When you set up the studio, how much money did you have to spend on equipping it and on rent down-payments etc?
We started the studio almost 12 years ago, back in 2000. Our rent back then was about $1,300 per month, and we had to put down around $4,500 as a deposit for security, which the landlord still has. We got one computer as a gift from our former employer and a table and a chair. We bought a sofa, a second chair, an iMac, Zip discs, printer, some cheap shelves, fridge, etc for a couple of thousand dollars. Before all this, Jan and I put 10k each into a bank account, which became our business account. That’s how we got started.
Did you borrow any money?
Yes. Seven to eight months after we started the company, when we were pretty much out of money, we each borrowed around $5,000 from our parents.
How did you find your studio?
Through a real estate broker, a funky Russian lady.
How did you get your first work – was it from previous employers? Did you do any self-promotion to launch the studio? Was it worth it?
The first few projects we got were through an old friend who became our client, and also through Stefan Sagmeister, where we had both worked – CD packaging and this kind of project.
We did a mailer after about six months in business that we sent out to contacts we bought through an address broker called Agency Access. It brought us quite a few projects over the first few years actually, so yes, it was absolutely worth the $200 we paid for the printing of the 600 newsprint mailers.
How do you get work now? Do you use an agent? If so, what has been your experience of that?
So far, almost all our projects we get from word of mouth. In addition, we do have an agent now. Let’s see.
How do you work out what to charge on a job?
We estimate roughly how many days/weeks a new project will take, and we price it accordingly. We also factor in the kind of client, how big or small it is. We also work quite often on a set budget from the client, then we give them what the budget allows. But to this day, the whole thing does not seem to work like maths for us, there’s a part that’s intuition or Russian Roulette in it.
Do you have a day rate? If so, can you tell us what it is?
We don’t have a day rate. On 99.9% of our projects we charge a flat fee based on our rough estimate of days/weeks and kind of client. If we work on it more than we expected, or less, same fee.
Can you tell us what the studio’s monthly outgoings are – not including salaries?
Around $9,000. That includes rent (which more than tripled since we started 10 years ago), phone, electricity, insurance, etc.
How much did you get for the biggest single paying job you’ve done to date?
We’ve had about three projects over the last 12 years that paid roughly $300,000. They were for branding, advertising, motion, copywriting, infographics, etc.
Who looks after the finances? Do you have any outside help on the money side of things?
We do. And no, we don’t.
You made a point of never wanting to get into debt with the bank – can you explain a bit more about that and how you avoid it?
We’ve never had a revolving credit facility from our bank. Our bank account can go down to zero, but not into negative, not even minus $100. If we had a revolving credit, we would be too afraid of slipping down there, and staying there. A few times we did almost ask our bank for a line of credit, when we were super slow and with very few jobs coming in. We were happy that we didn’t – it forced us to live on water and bread and really, really watch our spending.
Have you ever been in danger of going bankrupt? What’s the closest you came to it and how did you get out of it?
No, not really, but we have been extremely low on cash many times. And then, like clockwork, there is always that magic job that comes in and saves us. We’ve got quite accustomed to this situation by now.
What’s the long-term future for Karlsson Wilker as a studio?
To work on projects that we are passionate about, with clients that are willing to take risks, and to learn and to experiment with new processes, on projects that we haven’t done before. We haven’t done many self-initiated projects in the past, we were lucky enough to attract clients that came to us with projects that we were able to make our own.
To anyone thinking of setting up on their own right now, what are the most important things to do/remember?
Keep overheads as low as possible. To start the company already with one or a few projects lined up wouldn’t be too bad. But most importantly, you should only do it as long as you’re happy to give up the luxury of a steady monthly paycheck. We met so many people that told us they wanted to start on their own but never did because they thought they had too much to lose, like giving up the warm and fuzzy security of a paycheck paid by someone else.
Hjalti Karlsson and Jan Wilker met while interning in New York for Stefan Sagmeister. Their studio, Karlsson Wilker, is based above a Dunkin Donuts shop on 6th Avenue in New York City. You can see more of their work at karlssonwilker.com