Illistrated concept showing people designing phone apps with user experience in mind

Starting a UX design agency is no easy task, even if you’ve conquered the freelancing world. After all, the best design agency leaders have some degree of experience in their industry. Still, you’ll quickly find that working for yourself and running an agency are two very different things.

Whereas freelancers have complete control over when they work and who they want to work with, design agencies require more clients, more team members, and less flexibility. As a business owner, you’re responsible for more than just your own stability, and your decisions will impact everyone you hire. However, growth can only occur with added responsibility. 

Entrepreneurs can use money to build businesses bigger than themselves. Although starting your own UX design agency in 2021 is a big decision, you can succeed if you’re up for the challenge. Let’s take a look at the steps you need to take to start your own UX agency.

What Does A UX/UI Design Agency Do?

Design agencies of all types provide a service on behalf of another business, group, or person. Although that definition can also include freelancing, what separates design agencies from solo work is that an agency can’t function alone. All UX design agencies need to staff multiple people to provide a creative service to a wide variety of businesses.

The specific goal of a UX/UI design agency is to improve customer loyalty by creating a product or service that is easy to use, interactive, and visually appealing. It will discover a user’s needs by conducting market research that targets a business’s prime demographic.

UX/UI design agencies have an easier time discovering what a customer persona wants from a business because they have enough staff and cash flow to fund more unique projects.

How To Start A UX/UI Design Agency In 2021

Step 1: Knowledge of UX/UI Design

It’s possible to create your own agency without previous knowledge of UX/UI design, but this isn’t recommended. It’s better to know a thing or two about the service you offer so you can hire the right people and support them through the design process. It’s harder to make executive decisions within your industry if you have no idea how your industry is performing worldwide.

Step 2: General or Niche

Choosing whether you want to focus on a niche is essential to do earlier on because it determines what kind of service you’re offering to clients. A generalist agency will need to staff more specialists, but the biggest problem is your marketing. Without a way to target a specific market, you’ll have a harder time attracting the best clients in that niche. 

My best advice is to start with a niche and branch out because choosing a niche will:

  • Create Authority: If your UX/UI design agency targets restaurants only, you’ll build trust quickly in that niche. Other restaurants will trust you over a generalist.
  • Stand Out: Prospect clients will research multiple design agencies before landing on yours. If you’re the only niched agency, you’ll stand out amongst the crowd.
  • Minimizes Unknowns: Generalists have to learn about a different industry every time they take on a client. This tanks your turnaround time and cuts into your funds.

Before deciding on a niche, make sure there’s enough demand for the service you provide.

Step 3: Competitor Research

There are 4 benefits of conducting competitor research before starting your agency:

  1. Firstly, you start to understand your market. Competitor research will reveal trends that you might have missed while also giving you the skills to predict future trends.
  2. Secondly, you improve your marketing. Your customers want to know how your service will improve their lives. If you know how your competitors are marketing to their buyers, you can learn from them how to explain your service in a way that sells.
  3. Thirdly, you can identify market gaps. Through research, you may find that a portion of your competitors’ audience is underserved. Maybe you can reach those customers.
  4. Finally, you can plan for the future. Your competitors are a mirror of your own success. Take notes on how they scaled their agency and plan to do something similar.

It’s up to you if you want to conduct research yourself or hire an agency to do it for you. In the meantime, you can get started by identifying your main competitors and analyzing their online presence. Gather information by signing up to their email list and follow their social media accounts. Be sure to check online reviews as they can help you improve your own service.

Step 4: Name Your Agency and Choose Your Headquarters

Choosing the right name for your agency is critical because it’ll stay with you for the whole lifetime of your business. Before settling on a name, research if your choices are already existing trademarks, domain names, or social media profiles. Consider your long-term goals when naming your business. If you plan to expand your offerings, a limiting name won’t work.

After you have a company name, you can start applying for your business license. You can also choose your agency’s headquarters. While you can start your agency from your basement, it’s in your best interest to transition into an office quickly to appear more professional.

Step 5: Launch A Website 

As a UX/UI design agency, you shouldn’t run into any issues here. In fact, your website can serve as the first half of your portfolio. Prospective clients will see exactly how effective you and your team can be at creating a brand and establishing a presence on the Internet. Make sure samples of your work, professional accomplishments, and client testimonials are easy to find.

Step 6: Build Your UX/UI Design Portfolio

As you start to hire more employees, your UX design portfolio will fill up, but you can add samples of your own work for now. To attract the right leads, you need to focus your portfolio, especially if you work in a niche. You’ll appear unprofessional if you direct a prospective client to samples that aren’t relevant to them. However, what if you only have irrelevant samples?

Even if that’s the case, you can’t leave this section of your website blank. To earn the trust of your clients, you need to find a balance between specific samples and a generalized portfolio.

Step 7: Be Active On Social Media

Social media is a fantastic marketing tool that creates organic lead generation and allows you to communicate with your customers directly. At the same time, social media is the perfect way to increase awareness of your agency and brand. Many UX companies already have a unique presence on websites like Facebook, Instagram, and Twitter. To stay competitive, you need to carve your own niche in the industry by establishing your voice along with your talents.

Step 8: Decide On Your Business Model and Start Hiring

Start this process by deciding what positions you need to fill based on your strengths and weaknesses. While detailing out all the activities you handle as an entrepreneur or freelancer, ask yourself if you can handle these tasks on your own as you start to scale. You should also:

  • Think about your general workload and who to hire to fill these tasks.
  • Consider whether or not you need help finding clients, now or later.
  • Determine what technology you need during a typical workday.
  • Decide who will run your business, like a partner, accountant, or assistant.

It’s important to choose a leader that can make calls on behalf of yourself and your team. Otherwise, your staff members won’t know who to refer to in times of crisis. An organizational chart can help in this matter, as everyone will know their direct superior or team member. 

In the end, you need to determine what employment type you want to offer. Do you want to focus on hiring permanent part/full-time staff or freelancers? You’ll be subjected to different laws depending on who you hire, so be sure to research employment legislation in your state.

Step 9: Establish a Fee Structure

There are three major fee structures most agencies use to bill clients: retainer, per-project or hourly. You’ve likely heard of the per-project or hourly model, but working on a retainer could work best for your UX/UI design agency. Since clients must pay agencies on retainer whether or not their services are needed, their revenue grows exponentially over time.

While you will need to sacrifice time in exchange for a retainer rate, you will have a more secure revenue flow and a more diverse client base who need a flexible design agency.

Step 10: Generating Leads and Find Clients

In the beginning, it’s tempting to say yes to every opportunity, but it’s important to consider every client carefully. You want to establish a long-term relationship with your clients, or you run the risk of stressing out your staff and lowering their morale. Before writing a proposal, determine if you really want to work with this client and if they fit with your values and company culture.

In a perfect world, clients will flock to you, but you will need to put yourself out there at first. Use a combination of paid and free marketing channels to attract new, high-paying clients.

Final Thoughts

Starting a UX/UI design agency seems daunting, but there is no need to feel intimidated. Although you will go through some growing pains, you’ll eventually hit your stride. By reading this article, you’ve already learned the basics of starting, staffing, and attracting clients.