Be very careful on what you have printed, you can spend too much of your hard earned cash on stuff that just looks cool and is not effective in bringing in money. My suggestion is start of with a really sharp looking business card and get your Web site online. These two items will be your number one shot for bringing in business. The next thing would be to work on low cost letterhead and envelopes so you can send out for proposals and sales information. Once your company starts to bring in money, then look at cooler ways to do your self-promotion and attract the bigger fish. Spend more money on mass mailing and cover more area with your dollar.
There area a couple of ways around this, one is to call and set an appointment. Chances are that you may still be turned away if they are not interested in speaking with anyone regarding a sales pitch. My suggestion is if this does not work, do direct mail. Make a nice letter on your company letterhead with samples of your work inside and send it to them. After about a week, call them and say that you are following up on a letter you sent them the week before. Many times, this will get you in the door, because they are more familiar with who you are; that is if they read your letter.
I will try to answer your question, but I am not by any means a CPA, so what I tell you should be checked out directly with a professional. Usually, as a freelancer, you only charge tax on the final product. If an agency has contracted you to do a project, they will be the ones completing the final product for the client. Thus, charging the client tax. In order for the agency to be tax exempt, they must provide a Tax ID number and fill out a tax exemption form. Check with your state for state tax regulations and requirements.
To answer you question about what to charge, is dependent on experience as well as location. Your location could warrant a high fee such as $100 per hour, but that all depends on experience and skill level. As an artist starting out, I would charge between $30 and $50 per hour, with $50 an hour being the preferred rate. Use our pricing guides and plug in your hourly rate. You should also time yourself on a regular basis to see how much time it takes to do a project. By the way, never sell yourself short. If it takes you 5 hours to do a brochure, and you know that most designers would take 10, then charge for 10. If the client has a hard time with the costs, go down to 8 hours charge. You’re still making money and are beating the competition.
As for a client requesting a cat smoking a cigar or even a sailboat, you can always use clip-art or contract an illustrator. I know how to draw, but my skill is not in illustration, so I hire that extra work out. Of course, I mark the cost up. Put it this way, if a client requests something give them 2 options. One would be clip-art, which is not custom and you may not be able to find exactly what they want, or you tell them you can have your illustrator come up with custom artwork. Let them know the price difference. To figure pricing on clip-art, I just roll that into the cost of my design quote; it is so inexpensive, it does not justify too much additional costs. For custom work, this could range from $100 to several thousand. Get with an illustrator and mark up the work 20%.
Here are some links for clip-art and stock photography. I suggest signing up for them when you can, or on a per need basis. Some of the sites are a pay per image program.
Unless you’ve been living under a rock for the past decade, you must have come across at least one article preaching the gospel of starting an online business. Now, unless you were born into 3rd generation family wealth, chances are, you must have bought into that particular gospel. The reason for this is simple.
Online businesses or startups have evolved from being mere hobbies to becoming one of the surest paths to financial independence. And so armed with your billion-dollar idea(s), you set out to create the next big online business. But like many others before you, you hit one small snag. One which has plagued business enterprises for as long as we can remember. The problem of funding.
As you must have guessed, lack of funding for online businesses or startups is perhaps more detrimental than outright failure in the business itself. This is because while entrepreneurs may learn from their mistakes and bounce back, those who lack funds never get the chance even to start. And so, they’re deprived of the extra income and business experience, and the world, of the next big thing since Facebook.
So, we come to the big question, how do you raise funds for your online business or startup?
Fundraising 101
While the traditional methods of raising funds for your business are still valid, there are more creative ways to do so for your business. Below are some of the more creative options for you out there.
1. Crowdfunding
You’ve probably heard a lot about crowdfunding and are probably wondering why it’s on the list. But the truth is, there are few things as creative as financing your business with the help of total strangers who want nothing but your success. Crowdfunding, as the name implies, is the practice of sourcing for funds from “crowds.” Rather than seeking out a single investor, funds are pooled from different businesses and individuals on platforms created for that purpose.
How do you get started? Get on one of such platforms like Kickstarter and pitch your business idea. The more impressive your pitch, the more likely you are to gain support. One of the advantages of crowdfunding is that you retain 100% ownership of the business most of the time, unlike some other options.
2. Venture Capitalists (VCs)
Apart from crowdfunding platforms, venture capitalists are another way to raise funds for your cash strapped business. This is a funding option that sees investors invest in upcoming enterprises that have a high potential for growth and monetary returns. Because of this, this may not be the best option if your business isn’t profit-oriented. Also, your pitch must even be more impressive than would be the case in crowdfunding. Your growth projections and accounts must completely be in order. Now, if you don’t have a good grasp of accounting principles, you can use accounting software to solve all your accounting-related problems.
You must note that unlike crowdfunding, venture capitalists always look for equity shares in the businesses they invest in. And in addition to this, they are also vested in having a say in decision making.
One significant advantage of fundraising through VCs is that you can raise more substantial capital than you would in crowdfunding. That being said, a great alternative to venture capitalists are angel investors.
3. Vendor financing
For those new to the online business world, you probably may not have heard of vendor financing. And that’s simply sad because it is one of the most creative ways to raise funds. It is a goldmine for those who wish to deal with tangible products but lack the capital for inventory.
How does it work? When you need products but lack the funds to purchase them, you can convince manufacturers and distributors to defer your payment till you sell your goods. So instead of the usual 30-day period, you get an extension that can last for months. This naturally would depend on your creditworthiness and, of course, extra fees.
We advise you to explore this option only when you’re sure of the demand for your product and the direction of your product offering. To do this, you would need a product roadmap template to help you forecast your product’s development over time and align it with the expectations of stakeholders. This way, you don’t run into debt trying to cover expenses when you’re yet to make a profit.
4. Purchase order financing
This is another creative means of raising funds for those who deal with physical products. It is used by businesses that lack the cash flow to purchase inventory to meet customer demands. Here, a financing institution pays your suppliers for the products which you sell to your customers. To take advantage of this method, you need to sell finished goods to business-to-business or business-to-government customers with at least 15% profit margins.
Like vendor financing, your creditworthiness goes a long way in your ability to utilize this option. It also helps if both your customers and consumers are well established and trustworthy as well.
One of the many advantages of purchase order financing is that it creates opportunity for revenue growth without the problem of taking on debt or selling equity shares of your business.
5. Microloans
This is a fundraising option usually reserved for non-profit businesses. Here, finance institutions grant loans to startups that do not qualify for bank loans. The loans can be up to $35,000. Examples of where you can get funds via microloans are Patriot Express Loans, groups like Kiva, and the Small Business Administration, which has its upper limit at $50,000.
In conclusion
Funding an online business or startup is by no means easy. In fact, it’s probably the only barrier between you and the financial independence you’ve longed dreamed of. As you can see, however, it doesn’t have to be the herculean task it was ten years ago for the first set of brave entrepreneurs. By using one or more of the methods discussed above, you’re likely to solve most of your fundraising problems. And the best part? You can still combine these creative modern methods with older traditional means like personal savings and donations from family/friends.
As a guide to pricing comps, I normally charge full design rate. The reason being, is a comp takes as long as the final art in most cases. The idea, creative direction and set up is all in place even when designing a comp. As for spec work, that is always free. I do not recommend ever doing spec work unless you feel that you stand a chance to get the job. Chances are that the prospective client will take your idea and take it someplace else for cheaper. About 98% of the time, I do not touch spec work. If I feel lucky or I know I could get the job, I will do a job on spec. As for an hourly rate to charge, that will all depend on your skill level. I bill between $60 and $100 an hour for design or comp work. My suggestion is to never go below $50 an hour; you have to run a business and anything less will not pay the rent. For some ways to protect your work, you will need a contract, and possibly a copyright ownership agreement.
The form you are getting your freelancer to sign is really more for an employee of your firm or more of a permanent freelancer that you hire on full-time to part-time basis. My suggestion is to use a “work-for-hire” agreement. This form will protect you from all sorts of stuff and will act as a confidential agreement. If this person does not want to sign this form, I would advise to use caution when using them.
As for the rate of $125 per hour sounds fine. By looking at a currency converter, your $125 an hour rate is about equal to $77 per hour here in the USA. However, I would suggest calling up a few local design firms and do a little price checking. Also, depending on the Australian economy, will depend on how much you can charge. You might even consider having 2 rates, one at your regular rate and the other a little lower for lesser budget clients or bad economy issues. I have my rates between $60 and $100 US dollars per hour which would equal to about $97 to $162 AUD.
You are automatically protected by US copyright laws. You own your artwork and as long as you have not transferred the rights to the designs to the client, you still own them. The only thing you can really do to protect yourself is to place the copyright symbol on each logo and state that these logos are property of your company and may not be reproduced without your permission. If they take your design without paying, then hire an attorney an go after them. One other thing to consider is not doing this type of “spec work”. You are opening yourself up for someone to take advantage of your hard work and not pay you for your ideas. Many clients try to get ideas from designers and go other places to get the work done cheaper. Your portfolio should be enough to let the client know you can do the job. However, I understand that there are times that you need to do this to land a big deal, just be careful.
