I would've recognized earlier that by hiring assistance, my time would be freed up to better grow the business.”
“Go out, meet people and have fun.
It’s so easy to tuck yourself away in front of a laptop and forget to interact with real people.
I admit with Covid-19 this has been more tricky, but one of the best ways of staying focused and motivated is to surround yourself with like-minded people who are all rooting for you to succeed.
Start a mastermind with fellow designers, set up partnerships, or have regular zoom coffee chats with fellow online business owners.
You don’t have to do it alone.
Continue to invest in yourself.
I’ve invested in some amazing courses and a few things that completely wasted my time and money.
Embrace mistakes and failures. You won’t get it right every time and it’s ok to pivot as you go.”
“I am now in a routine of updating my finance spreadsheet every week and I wish I had done this at the start. It saves so much time (and procrastination!) and when it becomes habitual it makes things soooo much easier.
I have recently started scheduling time off/holidays and also wish I had done this sooner!
It's really easy when you work for yourself for your work and personal life to mix up.
I personally find it difficult to separate the two as I am always checking emails and thinking of ideas and feeling like I need to do little tasks here and there.
I realized I was never taking days off where I wasn't thinking about work, so I now book this time off in my calendar.
And that time is my time - to read a book, go out for a walk, or even rest and rejuvenate.
Remember that you deserve time off, and it's crucial to your creativity and productivity levels. You can't pour from an empty cup!”
“I wish I had a better process at the beginning.
Now I use Trello to upload drafts and have conversations with my clients. It's an easy way to keep track rather than sifting through email or trying to label emails.”
“As a Canadian designer working with clients from all over the world, I wish I would have charged in USD right from the start!
It was easier than I thought to set up a USD bank account, and it was like giving myself an instant raise!”
“I wish I knew the following:
It’s ok to not be an LLC! I’m still a sole proprietor and that works well for my business right now.
Hire an accountant to do your taxes for you. It’s worth it!
I use Excel to track my income and expenses and it works for me! Find what works for you and stick to tracking your expenses to save $ come tax time.
In the same vein, find a project management software you love!
I love HoneyBook (affiliate link! I snagged you 50% off your first year!) but other good ones are Dubsado, Asana, Bonsai, 17Hats, Monday.com, etc.
Invest in this and use automations to save yourself time on the backend tasks and keep track of your leads.”
“Save everything! Remember that being organized is key.
Have a clear filing system for your projects and make sure you know what your process is like.
Creating a document that has all the steps you take with each type of project can help you stay on track.
From the work-life balance perspective, don't forget that you need to take time off to stay productive.
Even if that means taking the afternoon to do something you enjoy, this can make all the difference.”
“Get HELP! Doing this on your own can be so overwhelming and honestly not always a great use of your time.
I would spend hours trying to understand the legal stuff and it wasn’t until I sat down with my lawyer, who already had all of the legal knowledge, that I was able to make smart decisions.
The best decision I’ve made for my business is to connect with a lawyer and an accountant who I trust. They have saved me hours of my time and sanity!”
“Don't let ALL THE THINGS overwhelm you.
Start small. Become a sole proprietor and get your business license in your county.
In terms of legal, that's enough in the beginning (I'm not a lawyer, just speaking from my experience + the hours and hours of research I've done).
Once you have more personal assets (or if your business is one that has a high likelihood of getting sued), it is time to become a LLC.
I didn't become one until 2 years into my business when I was making over $35,000.
There isn't an exact amount, but based on what I described above, I decided now was a good time.
Don't let the legal stuff overwhelm you or stop you from pursuing your dreams.
YOU CAN DO IT!”
“Set aside money for your tax each time a client pays you!
Even if you're not earning much, start your business with best practice.”
“Getting organized is such a big part of running a successful business that makes you happy!
Early on I invested in a course to manage my systems, set up my tools and improve my client experience.
It might be a bit of work at the start but now a lot of my business runs without me lifting a finger.
Things like email templates, welcome packages and Asana workflows will help you run your business efficiently for years to come so it's worth spending some time to get them in place.”
“Having a separate bank account for my business transactions has been life changing.
There’s no second guessing which charges are business related and it’s so easy to keep track of finances, taxes, and write offs this way.
I’m also a serial course taker and love investing in myself.
Each course or coaching program I’ve been apart of has made me stronger and more confident as a business owner.”
“When I first started out in business I was a fan of DIY-ing everything.
From teaching myself through Google and YouTube to creating my own contracts and invoices.
Not only is it extremely time-consuming to do this, but it doesn't make you look like the most professional designer in the world, even if your work is wonderful.
Discovering software that could automate all of these processes (I use And.Co) has been so game-changing for me.
I've had so many clients ask me how I create my documents because they look so great they want to use them in their own business!”
“The sooner you register your business the better because if you're self employed and want a loan you need to have ‘2 years worth of tax history’.
Quickbooks is really popular but a little confusing and I wish I knew about Hello Bonsai much sooner.
Bonsai allows me to not only track my finances but store contracts, proposals, and client information all in one spot which makes things so much easier for me to organize.”
“It’s always good to ask questions!! That’s what I did for a lot of these things.
You just have to start somewhere and then pivot and adjust as you find things that work better for your business.”
YOU’LL ALSO LOVE . . .
Web designers speak out: What I wish I knew about landing clients
Web designers speak out: What I wish I knew about building my portfolio
Web designers speak out: What I wish I knew about pricing & packaging my services
Web designers speak out: What I wish I knew about onboarding & off-boarding clients
Web designers speak out: What I wish I knew about choosing a niche
Web designers speak out: What I wish I knew about working with clients
12 ways Honeybook helps streamline your Squarespace web design business
Blogging tips for web designers: how to strategically share your portfolio
