People measure life success in a variety of ways but a successful creative business has two elements that make it successful. Revenue and expenses.
Successful creative businesses have more revenue than expenses. Plain and simple.
Of course loving what you do is important as you will be spending a lot of time at it but just because you are passionate about your creative business doesn’t mean it will be successful. If it’s going to be a BUSINESS it HAS to make money. Not only is this common sense but the IRS won’t let you call yourself a business if you don’t make a profit. Here are a few tips for building a successful creative business.
They aren’t all inclusive. That’s to say, it’s not all of the information you will ever need, but it is pretty important stuff to get you started.
Plan Ahead – It may take you up to 3 years before you start to show a profit. This is a big reason why creative business owners start out with a “day job” and work at their businesses as a part time job. If you take this path, at some point, you’ll have to decided that you want your creative hobby to become a creative business and work at it like a business. Basically working two full-time jobs until you can manage to turn your creative business INTO the day job.
Plan out your transition from working the day job to working at your creative business full time. Set up a time table, create a strategy, set goals and work toward being able to work for yourself. There is lots of free information on the web to help you get started, much of it provided here on this website.
Organize your expenses – If you operate your receivables and payables out of a shoebox you may be headed for disappointment. Lots of creative minded folks aren’t good at book keeping. If that is the case, you will want to hire it out but it’s not an optional part of owning a creative business.
You need to understand exactly how much it costs you to be in business. What are your fixed expenses— rent, utilities, web creating and hosting, equipment and all the other stuff you need to be IN business. Don’t forget the “hidden costs” like wear and tear on your vehicle, equipment repair etc.
Another part of this is knowing how much to charge. How do you know what to charge for a necklace if you don’t keep track of the cost of all of the supplies included in it? Again, don’t forget the hidden costs. One way to do this is to get a business credit card and put all business expenses on it (be smart about this though – you don’t want to buy equipment you really don’t need.) Don’t carry a balance. Just use it to track your NEEDED purchases and expenses and that way you’ll have a clear idea of what operating your business really costs.
Don’t forget payroll. Even if you are just paying yourself. Knowing how much everything costs, figuring out how much to sell your product for and then setting up budgets will help you manage your business and personal cash flow.
Owning your own business is a lot of work, especially if you are at the point where you are working the two full-time jobs like I mentioned above, but the rewards can be great. There are lots of free seminars on the web for creative businesses, local classes at your local collage (community colleges are usually cheaper), the Small Business Administration is also a great resource.
What are some obstacles stopping you from getting started?
By: Vicki O’Dell , The Creative Goddess