Dear Mr. Gillitt,

I found your profile on BRUnet and I was wondering if I could ask for your advice. I’m a senior at Brown, and I’m considering starting a small web design firm after I graduate. The plan is to offer re-design and possibly database services to small businesses in the Boston area, and I’d be particularly interested in hearing about how you started your business, the challenges you faced, and how a new company should make its pricing decisions.

Thanks for your time and consideration.

Sincerely,

Brown Student ’09

Hi there-

I did not start my own business right out of school; instead, I had many years of working for other companies under my belt, and I’d recommend that to you as well, unless you are an extremely well-connected and talented designer and programmer with work already lined up. Especially in this economy, potential clients are interested in two features of their potential service providers- price and skills/experience. You have to be able to wow them with at least one, if not both. However, you also can’t work for pennies- you have to earn a living.

When it comes to pricing, there are several places to look for ideas. The simplest is to scan Craigslist for local ads and see what the competition is charging. However, and I cannot stress this enough: do not be tempted to apply for jobs that promise you “exposure” or contests that offer you a slim chance of winning a prize after you put in a lot of hard work. Take a look at www.no-spec.com to get an idea of what I am talking about. This is a major problem these days; people treating design and programming like a cheap, disposable commodity that they can order off a tasting menu, and only pay for the one they like best. Despite the glimmer of hope that you might win the contest or see your work with your name listed as the author, you can’t pay rent with “exposure.”

Another way to set at your pricing is to figure out what your monthly costs are, and divide that by 160 working hours per month. That might be a little more depressing, because you’ll also have to figure in things like paying for your own health care and taxes and the like.

The biggest challenges to deal with when starting a business are acquiring clients, satisfying them, getting more work, and paying your bills on time. You have to stay on top of all the little details (receipts, mileage, hours, contacts) and  wear lots of hats, and also be prepared to keep yourself busy when you have down time too.

I wish you success with your new venture, and I hope you’ll find my advice helpful.

Best wishes,

Adam Gillitt

posted on Friday, April 3rd, 2009 at 11:58 am in eponymous.
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