Categories
Finance Self development

A Dozen Things You Need To Know Before Starting Your Creative Business

A valuable product or service is integral to starting your creative business. Still, to run and manage your business successfully, you need to consider a dozen other factors such as:

  1. Selecting a business model.
  2. Seeking the help of a business consultant.
  3. Selecting a business name.
  4. Branding
  5. Business Plants or Business Blueprints?
  6. Rates and Fees
  7. Negotiations
  8. Quotes and Estimates
  9. Writing Proposals
  10. Portfolios
  11. Moonlighting
  12. Hiring (Delegation)

1. Selecting a business model

At the startup phase of your business, you want to consider what you want from your business in future, this usually requires selecting a business model and working up from there. Most small businesses start as a sole proprietorship and then either stay that way or expand and transition to a limited liability entity or corporation.

  • Sole proprietorship
  • Partnerships
  • Corporation
  • Limited-liability company

Sole proprietorship

A sole proprietorship is a business owned and run by one person and in which there is no legal distinction between the owner and the business entity.

The sole trader receives all profits (subject to taxation specific to the business) and has unlimited responsibility for all losses and debts. Every asset of the business is owned by the proprietor, and all debts of the business are that of the proprietor.

Partnerships

A partnership is a form of business where two or more people share ownership, as well as the responsibility for managing the company and the income or losses the business generates. That income is paid to partners, who then claim it on their personal tax returns – the business is not taxed separately, as corporations are, on its profits or losses.

Corporation

A corporation is a legal entity that is separate and distinct from its owners. A corporation is owned by shareholders, who elect a board of directors to oversee the organization’s activities. Corporations can be for-profit, as businesses are, or not-for-profit, as charitable organizations typically are.

Limited Liability Company

A Limited Liability Company is the US-specific form of a private limited company. With two distinct features:

  •  It protects its owners from being personally pursued for the repayment of company liabilities,
    and
  • The business is not taxed separately, tax is paid by owners or investors personally after profits have been shared with them.

2. Seeking the Help of a Business Consultant

Having a lawyer or an accountant review your business plans may save you a lot of trouble in future.

A consultant can help you select the right type of entity to match your goals, set up that entity properly and help plan for problems. It’s true you may be able to do all these yourself but if you don’t set up your business properly you could lose the protection you thought you were gaining. Ensure you consider this carefully, especially if you have the means.

3. Selecting a Business Name

You want to search for a name that’s available, unique to you and reflects your brand. It’s also important that you check to see if domain names are available for you. Fortunately, you can achieve all these with Shopify’s brand name generator tool. You no longer have to part with a phenomenal name because it doesn’t have an easy-to-read domain available.

4. Branding

Branding Is About Loyalty—Not Just Looks

Your branding should draw upon components of communication to give people an idea of what you’re all about and what to expect when working with you.

It’s not just about logos, though the visuals on your business cards and Web site are a key aspect of branding. It’s really more about the client’s experience. You want to use your brand—logos, content development, publicity, and the like—to build credibility, convey a message, and encourage loyalty. You want prospects and clients to want you and only you.

Photo by Bich Tran on Pexels.com

5. Business Plans or Business Blueprints?

According to a study conducted for AT&T, only 42 percent of small-business owners bother to develop a formal business plan; of those who do use a plan, 69 percent say it was a major contributor to their success. Having a business plan or at least a summarized blueprint can serve as a guide to help you define and meet your business goals.

Should you choose to draft a business plan, make sure to think of it as a strategic roadmap that not only includes market research and details on competitors but also sets goals for the future.  A business plan can also include operating procedures, financial details by month and quarter, licenses, and tax details.

There are three major parts to a detailed business plan:

1. The first is the business concept, where you discuss the industry, your business structure, your product or service, and how you plan to make your business a success.

 2. The second is the marketplace section, in which you describe and analyze potential customers: who and where they are, what makes them buy and so on. Here, you also describe the competition and how you will position yourself to beat it.

3. Finally, the financial section contains your income and cash flow statements, balance sheet and other financial ratios, such as break-even analyses. This part may require help from your accountant and a good spreadsheet software program.

However, it’s important to acknowledge that many details will be unclear at the startup phase of your business therefore making a detailed plan may not be feasible, instead, you may decide to create a little blueprint, by answering the following questions honestly:

  • General Goals: If you are just beginning, what is the overall objective of your business?
  • Marketing Goals: What values and services make up your brand? What is your branding goal?
  • Financial Goals: How much do you want to make per year? What do you need to do in order to achieve that objective?
  • Legal Goals: What type of business model will you/do you use? If you are already in business, do you need to switch the model?  Do you need to hire a lawyer for anything?
  • Client Goals: Who is your ideal client? What types of clients would you like to reach?
  • Administrative Goals:  What kinds of administrative tools do you need in place?

6. Rates and Fees

Coming up with a price is a big challenge for just about every creative business owner, You want something competitive, but you also want to be able to attract enough clients to keep money coming in. You probably know what is too low for you, but what is too high? What’s just right?

Do your research and come up with a starting point, then go up from there. Know your baseline rate and use it to formulate lump-sum fees.

Another approach may be to identify your total cost, which is a combination of:

1. The cost of the product (materials and process)

2. The cost of packaging (materials and labour)

3. The cost of delivery (if any)

Then to get your price, multiply this total cost by three.

This may sound like a lot but I have found that In most cases it usually is not. One thing to always bear in mind though is that nothing is set in stone with regards to pricing, and you should be willing to experiment with various prices (price range) to see which your customers respond to the most, while still keeping you at profit levels.

You also want to surround yourself with a network of other creative professionals, from there, you will have resources and advice for just about anything you’ll need. The best technique is to offer up your information first, and then often they will reciprocate.

7. Negotiations

One of the nicest things about being your own boss is being able to negotiate your rate. Everything is negotiable; don’t be offended if a client asks you to come down a bit, but know that you have the power to negotiate just as much as a client.

When you set your rate, make sure you go high enough so that if you decide to come down in price, you are still making enough money to turn a profit on the project.

8. Quotes and Estimates

When a client asks you for a quote or estimate, it is good practice to never give a price off the bat.

Instead, take time to learn more about the project and then crunch some numbers before putting together the quote or estimate in writing. A quote or estimate is just that—an assessed fee for services. Sometimes you only need a quote or estimate for simple jobs, but you probably want to go further and include a little bit about the scope of work involved for a larger gig.

9. Writing Proposals

A proposal contains specifics about how you will approach the job and what the scope of work entails.

Clients often need written proposals for their records or for budgeting purposes, and it’s good to have everything in writing so you can avoid scope creep, a term coined for when a client tries to get more than you originally agreed to.

To craft a winning proposal consider asking the following questions:

  1. What are the big-picture goals of this project?
  2. What is the specific objective you need to achieve?
  3. How will you measure the success of this project?
  4. What/who is the market for this product or service?
  5. Who is the main decision-maker on this project?
  6. What models are you using for this project?
  7. Where is the source content coming from?
  8. How much research will be necessary?
  9. Are there specific technologies you do or do not want used?
  10. How does this project fit into your big picture?
  11. Have you ever done something like this before? If so, what?

Also, be sure to find out when the prospect expects the proposal so you can deliver it in a timely manner. From there, you will hopefully win the job and can start working on it.

Photo by RODNAE Productions on Pexels.com

10. Portfolios

Your portfolio is the best example of your talents as a creator. To put a portfolio together, gather as many examples of your work as possible.

Most clients only want to see 1-3 pieces so it’s important that when you want to show potential clients your portfolio make sure it is tailored to their job descriptions, this helps you put your best foot forward.

The goal of a strong portfolio is threefold:

  • You want it to highlight the range of services you offer
  • Show off your capabilities,
    and
  • Resonate with the prospect so they will hire you.

11. Moonlighting

Working 40+ hours per week for an employer while adding your own business to your plate is certainly a challenge. Without much time for charging your batteries, it is a recipe for creative burn-out. I found the following  recommendations from Khierstyn Ross really helpful:

  1. Set aside 1 hr per day for your business (before or after work), and 1 day on the weekend.
  2. Plan your week ahead of time.
  3. Batch task (ex. Writing emails for the month)
  4. Know what your priorities are before you start working on them.
  5. Define what “done” looks like on a project so you can get momentum and check it off.
  6. 1 day off a week.
  7. Consider hiring a VA for admin tasks.
  8. Can you habit stack? Listen to the content at the gym/audiobook while driving.
  9. Work on the important, not easy.
  10. Have a “dailies”/”weeklies” list of non-negotiable things you need to do every day or week.

12 Hiring (Delegation):

This is as direct as it sounds, there are only 24 hours in a day, so you need to keep your mind and body fresh to work on your most important task. Therefore hiring a virtual assistant for basic data entry or an accountant to keep your account records in order will save you from burnout and make you more productive. A skilled accountant can also help take advantage of tax benefits, thereby saving you money.

FINALLY

Push yourself to take risks, nothing is set in stone, you will make mistakes, don’t let that stop you, don’t dwell on them, learn your lessons and move on.

Remember, No one can go back and make a brand new start but anyone can start from now and make a brand new ending.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s