Graphic design professionals create or maintain a visual look that might be carried out in signage, letterheads, ads, sales collateral material, website and digital content and virtually all other internal and external communications. This can involve logo design, fonts and typography, color and imagery selection and layout. The owner of a graphic design studio might work alone or have one or more employees to generate new business, work on existing projects and support the enterprise
What are the ongoing expenses for a graphic design business?
In the beginning, you’ll probably work alone and from your home. As your business grows you might eventually have ongoing expenses related to studio rent and employee costs—including taxes and healthcare benefits.
You might have monthly subscription costs of less than a hundred dollars for your graphic design software. And you’ll have to pay vendors such as freelance designers, photographers, illustrators and copywriters. While those expenses will be billed into your invoice, you might have to pay the vendors before your clients pay you.
Who is the target market?
Some graphic design studios get the bulk of their work from advertising agencies while others promote their services directly to clients. Many work for both client types. Some studios might specialize in a certain type of client, such as non-profit organizations or business-to-business firms. Others might focus on a particular practice, such as logo development or packaging design.
How does a graphic design business make money?
Graphic design studio owners charge their clients an hourly rate or bill by a flat fee based on their hourly rate. If there are ongoing assignments they might negotiate a monthly retainer.
How much can you charge customers?
First, establish an hourly rate. For some client relationships, you’ll keep track of your time and charge that rate. But since many clients will feel more secure knowing the cost upfront (and you’ll avoid arguments after invoicing) you might be better off charging a flat fee for every project based on your estimation of how long the project will take.
Many graphic designers and studio owners charge an hourly rate of somewhere between $75 and $100. You probably won’t want to go lower than $75 unless you’re guaranteed many billable hours. And you might want to go higher if the competitive situation allows a higher rate.
How much profit can a graphic design business make?
Experts say that a graphic design studio must make at least a 15 percent profit margin and that a preferred rate is 50 percent or higher. That’s based on the rate you’ll charge your clients minus the out-of-pocket costs to get the job done: your employees’ hourly rate or the costs of hiring freelancers to complete the job.
How can you make your business more profitable?
Graphic design studio owners sometimes develop sideline businesses that also use their artistic skills. This might include art and jewelry design, t-shirts, book jacket design, web development and photography, to name a few possible areas of expansion. You might also consider partnering with a copywriter and forming an advertising agency.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Graphic Design Business Name Generator
If you operate a sole proprietorship, you might want to operate under a business name other than your own name.
When registering a business name, we recommend researching your business name by checking:
- Your state’s business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It’s very important to secure your domain name before someone else does.
