Graphic Design Business Plan
Over the past 20+ years, we have helped over 10,000 entrepreneurs and business owners create business plans to start and grow their graphic design businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a graphic design business plan template step-by-step so you can create your plan today.
What is a Graphic Design Business Plan?
A business plan provides a snapshot of your business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes research to support your business plans.
Why You Need a Business Plan for a Graphic Design Business
If you’re looking to start a graphic design business, or grow your existing graphic design business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your graphic design business in order to improve your chances of success. Your business plan is a living document that should be updated annually as your company grows and changes.
Sources of Funding for Graphic Design Businesses
With regards to funding, the main sources of funding for a graphic design business are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.
The second most common form of funding for a graphic design business is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan. Venture capitalists will not fund a graphic design business. They might consider funding a graphic design business with a national presence, but never an individual location. This is because most venture capitalists are looking for millions of dollars in return when they make an investment, and an individual location could never achieve such results.
How to Write a Business Plan for a Graphic Design Company
If you want to start a new graphic design business or expand your current one, you need a business plan in the proper business plan format. Below are links to each section of your graphic design business plan template:
Executive Summary
Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of graphic design business you are operating and the status. For example, are you a startup, do you have a business that you would like to grow, or are you operating a chain of graphic design businesses.
Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the graphic design industry. Discuss the type of graphic design business you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing strategy. Identify the key members of your team. And offer an overview of your financial plan.
Company Analysis
In your company analysis, you will detail the type of business you are operating.
For example, you might operate one of the following types of graphic design businesses:
- Publishing graphic design: this type of business creates eye-catching visual materials for books, magazines, and newspapers.
- Website graphic design: this type of business creates user-friendly and aesthetically pleasing website pages.
- Product graphic design: this type of graphic design studio creates illustrations and prototypes of various products.
In addition to explaining the type of graphic design business you will operate, the Company Analysis section of your business plan needs to provide background on the business.
Include answers to question such as:
- When and why did you start the business?
- What milestones have you achieved to date? Milestones could include the number of client contracts, contract renewals, revenue generated, number of referrals, etc.
- Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
Industry Analysis
In your industry analysis, you need to provide an overview of the graphic design business.
While this may seem unnecessary, it serves multiple purposes.
First, researching the graphic design industry educates you. It helps you understand the market in which you are operating.
Secondly, research can improve your strategy, particularly if your research identifies market trends.
The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section of your graphic design business plan:
- How big is the graphic design industry (in dollars)?
- Is the market declining or increasing?
- Who are the key competitors in the market?
- What trends are affecting the industry?
- What is the industry’s growth forecast over the next 5 – 10 years?
- What is the relevant market size? That is, how big is the potential market for your graphic design business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.
Customer Analysis
The customer analysis section of your graphic design business plan must detail the customers you serve and/or expect to serve.
The following are examples of customer segments: business owners and entrepreneurs, bloggers, marketing professionals.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of graphic design business you operate. Clearly, entrepreneurs would want different service options and would respond to different marketing promotions than bloggers, for example.
Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. You can find demographic information for various locations on government websites.
Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.
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Competitive Analysis
Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.
Direct competitors are other graphic design businesses.
Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes low-cost freelance platforms and design tools like Canva. You need to mention such competition to show you understand that not everyone who needs graphic design will utilize a graphic design company.
With regards to direct competition, you want to describe the other graphic design businesses with which you compete. Most likely, your direct competitors will be graphic design businesses in the same niche.
For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:
- What types of clients do they serve?
- What types of graphic design services do they offer?
- What is their pricing (premium, low, etc.)?
- What are they good at?
- What are their weaknesses?
With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
- Will you provide superior services?
- Will you provide services that your competitors don’t offer?
- Will you make it easier or faster for customers to use your services?
- Will you provide better customer service?
- Will you offer better pricing?
Think about ways you will outperform your competition and document them in this section of your plan.
Marketing Plan
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a graphic design business plan, your marketing plan should include the following:
Product: In the product section, you should reiterate the type of graphic design business that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to graphic design, will you provide unlimited revisions, a dedicated project manager, or free mock-ups?
Price: Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.
Place: Place refers to the location of your graphic design company. Most likely, your graphic design business can be operated remotely, and you can serve several geographic locations at once. Mention how your remote graphic design business offers ample opportunities.
Promotions: The final part of your graphic design marketing plan is the promotions section. Here you will document how you will drive customers to your location(s) or website. The following are some promotional methods you might consider:
- Advertising in local papers and magazines
- Reaching out to local websites
- Flyers
- Social media marketing
- Local radio advertising
Operations Plan
While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.
Everyday short-term processes include all of the tasks involved in running your graphic design business, including project management, sales and outreach, and design work.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to work with your 100th client, or when you hope to reach $100,000 in revenue. It could also be when you expect to partner with a major brand or complete your first graphic design case study.
Management Team
To demonstrate your graphic design business’ ability to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally you and/or your team members have direct experience in managing graphic design businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing graphic design companies or successfully running small businesses.
Financial Plan
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.
Income Statement: an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, will you work with 60 clients per year or 120? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance Sheets: Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your graphic design business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement: Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. For example, let’s say an advertising agency approached you with a $75,000 contract to provide graphic design services for their clients on an annual basis. Let’s further assume the contract would cost you $75,000 to fulfill in terms of increased staffing costs. Well, in most cases, you would have to pay that $75,000 now for employee salaries, software, image licensing, etc. But let’s say the company didn’t pay you for 180 days. During that 180-day period, you could run out of money.
In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a graphic design business:
- Business build-out including website design and branding fees, hosting, advanced digital security and encryption, etc.
- Cost of equipment like design software, high-speed internet, project management platforms, etc.
- Payroll or salaries paid to staff
- Business insurance
- Taxes and permits
- Legal expenses
Appendix
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your trademark or copyright information.
Graphic Design Business Plan Template PDF
You can download our graphic design business plan PDF to help you get started on your own business plan.
Summary
Putting together your own business plan for a graphic design business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the graphic design industry, your competition, and your customers. You will have developed a marketing strategy and will really understand what it takes to launch and grow your own graphic design business.
Finish Your Graphic Design Business Plan in 1 Day!
Don’t you wish there was a faster, easier way to finish your Graphic Design business plan?
With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!
OR, Let Us Develop Your Plan For You
Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success. Growthink’s professional business plan consulting services can create your business plan for you.
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