What is the best way to represent yourself to clients if you are a one-man band? There’s always a chance you miss out if you are seen as too small. (From Rob Turpin @thisnorthernboy)
I think the most important thing is just to be honest and let your work shine – clients invest in people’s talent first and foremost. It’s a small industry so if you overhype what you can do, you can open yourself up to credibility issues. If you are a one-man band, but want to take on bigger projects, then get some great case studies under your belt – where you’ve successfully pulled together teams to work on bigger projects. These can be side projects, not necessarily commercial, that prove you can nail a larger brief through your network.
Which skills among freelancers are most in demand right now?
Digital skills, hands down! For example, there are way too many Graphic Designers for the number of roles available but there aren’t enough UX Designers, UI Designers and Product Designers, all of whom are commanding five to ten times the day rates. General Assembly (generalassemb.ly) and Hyper Island (hyperisland.com) do great courses. I’d then get some experience working at a startup and once you’ve got some experience and solid portfolio pieces under your belt, you’ll be spoilt for opportunities.
How do I work out what to charge? (From various readers)
That is the best question ever! It breaks my heart how often creatives undervalue themselves, so the fact that you even asked is wonderful. My experience is that brands and employers are happy to pay for great creative, so knowing your worth is crucial.
If you’re a freelancer there are a heap of great freelance salary surveys available that will help you benchmark your day rate. Major Players does a good one (majorplayers.co.uk/salary-survey-2015/creative.html) – but there are loads of other available resources, just Google ‘Freelance Salary Survey’.
If you’re a studio and trying to work out what to charge clients for projects then a good (but very basic) rule of thumb is to allocate a third of the project cost to time spent on the project (ie salary allocation), a third to fixed costs (ie studio rent, amenities, legal, accounting etc) and a third to profit. For example, if the cost of your team allocated to the project is £5,000 then you should charge roughly £15,000 (£5,000 to cover the cost of the team + £5,000 to cover fixed costs + £5,000 as your profit).
It’s also worth trying to get a sense of what your competitors are charging, as this will set a good benchmark. If your costs are more complicated (ie they include other costs associated with the project beyond simply salaries), then hit up the Small Business Centre (smallbusinesscentre.org.uk) for advice, free mentorship and guidance.
Is it wise to set up a new creative business during a recession? (From @SHU_Graphics)
This really depends on what your business does.
If you’re thinking of starting a business that is disrupting the status quo and gives your customers a more cost effective solution to what they currently do, and what they have to continue doing if money gets tight, then absolutely – recessions can be a real opportunity. In the end, people are trying to save money during a recession. There is also a lot research that shows companies that start during recessions – and survive – tend to be more profitable. Things are cheaper, there is more talent available to hire, interest rates are usually low (so better access to financing), competitors are more vulnerable and you’ll be running agile and frugal, which is a great habit to get into. Recessions also create problems and challenges to companies, so if you are in the business of solving those problems, you’ll be in a fantastic position.
Companies also tend to re-evaluate their fixed costs during recessions, including the cost of full-time staff. Many businesses will prefer to hire freelancers instead of permanent staff, so they can be more flexible if clients begin to dry up. This can be great for freelancers to a point, but if things deteriorate too far, this can lead to flooding the market with too many freelancers and too much competition.
If your business isn’t disrupting the status quo and relies on clients whose budgets might reduce, or customers that may have less disposable income, then definitely be cautious starting during a recession. If there is a way to test if people really, really want the service or product before you quit your day job – or even run the business part time or on your weekends – then this is a great way to go.
Do you still need a physical office/studio space for a creative business or is it better to save the costs and just hire meeting spaces as you need them?
I’d save the cost and either work from home or free co-working spaces, like coffee shops with Wi-Fi. That is unless you find an amazing co-working space chock full off potential clients, in which case you can justify the cost from the additional opportunities and revenue you’ll bring in.
Working from home can be a bit isolating at times so definitely mix it up by heading to industry events (Design & Banter b
(designandbanter.com), Glug (glugevents.com), Nicer Tuesdays (nicertuesdays.com), Creative Social (creativesocial.com), New Designers (newdesigners.com), OFFSET (iloveoffset.com) are great ones) and mix it up by working from free co-working spaces. My favourites here in London are the Ace Hotel (Shoreditch), Peyton & Byrne at the British Library (Euston), The Towpath Café (Hackney)… I could go on. In London it is worth downloading Dojo (dojoapp.co) and search ‘café + Wi-Fi’ to find a good spot near you. If you work outside London then simply Google ‘coffee and Wi-Fi’.
Our customer satisfaction levels are very high, but our awareness is very low. What is the best way for a small, independent outfit to promote itself in a large and highly competitive market like London? (From Stefan Liute)
I think the most important thing (but also often the most challenging when you’re running a small outfit trying to deliver great results for your clients), is to allocate time to business development.
The agencies I know that nail it are brilliant at their own PR – getting coverage on blogs or in magazines, speaking at creative events, entering awards, building their profile on (again sorry shameless plug!) The Dots (the-dots.com). It can be tricky, as not everyone is able to work on PR-able projects, but still create really solid work. In this case it might be worth working on a side project or doing pro-bono work for charities, that gives your studio the recognition it deserves. You’ll also get that warm fuzzy feeling from working on something that you love and are doing something to make the world a better place.
All of that said, I still think there is too much focus on the shiny products we produce and on awards. In the end, clients want to work with outfits just like yours that they can trust to deliver on time and to budget.
Having client testimonials in your pitches and when you promote yourself online is a great start. It’s also why getting recommendations from clients and past teams on The Dots is so important, as most of the brands we work with use this as a way to search and find great talent.
It also helps if at least one of you loves networking and going out to industry events. I caught up for a coffee yesterday with a friend who runs a two-man show and he just came back from the Cannes advertising festival with four new clients (albeit rather hungover).
Do you think location is a big factor (town or city) for freelance success and the calibre of creative work? (From Mandy Barker @mbarker_design)
Excitingly it’s getting less important as technology is enabling great freelancers to pick up, and manage, clients from all over the world. You can work from a beach if you want – lots of our community do (the-dots.com/creative/people) – which I love.
Saying that, it really depends on the work you produce and how in-demand your skills are. If you’re a freelancer in a highly competitive market, like photography for example, it will be much easier to build up a network, portfolio of client work and potentially an agent if you’re based in a big city before moving remote.
It also really depends on where you draw inspiration and energy from. Some of the best freelance illustrators I know have to work remotely to produce great work. Other designers I know have to be around lots of other designers and get the inspiration from big city living. It’s really personal to the individual.
Here in the UK – and in many other countries – there is a massive digital and creative sector skill shortage, with vacancy rates over 60% the UK average. This has led to companies being much more open to remote working. Saying that, who knows what’s about to happen to the economy post Brexit.
What is for sure, is that if you do work remotely then you can’t rely on referrals as much and it’s even more important that you dedicate time each month to promoting yourself online and applying for freelance gigs via platforms like The Dots and submitting work to publications such as Creative Review.
What is your advice for someone trying to set up a creative business in a new country?
Definitely do your research. Each country has its own distinct business environment and the more work you can do upfront the better. Before I moved from Australia to London to launch The Dots, I visited London on a two week fact finding mission smashing five to eight meetings a day, just to make sure that there was appetite for a creative network and that we were on the right track. It paid off in spades as we were able to make tweaks as to how we did things so we could cater better for the UK market.
If you are based in the UK and looking to expand internationally (or based outside the UK and want to launch a business in the UK) I’d also contact UK Trade & Investment (UKTI, gov.uk/government/organisations/uk-trade-investment), who have teams specifically in place to help businesses expand internationally or enter the UK market from abroad. When I moved to the UK, the UKTI (exportingisgreat.gov.uk) were incredible. They assigned me what they call Deal Makers, who are essentially independent fixers who helped with everything from legal, regulatory and financial advice to where I should locate the office. Most importantly they made key introductions to amazing businesses and partners that were on my hit list like the BBC, UAL, WPP and loads more.
If you are planning to expand into a new country, while retaining an office where you are currently based, it makes sense to relocate some of your existing senior team to the new country, as they know the business inside out and can hit the ground running. Hiring a whole new team untested can be super risky as it takes time to build trust, train people, get them up to speed on your culture and build a successful working relationship – all while you are simultaneously trying to grow a new business in a new country.
In a business, is it important to have mentors who are more senior than you? How do you find someone to play that role?
I think when it comes to running a business it’s more important to have mentors that have different skills than you do. If they are more senior it does help but it’s not always possible.
You wear so many hats running a business – business development, finance, HR, strategy, marketer, not to mention your day job. You can’t be amazing at everything so supplementing your skillset by chatting problems through with people who have expertise in areas you don’t is the best resource you can utilise. I have a number of mentors who specialise in areas such as business process, product development, startups etc.
I never really went on the hunt for mentors, I simply met brilliant people at events, invited them for a coffee and if there’s a connection suddenly you find yourself catching up regularly. Great mentorship is about trust and having a great connection, so I think it’s more important to get to know that person first.
For a small design business with ambition to grow, which funding route would you recommend – VC, crowdfunding, friends and family or bank loan?
I think the first question you need to ask yourself is, is it critical you take on money, or is it possible to achieve what you want organically? Don’t take on money unless you absolutely have to. Both loans and investment come with their own challenges and risks.
If you do need the funding and have a solid track record and client base I’d recommend taking out a loan. That way you’re not giving up shares in your business and you can remain fully in control of your future. If you’re based in the UK – and need anything up to £25,000 – there is a great Government scheme providing funding and support to small businesses (smallbusinesscentre.org.uk). The great thing about these loans is they come with free business mentoring and if you default on the loan it doesn’t affect your credit rating. Running a business is inherently risky so only take money from family and/or friends if they are willing to lose that money or you are sure that you can pay them back eventually. You don’t want to ruin relationships with those you love most.
If you need over £25,000 then it’s worth looking into bank loans or investment. When you raise investment you’ll be selling shares in your business in that you’ll no longer own 100%. Bringing on an investor is a lot like marriage, just without the benefit of make-up sex. Once the honeymoon period is over, a bad investor can become more like a demon – interfering operationally and being time consuming and power hungry. A good investor, however, can help catapult your business onto the next level, mentor you through the tricky times and know when to take a back seat when you’ve outgrown their expertise. You can raise investment either via Venture Capital (VC), angel investors, crowd investment platforms (like Crowd Cube, crowdcube.com) and/or from what the industry calls FFF; Friends, Family & Fools (!).
VCs tend to only back a business that can prove it can scale and they believe will give them significant return on their investment. They rarely back service businesses (like design studios) as it’s harder to scale people than products. Also a VC will want to see a return from their investment in five or so years, so you’ll be expected to sell your business either to another company and/or float on the stock market. You can raise investment via angel investors (who are individuals that invest their own money in businesses) or via crowdsource investment platforms. However, like VCs, you are more likely to raise money if you have a scalable product, than a service.
With that in mind unless there is a scalable product component to what you do, I’d go down the loan route if possible.
Pip Jamieson is founder of The Dots, a career network for creative talent. For more details, see the-dots.com