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Avoid These Mistakes If You Launch a Creative Business

By: SmallBizClub

 

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Businesses come in all shapes and sizes. If you’re a creative type—a photographer, designer, videographer, animator, illustrator or other artistic person—your business model will be different from other professional situations.

Yes, it is exciting, liberating, empowering and just downright fun to strike out on your own. It can also be a terrifying, stressful, and hunger-inducing activity.
Many artistic professionals spend years in school or completing other formal training, getting ready to spread their creative wings. But few give enough attention to the actual essentials of doing business.
If you are ready to start earning a living from your passion, here are some things you’ll need to consider.
1. It’s Madness to Do Business without a Contract.
Would you consider yourself an adrenaline junky? Do you like jumping out of airplanes, driving fast cars or swimming with sharks?
If these types of things sound irresponsible—maybe even a little crazy—why on earth would you start a project without a contract?!
It doesn’t matter if you are working for friends or family. Wait. Yes it does. Because in reality, creative people are more likely to be “ripped off” by people they know. Your loved ones might expect to get a deal, a few freebies, or endless revisions.
Friends, family, very first clients, long-time associates—get a contract! Every single person you work with should have a very clear understanding of what you will and won’t do, when they can expect a completed project, what the cost will be, and when the payment will be made.
2. Don’t Forget, Your Time is Valuable.
Every single creative project requires brainstorming, research, thought, and time. You can never get those things back.
Don’t work for someone who won’t pay a deposit. If a woman hired a carpenter to build a house, she would be expected to foot the bill for the construction materials before the project got started.
Your brainpower is the same way. The carpenter needs nails. You need time to think. Both are worth something. And your client should be willing to pay for that investment.
Don’t sign on for spec work, either. Did you find a potential client who wants to see a sample of your work first? Fine, he can check out your portfolio. Don’t offer to do a sample project based on his needs while he shops around for the best deal.
A traditional business can resell a football if the customer isn’t happy with it. You can’t resell your time, effort, or ideas.
3. You Are Not a Bank. Don’t Act Like One.
If Bob buys a loaf of bread from the grocery store each week, he must pay for the first loaf before he can get the second one. The store needs the profits earned from his first transaction in order to go out and purchase the necessary product for his next transaction.
Your creative services are the same way. You need to be paid for the website content you wrote so you can pay the bills accumulated during that portion of the project. You can’t (shouldn’t!) move on to the website design phase of the project if you haven’t (financially) completed the first.
Send out invoices for each stage of the project. You need to maintain a cash flow—just like any other business. If you wait until you’ve finished the project to invoice the client, you’ll struggle to keep your business afloat.
You are not a bank. Don’t bear the burden of your client’s debt.
4. Don’t Lower Your Prices.
All potential clients are capable of giving you a sob story—we are just starting out, we don’t have much money; we need to design the website before we can start earning a profit; our dog just died.
No matter what the story, the outcome is always the same: they want you to lower your prices.
Don’t do it! Refer back to every single point we’ve already made. Your time, effort, and talents are worth something.
Even if prospects promise to send tons of business your way (meaning you could theoretically make millions), don’t cave. Those future profits will likely never materialize.
Find a way to work within the client’s budget without sacrificing your profits.
5. Be Sure to Have a Cushion.
Startups are risky. No matter how successful you are or what industry you are in, it will take a while to turn a profit.
Anticipate that before striking out on your own. Most experts say it will take at least a year to be profitable. That means you’re going to need to save some dough, set something aside to keep you solvent when the lean times come.
If you are worried about your financial situation, consider freelancing only part-time while you still have your full-time, money-making gig. For example, you can work as a creative hippie graphic designer at night but do a Superman-esque change every morning to become a respectable CPA earning a cushy salary.
6. Diversify.
Wouldn’t it be wonderful to have one big client? You wouldn’t have to wonder where your next paycheck was coming from. You wouldn’t have to worry about networking. You wouldn’t have to go hunting for new clients. You could just sit back and enjoy the creative juices.
To those of us in the know, that sounds like a terrible idea. What happens if your one and only client pulls the plug? You’ll be back at square one.
Don’t let a single client provide more than 20% of your total income. Play it safe; you’ll be happy you did.
7. Right Brain Thinkers Need Help From Left Brain Experts.
Yes, it is your business. Yes, you are doing your own thing. But that doesn’t mean you can’t benefit from some professional help.
You know creativity. But do you know invoices, accounts payable, income taxes, and articles of incorporation? No? We thought not.
Get help—especially in the beginning. There may come a time when you feel ready to tackle both the creative and analytical side of things. But in the beginning (at least), let a left brain thinker secure a firm foundation for your business
Are you considering the launch of a creative business? Do you have questions about what does and doesn’t work? Let us know! We don’t want you to fall victim to these—or any other—startup mistakes.
Jessica VelascoAuthor: Jessica Velasco writes for a Clearwater graphic artist at Subtle Network Design and Marketing. Launching this web design and online marketing company was no easy task! Jessica wants creative startups to learn from other people’s mistakes.
Published: October 3, 2014
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