Information and tips for newcomers to the profession

Becoming a free-lance designer

You intend to set yourself up as a self-employed designer? To earn a living from your art and your creative talent? Then you have come to the right place! Welcome to the AGD. Although we should make it clear from the start that we can‘t offer you a patent recipe for free-lance success – but we can supply a few tried and tested tips to ensure that your new venture doesn‘t collapse before it even gets off the ground.

 

Professional Qualifications

Ideally you have qualified as a designer at an educational institution. Perhaps you are self-taught or have come to design after a background in other fields, and now you have gained professional experience in agencies, businesses or design offices. Whatever your background, you should be in possession of solid design qualifications when you set out on an independent career, because times are hard. There are wonderful sunny days, of course, but there is one thing you should always bear in mind: if you choose a free-lance career, then you are your own boss – and you alone are responsible for your income. The better your commercial skills, the more efficiently you will be able to make use of your talent.

Concept and business plan

You know what you can do. But do your potential clients know what you can offer them? After all, your clients have to understand you… and you of course have to understand them. Draft a brief description of the services you can offer, and avoid too much specialist language. What can you do? How much will it cost? Who might want to commission work from you? Only if you yourself are able to answer these questions will you be in a position to communicate this information to others. Draw up a business plan for yourself. This will provide you with the clarity you need in order to launch yourself as a free-lancer, and it will also show you the costs you will need to cover each month.

What is your USP?

Before you start off, think about a few questions: What can you offer? How do you plan to sell yourself? And why should a client commission a job from you rather than from any other designer? What makes your work unique? Think carefully about all this, and note down your answers briefly. These are the essential commercial aspects of your prospective free-lance career, what are known as your Unique Selling Points or USPs. The more clearly you distinguish yourself from the rest of the market, the better you will be able to position yourself. And this makes it easier for prospective clients to find you.

Inform yourself

The most important prerequisite for a successful free-lance career is thorough planning. In many cities there are courses for people setting themselves up in business, lasting for between 3 days and 2 weeks, depending on the extent of subjects covered. The Federal Ministry for the Economy also provides comprehensive information on its small business start-up website. There is even a sub-menu about setting up business as a creative professional. The AGD offers seminars specifically for people who intend to establish themselves as independent designers, such as the Start-Up seminar developed and presented by Lutz Hackenberg. The AGD will also provide you with all the information you need to help make your business launch a success. There are numerous seminars on the art of client acquisition, sales techniques, price negotiation, etc. In other words, the AGD provides the information that makes you fit for your job.

Free-lance or a commercial enterprise?

According to German law, a free-lance activity is as a rule that which is based on particular professional qualifications or the creative talent involved in the personal and independent performance of services of a higher nature in the interest of the client and the general public. Any entrepreneur whose independent activities are other than that stipulated by this law is regarded as being engaged in a commercial enterprise and is thus subject to trade tax. In the final analysis the tax office will decide, on the basis of the description of your activities that you submit, whether you are to be considered a free-lancer a commercial entity. If you are a free-lancer:

• You do not need to file with the commercial registry
• You do not pay trade tax
• Single-entry bookkeeping is sufficient
• It is possible to establish a private company with partners

Give me your number

Apply to your local tax office for a tax number. You should do this four weeks after beginning your free-lance activities at the very latest. When you have received this tax number it means you are registered with the tax office and will have to make an income tax declaration every year. And in future your tax number will have to be stated on every invoice you issue. For international clients you will also need a VAT identification number (Umsatzssteuer Identifikationsnummer or USt-ID). In these days of global networking you may get international clients sooner than you think. You can apply for this VAT identification number by phone or letter from the:

Bundesamt für Finanzen (BfF) Außenstelle Saarlouis Zentralstelle Umsatzsteuer-Kontrollverfahren
Tel: +49. (0)6831. 456 44 4
Fax: +49. (0)6831. 456 12 0

When you apply for this number you should expect to wait 4 to 6 weeks before it arrives.

The first job

Congratulations on your first design commission! To minimise the chances of any misunderstanding between you and your client, do make sure everything is in writing. Draft a clear description of the task in question, the work you are required to perform and the payment that has been agreed upon. Ask the client to sign a written agreement to this effect.

 

Bookkeeping and Co

As a free-lancer you will keep accounts based on the single entry bookkeeping system. This means that you keep receipts for all your expenses and income. To put it another way, nothing is written in your accounts until there is a receipt for it. Only when money actually reaches your bank account (or is taken from it) is the relevant sum taxable (or deductible from your business expenses). Taxation is a huge subject in its own right, and the AGD provides members with professional tax advice free of charge.