When I started my business four years ago, I wish I would have read more on what to expect. There are the basics of course, like writing a business plan, but there was not enough information in one place that laid it out for me. I have my top five tips below when starting a creative business.
1 | Money
Probably the most important item, depending on the type of business you are opening, it all takes money. I know many who have taken out loans to start their businesses, and use revolving credit to manage everything. I chose the debt-free route, but I know this would not work for everyone. I have a business that has low overhead costs (computer, website, printer, paper, envelopes, etc.) so I was able to do everything for about $3000 when I first started. I waited almost a year, saved, researched the market for my industry, etc. before even putting anything up for sale. Make a list on how much total it will cost for you to be up and running before deciding where the finances will come from.
I cannot stress enough to make sure you have plenty of savings! I worked a full time job and had my business part time for three years; while exhausting, it was totally worth it for financial security. Once I was ready to quit my full time job, there was less worrying about money. I recommend having about one year's worth of your personal bills saved before becoming a full time entrepreneur, if possible.
2 | Hire an Accountant
Yes, this is an absolute must, so find one right from the start who you feel comfortable with and can explain how taxes will work for your business. This has saved me a lot of money over the years, and is well worth the cost. For bookkeeping, I recommend using an online service that can auto-drop all of your income and expenses in for you. It is minimal work on your end, and having these records will save you time and money during tax time. Also, create a business checking account before you start selling. Ensuring your finances are separated will help you tremendously for a tax audit, as well as keeping good records for yourself.
3 | Register Your Business
You will want to register your business as soon as possible; most small businesses go with LLC, but there are a few options you should consider before deciding. Also, discuss this with your accountant, as each one has different tax structures. You should form your company as soon as possible, preferably before you sell anything to protect yourself if your business gets sued. If your company is legal, your personal assets are not liable, only your company assets. Here is a great article that explains the difference between them: Comparing an LLC to a Sole Proprietorship and a Partnership. I chose Legal Zoom to assist me with mine, and it was very easy and not expensive. I do recommend hiring a lawyer or going through a service to ensure everything is completely properly.
4 | Create a Business Plan
Many think you only need to create a business plan if you will be pitching to investors, which is not true. A simple, one page business plan will assist you with what direction you want to take your business, how you will do it, and the specific goals you are setting for yourself. Here is a great article and step-by-step guide on writing your own business plan.
5 | Build a Website
No matter what you are selling, whether it is a finished product, digital product, or service, you will need a website. Even if you just plan to sell on a site like Etsy, you will still need a place for your buyers to vet you, so they feel comfortable that you are a legitimate business. There are many website platforms out there, and I have tried a few of them before finding Squarespace. Squarespace to me is the best for a lot of reasons, and I have another blog post on why I use Squarespace.
There are many pieces involved with starting your own business, and hopefully these will assist you as you begin the process.
Do you have any other tips that worked for you? Is there anything you wish you would have known before starting?