Starting a Web Design Business: Part 1

The Big Picture: Is It Doable?

The first step should always be planning: what are your goals and is it feasible? And beyond that, what’s the risks and rewards? What income and expenses will you have?

For me, I’ve been itching to start my own company again for probably the last 2 years but it wasn’t until lately that it all started to really come together. The opportunities look like they’re there (can’t always be sure), and there’s plenty of office space to lease downtown.

So I started by forecasting my first year’s revenue, calculating the expenses, and determining if that was even take-home pay to make it. Since the revenue can fluctuate based on sales, work, and just plain luck, I made it a real point to calculate my break-even point: that establishes a base line so I always know the minimum I need to make.

For expenses, I came up with the following list (monthly) for operating costs:

  • Rent
  • Internet
  • Phone
  • Hosting
  • Advertising
  • Hardware/Software Budget
  • Meetings Budget (meals, drinks)
  • Insurance

But there’s also the take-home pay that I need to bring home to my family. Since I have my business set up as an LLC, filing my taxes as a corporation, I get an employee salary. As an employee there’s the normal payroll taxes and other deductions (Medicare, Medicaid, health insurance, 401k) but there’s also additional costs on the employer side. This includes workers compensation, unemployment, medicare, and medicaid. Incidentally, if you’re a contractor, your business is considered a sole proprietorship and those additional costs still have to be paid.