Graphic Design Business vs. Freelance Career

Launching a graphic design business is not for everyone. You might prefer to work as a freelancer instead, and have another company deal with the hassles and finances needed to operate a business. There are major differences between these two paths, and understanding those differences can spare you a lot of headaches. Here is what you need to know about these two options:

Self-Employment Taxes

As the owner of a graphic design business, you can expect to pay self employment taxes to the Internal Revenue Service (IRS). This consists of Social Security and Medicare tax payments, and the rates do change. You will need to pay the rate for the tax year based on your earnings on a quarterly basis in most cases. Freelancers don’t pay self employment taxes, but the income is added to the overall personal income and taxed accordingly. The other thing to note is that the IRS won’t let you claim that you’re a freelancer in the same line of work for long. For example, if you work as a freelance graphic designer for one year and plan to do so the following year, the IRS may consider you self-employed anyway, and you’ll have to pay self-employment taxes.

Income Stability

One of the main reasons why people put off their dreams of working as a graphic designer is the fear of losing a steady paycheck. There are no income guarantees when you work as a freelancer, but it can be a more stable option than launching your own graphic design business. For example, you can apply for freelance jobs that promise a steady flow of work, and try to get hired by as many clients as you need to help you meet your monthly living expenses. As a brand new business owner, you never know when you’re going to land your next client and where your work will come from. Once you establish yourself though with steady clients, you may have the opportunity to earn much more as a business owner, and have the assurance of steady income.

Work Life Balance

You may choose a freelance career over a graphic design business any day because of work-life balance issues. You work much fewer hours as a freelancer because you don’t have to do everything else that is required of being a small business owner. You don’t have to spend nights and weekends trying to land more clients, completing bookkeeping tasks, making sales calls and collecting your accounts receivables. Your family needs and other responsibilities may not allow you to dedicate so many hours to the work. If that’s the case, than freelancing is a more flexible option.

Less Selling Required

You can’t escape selling yourself altogether as a freelancer, but you’ll do far less of it than if you operated your own graphic design business. The majority of your sales as a freelancer occur when you pitch your talents and skills to potential employers. Once you’re hired, then very little selling needs to be done. You’re always selling as an entrepreneur though, which can be overwhelming if it’s your area of weakness.

It’s important to consider these issues when making your decision to start a graphic design business or a freelance career. You may decide to launch a freelance career first and then segue into a business after you build your reputation.