There are many ways for brands to establish an online presence, such as social media and blog platforms. However, they don't provide the same level of customization and control as a website.
To ensure a successful web design strategy, many businesses rely on professional web designers to create websites that build their brands, generate leads, and increase revenue.
Thinking of starting a web design business? Review these essential steps.
Develop a strong value proposition
Your value proposition is one of the more important components of your web design business. It is the primary reason why someone should choose to buy your product or service.
As a web designer, you will face fierce competition in a crowded marketplace, not only from other web design businesses but also from website builder platforms that promise individuals a no-code “build it yourself” option.
To develop your value proposition, you’ll need a keen understanding of your target market, including who your ideal customer is, their pain points, and how your product or service can address their problems.
Ask yourself the following questions:
- What does my web design business offer?
- What do customers hire my business to do?
- Who is my competition?
- What sets my business apart from my competitors?
Your value proposition statement should clearly and concisely explain why your service is superior to the competition. It should emphasize your service's unique benefits and how it can help customers achieve their goals.
To ensure your value proposition is effective, consider testing it with people unfamiliar with your business. If they are confused, revise your statement to address any issues.
Have a business plan
A well-crafted business plan serves as a guiding companion through the stages of starting and managing your business. Treat it as a blueprint for structuring, operating, and expanding your web design business.
A business plan is a crucial tool to help secure financing for your new business or attracting business partners. It should clearly outline how stakeholders will gain a return on their investment in your business. If you are looking for investment or business partners, your business plan should be detailed and comprehensive, including the following components:
- Executive summary
- Company description
- Market analysis and industry outlook
- Company structure and management
- Services description
- Marketing and sales strategy
- Financial projections
For more information, see:
- Writing your business plan
- Creating action plans: Operations and management
- Marketing plan component of your business plan
Choose a name for your design business
Your business name is a key part of your brand strategy and should be easy to remember, pronounceable, and unique. It should also reflect the industry you operate within. Consider your geography and market reach and avoid turning customers off with a location-specific name.
In addition, keep the name short, easy to remember, attention-grabbing, and descriptive of your business.
Depending on the business structure you choose, you might need to register your business name and/or obtain approval from the local or state government where your business is established.
For more information on naming rules for different entity types, read Naming your startup business.
Choose a business structure
Your choice of business structure will impact your daily operations, taxes, and the level of risk you are willing to assume with your personal assets. When choosing a business structure, strive to strike a balance between legal protections and potential advantages.
The most common business structures are:
- Sole proprietorship: This type of business is owned and operated by a single individual, with no legal separation between the owner and the business. This means that the owner is personally responsible for all the business's debts and obligations. One of the easiest business structures to form; there is no official state filing needed to establish a sole proprietorship.
- General partnership: A general partnership is the simplest type of partnership and is automatically created when two or more people form a for-profit business. In a general partnership, the owners have unlimited personal liability for the business's debts, including the acts of employees. No state filing is required.
- Limited liability company (LLC): An LLC provides limited liability protection by separating the business assets from the owners' personal assets and allows for pass-through taxation.
- Corporation: A corporation is a distinct legal entity owned by shareholders, thus shielding owners from personal liability for corporate debts and obligations.
To form an LLC or corporation, you must file Articles of Organization (LLC) or Articles of Incorporation (corporation) with the Secretary of State or other office that handles business formation in your state.
Note: Entering into a contract as a sole proprietor means you remain personally liable for the agreement, even if you later incorporate or establish an LLC.
For more information on business entity structures, read Comparing company types and Compare S corporation vs LLC.
Consider best practices for preventing scope creep
In any web design project, it's common for new requirements to arise or for clients to request changes from the original plan. However, if not managed effectively, scope changes can lead to delays, budget overruns, or both.
Getting a project started on the right track can significantly reduce or eliminate scope creep. For each project, consider the following:
- Gather information: Gather initial project details to get a basic idea of the project. Avoid asking for too much information at this early stage. The last thing you want is to discourage people from contacting you.
- Kick-off the project: Next, schedule a kick-off meeting to establish goals, timelines, and expectations.
- Have a defined contract: Ensure that your contract contains a comprehensive project brief outlining deliverables, specifications, project phase schedules, and any restrictions.
- Ensure feedback is consolidated: If multiple stakeholders contribute to the design, request that all feedback from the client be consolidated. This helps to avoid receiving feedback at different times or requests that may lead the project in a new direction, resulting in extra revisions and scope creep.
- Manage additions: When a client requests work not covered by the initial agreement, you have an opportunity to increase your earnings. In this situation, it's important to create a change order that clearly outlines the expanded scope of work, the additional fees, and the extra time required to complete the task. Remember to wait for the client's approval before proceeding with the new work. This gives the client the chance to reconsider if the added work is not within their budget or to find the necessary funds.
- Learn how to handle minor add-ons: For simple or quick project additions, it might be beneficial to complete them for free. This can help strengthen your relationship with the client. However, it is important to clearly communicate in writing that the work is beyond the original scope and is being done as a gesture of goodwill. You may also consider adding any additional work as a separate invoice line item with a zero charge. This will convey that you usually charge for additional work and the client should not expect it to be provided for free in the future.
- Communicate clearly and often: Ultimately, you are accountable for all project tasks. If there's a change in scope, take the initiative and arrange a meeting with your client to discuss how the change aligns with the overall project and its impact on timelines. Provide your professional insights, engage with the client to understand how the change aligns with the overall project, and then implement the agreed-upon course of action.
Understand the legal requirements of your web design business
Depending on your business structure and the location of your web design business, it may be subject to certain legal requirements. These include:
- Obtain a business license: Most businesses, no matter their legal structure, must meet licensing and registration requirements. Your web design business might need a general business license at the local or state level. Even if you work from home, you may still need a home occupation permit in some areas.
- Sales tax: Each state has its own rules regarding whether businesses are subject to sales tax. You may need to register with the Department of Revenue in your state, and potentially in other states where you have nexus. This depends on whether the state requires you to charge your customers for website design services.
- File a DBA name registration: Also known as a trade name or fictitious business name, if you do business under an assumed name then you must file a DBA registration with your state or local jurisdiction.
- Obtain an EIN: If you plan to hire employees, you must obtain an Employee Identification Number (EIN) from the IRS and register with your state’s Department of Labor. You must also get an EIN if you form an LLC or corporation.
- Get a registered agent: A requirement for LLCs and corporations.
- File a BOI report: LLCs and corporations may be required to file a Beneficial Ownership Information report with FinCEN.
You should also be familiar with regulations that impose legal requirements on website owners, including data protection and privacy (including GDPR and CCPA), web accessibility (Americans with Disabilities Act or ADA), and copyright protection, among others. You should also seek advice from a legal professional to determine the best ways to protect yourself from potential liability issues.
For more information, see What are the legal requirements for starting a small business?
Keep finances separate
It's important to keep your business and personal finances separate. This makes it easier to track your business cash flow and is especially crucial if you have an LLC or corporation. These business entities are required by law to have a dedicated bank account for business transactions. Failing to separate your finances from your business could put your personal assets at risk.
Get comfortable with networking
As a web design business owner, you’ll need to network with prospective and new clients. Networking can help identify opportunities for growth and continuous improvement.
If you struggle with networking, consider how forming new relationships can help you learn from others. Instead of focusing on what you have to offer, concentrate on learning from others. Ask questions, listen, and opportunities to engage will arise.
Before any networking event, research who will be in attendance and prepare for conversations. Also, think about what you bring to the table. Your knowledge, market focus, experience, or insights could be valuable to someone else.
BizFilings can help
If you're initiating a web design venture or formalizing an existing business, it's beneficial to be aware of the specific formation and maintenance obligations that each state imposes on corporations and LLCs.
Check out our state guides for LLC and corporation. We provide key information on state-specific requirements for forming an LLC or corporation plus ongoing compliance requirements.
