The secret to a thriving design business
Learning to manage
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Last year I did what a lot of designers often dream of doing: I started my own design business.
A year and over six figures in revenue later, I’ve been reflecting on areas of knowledge that I’ve developed along my decade+ career that helped make running my own business survivable.
This is part 4 of a multi-part post series about things you should probably know before starting out on your own.
These are things that I would encourage any designer to have a strong foundation in before taking the plunge, or be ready to learn them the hard way through trial and error.
Other posts in the series:
Part 1: Learn your craft (as it applies to the real world)
Part 3: Learn to build relationships
Part 4: Learn to manage (this issue)
Part 4: Learning to manage
What does it take to run a successful design business?
A mistake that I think many designers make is thinking that being a good designer is all you need to start your own business. And if you are a good designer you should eventually start your own business or studio.
But I believe that is very much not the case.
Many designers are better creatives than they are business operators.
To successfully run your own design business, you need to have to have the skills not only to create beautiful design work for clients, but also to operate and manage a company. Even if it is just a company of 1.
This might be surprising, but starting a design business is actually easy. I started a design business without leaving my house.
All I did was go online, file some paperwork with the State, set up a business bank account, and within a few days I had my very own limited liability company that I could operate under.
The hard part, of course, is staying in business and growing. I’m not sure about you, but operating and managing a company were certainly not subjects covered as part of my design education.
Some people go get an MBA (Masters of Business Administration) to learn how to do this. You certainly could do that too, if you can afford the time and money investment (2 years and good chunk of change).
I was lucky enough to become a Partner at a growing design firm early in my career. I was able to learn on the job and with very little risk due to it already being an established firm. This is where I learned and practiced what I know about running a business, which I still apply every day now that I run my own.
If you can find a situation where you can get involved with the running of a business with the potential for guidance and not a lot of personal risk, either as a manager in a larger company or helping someone else run their small business, I think this is the best possible learning environment for picking up the skills you’ll eventually need to run your own.
Provided the business is fairly similar to the one you might want to start one day, it’s essentially a real-world MBA where you are being paid to learn. Even if the business is only tangentially related to what you want to do, a lot of business knowledge is generally applicable, so it might still be worth doing.
A well-managed business doesn’t guarantee success, but it gives you a smooth playing field to operate on. If you don’t stay on top of the many moving parts of a business, you can find yourself tripping over various potholes that you maybe didn’t even know were there.
A well-managed business means that when the essentials are handled, you can focus on creative work without distraction.
In my 6+ years of being a Partner at my old firm, I learned that there are basically 6 areas of business management, each of which needs regular attention, care, and feeding.
I’ll list them below and go into a little detail on each one.
Strategy
This is what do you focus your business on (or not focus on) and why. It’s really hard, especially as a small business, to do too many things at once.
For example, it would be hard for me to be both a industrial designer focused on new product development and hardcore CGI product visualization at the same time. The work is related, but the types of clients, the sales cycle, and the delivery process are completely different.
Even with a larger team, an unfocused business can often lead to confusion and inefficiencies because people simply don’t know what’s important.
Even as a company of 1, having a clear strategy makes it easier to operate day-to-day. It can be as simple as asking yourself on a quarterly basis, “what do I want my business to focus on, and why?”.
Sales and marketing
I already covered learning to sell in this series, so I won’t go into too much depth about why that’s important.
From a business management standpoint, the critical thing is that you have some mechanism for potential customers to find out about you, and then a process for converting leads into customers.
This one can be pretty hard too figure out on your own, and if it starts to look like you don’t know what you’re doing during a sales process, a potential customer can rapidly lose trust in you.
It helps to learn from others. If you are at a design firm now, try to find your way into the “room where it happens”. Observe how a company sells their design work and see how you might apply that to your own work one day.
Finance
One thing I’ve realized is that any challenge you face as a design business can be traced back to your cash flow and balance sheet.
Can you purchase the supplies you need? Can you hire? Can you outsource something? Can you spend the amount of time you want to complete a design exploration? Can you afford to pay yourself a decent salary?
It all comes down to how much you are charging and how much money you have in the bank.
This was something that I didn’t have to think much about when I was just a designer. The finance side kind of just took care of itself. But when I started running a business, it was clear that everything boiled down to a spreadsheet.
If you’re early in your career it might be hard for you to get access to this level of financial information at a regular job, but if you eventually think you want to run your own business, at least conceptually pay attention to how the money moves through the business.
Human resources
Humans are hard. They have complex feelings and motivations. Running a business means you need to be able to get at least somewhat predictable output out of them.
While that sounds a little cold and calculating, it’s essential for keeping things running smoothly and it’s what keeps you and your staff (if you have any) paid. Learning to manage people and help them grow was one of the hardest and most rewarding parts of my career to date.
I would highly recommend getting some experience managing a team before starting out on your own. Even if you work as a company of 1 (as I do), you might still be working with contractors and eventually you might take on employees that will need managing.
Technology and equipment
As a business you need to have a reliable technology infrastructure to make sure you can deliver work predictably and efficiently.
The larger your business gets, the more hairy this gets. Right now my tech is basically a laptop, a 3D printer, Google Drive, and my home WIFI network . But when I was managing a design studio, it was a network of 20+ computers, a server system, several 3D printers, paper printers, and god knows what else.
In my experience, this is worth investing in. Nobody wants to be dealing with an IT problem with a deadline the next day. If you start your own business, make sure this isn’t something you have to constantly deal with by getting the best, most reliable equipment you can afford.
Operations
Operations sounds vague and can be hard to define, but I basically define it as the activities that allow your business to run predictably and efficiently.
This means having repeatable processes for dealing with the day-to-day running of the business, from renewing annual business licenses, to paying taxes, to monthly accounting reconciliation.
It’s hard to know what these things are or what to do with them until you are in the thick of it, but if you’re at a job now and want to someday start your own business, start to pay attention to what the things are that have to happen on repeating schedule. How does information or material move through the business, and what are the processes for controlling that?
If you have a handle on all 6 of these categories, then congratulations! You are set to have a well-functioning design business and you can get to the fun part of designing cool stuff.
If it sounds like a lot of work, that’s because it is. Running your own business comes with a host of additional responsibilities that can be a real headache. The upside is a lot more freedom, and potentially a higher financial upside.
I think a lot of designers start their own businesses simply because they think that’s the thing to do at a certain point, but really consider whether you have the foundational knowledge to do so, or if you’re willing to learn on the fly (and make a lot of mistakes).
Some designers might look at all of this and say, “Wow, that’s not for me. I’d rather just focus on designing stuff”. And that’s OK.
If you’re still looking to start your own thing, hopefully this series has given you a taste of what you might need to know before you take the plunge.
Let me know what you thought about this more business-focused series of posts and if there’s any topic you want me to dive deeper into!
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Just the ID Jobs - 18x Full-Time, 1x Internship
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Plastipak Careers - Industrial Design Intern - Summer 2024
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Packaging
0 years experience minimum
Schylling - Junior Toy Designer
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Toys
5 years experience minimum
Access Corporate Group - Packaging & Design Director Product Design Management
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5 years experience minimum
The Estée Lauder Companies - Senior Designer, Packaging Design
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Tuuci - Industrial Designer
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5 years experience minimum
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Packaging
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14th Round, Inc. - Industrial Designer
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