Starting a Freelance Business

[CreamSoda]

Hello, I was wondering if anybody could give me some info/tips on starting a freelance graphic design business. I was looking at starting just a small side project but wanted it to be official. Is it best to form a LLC or is there a better option?

Do the benefits of registering as an LLC outweight any costs?

Has anybody else done this and have any suggestions?

Thanks you. (I know I could find this on google but thought a board full of designers could provide better and more up to date info)

[Cola]

Do you have a basic contract (and variants) typed up to protect yourself when dealing with a client?

Do you have a concrete rate structure (per hour, per job, etc)?

I guess the first start would be to get a business license and decide whether you want it to be in your personal name and DBA (Doing Business As) whatever design title you have or to put it right in your design company name...I only say that because if it's in the business's title, you'd have to have a separate bank account for the business (which you may plan on doing anyhow). At least that is how it worked with my credit union.

[oddball]

Put into your contract that you get 50%-60% up front, and that work does not begin until you get that first payment and then structure yourself to have landmark payments where you get another 25% and then the final 25% before you hand the file or work over to the client. When I say work does not begin, you don't even sketch something, you do nothing until you get a first payment. You shouldn't do any work for anyone until you see money if you are being paid to do work for them. You have an initial meeting to find out what the client is expecting and you take notes. At the end you say, "Thank you and you'll get back to them on if you will take the job and the cost." Why? Because you shouldn't feel like you have to take a job that you can't commit to, do well, or they won't pay you. If they want you to work for them, they will understand if you have time to take it and what it will cost. If they can't afford your price, then you ask them what you can cut out, and what has to be there. Don't be afraid to say, "No. I can't take the offer because of price or time." Be honest with yourself and them. You will get more respect by saying, "No" than you will by saying, "Yes" and then getting overwhelmed by the project or multiple projects. By the way, when you say freelance, what kind of work are you talking about? Also, ask for what you feel you're worth. This is your time that you are using, so get what you feel is the right amount. If you're doing a simple 4 page website and want to do it for $100 per page and then $75 per page after that, then that's what you ask for. Don't drop your price because someone can't afford you, because there's always someone who will pay.

[CreamSoda]

Thank you both for your reponses. I appreciate that. I have some rough templates for contracts but need to improve them. Excellent advice on the payment schedule Oddball.

I guess my main question is is it better to register as a sole proprietor or to create a single memeber LLC?

Are there any other licenses I would need to obtain?

[oddball]

Here's the simplest answer, which really doesn't give you a clear way to go. There are both advantages and disadvantages for both. What's you're going to have to do, is to read up on the sbject and you might even talk to a lawyer on the subject. Speaking of lawyers, I was talking to a friend about getting screwed out of some money and a lawyer happened to be behind us and he mentioned to me a couple of things that you might want to think about. You can have a verbal contract, but I think if it's over $500 or more than 6 months in length, then you need to have in a written contract or a court will probably throw it out. http://www.essortment.com/career/limitedliabilit_smuq.htm