Build a profitable creative business
This is part 2 of a series on how to manage your creative business.
You're dropped off in the middle of the ocean, alone….
How long would you last out there?
How far would you go if you started swimming?
How fast could you swim?
If a storm or a giant squid show up, what would protect you?
What if you get tired? Who would help you?
Many artists and creatives throw themselves into the market without any structure to thrive in that environment.
They are essentially alone in open waters, swimming for their life. And sadly, many drown their creativity because of this.
This is the too common reality of freelancers. People who see themselves as artists only.
But you are more than an artist.
You are a business owner.
You own a business of one person that provides creative services.
If you want to thrive as a creative and avoid drowning you need to understand how a business works.
Businesses stay afloat by keeping a close eye on three economic factors: costs, capacity, and income.
Businesses stay afloat by building a structure that protects them and makes them efficient.
Today I'll share with you the three things that comprise that structure.
If you want to sustain a creative business that:
Provides you enough income to cover your expenses... and then some.
Allows you to have more freedom, without working all the time.
Protects you against harsh market conditions
Gives you access to tax advantages
Then you need to build your creative business like a boat.
There are three main things to consider:
1. The structure of your boat
Also called a legal entity.
The most common around creative solopreneurs is a Limited Liability Company (LLC).
Why it’s important: It protects you and your personal property and gives you access to tax benefits.
If your primary source of income is your creative services, an LLC is the easiest and most affordable way to create a company.
With an LLC you'll need to manage your personal finances and your business finances separately. No more confusion surrounding what's personal and what's business related. You are a person with a boat (company) to manage. And many of the things you spend keeping that boat running are tax deductible.
If you want more detailed information, check out this awesome resource.
Please consult a financial advisor before doing this. Different states in the US have different rules for them, and I don't know much about legal structures in other countries.
2. The machines that make the boat work
Also called systems
Why it’s important: it's the things that your business need to have in order to function
A system is a group of structures.
Like the propulsion of the boat. You have the engine, the gas tank, the steering wheel, the rudder, etc...
3. The things you do to drive the boat
Also called processes
Why it’s important: it's how each of the parts of your business work in order to advance
A process is a series of steps that make things happen.
You got to put gas first, then turn on the motor, move the throttle slowly and steer the wheel to navigate.
Systems and processes allow you to keep things organized and be more efficient.
If you are organized you won't waste time repeating unnecessary actions and you can produce more work in a way that flows. This helps you navigate faster and safer throw any water.
Some examples of systems for creative businesses, and a few of their processes:
Finances
Processes for finances: invoicing, bookkeeping, pricing, etc...
Marketing
Processes for Marketing and sales: lead generation, branding awareness, campaigns, etc...
Customer Development
Processes for CD: negotiation and sales, customer experience, etc...
Information management
Process for IM: organization of files and backups, protocols for emergencies, templates for external communication, etc...
Operations
Processes for operations: Quality checking, time allocation, and prioritization of resources, etc...
Does it sound like a lot yet?
Well, it is.
This is why most people prefer to get a full-time job. It's just less complex to receive a paycheck than to manage a creative business.
If you feel like that's too much for you at this moment of your life there's nothing wrong with that. You can make a pretty good living and feel creatively fulfilled being just an employee.
But if you want to work independently, and own a creative business (even if it's just one person, you), I am not going to sugarcoat it for you:
It's a lot to manage.
But if you manage it well, it can give you more freedom than you though possible.
The good news is that you can build the boat as you go. And you'll be wise to consult with other business owners and coaches to gain more insight.
Next week I will share with you the next level to build your creative business.
Personally, I enjoy this one a lot. It's about how to make more money and be more profitable.
Because when you make more money, you can pay others to do some of the boring things you don't want to do (or aren't as good at) so that you can focus on what you really love: making great creative work.
In the next Fresh Idea Article I’ll teach you the principles of making money (aka. learning how to fish)
Fresh Tip:
Build your business like a boat:
Create a legal structure to protect you, and systems and processes to run it smoothly.
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