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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3 Things To Do Today For A More Productive Tomorrow - RD233
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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Writing The Perfect To-Do List - RD232
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...
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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...
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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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Invest In Yourself - RD229
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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Print Is Not Dead - RD228
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...
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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...
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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...
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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...
info_outlineIs your side gig a hobby or a business
I had a conversation with a fellow designer recently who works full-time for an ad agency and periodically takes on small design projects on the side. He called it a hobby. That got me thinking, what is a hobby and does what he’s doing qualify?
Hobby vs. Business
Standard disclaimer: I’m not a lawyer, accountant, tax expert or business advisor. The following is solely my opinion.
Hobby: A hobby is an activity done for enjoyment, typically during one’s leisure time. A hobby encourages the acquisition of skills and knowledge in that area.
Business: Business is the activity of making money by producing or selling products such as goods and services. Simply put, business is any activity or enterprise entered into for profit.
By those definitions, any design work you do where you get paid should be considered a business venture. At least you would think.
When does a hobby become a business?
According to the IRS, a hobby is an activity that an individual pursues without the intent of generating a profit. “Intent” is the keyword here. Meaning it’s ok to make money pursuing your creative hobbies as long as it wasn’t your intent, to begin.
For example, let’s say you have a screen printing machine and print yourself graphic T-Shirts. If someone sees one of your shirts and offers you money to make one for them, it’s still considered a hobby, because it wasn’t your intent to sell the design or shirt when you created it. However, if you designed and printed the shirt with the hopes of selling more like it, then it’s a business.
An artist who paints for the joy of it, and sells the odd painting to cover the cost of supplies is considered a hobbyist. But as soon as that artist decides to showcase their paintings, in the hopes of selling them for a profit, it becomes a business.
If you create something because you want to help a friend, a family member, your church, a local organization or charity you support or your kid’s sports team, and they offer you money for your generosity, as long as you intended to help them and not of making a profit, then it’s not a business dealing.
However, if that friend, family member, church, organization or charity asks you to create something for them in exchange for payment of some kind, then your acceptance is based on the knowledge you will be making a profit. Therefore it’s a business transaction.
Why is the distinction between hobby vs. business important?
The distinction between hobby vs. business is essential for tax purposes. Yup, blame it on the government. If you are making a profit from something, they want their cut. But that could be a good thing.
If you are making money from your “hobby” or “side gig” you should want the taxman to take a cut. Why? Because as a hobby, you can’t deduct losses and expenses on your tax return. But once you’re hobby is classified as a business, you are entitled to the same tax advantages other businesses enjoy. Including home business expenses or additional costs that don’t typically apply to income from your day job. Who knows, declaring your hobby a business, may even end up saving you money on your taxes.
Check with a professional.
Rules may differ depending on where you live, so check with a professional in your area to see if your side gig or hobby qualifies as a business. Keep in mind; you have to be actively seeing to make a profit for what you do to be considered a business.
But be careful. Even if you are actively seeking to make a profit, don’t just declare what you’re doing as a business without checking with a professional first. There are stiff penalties for claiming business expenses on your taxes if you don’t qualify for them.
What the IRS is looking for in declaring a venture a business.
The IRS has a vague outline for determining the state of your earnings. However, here are some rules that may help you achieve business status with your hobby.
- You engage in your activity with continuity and regularity.
- You’re taking actions to improve profitability.
- You keep accounting and business records.
- You consult professional advisors to help improve profitability.
Officially declare yourself a business.
The easiest way to get the IRS or any government tax agency to view what you do as a business is to make it official.
- Name and register your business.
- Open a business banking account
- Begin collecting sales tax if applicable
- Hire a CPA and other advisors.
There are no guarantees the IRS or whatever taxing agency there is in your country will consider you a business. But if you officially register as one, chances are they’ll agree with your assessment.
Is your design business registered?
Let me know by leaving a comment for this episode.
Resource of the week Savvy Social School
If you’re looking for a simple, easy (and fun) way to use social media as a tool to grow your design business, the Savvy Social School takes you from wasting time to feel confident that you’re making the right choice for you and your business.
Savvy Social School is the BEST training and coaching resources for entrepreneurs wanting an online presence who are tired of GUESSING and STRESSING about social media.
I’ve been a member of the Savvy Social School for almost a year now, and it has helped me grow the social media presence for my business, which in turn has translated to paying clients. You can do the same.