Business Planning

5 Reasons You Need A Business Plan for Your Creative Business

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Do you have a business plan for your creative business? Do you need a business plan for your creative business? Many most businesses rely on a business plan to secure a loan or attract investors. These probably aren’t activities you will undertake in your creative business. But that doesn’t mean that you shouldn’t be developing a business plan. A business plan is an important tool for managing and growing any business. And the process of writing the business plan provides significant benefit even if you never have to rely on the finished product. Let’s look at some of those benefits.

You’ll Think Through the Important Aspects of Your Business

Writing a business plan forces you into disciplined and structured thinking. To write a business plan, you need to answer critical questions in each of the three fundamental aspects of your business — your market, your factory (or studio), and your wallet.

Do you know who your customers are? Do you know what need you satisfy for them? Do you have a plan to reach them to let them know about you and your art and to get your art into their hands? The are questions you need to answer to have a viable business. And these are the questions you have to answer to complete the marketing sections of your business plan. They show that you understand not only who you are selling your art to, but how you will find and reach them.

Whatever medium you work in, you have a process to create and produce your art. Thinking through your factory — or your studio or your workshop — is the second step in developing a business plan. What are the activities you have to undertake to not only create your art, but to sell it? What resources do you need to perform those activities? What other businesses or people do you need to help you? These questions, which make up the operations section of a business plan, are critical to showing you can produce and distribute you art to your market.

Finally, you need to think through your finances; your wallet. What are you going to charge for your art? How are you going to charge for your art? What is it going to cost you to produce your art? How many pieces will you sell to how many customers over the next few years? Will you make a profit? The wallet, or the financials section, is where you “do the math” and show you can make money from your creative business by producing your art and selling it to your target customers.

The process of answering the questions is more important than the process of writing the answers. Regardless of what form you record the answers — document, presentation, sticky notes — developing a business plan requires you to think through the questions and articulate the answers. The journey is more important than the destination.

You’ll Spot Problems Before They Occur

One benefit of all of this thinking, is you spot problems before they pop up in your business. With my clients and students, those problems usually pop up in the financials — in the wallet. That’s where the number of customers and the price you will charge bumps up against your costs. Because you spent the time thinking through the fundamental questions about your market and your studio, you know what you will make — or lose — before you get started. You can adjust by revisiting those questions and tweaking your answers.

While problems usually show themselves in the wallet, they can pop up anywhere in your business plan. One of my students identified a problem with her business early on while thinking through her factory — given the time to make her products, she couldn’t possibly produce enough to meet her projected demand. So she thought back through her processes and her marketing to adjust her scale to fit her manufacturing constraints. Much better to have that conversation before launching to ensure that you can meet your customer demand.

You’ll Explain Your Business Better

Entrepreneurs use a business plan to explain a business to a variety of individuals or businesses. You might prepare a formal business plan to convince a venture capitalist to invest in your company or a bank to lend you money. But formal explanations of your business aren’t the only outcome of a good business plan. As you work through understanding and articulating the elements of your business, you’ll be better able to talk about it.

Being able to talk about your target customer and the value you provide is an essential part of being able to market and sell your work. As you think through the details of your production process, you’ll get better at articulating what you need to make and sell your products. This will help you talk to suppliers and other business partners you need to make that happen. Being able to explain the details behind your finances — the money that comes in and the money that goes out — will help you manage those finances.

You’ll Find Help

You will find people everyone who are willing and able to help you be successful in your creative business. Whether you are talking to a representative of the Small Business Administration, your local entrepreneur center, or a friend, you will find many people who will advise and guide you. But know what to ask for and be able to ask. Being able to explain your business is an important part of asking for help. Knowing where the potential problems lurk helps you know what to ask about. As you go through the process of thinking through and writing your business plan, you’ll come up with questions you need to answer.

You Don’t Have to Be Perfect

You need not have a finished business plan to start your business. You need to have enough of an understanding of the three key areas of your business to get started. You need to know your market. You need to understand how you will make and distribute your products. And you need to have a grasp of your financials. You don’t have to have it all wordsmithed and bound. The plan doesn’t have to be perfect. Every revision will clarify your vision and the path to achieve your business, personal, and creative goals. Don’t let perfect be the enemy of good.

Do you have a business plan for your creative business? It’s time to get started. Grab a pen. Grab a sheet of paper. Grab a stack of sticky notes. Grab a cup of coffee and get started.

 

What’s Next?

It’s time to get started on your business plan! I’ve prepared a list of of questions to get you started. You can download them here: Questions for A Better Business Plan

Grap your copy and work through the questions. Then let’s start a conversation about how I can help you unlock the business potential of your creativity,

 

 

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