Earlier this week I spoke to my good friend Spencer from YouLove.Us and asked him if he wouldn’t mind giving me an interview on going freelance / becoming self employed and his experience so far in setting up and running his own design agency. Thankfully, he didn’t turn me down which is why I’m able to share this awsome insight with you from what is in my opinion, one of the very best designers around at the moment.

To make it a bit more interesting, I’ve scattered screenshots of some of Spencer’s recent work throughout the interview, PSDTuts styleeeee.

Hi Spencer, for our readers who may not know could you tell us a bit about who you are and what you do?

Well first of all hello. I’m a web designer/front-end developer/information architect/insert your favourite buzzword here from the not-so-sunny south coast of England. Somewhere along the way I unknowingly creeped into the latter part of my twenties and that means that I’ve spent the better part of the last 10 years tinkering around with HTML and Photoshop graduating from my bedroom to what is now a nice little office in Chichester.

Almost exactly a year ago you made the jump to setting up your own business and working full-time for yourself (I remember it well). Was it a huge change in lifestyle? What were some of the things that took the most getting used coming out of a full time job and into your own business?

It was absolutely huge for me. I’d spent the best part of a year seriously considering it, opportunities came and went and the leap from a very acceptable salary into the realm of uncertainty was far too daunting to do alone. Luckily, I resumed contact with my old tutor at college and together with another of his students, we formed a good team. We planned things and talked about them for a few months, but things didn’t get serious until some office space landed on our doorstep.

The hardest part for me was leaving behind a job and a team I had grown close to, and of course moving house (again). The new commute on top of the additional stress of starting a business proved too much to me and I’m sorry to say that it affected my personal life for the worse. I parted ways with my fiancee roughly 3 months into the new business, the additional stress at least a factor in that.

Over the last few years you’ve churned out some really stunning sites which have been featured in (I believe) well over 100 different places, including the likes of Smashing Magazine and Web Designer Wall. How much does it mean to you receiving this type of industry recognition and  has it brought you any new work?

To be honest, I’m not convinced that it has brought us any additional work at all, but it has positioned us as somewhat of an authority on certain matters. We have always looked to push the envelope with our projects and I can’t describe how awesome it is when other people take notice. The recognition and feedback some of our projects have received is what keeps me going a lot of the time.

That said, the inbound links certainly don’t hurt when it comes to the search engines. Our youlove.us site leaped from PR0 to PR6 only 6 weeks after launch solely from the links generated by showcase sites and the like.

Speaking of getting work, what are your main sources of business now, and in particular when you first started out?

Literally our only source of work has been referral. We haven’t as yet needed to advertise although when the time arises we certainly won’t hesitate to do so. Luckily for us the clients we have worked with have enjoyed a lot of success with their websites and are keen to let their peers know who helped them achieve it. This means for the most part that we’re able to offer a personal, somewhat local service to most of our clients.

You currently have an extremely nice set of offices in Chichester, and have just moved into a much larger space in comparison to where you were last year. Does it make a big difference to you to be able to have a clear divide between work and home? Do you still do any work from home?

Oh absolutely it has made a huge difference. When I worked at agencies prior to setting up this business I maintained an office at home. I would work most evenings and never truly appreciated the work/home divide.

That all changed when we moved into our offices in Chichester. I maintain a computer set up at home purely for leisure and music production now, and when I leave the office, I truly feel as if I have left the office.

One of the real benefits of setting up your own company is getting a say in what equipment is purchased, what furniture you buy and how the office should be laid out. This makes a tremendous difference to my motivation. At previous agencies I would find myself working on ageing Windows XP machines with extremely cheap 19″ monitors and truly, my productivity suffered because of it. I wouldn’t be without my Mac Pro or Cinema Displays now, and I certainly wouldn’t be without the additional space gained in moving offices. I believe the creative mind needs physical space in order to manifest ideas, and will often take an idea outside to consider it, but any addition in space inside the office is welcomed by me.

You didn’t have a large amount of capital saved up when you made the transition from being a full time employee to running your own company, I’m in the same position! What helped you most in making a smooth transition in terms of your income every month?

This is one of the great things about web-based businesses, very little capital is needed to set them up. I believe each of us put £1,000 into a bank account and armed with a few projects ready to go, we were off. The funds soon disappeared on equipment and furniture, and pay-cheques weren’t astronomical over the next few months, but gradually the pot replenishes itself and once you have purchased everything needed for the year ahead in terms of services, equipment and furniture, everything earned thereafter is either wages or profit, save for rent and rates.

The hardest part we have found dealing with is cash-flow. Ensuring that clients pay on-time and regularly is vitally important to a small business as is distributing those projects in order to maintain a steady cash-flow. The worst scenario imaginable for us is an extremely lucrative month then a period of some months with little to be invoiced. Maintaining regular cash-flow should be the small businesses’ or freelancers number 1 priority.

What parts of running your own business have been exactly as you expected them to be, and what parts have been completely opposite to what you had envisioned?

Having worked in a few smaller-sized agencies before I had a good idea what it would be like running my own, but I wasn’t ready for the difficulty of juggling admin/sales/design/the rest all at the same time. Our next step will be finding somebody to help us with all of the additional admin work that’s required as we’re desperate to spend our days doing what we love and do best – designing and building web sites.

The best bit of advice I can give is that if you’re going into business with other people, ensure that you each have the same goals for the company. You may find that some people are happy to coast on what you would consider a relatively small amount of profit, and you may find that some people are hell-bent on taking over the world next week. Ideally, you should have a range of types of people within your organisation but you should all be on the same page with regards to where you want to be in 1 year, 5 years and 10 years. Even if you’re going solo, having a good, solid plan and sticking to it will be vital to your success. Be very clear about your goals, i.e. “This year I want to make £30,000 in wages and £20,000 in profit”.

Working my own hours has also proved unusual for me after being forced into the 9-5 for the past 8 or so years. Whilst I enjoy the freedom and flexibility afforded by keeping my own hours, I sorely miss the structure of the 9-5 and will likely return to it shortly. Having spent the first 6 months working hours more like 9am-9pm, flexi-time seemed like a nice reward, but in reality it doesn’t seem to be working out tremendously. There is a fine line between overworking and coasting.

Is there anything in particular that you would do differently if you had to start-out all over again?

Ask me this in 5 years. At the moment, no, I’m not convinced that there is. I probably wouldn’t have rushed into things in the way that we did, but sometimes opportunity presents itself and you just have to adapt to it.

I know you’re an Apple fan (read: evangelist) – could you tell us what the most essential applications are in your day to day work?

Obviously I wouldn’t be able to do anything without my trusty Safari and Mail, but I do actually do work on occasion also. My most vital of Mac Apps would probably be; Coda, Textmate, YummyFTP, Adium, NetNewsWire, iTunes, Spotify, Firefox and Photoshop and Illustrator. Fairly standard list.

We use Basecamp and Backpack for Project Management and Extranet type things. Alex uses QuickBooks for accounting and invoicing, and we use InDesign for proposals and other printed things.

With regard to GTD, I personally have found a pen and a pad far better than any of the apps I’ve tried. I also use a couple of ghastly whiteboards for scheduling and organisation also. We have a nice, big LCD hook up on the wall displaying the BackPack calendar which gives a nice overview of any upcoming meetings/milestones and deadlines.

Any other advice you’d like to share?

As I mentioned to you previously; pick a niche, pick an identity/brand, figure out your USP, and tell the world about it. A good brand identity and domain name is essential these days even for freelancers, although that said I find myself much more keen to use freelancers who present themselves under their own name than I do those that masquerade as larger companies. Pick your target audience, research your target audience, and tailor everything to them.

I’d like to thank Spencer once again very much for taking the time to answer all my questions and I hope that everyone reading this found it as valuable as I did!

If you have any other questions for Spencer please leave them in the comments and I’ll make sure he comes by to answer them!

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