Starting a web design business comes with many benefits. A web design business will allow you to work with clients from all kinds of companies and organizations across many industries. You’ll get to work with people in all types of professions on a wide range of projects. With time, you can grow your business into a lucrative enterprise.
There will also be significant challenges along the way. Starting a web design business means learning how to become a business owner capable of handling all the responsibilities that come with being a leader. In that position, you’ll be faced with many risks as you navigate the day-to-day operations of your business while trying to meet your long-term goals.
If you’re thinking of starting your own business, now’s the time. The demand for professional web design is as great as it’s ever been. This article will guide you through the main steps of starting a web design business to help get you started.
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Creating a Business Plan
The first step in starting a web design business is to create a business plan that will give you a roadmap right from the start. Consider the following:
1. Name Your Company
The name of your company is the first thing that clients and customers will associate with your business, and you should think carefully about what kind of name you want. The name of your web design business should be professional, memorable, and catchy. You can start off by brainstorming a list of names, but always make sure to consult other people, preferably professionals and other business owners, to get their feedback.
Also, consider your long-term goals when coming up with a name. Do you want to set up a local business, or are you planning on growing into a nationwide company? Will the business remain focused on you, or expand to include a much larger group of people? The answers to these questions can determine certain factors, such as whether or not you want to name your local area in your name.
2. Create Your Business Plan
Your business plan should provide an overview of the current state of your business and your future plans. A solid business plan should include:
- An executive summary with a company description
- An overview of market conditions for your web design business
- The short-term and long-term goals for your business
- An overview of the specific services you plan to offer
- A list of your target clients
- Financial overview, including costs, pricing, and projections
- Any hiring plans in the future
The executive summary should include a description of the brand and mission of your web design business.
3. Find Your Niche
Finding your niche will keep you focused on finding and attracting the right customers for your business. Otherwise, the search for new clients can be incredibly time-consuming and set you back. The best guide to finding the right niche is your own experience: ask yourself what you have focused on during your professional career, and make that the basis of your web design business.
Remember: your business will change and grow as you attract more clients, so there’s no reason to fear that you will be stuck in just that one niche. The important thing is to start off with a clear focus, and take things from there.
4. Choosing the Right Place and People
You also need to decide what the right location will be for your business, and who you want to work with. Ask yourself these questions:
- Where will your business be located? Will it be home-based or will you require office space?
- If you plan to set up an office, do you have plans for getting the right equipment, etc.?
- Will you work alone, or are you going to hire employees?
- If you plan to hire, will it be only designers, or staff, salespeople, etc.?
Coming up with an effective business plan right from the start is hard work, but it’s essential to help you get your web design business started on solid ground.
Funding and Setting Up Your Business Operations
From the start, deciding on how to finance your web design business is absolutely crucial. You should have enough savings before you start your business to give yourself a comfortable safety net in case anything goes wrong. Having your personal finances in order is a prerequisite to financing your business.
For non-funded companies, including web design businesses, it’s important to understand the risks involved and to ensure you have the right protections in place. For agencies that have not undergone funding rounds (or aren’t seeking any) but need financing, there are several sources of funding available:
- Line of credit: through an arrangement with a financial institution, you can set up a loan that lets you borrow money up to a certain maximum amount. Think of it as a credit card for your business.
- Peer-to-peer lending: these types of loans are between individuals and arranged through offers made by one party to the other. In the US, peer-to-peer loans are legally treated as investments.
- Microloans: as the name suggests, these are small loans (usually less than $50,000) for small businesses and non-profits. Microloans are best suited for small web design or development businesses.
- Personal loans: for individuals with good credit ratings, taking out a personal loan from a financial institution is a possible option for financing a small business.
Before deciding on how to fund your business, always carefully weigh your options and do your research, including checking out the information provided by government agencies such as the U.S. Small Business Administration.
Once you have secured funding for your business, it’s time to establish your business operations. That includes the following:
- Staffing: unless you remain the sole employee, you will need to bring in people to your business. That means reaching out to your network to find designers who will be interested in joining your organization, or taking a more traditional recruiting route by working with a staffing agency. As your business grows, you will also need people who can fill administrative, marketing, and sales positions. Consider outsourcing as an option to take care of various tasks.
- Equipment: high-quality web design requires up-to-date computer equipment and software, which can be very costly. Proper office equipment and dedicated, reliable internet services are essential as well.
- Work management: You will need to set up a management system to help keep track of your day-to-day business operations and the various projects your business takes on. Automation will help you increase your productivity. You will also need to have a system in place to keep track of work hours so that you can create invoices for your clients in a transparent and efficient way.
Taking Care of Legal Requirements
On a legal basis, the key to starting a web design business is deciding the right structure for your company. There are three main options:
- Sole Proprietorship: this is the simplest business structure, and consists of an unincorporated business owned by one individual. The owner is responsible for making all the business decisions, receives all the profits, and claims all the losses. Crucially, the owner of a sole proprietorship does not have a separate legal status from the business.
- Limited Liability Company (LLC): an LLC provides liability protection for the business owners. The owners cannot be held financially liable for any legal claims made against the business.
- Corporation: A corporation is a separate entity from the business owner(s) for both tax and legal purposes. That means that income and expenses are tied to the corporation, not the business owner(s). In a corporation, ownership is determined by the number of stocks placed.
Whichever structure you decide on for your business, there are important legal issues and risks that you have to consider. To avoid any litigation around errors, omissions, or other issues surrounding your client relationships, you should consider getting insured.
Keep in mind that you will also need to get a license to conduct business in your state. It’s important to consult your state’s official site to get the right information.
In addition, you need to ensure that you are registered with local and state governments for tax purposes, and that you have solid business contracts in place when dealing with clients.
Setting the Best Pricing Rates for Your Web Design Business
Once you have taken care of all your legal requirements, secured the necessary funding, and created a business plan to help you estimate your business expenses, the next question is: how much should you charge for your services?
For a detailed discussion, check out Embroker’s guide on how much web design businesses should charge their clients. Deciding on much to charge for your web design services involves many factors, such as your operating expenses, broader market conditions, and whether you and your clients prefer a flat rate, hourly rate, or monthly rate.
The key is to openly communicate with your clients when it comes to establishing deliverables and pricing. Make sure to keep your clients updated about the various stages of the project you have taken on. Having a solid contract in place from the start will allow you and your client to stay focused on the broader objectives while remaining open to any feedback and changes that may prove necessary down the line.
A solid work contract will have several essential elements:
- Any important details in terms of deliverables
- A clear timeline with a series of goals all the way to completion
- An outline of all the pricing and agreed-upon rates for everyone involved
- Specific instructions about invoicing and how clients can make payments
- Information about any potential alternate scenarios (such as failure to meet deadlines, etc.)
Getting Clients and Promoting Your Business
Knowing how to get web design clients for your business is the most important part of keeping your company running once you have it set up. You will need a steady flow of reliable clients, both returning and new ones. The only way to achieve that is by promoting your web design business. There are several ways of doing that.
1. Create a Unique Brand
Creating your brand is all about telling your story. Ask yourself:
- What makes your web design business unique?
- Why did you decide to start your web design business?
- Why are you passionate about web design?
- Why should clients choose you over your competitors?
- What kind of solutions are you offering to what kind of problems?
Creating the right brand involves choosing the right logo, color scheme, typography, and message. All those elements should come together to tell a story that is communicated in your own, unique voice that speaks to your values and style.
2. Build Your Portfolio and Website
There is no better way to represent your brand than through a strong portfolio on a well-designed website. A strong portfolio will showcase your skills, experience, achievements, and range. It should demonstrate to potential clients that you will be a trusted and reliable partner who can get the job done.
Your portfolio can include work you have done for previous clients, either as a freelancer or as part of another agency. Always make sure to ask for permission before displaying those samples in your portfolio. Consider getting in touch with previous clients who were especially happy with your work and asking them to provide testimonials on your behalf. The portfolio should also include a list of your services, prices, and contact details.
Your website will be part of showcasing your skills to potential clients. Make sure you create a well-designed and usable website that keeps visitors interested and impressed with your skills.
3. Focus on Marketing
Without the right marketing tools to promote your business, you will not be able to attract clients no matter how great your web design skills are. Creating an effective marketing plan is vital to growing your business. It’s important to identify your key targets as early as possible, and to do proper research and analysis to learn how you can attract their interests.
Here are some marketing strategies to promote a web design business:
- Create a website that can show off what your business can offer
- Make sure your portfolio is prominently featured on your website
- Set up a blog with valuable, original content
- Make use of SEO services and specialists to get your content out there
- Use analytical tools such as Google Analytics to keep track of your web performance
- Set up social medial channels that are regularly updated
- Create business pages on social media sites, including Facebook and LinkedIn
- Consider using targeted ads
- Provide free promotional resources such as ebooks or online courses
- Offer consulting services
- Build email lists to send regular newsletters
- Use emails to cold pitch your services
- Create partnerships with other businesses
- Host promotional events or trade conferences to increase your visibility
- Join affiliate programs or create referral programs
There are many ways of promoting your web design business. As you set up your company, consider the many marketing tools available to you and decide which ones suit your interests in growing your business.
Keeping Your Web Design Business Protected
As you create your web design business, it’s important to remember the potential risks that you will face. Risk management is an essential part of starting a web design business and keeping it running in a safe and secure way.
Working with clients means that you will have access to potentially sensitive data that requires protection. Clients can also sue for breach of contract for several reasons, such as any perceived failure to meet deadlines. Even with solid contracts, business owners can face serious legal consequences that could prove costly to their reputation and financial bottom line.
In cases like these, web design businesses need to ensure they have the right insurance coverage in place. Embroker provides market-leading insurance coverage for web design companies, startups, small businesses, and more.
Web design businesses need to consider the following policies to manage risk and stay protected:
- Technology errors & omissions insurance (Tech E&O) is arguably the most important coverage for web design businesses, including non-funded startups. Tech E&O is also known as professional liability insurance. The policy covers legal costs due to client dissatisfaction with services, such as professional errors, contractual liability, professional negligence, and copyright infringement.
- Commercial general liability insurance covers the main risks faced by every business owner, including web design business owners.
- Cyber liability insurance is necessary for any web-based company, including all web design businesses. Cyber insurance will cover losses resulting from data breaches or other forms of cyberattack.
- Commercial crime insurance helps protect web design businesses from losses caused by internal employees or third parties. The policy provides coverage for loss of money or other assets against theft, fraud, forgery, burglary, and more.
- Workers compensation insurance is required for almost all businesses with employees in all states except Texas. There are, however, workers compensation exemptions. Keep in mind that the legal structure of your business affects whether you can qualify for those exemptions or not.
- Employment practices liability insurance (EPLI) is an important policy for web design businesses with employees. EPLI covers claims made by employees regarding discrimination, wrongful termination, and other issues related to employment.
Conclusion: The Key Steps for How to Start a Web Design Business
Starting a web design business takes a lot of time and effort, but it can be a very rewarding experience. As you embark on your business journey, make sure you are prepared for the hard work that goes into starting a business. For anyone who is passionate about design, however, starting a web design business will be well worth it.
To summarize, starting a web design business involves the following steps:
- Name your company
- Create a business plan
- Find your niche
- Get the right funding to finance your business
- Set up your business operations
- Decide on the legal company structure for your business
- Take care of any other legal requirements
- Set the best prices and rates for your services
- Create a unique brand for your business
- Create a website featuring your portfolio
- Promote your web design business through marketing
- Protect your business with the right insurance coverage
Like other tech startups, new web design businesses need to have the right insurance policies in place as early as possible, even before starting funding rounds, to stay protected. To get the best insurance coverage for your web design business, check out Embroker’s digital insurance platform today.