When it comes to profits and losses, creative success and business acumen often collide.
Photographers start their own business to practice their craft, as do other creative entrepreneurs. They want to develop their talents unfettered by a boss who holds creative control. Stylists, videographers and wedding planners have a vision they want to share with the world to make it a better, more beautiful place. They want to tell a story by manipulating sensory elements as only a gifted artist can.
Creative talents are valuable commodities on the open market. Very few people have the skill, the talent, and the desire to execute creative projects, but everyone wants their home or event to make a significant impact. Most people are willing to pay for creativity, and some people will pay quite a lot. Going into business should be a lucrative venture for creative professionals as well as a means to feed their souls.
No problem, if only your soul needs to eat. If you want to put food on your table in a very literal sense, you need more than your abundant talent. High demand for your services does not automatically equate to high profits. A well-thought out and concrete business plan has to be part of your recipe for success.
Doesn’t Planning Detract From Creativity?
Business and creative fields do tend to run opposite one another. Business planning requires all the hard edges, clear definition and statistics that creative professionals want to rebel against. Most people who are talented with music or arts are not as well versed in finance. More importantly, they don’t usually enjoy being bounded by the rules of supply and demand or other rigid mathematical concepts.
Creativity cannot flourish without the proper resources, and in your business profit provides the resources to continue to practice your craft. To truly profit in your business, you need a business plan. In this way, planning does not detract from creativity. It actually facilitates it.
You must actualize, not just visualize, a business plan because:
- A well-written business plan can secure funding for your venture, for launching a new product or service, or for a special project.
- A business plan helps you effectively communicate your objectives to employees, partners and customers. It even helps you remember your specific business and financial goals and why and how you expect to achieve them.
- A carefully researched business plan helps you set pricing for your goods and services. It shows you how much you need to charge to be profitable and which products to offer.
- A business plan helps you pinpoint your target audience and decide how to attract their attention. It can help you align your offerings with what people in your target market are looking for.
In many creative fields, you begin a project without a clear idea of what the finished product will look like. Business can be similar in that your focus and markets can change, and the business plan can be amended. A business plan is essential, however, because it can show you if the project you are about to embark on has any profitability. A project without profit is a hobby, and that’s okay, too. A business plan just helps clear up your expectations.
Business Management for Creative Professionals
You need a business plan to succeed in your creative venture, but it does not need to be complicated. Writing a business plan is really just putting your ideas down on paper and adding a little research to back them up. You should organize your plan into these sections:
- Executive Summary — This section comes first, but you might write it last. It is a short overview of your business and what you expect to accomplish. No need to go into great detail. The details will come later in the plan.
- Company Overview — This is where you describe the physical and legal entity of your company. Talk about your location, type of facility and if it is owned or rented. Also, describe the corporate structure. For a small start-up, this could be just you as the owner of the company and maybe a part-time employee. Mention how your company is incorporated (C-Corp, S-Corp, LLC, DBA, etc.) and any immediate plans to grow the corporate structure with management levels, investors or additional employees.
- Products and Services — Sometimes this is a stumbling block for creative businesses because you are, well, creative. Even before you begin doing business, you need to define your offerings. As a photographer, for example, will you do portraits, events, nature photography or something else? You can do more than one thing, but the parameters should be defined. Will the end product be a framed picture, composite prints or digital files?
- Target Market — Describe your customer base. Who are they, what are they like, how old and well educated are they? It is important to limit your market so you can target your product and services to them specifically. It sounds counterintuitive to break down the buying public into just one niche that you will sell to, but it will increase your sales to be focused. This part of your business plan may require some research into buying habits.
- Marketing Plan — How will you find that target market you pinpointed in the previous section? Where do they hang out? What advertising mediums reach them? What do they respond to? You will have to do some research to answer these questions and make a plan for convincing your target audience to buy your products and services.
- Financial Plan — This might be where you really lose interest in writing your business plan, but it must get done. The financial part of your business plan covers the dollars and cents of what you have, what you need, and what you can expect to have. This section lays out what it costs you to run your business, from overhead costs like rent to the costs of materials or travel expenses. Also, calculate what it will cost to provide our service or product to a customer, then consider what you could charge for that. With that information, you can project how many sales you need to make to cover your overhead and operating expenses.
As long as your business plan thoroughly covers these topics, it is sufficient. There is no need to use business jargon you do not feel comfortable with. Lay out the plan in plain language, so you and anyone else who reads it can understand easily.
You will need to revisit your business plan at least four times a year to keep it up to date. A business plan is a living document that should change as your business changes. When you expand into new markets or add different services, your business plan should reflect those changes.
Making a Plan to Business Plan
Starting, or growing, your business can be an exciting time. There are many tasks you need to complete, and some of them are extremely enjoyable. Choosing a business name or developing a new product line taps into your creative core. Even something as basic as arranging furniture in your office may stimulate your visual senses and energy your creativity.
For all of the other tasks, like arguing with suppliers, making cold-calls to get sales, or applying for a business loan, you need to just trudge through. Writing your business plan falls into this category. To incentivize the process, break it down into smaller steps and schedule each step. Plan to complete one step each day and surround it by much more enjoyable tasks on your schedule.
Here are some tips to making easy work of your business plan:
- Write the parts you know, first. Describing your business, especially if you are already doing business, should be easy. Get those details down, and you will no longer be staring at a blank screen.
- Leave blanks and fill in details later. As you are writing your description, if you do not remember the type of incorporation you filed or the square footage of your new studio, leave a blank and move on. You can look this up later and come back and fill in the blanks.
- Save the Executive Summary for last. This is just a brief introduction to your plan. It will be easier to write when the rest of the plan is finished.
- Research your competitors. Although your products and services will be uniquely endowed with your flare, there are others in the market with similar offers. Visit them, research them online and get to know how they do business. Buy some of their products and experience them from the customer’s point of view. The insight you gain will be extremely helpful.
- Be realistic about projected costs and revenue. Whenever possible research the exact cost of materials. Remember to allow for shipping and labor costs, as well. Figure in your time at a reasonable rate. The more accurate your projections are, the better your business plan will be.
- When describing your products and services, think about them from the customer’s point of view. What problem are you solving or need are you filling for them? This perspective will help you design products and services that sell well.
- Consider how you will differentiate your business in the marketplace. Ask yourself what would make a customer buy from you rather than my competitor. Highlight those differences in your business plan to keep them fresh in your mind. You should use those factors to design your marketing and attract investors.
Don’t be afraid to ask for help. No one expects you to know everything you need to write a good business plan. You may be a creative professional who is distinguished for your work in a certain medium or niche market, but that doesn’t make you a business expert. Talk to the experts about financing, marketing and other business topics.
As a hairdresser, you would not expect your clients to be able to cut their own hair. Only with your guidance and tutelage would they even style it correctly. Get the professional guidance you need to write and execute a solid business plan.
Business Plan Execution
Writing your business plan will teach you more about your business than you could otherwise hope to learn. It gives you a sense of the key elements that are important to a successful business. Reading your business plan will show you how to maximize profits and scale your business.
Most creative businesses rely on the owner or principal’s touch to develop their identity and maintain quality and uniqueness. If you are a DJ, you can hire other DJ’s to work parties when you get extra bookings, but they cannot deliver your personal touch. To stay true to your branding, you have to be involved in music selection, programming and other aspects of the service delivery.
What becomes essential, then, for creative professionals to grow their businesses and increase profits is a way to handle business operations while you are the creative, the personality of the business. Someone still needs to answer the phone, schedule appointments and order supplies while you are interacting with customers and being the face of the business.
If operational functions do not continue, your business will close. Your business needs to do things like send out invoices to survive. But the more time you spend behind the scenes on administrative tasks, the less you can offer to customers and the fewer customers you can serve.
When you spend most of your day on paperwork, your creative energy can get depressed. You could hire people to handle these administrative functions, but for small businesses that can be expensive. Using consultants to do billing, booking, and payroll can save some money, but it means these essential tasks are further removed from your control.
The Answer Is Táve
The best way for creative professionals to execute a solid business plan is using a software application that is designed specifically to handle business functions for a creative business. Táve is one software application that manages multiple functions including automated billing, online booking, client management, online payment, lead tracking, reminder emails and more. Táve offers business management for creative professionals, so you can spend a majority of your time being creative.
The recipe for success in a creative business, or any business, includes a business plan. A solid business plan will increase your chances of making enough money to put food on your table. Executing your business plan efficiently can further increase the profitability of your creative business. You can use your business plan to apply for funding or grant opportunities and as a communication tool for describing your business to potential investors and employees.
Efficient execution of your business plan involves finding a solution for managing business functions and creative work at the same time, while spending a majority of your own time serving customers. Táve handles all of the business functions for a creative business in one software application.
To learn more about this business management software designed by creative professionals for creatives, sign up for a free 30-day trial today.