The longer answer to that question is that a designer makes their living on designing things (graphics, products, buildings, spaces) for YOU, the client. Their main goal is to make your project a success which means their goals align with yours. Make note that there is no shortage of manufacturers and ‘design-build’ type organizations which offer design services, so why not just go with them? Because they make money selling the item they manufacture and they have to hide the cost of the design in the product they sell while still remaining competitive for the product itself. The design cost is a liability for them, meaning a metal shop will design metal stuff for you, they’ll pay their in-house designer as little as possible and encourage them to work as quickly as possible. Does that sound like the optimal scenario for you to get the best solution for your needs? Independent designers don’t have a hidden agenda, they aren’t burying the cost of the design into a widget or a construction project, and they’ll design whatever you need to be made however you need it to be made. They work for you first offering unbiased advice!
Start-ups and small business:
Start-ups have crucial needs where design is related. Design can make or break a new company from small things like looking professional enough to get taken seriously, to big things like getting their product right, their tooling made correctly, and their product’s brand established. Many start-ups begin with an idea and passion but assembling the right team of experience in different fields is difficult at the best of times. Add to the mix the lack of cash flow and sometimes lack of business acumen and it’s no wonder so many struggle to get off the ground. Hiring the right independent designer or firm allows small businesses and start-ups to get the most experience for the least commitment in the most controllable manner.
As an established company, you have a requirement for industry leading design and innovation but what that often means is hiring designers to work fulltime in-house. Many companies have development cycles that don’t necessarily justify fulltime permanent design staff. They get stuck in a cycle of trying to keep the staff busy, or they decide to save money by hiring a junior designer who doesn’t offer the industry experience the company needs to be a leader.
Let’s get to business and look at the numbers.
In Canada right now an intermediate level industrial designer will cost an average of $60K per year + benefits, + office space + computer + software licenses + additional training etc. That can add up to $70-80K per year per staff member and that’s at an intermediate level. Senior level designers will run considerably more. Certainly many companies have a need for fulltime design staff but that isn’t always the case. As an established company with known and somewhat set needs, hiring out can offer a lot more flexibility, knowledge base, and fiscal savings. It may just make more sense.
How to hire the right designer or firm:
Before you hire you need to know what your needs are. What specifically do you need done, and are these tasks a one time thing or on going? How vital are these tasks and needs to the success of your business? Once you have established a list, you will need to determine if it makes sense to hire in-house or get help from independent designers and firms as needs arise or change.
Whether you hire in-house or independent, you should ensure the designer has the required education, experience level, and are members of their local accreditation body. Unlike fields in the medical or legal industry where you cannot practice as a doctor or a lawyer unless you are one, many design related fields aren’t regulated. If you are going to spend tens of thousands of company dollars on development, tooling, or construction, you want to make sure the people making the plans for you know what they’re doing. Most areas have accreditation bodies such as ARIDO for interior designers, ACIDO or BCID for industrial design, or RGD for graphic design, allowing you to be more confident in your hire.
Don’t be afraid to ask for examples of work, discuss directly related experience, and be open about your company’s goals. The more a designer knows about the company and it’s target market and future goals, the better he or she can tailor the design and development process to you.
Later I’ll discuss how to set up a contract or agreement that outlines scope of work, and expected deliverables and timelines to allow both parties get doing what they do best without any surprises along the way.
If you have an idea, there are a lot of ways to get a product to market, typically though there is a process which those who have done it before follow. The design process nets numerous prototypes. Those prototypes allow for testing and help in the communication with potential manufacturers. Designs made in 3D CAD software are used to create detail drawings and specifications for production. Tooling if required is then produced at an up-front cost that can range from a few thousand dollars into tens or even hundreds of thousands depending on the product. After production samples are reviewed, tooling is tweaked, assembly and finish methods are adjusted, quality control checklists are made, and a first order is placed with a large deposit. THEN…the product is ready to market and sell. A lot of time and a lot of money is spent before anyone even sees it. Making people aware of your great idea is a whole different challenge that comes after.
Crowd-funding changed the way small independent designers, artists, and craftsman can get capitol for start-up costs to bring a product to market. The idea of crowd-funding is well understood at this point in time; you are not buying a product but supporting an idea within a community and quite often the reward or “thank you” for the support is the said product being supported.
In the case of Kickstarter, the guidelines say that the reward a creator offers should be offered at a monetary level below the future market value of the product. It should also include shipping whenever possible as highly encouraged by Kickstarter. If your item will retail for $100+shipping…you might offer it as a reward for $80 shipped in your campaign. Backers who support the campaign get a deal on the item. You get some money up front to minimize risk. Everyone wins.
The downside of this for the project creator is that while minimizing financial risk, it also minimized profit or removes it completely. I’ll explain this below:
Lets say your item retails for $100+shipping. Your cost on the item is $30. Shipping the reward to a backer is $25 on average for North America. There was tooling that if you amortize over your first order adds $20 to each unit. There is freight to you and duties, and warehousing. Now if you said on your campaign it was $80 shipped…you would be lucky to break even and your time wasn’t compensated for. BUT…you didn’t invest any of your own money and if you have time to give but no cash to give this is an ok way to go about it!
On the other hand, if you had invested in the tooling and first order yourself with your own money and sold the first order for $100+shipping then you just made $20 ($100-$80) plus the $25 that would have gone towards shipping so that’s $45 on each one. You were out of pocket up front, but turned a profit at the end of that first order in this example.
I had the credit and capitol to invest in tooling and a small production order myself, so why did I do a Kickstarter campaign?
Crowd-funding allows you to test the market and feel it out. Is your idea as good as you think it is? Will it be worthwhile to invest time and money into it? What colours, options, or features will people like best or ask for? Crowd-funding not only helps you answer those questions, but it also gives you a jump start on marketing the product by giving it exposure before it’s even available. There are countless bloggers and websites who write about, repost, and showcase new ideas from crowd-funding sites and they do you a huge service for free buy sharing your campaign among their subscribers. In short, you get market research, real world input, and free marketing to build brand awareness, all while minimizing your financial risk.
It seems like a no brainer that crowd-funding is the way to go but later I will talk about some cases where maybe it’s not right for you, as well as some things I learned that will make the next campaign run much smoother while reducing the potential for stress and/or delays on fulfilling your campaign. Stay tuned…