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Definitive Guide To Starting A Home-Based Design Business - Part 4 - RD208

Resourceful Designer

Release Date: 03/23/2020

Standing Out From Your Competition - RD234 show art Standing Out From Your Competition - RD234

Resourceful Designer

How are you standing out from your competition What do you think of when you hear the word “pencil”? I bet that one of the images that flashed through your head is of a yellow-painted piece of wood with a graphite center. The quintessential yellow pencil found the world over. A Medium article by Melissa Gouty titled “Why Pencils Are Painted Yellow" got me thinking about the parallels between a yellow pencil and your design business. I'm going to paraphrase Melissa's article for the sake of my comparison. The common yellow pencil that we take for granted helped spark the renaissance....

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Resourceful Designer

Being diligent today will make you more productive tomorrow. I talked about dividing your to-do list into three sections, non-negotiables, procratinatables and optionables, and how doing so will help you organize your day. I also discussed listening to your body's clock to determine the best time of day to tackle certain projects and tasks. Today's post is all about setting up for a more productive tomorrow. And to do that, you need to start today. For as long as I can remember, my nightly routine before bed has included looking and preparing for the next morning. Call it my shutdown...

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Resourceful Designer

The Perfect To-Do List + Time Management = Success. If you search through the Apple or Google app directories, you will find dozens, if not hundreds, of options for creating so-called perfect to-do lists. I like for grocery lists and shopping lists or keep track of the unending chores and tasks I need to do around the house. For work-related lists, my go-to is  (get a free month with this link). I have Evernote fine-tuned with different notebooks for every part of my work life. But it doesn’t matter if you use a digital tool or pencil and paper if you don’t understand the...

Producing In-House - RD231 show art Producing In-House - RD231

Resourceful Designer

Are you producing any of your design projects in-house? I got the idea for this episode of the podcast when a member of the shared her new toy with us in our Slack group. Laura bought a . It’s an eco-solvent printer she plans on using to produce stickers, vehicle graphics and apparel graphics, among other things. This new piece of equipment will allow her to produce materials for her clients in-house. She also plans on using it to make pieces to sell through her Etsy shop. This got me thinking about different ways designers can produce things in-house. Now for the record, I...

Farming Out Design Work - RD230 show art Farming Out Design Work - RD230

Resourceful Designer

Do you farm out design projects? Finding yourself overwhelmed with too many design projects is a sure sign that you are not charging enough for your design services. Don’t turn clients away. Instead, raise your prices and start farming out design work. The following is a post from the . Hi guys So I'm turning away a lot of work at the moment, as I have my day job, and seem to have very little energy in the evenings and weekends to take on many freelance jobs. Seriously, I'm feeling so burned out, have been for a while now. I do the odd freelance jobs here and there for previous clients that...

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Resourceful Designer

If you want to succeed as a designer, you must invest in yourself. Have you heard the quote, “it takes money to make money?” The same concept applies to growing your design business as well as improving yourself as a designer. If you don’t invest in yourself, you’ll become stagnant, outdated, and eventually overlooked. Clients hire graphic and web designers because they want fresh ideas and skillsets to implement them. These clients will quickly tire of someone if all they ever produce are the same old things. No business or person, for that matter, can do the same thing over and over...

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Resourceful Designer

Contrary to popular belief, print is not dead. There was a time, not long ago, when graphic designers designed almost entirely for print. Sure there were trade show booths and vehicle graphics, but in their way, those are print as well. As the internet became more and more popular, started to encroach on a turf that was mostly populated by computer programmers. And before you knew it, a whole new industry was born–Web design. design allowed graphic designers to help clients on two fronts—both digital design and print design. But as time moved along and the world moved closer to being a...

First Contact: Interviewing New Design Clients - RD227 show art First Contact: Interviewing New Design Clients - RD227

Resourceful Designer

Do you vet potential new design clients? How do you know that you’re the right designer for a project? Or maybe the question should be, how do you know a potential new design client is right for you? In the past, I’ve covered what to ask during a , and to ask your design clients about their projects. Almost all of the questions covered in those episodes are for building relationships with your clients after you’ve decided to work with them. But I don’t think I’ve ever talked about that first contact with a potential new client before. First contact. The first contact refers to those...

What Got You Here Won't Get You There - RD226 show art What Got You Here Won't Get You There - RD226

Resourceful Designer

How are you going to take your design business to the next level? “What got you here won’t get you there.” I’ve heard this phrase a few times over the past couple of weeks, and it got me thinking about my life, my design career and my business. This is not about Marshall Goldsmith’s book of the same title. Although I hear it’s a great book. It’s about the phrase itself and how it applies to you and your design business. At its core, “What got you here won’t get you there” is such a simple statement, and yet it holds so much truth. You can only get so far in life...

Creating Systems - RD225 show art Creating Systems - RD225

Resourceful Designer

Are you creating systems to help your design business? Mike, a member of the , posted in the Community Slack group his frustrations with one of his clients. Mike built, manages and updates an eCommerce website for a client of his. His frustration is that every time his client wants a new product added to the site, he fails to provide Mike with all the necessary information, requiring Mike to contact the client, sometimes more than once, for the rest of the info. Mike’s situation reminded me of a similar one I had with a client several years ago. And how my frustrations forced me into...

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What structure are you planning for your design business?

In this final instalment of The Definitive Guide To Starting A Home-Based Design Business, I'm covering your business structure.

If you haven’t heard the first three parts of this series, I suggest you go back and listen to them.

Once you know what you’re going to do with starting your business. You need to decide what form or structure it will take.

  • Sole-Proprietorship,
  • Partnership
  • Cooperative
  • Corporation

Your business structure will determine how and when you pay taxes. It may affect how you deal with banks, especially if you are applying for a loan or line of credit to help you get started. Different insurance rates may apply depending on your business structure.

I’m not a business expert. I highly suggest you talk to your local business center, your accountant, your lawyer and seek their professional advice on the structure that is right for your design business. Plus, the information in this article is based on Canada and the USA. Rules and regulations may differ where in the world you are and may even vary depending on what state or province where you live. That’s why it’s important to seek the guidance of someone in your local area.

Also, your business structure can change over time. It’s possible that you start off using one model today, and switching to a different structure down the road.

The four business structures.

Sole Proprietorship

A sole proprietorship is the simplest way to structure your business. A sole proprietorship is a business that is owned and operated by one person, you.


    • Easy and inexpensive to set up.
    • Flexible - there are few regulations to comply with.
    • The business is directly controlled by you, the owner/operator.



  • The owner is personally liable for all debts of the business.
  • The life of the business is confined to that of the owner.
  • All business income is taxed as personal income.

If you are running a sole proprietorship under a name other than your own name, you are required to register the name with your government business registry.


A partnership is an agreement between two or more parties where they combine their skills and resources and share ownership in the business.


  • Reasonably easy and inexpensive to set up.
  • It allows a group of people to pool their skills and resources without the expense of incorporating the business.
  • Reasonably easy to add or remove partners from the business.
  • More people means more sources of capital.
  • Business risks are shared by all partners.


  • Each partner is personally liable for all business debts.
  • Each partner is responsible for the actions of the other partners, which affect the business.
  • Profits are personally taxable.
  • Slow decision-making and conflict resolutions because the approval of all partners is required.

Cooperative (Co-op)

A cooperative is an enterprise, or business, owned by a group of people or companies seeking to satisfy a common need. The initial capital for a business cooperative is raised by member shares, and personal liability is limited to the value of each member’s share. All members have one vote, regardless of the value of their shares.


  • More sources of capital due to members’ contributions.
  • A higher volume of production and service possible because there are more people involved.
  • Members provide mutual support and pool skills.
  • A relatively flexible structure allows for changes in membership and responsibilities.


  • Members may have trouble making decisions together and resolving conflicts.
  • Some banks don’t like lending to cooperatives, so individual members may have to arrange their own financing.


A corporation turns your company into its own legal entity. Meaning the company has the same rights as an individual. It can acquire assets; it can go into debt; it can enter into contracts, etc.

A corporation is the most expensive and most complex business structure to set up and operate. However, the majority of big businesses, as well as some smaller ones, are incorporated. In Canada, you have the choice of incorporating provincially or federally. In the USA, a business can be incorporated at the state or federal level.

For a home run design business, if you want to incorporate, you’re probably going to do it at the state or provincial level unless you regularly do business in a different state or province. For example, if you live in northern Florida and often travel to Georgia to meet clients in person, you may be better off incorporating on a federal level.

As an added benefit, if you incorporate on a federal level, you’re ensured that no other design business in your country can operate under the same business name. If you incorporate at the state or province level, there’s nothing stopping someone in another state or province from using the same business name as you.


  • Owners are not personally liable for the debts, obligations or acts of the company.
  • There are tax advantages to incorporating, talk to your accountant about them.
  • Capital may be easier to raise, and loans may be easier to obtain for a corporation than the other business structures.
  • The company exists independently of individual shareholders. I most cases, you the designer.
  • Funds can be raised by selling shares of the business with little effect on you as the business manager.


  • Corporations are the most expensive business structure to set up and do require a lawyer. Depending on where you live, the costs could be in the thousands of dollars to set one up.
  • Additional paperwork, including recordkeeping, regular reporting to the government, and corporate tax returns that may result in more expensive accounting fees.
  • Corporations are taxed differently than other businesses and implications vary depending on where you live.
  • Despite limited liability, financial institutions may ask for personal guarantees on business loans.

Any time you see the words “Limited,” “Ltd.,” “Incorporated,” “Inc.” or “Corporation” you know that the business is a corporation.

It is possible to incorporate it on your own. Still, the paperwork and regulations can get very complicated, so it’s advisable to hire a lawyer to help you through the process, especially when it comes to the division of and types of shares involved.

Plus, you’ll need to set out bylaws for your own business, stating how your corporation will operate, how “officers and directors” are chosen, how the business accounts will be maintained, etc. In other words, incorporating can get complicated if you don’t have help.


The majority of home-based designers are individuals who want to run a business all by themselves. For them, a sole proprietorship is all they need. However, if you want the extra protection, and you don’t mind the extra work and expense, then incorporating is the way to go. And if you plan on working with someone else, you have the option of starting a partnership or a co-op.

Once again, let me stress that you should seek business advice from a professional before making this decision.

Good luck.

What business structure did you choose?

Let me know by leaving a comment for this episode.

Resource of the week 101 Ways to get freelance design work & clients looking for websites.

If you are looking for innovative ways to get new clients, this article by Flaunt My Design has you covered. They even used my T-Shirt idea.