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How to Build a Recession-Proof Design Business

Is your creative business primed to thrive or wither?

Economists may argue about when it’s coming, but most agree that a global recession is on its way. Some say it’s starting already. With speculative headlines flying around, it’s only natural to worry how a changing economic landscape may affect your design business. Whether you’re a freelance designer or run your own creative studio, it’s prudent to take preventative steps to ensure your design work doesn’t dry up.

I’ve been reflecting on my own 18-year freelance design business. Here’s how I plan to not only weather the storm, but grow and thrive in an uncertain economic landscape.

Note: These are valuable tips to help any creative business thrive, whether the economy is booming or crashing.

Be a professional expert

Expert designers will always be in demand. As businesses get more risk-averse during a recession they can’t afford to gamble on unproven talent. If you’re seen as an experienced design expert you’ll stay busy, while less established designers may struggle to attract new work.

Expertise doesn’t have to mean narrow specialization. You can be T-shaped or a specialized generalist and maintain one or two areas of expertise, complemented by a broad range of other design skills.

Expertise isn’t just about your craft; it extends to how you run your business as well. Trusted, reliable designers will be easy choices to work with during a recession, while those who fall short on communication and professionalism will be seen as too risky.

Make sharpening your experience and building your reputation a priority.

Align yourself with healthy clients

Some businesses get hit worse than others during an economic downturn.

Vice industries like booze, porn, and gambling tend to do well in hard times — people need an escape more than ever. But your moral and ethical code may preclude you from working with those businesses. That doesn’t mean you can’t take a warning from their success.

Notice the red flags that are telling you a potential client’s business isn’t in healthy shape. Avoid clients when your gut says their missions or products are doomed to fail or stagnate when consumer spending dips.

Businesses providing necessities do well because people need them no matter what. Likewise, luxuries always perform because the rich stay rich and keep spending. It’s the middle ground of B2(middle-class)C companies that may get hit the hardest when the economy takes a downturn and everyone tightens their spending. In contrast, B2B companies who help other businesses be more efficient and productive may flourish.

The last thing you want is for a client to go under while they’ve engaged you and see a design project get pulled from under your feet. Choose clients who are likely to be around for the long haul.

Diversify your client base, don’t niche

I’ve always been a fan of style-agnostic design and appealing to a wide range of industries instead of niching down on one. Specializing in a niche can be a good way to establish your expertise, but it carries more risk during a recession. What if the niche you land in is hit harder than others?

For example, you may be in a spot of worry if you specialize in design for real estate agents when the market shifts and property sales plummet. You’d be better off leaving your door open to a wider range of clientele.

If you’re confined to a design niche and you don’t know how it will handle economic change, diversify ASAP. Position yourself to attract business across a wide range of markets so your client portfolio is less prone to collapse.

If you’re valued as an indispensable design strategist, you’ll never go out of fashion.

Creativity and problem-solving over visual execution

What makes the best designer most valuable? Creativity, problem-solving, strategy. These needs never die. In fact, in a recession, they’re likely to be in even higher demand. When times get tough, better creative solutions are required to overcome them. Mediocrity isn’t good enough anymore.

Focus your design business on delivering true strategy and creative problem solving rather than emphasizing visual design execution. If you’re a graphic designer, that may mean up-skilling to UX design to broaden your offering. If your skills could be seen as a replaceable commodity, you’re in trouble. If you’re valued as an indispensable design strategist, you’ll never go out of fashion.

You want to position yourself as a fundamental part of the projects that hold the most importance to your clients, the ones they can’t risk being less than excellent. If your work could be seen as a superfluous nice-to-have, you’ll find your services are the first ones cut when budgets get trimmed. (Incidentally, this also makes you more automation-proof.)

An opportunity for innovation

Most companies curl up into their shells during a recession, but the daring ones do the opposite. While everyone else is playing it safe, they get ahead by doubling down on innovation.

If your design offering caters to innovators, you’ll grab those lucrative clients who are still spending confidently, in areas like AR/VR, voice/conversational interfaces, wearable tech, data services, and complex web/mobile apps. Position your tech skills to attract clients willing to push boundaries with design and user experience.

Diversify revenue streams with passive income

Most creatives are used to trading their time for money. You exchange design services for cash, rinse and repeat. I’ve been doing this for 18 years, and there’s no shame in that. Not everyone has to be an entrepreneur.

But it’s smart to consider what other revenue streams you could add to your business. Just as you diversify your clientele, you should look to diversify your income.

Can you productize one of your existing services and sell it for more passive income? Do you have a great idea for a SaaS app that you can design and build on the side? Do you have a unique point of view to write or speak about in the form of articles, e-books, podcasts, or online courses?

There might be something you already do that you’re passionate about, that touches the fringes of your normal design work, but that also stretches you to learn new things. Find that thing and monetize it. The more new income streams you can generate — no matter how slow-growing or small they are — the more secure your design business will be.

Just as you diversify your clientele, you should look to diversify your income.

Overdeliver and be referable

Word-of-mouth referrals are one of the strongest forces for all successful service businesses, and any thriving design company will tell you they get most of their work this way.

Referrals bring clients pre-loaded with trust. During a recession, that relationship is more important than ever. Risk-averse clients need to trust a design partner they’ve been told is reliable. They can’t afford a false start or changing horses mid-race.

Overdeliver for every client. Turn each one into an ambassador who regularly praises your work by delighting them with your professional service and world-class design work. Post those recommendations on LinkedIn so they bring you passive referrals in addition to direct ones.

Referrals may be the difference between thriving and withering. They take away the stress of hunting for new work and replace it with the assurance that pre-screened clients will come directly to you. This is more important than ever in an uncertain economy with less appetite for risk.

Stay lean

None of the advice above matters if you can’t keep your own business afloat.

Have your expenses bloated over the past few years? Do even you know how many online subscriptions you’re paying for every month? How much are you spending on software, cloud services, fonts, travel, salaries, admin, and all the rest?

Reduce your own wasted time and bloated costs. Stop buying the latest iPhone every couple of years. Work from home if you can. Trade commuting in favor of virtual meetings. Flatten your business structure to remove admin. Prune subscriptions you haven’t used in the past few months. Use tools to help maximize your productivity, accounting, and scheduling. Find all the efficiencies you can in your own business first.

I pride myself on keeping my business ultra-efficient. It reflects positively to my clients when they see how much value they get out of my time. It reflects positively on my bank account too.

Location matters

Here in New Zealand, we skated through the last financial crisis relatively unscathed. Perhaps it was the geographic or technological distance. It was more than just luck.

Location matters. Some countries fall hard, while others can insulate themselves from the damage.

If you live in a recession-prone country — or your clients come from one (even if you live elsewhere and work remotely) — consider how their location comes into play. Should you diversify the location of your clients as well? If your local market crashes, are you in a position to attract international clients, or vice versa?

Creative and tech services are strong, but not immune

We’re lucky that creative services like design are in high demand, and should continue to stay strong during recession time. But that doesn’t mean we’re immune from harm.

How efficiently you run your business matters. How you diversify your clients and income streams matters. The breadth and depth of your design services are important, as is how you position yourself to potential clients. These are all common-sense business practices no matter the economic atmosphere.

I’m confident my design business is in healthy shape to ride out a recession, but I’ll continue to implement as many of these ideas as I can to ensure its success, recession or not.

What else are you doing to prepare?

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Benek Lisefski

Hi, I'm Benek Lisefski. Since 2001 I've run my own independent design business. Join me as I unfold 18 years of freelance business knowledge: honest advice and practical tips to help you take your indie career from good to great.

MediumTop writer in Design, Business, and Entrepreneurship.