How to start a design studio

by Scott Bonanno

30 May 2017

Hi, I’m Scott Bonanno, Managing Director of Liquorice. I also founded Dokio, a web application for marketing teams. That means I have two business cards. Pretty sweet. The article below is based on a presentation I gave to a group of third-year RMIT design students, so much of the content is geared towards people who are about to graduate or are early in their design careers.

Thanks, I hope you enjoy it — SB

How to start a design studio (or how I started a design studio, anyway)

How and why I started my businesses is something I get asked a lot. Starting a studio is the dream for many designers and while there are no shortcuts and no guarantees, running your own practice can be hugely rewarding if you’re able to make it work.

During my time in the industry, I’ve spoken to lots of studio owners about how and why they do what they do. Although their individual stories are very different, there are some common milestones that everyone seems to come up against in their first few years of being a business owner. In this article, I’ve tried to identify those milestones and give you some insights into how I was able to get over them (sometimes after multiple attempts).

Milestone one — Getting started

So you want to start your own design studio. Great.

Before you jump in the deep end, remember that running a design studio and being a small business owner are the same thing. The minute you decide to start a studio, your job is no longer just about designing beautiful brand identities, you also get to read lease agreements, set up employee contracts and lodge your business activity statements with the ATO. Hooray!

Don’t panic, you’ll work all of that out as you go and there are plenty of people who can help if you get stuck. Just remember that the ‘business’ part of your design studio is going to be a lot of work and you should try to get your head around some of it before you're knee-deep in expense claims.

Pro tips

  • - Ask yourself why you want to run your own studio. Remember it’s a real business.

  • - Get in touch with people who run studios and ask them why they do it, what’s great and what’s hard. The good ones will be happy to share.

  • - Make a pros and cons list, think about best-and-worst-case scenarios and try to plan for them.

  • - You might feel like you’re going in blind. That’s ok, you’ll have to learn some things as you go. Just don’t forget that when you start a business, you'll become a designer and a business owner — they are different things and you need to know how to be both.

Milestone two — Getting enough work

The thing I hear most often from people who want to start a studio is "How do I make sure I’ll have enough work?"

When I first started out, I didn’t have enough work. Most people don’t. I had to keep a part-time job to supplement my income and didn’t really know if I’d ever be able to support myself with design work alone.

If you work hard and do good work, word will spread and eventually you’ll build up a good set of clients. The hardest part is sticking with it.

Pro tips

  • - Tell everyone (I mean everyone) what you’re doing. Don’t be shy about it, you never know where the next job might come from.

  • - Supplement your income if you have to. You might need a part-time job when you start up. Look for clients who need ongoing work. These can be hard to come by, but they’ll provide you with some steady income so you can focus on building your studio.

  • - Stick with it. There’s no rule for how long it takes. Keep doing good work and you’ll eventually build up a good reputation which should lead to a good set of clients.

Milestone three — Hiring another designer

Now you’ve got too much work. Great.

If you’re trying to grow your design business, the last thing you want to do is knock back work. Having too much work is a good problem, but it’s still a problem. When this happens, it might be time to get some help.

Hiring your first staff member is scary and it immediately makes your business more complex. Most people will bring in freelancers before they put someone on payroll which is relatively easy and a good way to try on your management hat, but if you have people working in your business for an extended period of time, eventually they’ll need to become your employee. Check the ATO website for the latest information on this and/or get a good accountant to help you.

Pro tips

  • - You can never be 100% sure it’s the right time to hire a new staff member. At some point, you’ll need to take a punt and do it. You can always offer a short-term contract or start them out part-time if you’re worried about running out of work for them to do.

  • - Get your IT sorted. Make sure you have a good system for organising and sharing jobs. Be diligent with file naming and archiving so you and your employee can find things easily.

  • - You should have an official employee contract written up — AGDA has some resources that will point you in the right direction. You might want to speak to a lawyer or an HR expert, too.

  • - Don’t be a jerk. Look after your employees — you’re probably going to have to ask them to do you a big favour at some point.

  • - If you’re interviewing people from your share house bedroom, it’s probably time to look for an office (I actually did this).

  • - Not every design studio needs to keep growing or grow at all for that matter. You might want to be a sole freelancer forever, or keep your studio small. The perfect studio is the one you’re happy to go and work in every day, so work towards that, whatever it is.

Milestone four — Renting an office

The days of meeting clients in your front room are over, it’s time to get an office.

When I rented my first office space, I was very worried about the costs. I had one full-time employee and another about to start — so as well as the office lease, I was about to take on another full-time wage. I eventually found a shared space with a group of great people. It wasn’t really somewhere I could bring clients, but it was cheap so I signed on and set up shop.

There’s no perfect time to take on an office lease. In my case, it happened more out of necessity than anything else but moving out of home allowed my business to grow. I stayed in my first office for just over a year and then took on a shared lease with another small business who eventually became part of Liquorice.

Pro tips

  • - Think about all the costs (setup can be expensive). Make a spreadsheet and try to factor everything in: wages, rent, overheads, moving costs, transport, furniture etc.

  • - Give yourself some extra room. If you’re planning on expanding, try to find a space in which you can grow. Moving a studio is hard work (even a small one), the fewer moves you have to make, the better.

  • - Share or sublet. You might be able to find a shared studio space to begin with or take on a new lease with another business to save on rent.

  • - Get the basics right. Reliable internet (don’t skimp on this). Make sure you have a good space for presentations and meetings. Fancy chairs can come later.

Milestone five — Hiring someone who isn’t a designer

The first three people I hired were graphic designers because I didn’t really know how to hire anyone else.

We shared the project management and all spoke to clients on the phone. I spent most of my weekdays working on design jobs, and my weekends bookkeeping, setting up IT systems, invoicing and doing everything else you need to do to run a small business.

If you choose to grow your design business, you’ll most likely hit a point where you need help getting all the non-design work done. Hiring someone who isn’t a designer can be challenging, especially if you’ve only ever worked with other designers. Once you have them on board, though, you’ll wonder how you ever ran your business without them (literally everyone says this). Make sure you find someone you can trust to take initiative and solve problems for you. You’re going to want them to take things off your plate, not add more. The last thing you’ll need is another person to manage.

Pro tips

  • - Get someone who can do things you can’t. If you’re super awesome and you can do everything, get someone who will do the things you don’t want to do. For me, that was answering emails, managing calendars and helping with invoices.

  • - Talk to as many studio owners as you can. Every studio runs differently so find one that has a structure you can model your business on.

  • - You’ll need to cover your non-designer’s wage so it might be time to put your prices up. Your non-designer’s time may not be directly chargeable in the same way a designer’s time is (depending on their role) but the added efficiency they bring to your business should justify a price rise.

Bonus tips!

  • - Learn about tax and employment laws. GST, PAYG Superannuation... welcome to running a business. A good accountant will help you with this but don’t leave it all to them, make sure you understand the law and all your obligations.

  • - Set up systems that can grow with you like your office space will. Make sure you invest in systems that will scale if you want to grow your business (find a good IT consultant).

  • - Your folio is important but so is being able to sell yourself. Clients will need to be convinced that they can trust you to get the job done.

Good luck.

P.S. Another question I get asked all the time is why I called my agency Liquorice and why I called my software company Dokio. Here’s the short version of both stories.

Liquorice was named in honour of my first employee Reidar Oksavik from Norway who introduced me to Scandinavian salty liquorice. We used to eat it in my front room while we worked. Also, the URL was available.

Dokio is a word made up by shortening the words “document input output” which describes what the product does. Also, the URL was available. Also, we thought it sounded cool.

Cheers — SB