This week we are investing business models and how they support growth. In general design studios don’t grow very big, but there are a few exceptions that become global or are a collection of companies.
Kate Moros – Studio Moros
Kate is an art director, illustrator and designer who founded studio Moros in 2012. Now it is separated into two sections, design and video.
The studio focuses on music in different forms.
They always have a paid intern and someone on a 2 week work placement, this is to help new designers get the experience they need. They also have a part time accounts department and external financial advisors, hr advisors and IP lawyers to help the business run smoothly. They then also get freelancers to help out on projects when needed.
The studio runs on a 35hr week and discourages overtime, any that is worked is paid and needs to be approved by Kate herself. I think this must breed a healthy work environment where wellbeing is taken seriously and reduces the likelihood of burnout. The studio also buys lunch for all the staff everyday and they all sit together to eat. There is a bonus scheme in place, that allows designers to gain a percentage of the companies profits. All these factors combine to sound as if they create a really positive and supportive working environment and a studio that respects its staff.
When it comes to pricing, they have a few different pricing structures. Some jobs are priced up by hour, some are a fixed rate and some jobs they choose to loose money on. These jobs would be for charities etc.
Kate tells us how 80% of their business is repeat business but she also has to go out and actively look for work.
The company doesn’t have a hierarchy which is an interesting idea. Each project is treated separately and given to the designers whose skill sets fit best with the work.
She also touches on the collaborative nature of design work, but how for introverted designers alone time is also important. So she makes sure there is time and space for that too.
Need Rehman – ustwo Agency
Ustwo is a digital product studio that is around 15 years old. It has 7 studios across the world, with 250 employees from 29 nationalities.
They want to work with people who have a meaningful impact on the world. 90% of the work they take on is for clients, and then the rest are their own ventures. An example of this is Monument Valley, a video game that they created and then sold. Because of the success of this they now have a video games creation section of the company.
It is an independent company, so they don’t have investors pushing them in certain directions.
There are coaches to project manage each team, which makes sure everyone is learning and progressing. This idea came from Scandinavian school of thought and they believe it improves relationships with clients, and helps people empathise with each other.
Lisa Armstrong – Lovers – Collective
Lovers is a creative supergroup. They only work on projects that they love.
The collective is created on a model where people can work together but only have to take on projects they love.
They have a small central team of project mangers and creative directors that work alongside a huge network of freelancers that come on board depending on the skillset needed for each project. They spend time together socially to bond and inspire each other.
Theo Inglis – Freelance Designer
There are many ways to do freelance work. You can be an in-house freelancer where you work on a day rate in different agencies or have an agent place you. This allows you to focus solely on design and work with big companies.
If you are an independent or a studio of one, then you have to get your own clients and negotiate your own fees. This means you need to find clients, run a studio, market yourself and deal with finances.
Finding work can be difficult at the beginning. Theo tells us how he found work through friends and by pitching. Even if you don’t win the pitch, you still gain connections that could lead to work later on. He also said it can be a good idea to look for sectors where people need designers that are not immediately obvious, as this gives you a good niche.
Panel Discussion
Managing clients. When working with a big company, designs can take a long time to be approved which can be frustrating.
However, juggling lots of smaller clients is also a challenge. Being freelance you have the stress of not knowing where your next bit of work is coming from, but luckily you also have very smaller overheads and no other staff to consider like in a studio.
Wellbeing needs to be considered as something important within any workplace. Kate from studio Moros says “A good business lets you go home to your family.” Working freelance you can get lonely, but you can always do some in-house work to help combat this.
Ustwo offers free fitness classes to all their staff and gets an independent 3rd party person in to discuss any mental health issues. I think companies that consider the physical and mental wellbeing of their employees are something we should see more of.
Analysis
There are multiple ways to run a successful design company, and it seems that these different ways can work best for different people. I found the ethos of Studio Moros to be really interesting. I think how Kate prioritises the wellbeing and happiness of her staff is important. However, it does also seem like her role would be quite pressured, trying to find work for all her employees. I found Lovers and interesting idea for a company where designers only work on jobs they love, and have some of the freedom of being freelance but without the stress, but I would be interested to see what this is like in reality.
AIGA
How Clients want to be treated
The reasons that clients leave are more important to running a successful business than the reasons why they stay.
You need successful marketing to attract the right clients to you. Don’t make claims that you can’t reach and be honest about what it is that you are doing.
Formalising is also important, you need to define the relationship with your client as early on as possible.
It is important to have a good process of getting feedback from clients and listening to what they say. All clients will need to be treated differently, so its good to have a file for each client to collect their likes and dislikes etc.
Providing clients with unprompted updates on your progress is a good way of keeping them happy. Ideally weekly and in writing Be collaborative with the client, but have your own opinions.
“Be human; but not too human”
Be passion about their brand and proud of the work you do for them.
For business development, you can choose to loose clients to allow you to take on new ones, but this needs to be done carefully.
The process of setting fees
When setting fees their are 3 main things to consider:
1- Staying in business – what are your overheads
2- Your best estimate of the nature and complexity of the job
3- the intrinsic value of your final product, or its market value.
Your overheard are rent, utilities, equipment, insurance, salaries, taxes, accountant etc. and the cost of non-billable time doing promotion and admin. Then you need to add about 20% for profit.
You can only really bill for around 50-80% of your time.
Hourly rate = Annual overheads (inc salary + profit)/ Annual billable hours.
Your hourly rate should be transparent in your fee structure. Tracking the time taken on each project can be a good way of making it easier to accurately price up future jobs.
Materials that are billable back to the project must be accounted for with evidence of purchase.
When doing something like commissioning a photographer, you need a written record of what has been requested, by when and at what price. As well as the copyright terms.
Payment schedules are often 1/3 in advance, 1/3 on approval of design drawings and 1/3 on completion. This is important to ensure they client doesn’t leave you without paying, or that you don’t and up getting out of pocket for materials.
When creating a project brief, you need to break the project down into phases such as:
pre-production
initial client briefings
research
development
concept sketches
application of approved concept
production of finished design
printing or creating the product.
Add tasks to each section and work out how long they should take, adding in time for issues. Then work out what and who is needed for each step.
Multiply the final figure by 15% to allow for contingencies.
The services like printing and commissioning photographers can be marked up to allow for your admin and research time.
And changes or additions separate to the plan should be considered and priced separately.
The inherent worth of what you’re creating should also be considered. This relates to the distribution, exposure and the industry you are working for. Also you need to consider the future usage of your work, you can reserve the rights to it (in writing) so it can’t be reused/ reprinted without your consent.
A good place to start is finding out how much they have budgeted for the project. They will negate with you, but both sides need to feel as if they are getting a fair deal.
Lower fees can be okay if the work has high exposure or likelihood of future work.
Other Research
Tim Bousfield – Path
I met with Tim Bousfield, creative director and founder of Path Design.
He explained to me that the company was founded by him and three others. He is from a graphic design background and the other three where product design. Over the last 16 years, the company has grown to over 35 people.
They have a strategic department who monitor trends and marketing. They work out what the problem is for the designer to solve. They look closely at consumers and their behaviour and create personas etc.
He talked me through their usual process for creating work:
- brief by client
- Initial rough design sketch on iPad
- Send to client
- Tighten up design/s on photoshop/illustrator
- Create a design solution
- Send to client – they then run focus groups with consumers
- Get to a solution after this
- Send to artworkers to create designs into technical artworks to be made and go to printers
The proposals they make are made up with their process and cost. Explaining to the client where they will start and what they will do and how long it will take. They then bill by the hour for their work.
He believes it is important to spell out each section of the work you will do clearly and simply, before getting the client to sign off on this process. Eg. 3 loose concepts, 1 conceptual design and 1 developed design. That means that if a client tries to push for more work or more amends than agreed you can bring them back to the contract and they will have to pay extra for those things.
Carys Ink have created a great illustration of the journey that client and designer take together. I think a visual explanation of this is a really good idea to help the client understand and respect the process. I think this is something I will look into creating as a design to sent to clients to show how the process will work.
I read an article by the Creative Independent that gave some tips on pricing your work.
- list out all the services you offer through your business.
- Track your time to understand about how long it takes you to perform each of these services.
- Multiply your newfound hourly rate by the time it takes you to complete each service. This should give you an understanding of what it costs you to offer these services to clients, and will help you prepare cost estimates in the future.
However they warn against charging hourly rates, and prefer to go for a fixed rate.
“Charging hourly rates means we’re in the business of selling our time versus our work, and all client conversations eventually circle back to that. (Trust us.)”
Workshop Challenge
For the brief this week I chose a company and job that would be something I would ideally like to do.
The Bristol Bike Project, a bike charity in Bristol are running an event to celebrate their reopening after a move of premises. For this they want a promotional poster, a digital banner and a 10-page brochure.
Working out what I need to earn each year to set a day rate.
To start with I created a spreadsheet to work out what hourly rate I would need to charge to ensure I covered my overheads.
I then separated out each section of the job to work out what I would need to do, how long it would take and therefore how much I should charge.
Pricing up job with Bristol Bike Project
After speaking with Ben about my pricing structure he advised that my hourly rate was too low and I was budgeting too much time for each section. I wouldn’t be able to guarantee work everyday of the year, so need a higher day rate to cover any gaps in work that might occur. I also needed to simplify my process into clearer development phases.
Stage 1
Initial Brief
We will have a meeting (in person or via Zoom) to discuss the project in depth.
Research
We will conduct research around your company, competitors and design trends. We will explore some ideas to best represent your company and explain this thought process in a written document.
Initial Concepts
We will create 2 initial concepts on the design direction for your project. This will include layout ideas, colours, fonts and approach. These will be presented to you with an explanation of the strategic thought behind them. These will be in the form of sketches, moodboards or simple designs.
Feedback
You will then have 3 days to decide which concept you would like us to take further.
Stage 2
Design Development
We will get a photographer in to take the desired photos of your new venue and staff.
We will develop your chosen design approach into more comprehensive mockups, with examples of how the documents would look. We will produce a selection of mockups that will be presented to you.
Feedback Stage 2
You will then have 3 days to feedback on the design mockups.
You will then be able to feedback and ask for amends on the designs. You can provide 3 rounds of amends on the designs. This process should take max 2 weeks.
Stage 3
Refinement
We will refine the designs into finished and print ready documents.
Feedback and Sign off Stage 3
You will then be able to ask for a maximum of 3 rounds of amends before signing off on these finalised designs.
Stage 4
Production
We will oversee and organise the printing and finishing of the poster and brochure, before delivering it to you. The digital banner design will also be sent over.
By putting my day rate up to £300 and shortening the amount of time spent on the project, my total figure was quite similar but I feel like this quote makes more sense now.
I then created a designed pdf to send to the client that would clearly explain what I was doing and how much it would cost. That way I can get them to sign off on the project to ensure that they were not able to ask me for more than agreed.
Project quote to send to client:
Reflection
Having never previously priced work for a client, this was a steep learning curve for me. However, I feel that after some exploration and conversations with people working in the industry I now have a much better grasp on how to price work. I think the more jobs I price and the more work I undertake, the more accurate my pricing will become. Going forwards, I am going to ensure I track the time taken to do certain jobs to give myself a better idea of how long a project will take.
As I am interested with working with charities, b corps and small start-ups, there may be situations where I have to significantly lower my pricing to allow companies to work with me. I think that this is something I will be happy to do for a good cause, but I also need to ensure I take on enough well paid work to allow me to do this.
Planning to set up as a sole trader means I will have low overheads and won’t have other salaries to pay. This makes the process of looking for work less stressful in the beginning, then as my reputation and connections grow I could look into taking on more staff.
Reference list
BAKER, David C. 2008. “How Clients Want to Be Treated.” In AIGA Professional Practices in Graphic Design. New York: Allworth Press.
BRUCK, Eva Doman. 2008. “The Process of Setting Fees.” In AIGA Professional Practices in Graphic Design. New York: Allworth Press.
CARYS INK. 2017. “What’s It like to Work with Me? A Guide to the Process Stages of Your Design or Illustration Project.” Carys-ink | Freelance Illustrator & Graphic Designer, Bristol UK [online]. Available at: https://www.carys-ink.com/blog-feed/2017/1/24/whats-it-like-to-work-with-me-a-guide-to-the-process-stages-of-your-design-or-illustration-project.
HAWRAF. 2018. “A Guide to Working with Clients.” thecreativeindependent.com [online]. Available at: https://thecreativeindependent.com/guides/a-guide-to-working-with-clients/.
Lizzie Wa Design 
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