Define your position in the market and work it into a tag-line. Examples...
Illustrator/Animator
Children's Illustration
UX Designer
Turn-key marketing & design for small business
Etc.
If you can differentiate yourself from your competitors in a way that is attractive to clients, it can be a huge advantage. Your tag line should reflect your position(s). Here are some ideas for positioning:
Value (Cost Effective) ... low cost but high results due to low-overhead.
Value Added... ability to incorporate animation & soundinto projects
Personal Service ...partnering for success
Technical Specialist... 3D animation, motion graphics, etc.
Visual Specialist... cartoon, representational, etc.
Visual Style Generalist... whatever the client needs
Turnkey delivery... handle all aspects of projects including web hosting, printing, etc.
Personal Connection... share personal interests in your website bio.
Award Winner... list them
Etc.
This includes a company name, a tag line and a list of services. Examples...
Sam Smith Illustration: Game Artist
3D Modeling & Texturing • Character Design • Environment Design • Production Art
Sally Smith: Digital Designer
Web Design • Motion Graphics • Print Design • Campaigns • Social Media Design
Terry Toons: Cartoon Animator
Cost effective Storyboard/Animatic • Character/Background Design • 2D Animation • Sound Design
If you can differentiate yourself from your competitors in a way that is attractive to clients, it can be a huge advantage. Your tag line should reflect your position(s). Here are some ideas for positioning:
Youth focused animation
Sugar coated illustrations
ADA compliant designs
Adobe Animate and Aftereffects workflow
apparel
Web-based media
sound design
Online or brick and mortar store front
Web developer/coder
non-binding group (agree to work together with option to pull out/kick out without penalty)
partnership (legally bound)(partners must buy out to change the relationship)
outsource , in-house or a combination
Design, production and operating costs plus a markup
Day job, savings, crowd fund or business loan
If you are billing clients for work ... you are by default a sole-proprietorship business. You can operate under your social security number and personal checking account, but there are advantages to setting up a separate business.
(if you will not be operating under your own name) register a name with the county administrative offices where you will be living. In GR that is the on the 2nd floor of black building directly behind the Calder. It costs $10-$15. This kind of business is a 'Sole Proprietorship' and is the most common for free-lancers.
Once you have a registered business name, you can set up a separate checking account called a DBA account. DBA stands for 'doing business as'.
Search Names and download the form
Having a separate account will make t is easier to do taxes because your business and personal transactions will not be mixed together. It also puts a more substantial 'store front' in view of your clients and that can effect your billing rate. Also if you get audited you will have a more legitimate business structure. Set up the account under your business name if you are not operating under your own name. That is called a DBA (Doing Business as) account. If you are operating under your own name, you can just set up a separate account under your name. You can loan money to the business from your personal account to get started, then pay yourself back later. Handle all income and expenses for the business in that checking account. Maintain a separate personal account and pay yourself a 'draw' from the business account as needed. For tax and accounting purposes it is important to keep these separate. Your 'draw' is your personal income for which you will pay personal income tax. The money remaining in the business account will be considered business income. These are taxed at different rates, so it is important to think about them separately.
You are not required to obtain a trademark for your company. If you are going to invest in and sell a retail product nationally or internationally, it may be worth protecting that name with a trademark. Trademark is different from Copyright. It is for registering product and company names, marks and logos. More than one company can claim a trademark on a name as long as they are not in a competing enterprise. For example, EPIC is a name for which many enterprises are claiming a trademark. Find out more about and search trademarks.
You can use your social security number for all of your tax forms (not recommended) or you can obtain a (free) EIN number from the IRS for use in place of it. It is one thing you can do to protect against identity theft.
Make sure that it does not look like you are job searching with your website. Make it lookS like you are 'in business'. One way to do that is to list 'services' a 'client-list' or 'capabilities' instead of a resume and bio.
Create a space in your home where you can leave your work out. It should be comfortable and productive. The space should be separate from your living room, kitchen, bedroom, etc. In order to count the space as an operating expense, it must be dedicated to your professional work.
Keep track of your car milage for all business activities. Keep a log with dates, trip description and distance. This can add up to a substantial deductible expense.
Set up a file folder for storing forms you will be receiving and sending (these are described and available for download in Turbotax , Outright and similar software):
1099 Form
This is an income reporting system for the contract employment world. You will receive these from clients that have paid you $600 or more for contract work. They will also send a copy to the IRS. This informs the IRS that you have received that income. If you sub-contract to another artist or designer and pay them $600 or more, you will need to submit a 1099 to them and the IRS as well. These are required to be mailed no later than Jan 31. Download Form
W9 Form
This is used by your clients (or you) to request the name, address, and taxpayer identification information of a contractor. The tax ID number can be a Social Security Number or Employer Identification Number - either number is considered a Taxpayer Identification Number or TIN (as it is commonly called). The form is never actually sent to the IRS, but is kept on file by the person who will be creating 1099 forms for reporting the payment. Download form
W2 Form
This is the standard wage and tax statement that you will receive from an employer that paid you through a payroll check or direct deposit (not through a contract). Employers are required to send those to employees no later than Jan 31. Download form
You can use a program like Turbotax , Outright, and similar software to figure out how much to pay, where to send it, and download all the required forms. These software programs make it simple by giving you form fields to fill in, then directing you how to proceed. If you have set up a separate checking account, logged milage, and have kept your 1099 & w2 forms, This will be a fairly quick and easy process. You do not need to need to be a master of accounting methods. The software will direct you where to distribute your expenses and income for the tax calculations.
You do not charge sales tax to your clients for art and design services nor for deliverables such as printing or other physical objects unless it is a retail product and they are the end-user (like greeting cards, wall art, crafts, etc.). Everything you need to know about charging and filing sales tax in the state of Michigan is available here.
This is an expensive, soon as you can afford it, necessity. The key to finding an affordable rate is to buy into a group insurance policy. Many organizations and contractor unions have these available. You can also purchase through the 'National Small Business Association'. Local options include Priority Health, Blue Cross and United Health Care Golden Rule.
Now, with the Affordable Health Care Act in place, you have a variety of lower cost insurance options that you can purchase from an exchange. See details here: https://www.healthcare.gov/
Plan on spending up to 50% of your time on non-art and design activities:
Finding work setting up/maintaining your studio and performing administrative tasks like creating estimates and invoices is a big part of running a business. This percentage can decrease significantly once you become established, rely mostly on referrals and become an efficient administrator. Set up specific days of the week to handle the various aspects of running your business. Here is an example:
Check project deadlines and prioritize your work
Work some bill-able hours
Check your bank account
Follow up (with phone calls) on accounts receivables (money clients owe you)
Write checks for outstanding accounts payable (money you owe)
Send tax payments (if due)
Work some bill-able hours
Network (blogs, communities, etc.)
Work some bill-able hours
Market (make cold-calls, send postcards, etc.)
Work some bill-able hours
Clean and equip your studio.
Work some bill-able hours
Never perform a significant amount of work without a signed estimate or contract See the Pricing, estimates, Invoices section for information on how to create these.
Don't finance projects for your clients. It's typical to collect 1/3 up front on large projects. Then bill 1/3 on delivery and allow the client to pay the remaining third in 30-60 days. Some clients may not pay the last third for 90 days. This is standard in the industry and clients should not be surprised by this payment schedule.
Don't worry about making a lot of money out of the starting gate. Focus on delivering quality work, on time with good communication during the process and your clients will refer you to others. You will become faster in your ability to create concepts and produce deliverables as you gain experience. Your actual hourly rate will increase then, because you will perform the work at the industry standard rates in less time.
Be patient It can often take up to 2 years to get a freelance business to the point where it adds up to a real living. Considering that you will need to purchase your own health insurance, pay expenses and quarterly taxes... that means, at minimum, $40,000 in sales.
Many artists work their entire lives as freelancers and sole proprietors with no employees. However, if you grow into an entity that has employees, significant physical assets and other liabilities, you will want to change to an LLC (Limited Liability Company). This requires a $50 filing fee. Forms and information are available at Michigan Department of Licensing and Regulatory Affairs.
If you are running a philanthropic you can register as a B Corporation. B Corps are for-profit companies certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency.