Are you a web designer and ready to take the next step and start your own web design business? You’re starting in the right place by educating yourself about the business startup process. Starting a business can seem daunting, but it’s not as overwhelming as you think. You just need to follow some simple steps to get your web design business up and running.
Do Some Research
First, you need to know the market that you’re getting into. Research other web design businesses to see what they offer and what prices they charge. This will help you to determine your prices, but it might also uncover an opportunity for a type of web design that you can specialize in based on your experience and what’s missing in your market. For example, maybe you could specialize in designing modern e-commerce websites.
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Come Up with a Business Name
Your name will be the first impression people have of your company, so choose wisely. It should be short and easy to remember, but also reflect what you do. Once you’ve chosen a name, you need to make sure that it’s available to use. You can do a business name search in your state, usually on your secretary of state’s website. You should also visit the website of the US Patent and Trademark Office to make sure the has not already been trademarked. You should also search a site like GoDaddy to see if the domain name is available.
Write a Business Plan
Your business plan should include the following:
- Executive Summary: Brief overview of the entire business plan (write it after you have written the rest of the plan)
- Business Overview: Overview of the company, vision, mission, ownership, and goals.
- Product and Services: Describe your web design services.
- Market Analysis: Assess the industry size and forecast, as well as what is trending in web design.
- Competitive Analysis: Analyze main competitors, and determine your competitive advantage
- Sales and Marketing: Develop sales, marketing, and promotional strategies.
- Management Team: Overview of the management team, detailing their roles and experience.
- Operations Plan: Your company’s operational plan includes how you will deliver your services, office location, key assets and equipment of the company, and other logistical details about how you will run your business.
- Financial Plan: Three years of financial planning, including startup costs, break-even analysis, profit and loss estimates, cash flow, and balance sheet.
Choose Your Business Structure
Here are the main options:
- Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
- General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
- C Corp – Under this structure, the business is a distinct legal entity, and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
- Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
- S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just needs to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.
Once you make a decision, you can go ahead and register your business entity with your state.
Get an Employer Identification Number
An EIN is required if you will have employees or if your business has more than one owner. You can file for your EIN online. Visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Get Business Licenses or Permits
You may need various business licenses and permits at the state and local levels. Check with your local governments for requirements. Go ahead and fill out the applications. Small fees may be involved.
Open a Business Bank Account
It’s important to keep your business and personal finances separate, so you should open a business bank account. You’ll need your EIN to do so.
Get Business Insurance
Check with your insurance agent about what types of insurance they recommend. You’ll probably need at least the following:
- General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage.
- Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
Develop Your Website
You’ll need a website to market your business. As a web designer, you should be able to do this very inexpensively. Just design it the way you would for your clients!
Start Marketing and Make Money!
Get you business up and running by marketing yourself. Use SEO strategies, social media, and other digital marketing. Now you’re in business!
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