To start a freelance graphic design business, what exactly do I need to do to start officially working and billing clients?
Question Details: Just as the title says, I am in the process of launching a freelance graphic design business. I have no employees or contractors. I am the only one in the business. Essentially, my business would work like this client contacts me and we discuss their project. I submit an official proposal/contract detailing the timeline, budget, specific deliverables, the terms for each party, etc. We both sign off on it, at which point the client would pay a non-refundable $50 deposit, with the other $50 to be paid after project completion and approval. Once it is paid, their deliverables will be sent and they will have full access to the designs. Does this sound correct? What specifically should be included in the proposal/contract? And most importantly, what do I need to do in order to set up and structure my business What do I need to file? Do I need an EIN? Do I need a separate bank account? Is there anything else that I need to know?
Ideally, hire an attorney to help you set up the business and draft your contracts. In brief, what you should have are:
1) An LLC to conduct the business under: it will protect your personal assets and you from the majority of business-related liability, such as if the business is sued by a disgruntedl client--they can sue the LLC, but not you personally.
2) Once you set up the LLC, it needs an EIN.
3) You will need a separate business bank account, which you must, to maintain the LLC, keep separate: don't mix in or "co-mingle" business and personal funds.
4) Business liability insurance, to protect you further; also insurance for any equipment or assets you have, and possibly business interruption insurance to ensure some income if you are unable to work for awhile due to fire, flood, etc.
5) The contracts just need to state all the terms: any deposits; the full amount due; the deliverables and deadlines and payment schedule; if the customer has any right to cancel and, if so, how, when, and what they get back from the deposit or other payments; whether the customer has to pay any costs you incur (like if you have to buy stock photos or upgrade a program); who owns what rights; etc.