Business Planning for Web Designers

New business team working together in creative office
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So, you've decided you want to earn some extra money as a Web designer. You have the skills and the talent, but how do you start a business? Many designers decide that the best way to get their business off the ground is by determining their prices, but interestingly, pricing is often the least of your worries. Creating a business plan is what will turn your idea of making money with your Web design into a real business.

You may think that a business plan requires that you have an MBA and an interest in finance and financial accounting, but really all it is is a focused plan for your business.

If You Treat Your Business Seriously, So Will Your Clients

This is often easy to forget as you design pages for your friends and neighbors. But if you take what you're doing seriously, your friends and neighbors will be more willing to commit money to your burgeoning business.

What Is a Business Plan?

While your plan can be as detailed or specific as you like, there are two primary things about the description of your business that you should include:

  1. Be as descriptive as you can be. Include who your customers are, what niche (if any) you'll be targeting, who your competition is, and how your business will compete.
  2. Clients, both specific and general (ie. any local businesses in your town)

Other important points to address:

  • Competition Specific and general
  • Competitive advantage — For example, you've built Web designs for four local businesses, and have an in with the chamber of commerce
  • Your business finances — This includes all the costs of your business as well as both how much you need to make to break even and how much you believe you can make. Include:
      • Your target salary
      • Taxes (30-40%, but consult your tax attorney)
      • Business expenses (rent, utilities, computers, furniture, etc.)
      • Billable hours (will you work 40 hours a week, part-time, only on weekends, etc.)
      • If you divide your total expenses (first three bullets) by your billable hours, you have a baseline hourly rate you should charge.

Why You Need a Business Plan

Aside from the issue of people taking your business more seriously, business plans can also help you obtain financing and get additional customers. The plan helps you solidify exactly what you're reaching for with your business and should help show the weak spots and where you'll need help.

If you're using the business plan to obtain funding, you'll need to do a lot of research on your financials. Banks and venture capitalists don't fund "best guesses". But if you're going to start your business out of your living room, then you can be less rigorous. Just keep in mind that the more research you spend in determining the financials, the more likely your business will be a success.