Never work for an agency that prevent you from showing the work you do for them I worked 3 years as a designer (retail design, 3D rendering, graphic design) for top tier brands (Bvlgari, Rolex, L'Oreal) I've designed shop windows for the 5th avenue... But my contract stated that everything I did was owned by the agency and with a strict policy of not showing anything. 3 years of work and you can't even display a single image on your portfolio/website/instagram anything... This sucks to find another job. Now I work as a freelance photographer, people remember my name. I'm not just a guy owned by an agency.

Assuming that you're good at what you do, the most important thing to remember is the age old adage –

Revenue is vanity. Profit is sanity. Cash is reality.

You only run out of cash once, so manage your cashflow properly! Ensure that you have at least a simple one-pager contract for all work; which sets out payment terms etc. Take a deposit before you start work. Potentially offer a small discount for early payment and/or fines/interest for late payment.

• Don't have one client that is more than 30% of your gross revenue.
• Any agency, no matter the size, is one quarter from going out of business
• Scaling an agency past 30-40 people usually requires outside capital
• Collect 30-50% up front, depending on the size of the project
• To stay in business, you need to make at least 50% on the project. Try to make more. You are selling value, not time.
• Have a contract. Fuck You Pay Me
• Be aggressive about collections. If it isn't paid in the first 45 days, it is highly likely you won't get paid.
• Never have a contentious conversation over email
• Treat employees and contractors better than you would treat your children.
• To that end, pay your bills faster than expected
• You can scale sort of scale a small design business if you corner a niche – be the web/brand guy for single-physician practices that do LASIK, for instance.
• Big (or well-monied) clients pay more than small clients and take the same amount of your time, or less.

Hire an accountant. If they don't end up saving you money, hire a better accountant.

Spend a little time/money with a lawyer to write up a work-for-hire contract that is right for you. In 7 years of running my own design business (4 as a freelancer, and 3 as a bona fide company), I've never actually had to take a dispute into the legal system, but I've benefitted GREATLY from having good contracts. Two reasons:

1. Contracts lets you talk about your values with a potential client in a very transparent way.
2. If a potential client responds negatively to an important part of you contract (ie — asking you to change or remove it) it can be a great sign that maybe you shouldn't work with them.

It's definitely not glamorous or fun, but it's one of the most valuable tools in my arsenal.

1. When you create an offer never think you have to go cheap. Make you pricetag real, communicate what you do and for most of all why. Explain your client why your prices tag is higher than others, explain what benefits the client will get. Communicate also that you rely on the success of your clients project, because if the project goes wrong the client will not come back – tell him that.

2. When you start as freelancer without employees than set your daily/hourly rate and stick to that no matter what. Ask other freelancers they will help you. And if you don't now how much you want for a day/hour just calculated what you need for a month. Double that and divide it by 20 workdays.

3. Get an tax guy. (Especially when you living in germany like me)

4. Take some student in if your workload goes up like crazy, don't try to tackle everything by yourself.

5. Set one day in a month to take care of your offers, Invoices and other paper related stuff nobody wants to do. Stick to that day never say tomorrow.

6. Don't take a job you didn't like.

7. Be always in the search for business partners, they have jobs for you and you for them. Go out and get on business events and talk to people in your business.

8. Get stuff done, no matter what.

9. If you can't do something, because you have zero knowledge don't do it. But if you think you could learn something new than do it 120% and with passion.

10. Never stop using new tools, never stop reading articles about your business, be young and foolish all your live.

A good read for that is: https://abookapart.com/products/design-is-a-job This book changed my perspective on my job.

Yes, you need to have a level of business acumen, package yourself, niche yourself, promote yourself, get the contracts, have the project management tools in place and so on.

However, the number one thing I wish I had a better grasp on when I was starting out:

Clarity

Demand, clarity.

Be clear in your communications as well, it's a two way street.

The more time you spend trying to read collaborators tea leaves of vagary and ambiguity, the more time and money it costs you.

The more vagary you tolerate, the more room you have for your projects to hit a break down point.

When a customer says, "make this button more powerful" - you need to have a process, a case and set of questions to guide them in the right direction, if there is anything useful to even extract at all.

Describe what you mean?

What purpose does this serve?

Why?

Don't get too attached to your employees. People won't feel the same about your business as you do and they will jump the board whenever another opportunity arises.

This also means be mindful about how you invest in people so that you can get your return in 6 months tops.

I've been running a design/dev agency for 4-5 years. I'll take a whack at your Q:

1. Don't take outside funding
2. Don't give anyone more power/equity as yourself unless you know them extremely well
3. Set a minimum amount, (i.e. $2500 or $5000) tell clients you only take 100% upfront for those budgets.
4. Don't underestimate the power of spec work
5. Specialize in a system that you have a competitive understanding of
6. If you're going to take payments online, use WePay
7. Read: The E-Myth Revisited (might recommend "Rework" as well).
8. Build great documentation, and you'll be able to scale faster
9. Don't confuse scale with success
10. Do exceptional work, and if you find yourself becoming jaded, re-evaluate your business

Those are just some valuable lessons I've had. Good luck!

Couple extras I thought of:

• If you give clients 10% off for the first 7-10 days after you send your invoice, I've found the close rate is much higher.

• When doing the "discover process" with a client, really dig in and question everything about their last project. I've found they will usually tell you how much they payed even, which can result in charging a lot more and not feeling bad about it.

Sign-off is irrelevant if it isn't meaningful.

Link product requirements contracts to a payment schedule in order to receive meaningful sign-off.

The higher level of contract sign-off required (CTO/CEO), the more diligently the project staff will work with you to run the project on time and on budget.

Work to frequent milestones, with each milestone requiring payment.

Take how long you think the project will run and add on 30%.

Work with freelancers/contractors before you hire for a position. A job requirement is fine, but you'll quickly learn through the freelancers what's actually essential in the job...professionally and personally for the other team members.

If you don't consistently recognise and reward your teams achievements, they wont stick around for long. Small gestures and simple words go a long way when people work hard to make your company a success.

Getting clients is the name of the game. I can't stress enough how important networking is. Connect with people, make lots friends and you will end up working with people you consider as friends, which is the best.

I know some people say that you shouldn't work with friends, because it may create friction and brake the relationship. But I say, if a friend tries to screw you... It might be time to raise those friendship standards ;)

This articles is worth the read: http://alistapart.com/article/getting-clients

Cheers Ivan and best of luck.

Wish I'd asked this starting out; would have made my life easier.

Contracts have been mentioned. I didn't think I needed them because I didn't want to deal with legal stuff. But they are important because they convey a sense of professionalism that puts your clients at ease, not just for legal protection. Let's face it, if you're small you probably couldn't afford to go to court anyway, but having a common sense foundation for a relationship still makes good business sense.

Not sure where you're coming from, but as a freelancer I eventually ended up modifying this contract to the shortest version I could that made both me and my clients feel comfortable. One thing I did was specify that copyright ownership transferred to my clients only upon receipt of the final payment. This made me happy because I almost always got payed promptly after that, and made my clients happy because it removed ambiguity and allowed them to feel in control.

Probably the biggest mistake I made starting out was thinking of myself as a designer, not a business owner. When you are self-employed, you are also marketing, sales, accounting, and support, so you have to learn to enjoy developing the business. If you can't, it's going to be tough to find the motivation to keep it going over the long haul. Being a great designer alone is not enough. You have to:

1. Do great work.
2. Tell the story of what makes your work good. (Don't take it for granted that people will automatically get it. This is not about a slick sales pitch; it's about explaining what quality work means to you and how you get there, in terms somebody who's not a designer can appreciate.)
3. Make sure the right audience hears that story.

Ivan - exciting, congrats! What kind of business? Agency / Consultancy, producing in-house products, a mix or something else?