Incredible! Happy for everyone! But where is this coming from? Why? Are more people using the web and seeing the true value of it’s earnings and reach finally? Does a majority of the recession reasoning the U.S. deal with the way business is changing and companies are growing online through collaborative consumption? How much of an impact does Dribbble have on the increase of jobs (I’m sure a lot but that doesn’t mean Dribbbble gives them the money to spend on us)? How much of an impact does Apple have on our professional (surely companies have noticed that good design does indeed make a difference)? Why, all of a sudden, have people been investing more in good, strategic design?

These are just a few of the many questions I’ve been asking myself lately. I too have nearly doubled from an already incredible year last year – not to mention we still have five months left in the year. I could answer these questions personally from the stance of my insights and business however I’m just one person giving my take on this dramatic increase. A better assessment would be getting more takes and stories on the matter; so I ask you, Designers, Freelancers, Agencies:

• Have you seen an increase of work this year versus last? Much more? About the same? Less? A tad more? Come on spill the beans.
• Where are your clients coming from? Word of mouth? Dribbble? Google searching? A little this and a little that?
• What do you feel accounts for this increase?
• US folk (or non if you like to also chime in): Why do you think our country is struggling financially, yet people are throwing money into our work?
• If you see an increase of work, what type of work are you seeing the most of (ie: Startups? “Social” UI work? Church sites? etc.)
• Are you marketing more or less?
• Are you turning down more work than you take on?

Would love to make better sense of all this and your help would be appreciated (and also helpful for everyone).

After reading a bit into the book I felt that it would be a perfect match for those that ask, “What advice as a small business owner would you provide to others?” The book goes into detail on the new ways we connect with customers, the benefits of staying small and personal and the advantages small companies have over the big dogs.

“After 40 years of public speaking I can guarantee that every audience has a bullshit detector. Speaking like a normal human being is the only effective way to communicate. I am glad that another Eric has finally written the book to back up my theory.” —Erik Spiekermann

In addition to giving away a free copy of Speak Human, I am also curious as to what other books you recommend on running a small, intimate business.

Enter the contest two ways

1. Tweet your favorite business book with the hashtag #TDCbusiness
2. Tweet this here post [link: http://cl.ly/2h8K] with the hashtag #TDCspeakhuman

I’ll follow up this post with the other mentioned business books as well and randomly select one winner via the hashtags on Twitter  at the end of the week, so make sure to include one of the hashtags if you like to be included in the giveaway. If not, just reply to me, @behoff, with your favorite / recommended business book.

For other books that I recommend organized by category feel free to check out my Recommended Reading list on Amazon.

“Observe the world around you – everything you do, and especially everything you hate to do.” — Aaron Patzer, Founder of Mint

Make no mistake about it; running an independent business, no matter what field you are in, is extremely time consuming, exhausting and requires a lot of motivation and dedication. It’s not for everyone. Running your own business means that there are more unpaid and non-billable items that you perform on a daily basis. Emailing, answering phone calls, marketing, networking… these are all, for the most part, non-paid facets of what we do. If you are an in-house designer, responding to emails, answering phone calls, and marketing, among other things, are payable because you are on the clock. You get paid for the time you are under the roof of your office. The self-employeed unfortunately do not. This means that we need to compensate for the time we do not get paid. Freelance means that we do more unpaid “clock” work; not that we do more paid work for less money.

This might sound familiar to some most of you: I received an email from a potential client inquiring a new website. After a few emails back and forth, the talk of money came into the equation, only to have the client question why my rates where so high as “they too were freelancers or small businesses.” They also asked if I’d consider slashing my rate by two-thirds. How about this one: I received emails looking for a $1,000 website because large firms I’ve contacted charge in the six-figures.

There are reasons large companies charge $100,000 for a website and it’s not only based on credibility and size of the website. They have more employees to pay and a much larger overhead to cover. The price for this is taken into consideration. It’s not just design firms that do this. It’s all businesses. How much do you think your local grocery store buys a box of Cheerios for? Having worked for a TGI Friday’s a while back I remember seeing how much they get a rack of ribs for in comparison to how much they sell to the consumer. The margin is so unbelievable that you don’t even want to know. The Apple iPad costs $270 to make. Does this stop you from buying one for $499? Most likely not. Why? Because there is the need factor and there is the trust factor. Need not in the way that if we don’t have one we will die, but need as in we want that one instead of another tablet computer. Why do we want that one? Because we trust it and the company behind it. The same can be said for design services. Sure you can go out and get a $500 website done up, but I guarantee you will eventually come back to getting what you want from someone you trust, and between me and you, if someone is designing and building a website for $500 I’d be extremely vigilant making that decision.

I receive a lot of emails from designers just starting off asking “how do you charge?” This is a tough one and I can tell you with time it only gets better for understanding what you should be charging. Now I’m not saying to go out and rip off your clients, but when you are pricing your services take into account all of these extra “non-billable” things. A good ten hours of my week (at least) is dedicated to answering emails. Do I get paid for this? No. However, I do need to make up for all of these extra hours someway. Either that or I’d find myself spending more than I make per say. Also, consider taxes. Around 40% of my income goes to good ol’ Uncle Sam. A thousand dollar project pretty much goes right down to $600 bucks. Freelance is a business and it should be handled no different than any other. Sure, we can charge less than the large firm because we have lower overhead costs. That’s one benefit of working with an independent designer, but lets not take advantage of the fact that we are working alone. Quality design and development comes with time. Each project requires a unique solution and without taking the time to think, plan, structure, design, develop and so on, will only return bad (or less than par) results.

I understand that it is often difficult to budget a company, especially if its just getting its feet wet, however building a larger budget and coming back to a project later is a much smarter investment than getting something slapped together for the sake of needing it. Investing a few extra hundred or thousand dollars (or whatever the cost difference might be) to have it done to the best of its potential will kick back a greater outcome all together and all sides will be much happier in the end.

With my first year of independency almost under the old belt, I’ve learned a lot about running an independent design business through mistakes of which I adjusted accordingly throughout the last ten and a half months.

Below are 16 common mistakes and misconceptions when running your own independent [design] business.

1- Working with set pricing

Let’s face it: Time is money and I first made the mistake of not charging hourly when starting off. I used to estimate the amount of time by the nature / medium / complexity / etcetera of a project and ask for 50% of a set project cost up-front (more on this below) and the remaining 50% at the end.

While I still provide my clients with an estimate up-front (how much I think it will cost), I make sure that they know (and is listed in the contract) this is only an estimate. Honestly, there is never any way to know how long a project will take and we all know good design takes time. Plain and simple, charge hourly while providing a round-a-bout estimate.

2- Working without contracts

Believe it or not, I’ve received many emails from new designers running their own small business asking if contracts are essential. The answer: Yes! No matter how large or small the company you are working for is, always, always, always, work under contracts — and make sure you cover all your ends (more on this below)! 

I’ve received some negative feedback from other designers stating that my contract—around 21 pages—is too long and might scare clients away. My take: If a client is unwilling to read through the contract that protects myself as well as them, than their business isn’t important enough to them… and why would anyone want to work under those conditions?

Also, working with contracts allows you and your clients to know exactly what to expect and you can refer back to it throughout the project if things start to go sideways.

3- Not asking for 50% upfront

Asking for 50% of the estimated project quote upfront is a must in my opinion. It ensures that the client is serious about working with you, covers initial overheads and costs, as well as covers (most of) the time and expenses if the client decides to “run.”

If it’s a very large project I will do payments in thirds: 33% upfront, 33% mid-way and the remaining at the end before deliverables are handed over.

4- “Freelancing” is a walk in the park

Sure, running your own business is a great feeling, but make no mistake, it’s no walk in the park. Motivating yourself can be one of the hardest things to do and working on your own is definitely not for everyone.

I remember the day I decided to go full-time into my own business and immediately a close friend of mine said: “I wish I could do that; that way I could sleep until 12pm everyday!” Sure you could, but let’s face it, you won’t be successful that way.

Freelancing is a 24/7 job. When I’m not designing Monday through Friday from 9–5, I am blogging, marketing, responding to emails, looking for new inspiration, etc. I’ve even taken a short conference call at 7:30pm on a Friday night while out to dinner with friends.

5-  Not standing up for your work

I find many designers make the mistake of always saying “yes” to everything their client says/asks. I understand that design, being a derivative of an “artform”  will always be subjective to likes and dislikes, but that doesn’t mean you should give into everything a client suggests or states—especially when you know their suggestion is not the best solution. 

Instead, try offering them advice and help them to understand “why”. Be the designer and the teacher. One of the first reasons I started this site was to not only help other designers, but to also help educate clients.

Here’s a short email from a client that initially turned down a proposal, but overall was impressed with how I explained things and later came back to work with me:

“You were my number one choice and I want to compliment you on your communication, organization, and professionalism. Your success is well earned and I was very impressed by your business model and the information you provided online and through email.”

6-  Under-estimating the power of word of mouth

Word of mouth is your number one marketing tool. Never under-estimate it. However, this does not just mean being a great designer and people will talk about you. I’ve had clients refer me based on the way I communicate all the way down to how I seem “friendly and myself on the telephone.”

Twitter is a great way to spread the word. As Gary V says: “Twitter is nothing more than word of mouth on steroids.” So true! Word-of-mouth on Twitter can do wonders for yourself and your business. Stop trying to “game it” and instead build relationships, trust and friendships. Interact.

7-  Not including legal fees in your contract

This was a slightly newer element I’ve added to my contract that I’ve learned a few months ago: Make clients responsible for legal fees if action is required.

If you are a small business chances are you work with other small(er) businesses, hence having smaller budget prices. If you were to take action against a client that owes you $2,000 for a project that they have not yet paid in full for, chances are it will cost you close to the same amount to hire a lawyer.

If you include this in your contracts, the client will be responsible for the money owed and the fees it cost you to hire a lawyer. Always protect your interests.

8-  Over-promising

Set realistic goals with your clients and make sure you meet them. Even though you are your own boss and don’t have someone higher up yelling at you to meet deadlines, doesn’t mean you can slack. 

If you think a website redesign will take you 4 weeks, quote the client 5 or maybe even 6 weeks. You never know when something can just pop-up out of the blue, and if you finish the project in the 4 weeks it will the client even happier.

9-  Thinking you don’t have to be a salesman

Another huge mistake when starting off that I quickly learned is that 60% of your job is being a salesman. You can be the best designer in the world, but not knowing how to sell or talk about your services will only hold you back. 

Clients don’t always come to you. Sometimes you have to pitch to them instead.

10-  Showing work that you don’t want to do

This is another mistake I made when first starting out; showing work in my portfolio that wasn’t work I wanted to do all the time. 

Clients often choose to work with a designer based on his/her portfolio. If they like what they see they will usually follow up and expect the same quality and sometimes style. If you dislike doing logo design, than do not show logos in your portfolio. Doing work you are not fond of will also dull your portfolio, as it will lack the same quality of what you are passionate about.

11-  Competing with your peers and not working with them

Many companies, both large and small, feel the need to compete. While this might work to an extent, I’ve found that being a small business the more I engage the people that do the same thing as me the more it improves my work and business. Your peers can teach you many things, especially those that have more experience than the current level you’re at. Embrace those people.

Many wonder how aiming a blog mostly towards other designers, brings clients to it. It does because I learn from those around me (and on Twitter and blog comments) and I share my experiences and passion through my writing. Clients also learn from this.

12-  Not sticking to your passion

There was a time when I was a “dabbler”. I would try to be the “best” in everything (i.e: design, front-end development, back-end development, etc.) but I’ve quickly learned that my passion lies in design and that I should let others do what they are most passionate and best in. 

Overall it not only makes your work better in the end, but you will also have happier clients and enjoy your line of work much more.

13-  Not raising rates every year

Towards the end of last year I received an email from a client asking for my hourly rates, which I provided them at the time. However they decided to hold off for another 3 months, which took us into early January of 2010 by the time they reached out again. However, my rates were slightly increased due to a number of reasons, but mainly because we all should increase our rates each year. With every new year we gain more knowledge and experience. 

14-  Not saving info

There has been many times early on when I would receive an email from a client asking if I could work with them, however after talking further they or I either denied the work at a specific time for many different reasons (on vacation, too much work, work beyond knowledge…).

The mistake I made was not to store their contact information for future reference. Even if you do not work with someone at a specific time does not mean that you will never work with them. Include them in your holiday e-mail blast!

15-  Thinking communication doesn’t matter

Many freelancers enjoy hiding behind their computer screens out of view from clients. As this might be true, it doesn’t mean we can slack on our communication methods. Actually it’s the opposite. Since many of my clients I never meet face-to-face I have to increase my methods of communication: faster email responses, Skype and phone conversations that explain things in terms clients understand, etc.

The better you communicate, the better relationship you will build and the more a client will say “yes” and refer you.

16-  Under-pricing

I left this one for last as I feel it is the biggest mistake everyone makes at least once: under pricing your services. Many times we lower our prices to meet a client budget or just to take on work at a slow time. This is bad. Stand up for your prices and knowledge.

Again, this goes into selling your work and helping your clients see the real, true value in what good design provides. Effective design has no price tag. Don’t be afraid to tell your clients that they should hold off for another few months until they can build a slightly larger budget for their project. Trust me they will thank you in the end. Too many times I’ve had clients come to me saying someone just designed my website 6 months ago for a cheap price but I’m now incredibly unhappy with the results.

What are some mistakes and misconceptions you faced when starting out?