Web Design Business Owner

Setting Up Your Web Design Business

So you’re beginning to see the profit potential of starting a web design business. Great! Likely by now, you’ve built at least a few sites for practice and are ready to go legit. Here in the good ol’ U.S., we have seemingly endless freedom and opportunity to put a stake in the ground and build wealth on our own terms. This is the land of entrepreneurship—AFTER you do some paperwork, of course.

What’s in a Name?

I’m ashamed of how cheesy the title of this section is. Alas, we’ll move forward. You need to come up with a name for your web design business. Back in my Fiverr days, people would hire me every day to help them develop the perfect moniker for their new venture (not always an easy task). It’s oddly personal and subjective and almost too important to outsource.

Sure, right now you may be a solo act cranking out cheap Wix sites in your parent’s basement—but what about the future? This name needs to not only encompass what you are today, but what you might be someday. Who knows… you could be a full-fledged creative agency with 30+ employees in the next few years. “Marty’s Decent Sites LLC” might not age well as you grow.

Take some time to find that perfect balance between clever and meaningful. Imagine a prospect telling their boss or a boardroom the name of your business. I usually shoot for memorable yet provocative. Oh, and don’t forget to factor in domain name availability!

Make it Official

In order to accept payments from clients, you’ll need to legally form a company. Most people in the beginning stages of their web design business will elect for an LLC. This option is ideal because it protects you (the owner) from the company’s liabilities affecting your personal assets.

You aren’t gonna be messing with payroll or anything crazy like that out of the gate. An LLC is a pass-through entity so you avoid all that double taxation rubbish. Overall, it’s an easy breezy way to get up and running officially. Services like LegalZoom make it even simpler (and faster). Be warned: once you form an LLC, your days of straightforward free online tax filings are likely over. Get yourself an accountant, track all of your business-related expenses, pay your quarterly estimated taxes, and don’t leave money on the table. The formation process takes a few weeks, depending on your state, and will run you a few hundred bucks.

FUN TIP: When you file for an LLC, they will require you to choose a Registered Agent. This is essentially a place for official mail to be sent if they can’t find a direct address for you. LegalZoom offers this service but you can get it MUCH cheaper with a quick Google search. Mine is less than $40/year.

Take THAT to the Bank

What is with me and these section titles today? In my defense, you really DO need to take your LLC formation documents to the bank. Make an appointment to sit down with one of their business specialists and set up an account.

Personally, I have two accounts: one checking and one savings. The checking is where all my company’s revenue lands. From there, I make frequent transfers to the savings account for taxes and my own personal account for salary draws. All of my business expenses and recurring charges are debited from the checking account. This makes for a nice clean separation between everything.

Keep in mind, when you start using billing software, it will integrate with your bank account(s). This facilitates automated, real time expense tracking and one-click accounting every year. So you aren’t gonna want it linked to an account that has a mix of business and personal activity.

FUN TIP: A lawyer friend once told me it’s wise to use a different bank for your business than you do for your personal life. This adds another hurdle of protection in case there’s ever an incident where assets are being frozen or possessed. I didn’t take this advice myself, but do with it what you will.

Put Yourself Out There

Look at you with your newly-formed, tax-paying LLC! Not only is it refreshing to be in the good graces of government, but it gives your clients an added layer of confidence as well. You’re legit. You’re a big boy or girl now!

All that’s left is to start telling the world about your web design business. Build a website, make some business cards, and get to work!