I’m an Artrepreneur. When Do I Need a Business License?

As an artist, you probably don’t have a ton of experience with the legal side of business. In fact, one of the most common questions I hear from clients is: When do I need a business license?

So let’s talk about business licensing.

A business license is a registration with your state, county, and/or city that allows you to conduct business in that area; it allows you to legally exchange goods/services for money. So, it’s a good idea to obtain your business license before you exchange your product or service for cash for the first time.

Seems easy enough, right? But we can’t forget that there are multiple kinds of business licenses. To fully prepare you for obtaining your business license, let’s talk about the following:

NOTE: Business licensing varies from state to state, but the following information is generally the same no matter where you live. For more detailed information regarding special rules in your state, reach out to your local Small Business Development Center!

Sole Proprietorship / General Partnership

Becoming licensed as a sole proprietor or general partnership might be a good fit for your creative business early on. As a sole prop, you ARE your business. Generally, your business license will be registered under your name, and you can obtain a DBA (see below) in order to operate under another name. Come tax season, all your income is taxed as personal income. In this scenario, there is no separation between yourself and your business. Most independent contractors and freelancers file for this kind of business license. In Nevada, you might expect to pay about $225 for your initial registration.

Limited Liability Company (LLC)

A Limited Liability Company gives you a bit of separation between yourself and your company. In this case, you’re creating a separate business that is strongly connected to you, the owner. In order to maintain separation, all your business finances must be separate from your personal finances. Otherwise, you could still be held liable on the company’s behalf. What’s special about an LLC is that, come tax time, you will have two filing options: 1) You can be taxed as a general partnership and count all your profits as personal income–they will be taxed accordingly. 2) You can be taxed as a S-Corp, allowing you to take your own salary, then have the leftover profits taxed as earned income. Each taxing structure is different and will give you a different net profit after taxes are removed. I usually recommend that clients don’t file their taxes as an S-Corp until they’re making at least $75k a year. Consult with your tax person to learn more and find out which option is best for you. To file for an LLC in Nevada, you might expect to pay $425 for your initial registration.

NOTE: An LLC is a cool hybrid that gives you flexibility come tax time. But remember, you must keep all finances and operations separate from your personal life in order to avoid liability in the case of a lawsuit.

C-Corporation

When you file as a Corporation, you are creating a legal entity that is entirely separate from yourself. It acts, and can be prosecuted, on its own. This means that you are (usually) completely protected from liability should the company be sued. However, Corporations must have their own Board of Directors and are often run in the interest of the shareholders, which isn’t always just you. Filing as a Corporation gives you the most protection, but can also reduce the amount of control you have over your creative business. In Nevada, you might expect to pay about $700 for your initial registration.

(Non-Profit)
If you’re interested in becoming a non-profit organization, you must first become a C-Corporation, and then file additional paperwork in order to obtain non-profit status. When thinking about becoming a non-profit, you must think about your potential revenue streams. If your most likely revenue streams are grants and donations, then becoming a non-profit might be a good fit for you.

Don’t Forget

EIN (Employer Identification Number)
After filing for a business license, you must register your business with the IRS. You will receive an EIN to help you identify your business when you file federal taxes at the end of the year.

State Tax Registration
You must also register with your state tax agency. Most states have an online portal where you can create an account and pay your taxes digitally. State taxes are generally paid quarterly, so make sure to stay up-to-date to avoid unnecessary fees.

Doing Business As (DBA) aka Fictitious Firm Name
Some businesses file their business license under one name (i.e. Kayla’s Business) but want to operate under a different name (i.e. Kayla’s Super Awesome Business). If this applies to you, you’ll want to file for a DBA with your county. DBA’s usually cost about $25.

Special Licensing
Depending on your type of business, you may need to file for additional licenses and/or permits (such as liquor licenses or cabaret licenses). Reach out to your local licensing office, or your local Small Business Development Center, if you think you might require additional licensing.

Remember: Licenses are generally renewed every year, so don’t file for your state business license until you’re truly ready to start conducting business. Practice truth and evaluate your business model realistically… is your creative business ready for launch?

What other questions do you have about the legality of starting your own art-based business? Drop them in the comments below! And don’t forget to follow Artrepreneurship – where ‘art’ and ‘entrepreneurship’ meet to get helpful content sent straight to your inbox.

Peace, Kayla

NOTE: I am not an attorney. This article is educational, and therefore not meant to provide legal advice.

The Artrepreneur’s Battle with Ego

This is a blog about artrepreneurship–so why are we talking about ego?

Beowulf’s inability to control his ego and let go of his pride ultimately resulted in his death and the vulnerability of his people.
Lucifer’s hubris and selfish viewpoints disconnected him from his heavenly people and caused suffering for the world below.
King Oedipus’ prideful attempts to deny the prophecies of the Greek gods brought about the death of those he loved.

Our (real and imagined) relations with the phenomenon known as the “ego” are nothing new. For centuries, we’ve been intrigued by ego and its impacts, most likely because it affects each of us. Our fascination with ego is not unprecedented–when not monitored and dealt with strategically, our egos can cause problems for us that we never intended.

artrepreneurship, ego, successful entrepreneur
Image by Gerd Altmann from Pixabay

That’s why it’s important for us to talk about ego here at Artrepreneurship – where ‘art’ and ‘entrepreneurship’ meet. As an artrepreneur, you will be faced with many challenges related to your ego. After all, this is YOUR creative business, this is YOUR vision, and much of your success lies on YOUR decisions and actions. It’s hard not to overemphasize the importance of yourself.

However, there are some ways you can keep your ego in check during your artrepreneurial journey:

Listening to others
As an artrepreneur, its important to ask others for their thoughts and opinions. We’ve talked before about the importance of others along your artrepreneurial journey: involving others can help you strengthen your weaknesses, come up with new ideas, and see things from different perspectives. Take the time to listen to what others have to say. You might find a gem in their advice one day.

Asking others for advice (and sometimes, taking it)
This is similar to listening to others, but requires that you take the first step in initiating their involvement. When you do ask for advice from others, listen deeply and consider what they have to say. Remember: you don’t always have to follow their advice. But, if there seems to be potential in what they have to say, don’t be afraid to take their advice and give them credit for the benefit they’ve added to your creative company.

Trusting the ability of others
Sometimes, we’ve added people to our team but still don’t fully trust their ability to execute. It’s easier to trust and rely on ourselves, because we’re confident that we won’t let ourselves down. But sometimes, you have to give others a chance to prove their ability and add to your vision. If they let you down, you can re-evaluate their position with your business–but at least give them a fair, fighting chance.

Evaluating yourself realistically
We’ve talked many times about the importance of being able to evaluate yourself and your circumstances from a place of reality. Sometimes, our ego can cause us to overestimate our own abilities or underestimate the abilities of others. This can leave promises unfulfilled and opportunities undiscovered. Work with your ego by evaluating yourself realistically and acting accordingly.

When you don’t take the time to check your ego as an artrepreneur, you might face unnecessary problems, such as:

– Losing potential partners
– Losing potential clients
– Missing out on good opportunities
– De-valuing your brand

Dealing with your ego might not be the first thing you think of when planning for your artrepreneurial journey, but it’s important. Keeping your ego in check will help you build a successful creative business that will last.

Peace, Kayla

Follow Artrepreneurship – where ‘art’ and ‘entrepreneurship’ meet to receive more straight-up information that will make your artrepreneurial journey easier.

Should You Still Start Your Own Creative Business in the Midst of COVID?

Coronavirus has brought a lot of uncertainty to our lives, especially for those planning to take the artrepreneurial leap. With businesses closed and consumers running out of disposable income, you might be wondering if now is still the right time to start your own art-based business. Before making a decision, ask yourself the following questions:

Photo by Andy Dean Photography

Does the need still exist?

Hopefully, you’ve been able to work through your business model and you understand the need that you can fill with your creative business. The solution you create to help fill your customers’ needs is your true value. To understand if you should still start your creative business or not, you must think about your value and whether it is still strong enough to move forward. So, if the Coronavirus has completely changed the market you’re thinking about entering, your value might no longer exist.

You must be candid with yourself: Does the need for your product or service still exist? You might want to do some research to understand what’s changed.

How has the need changed?

Maybe the need does still exist, but has shifted in some way. Maybe customers could still use your product or service, but your offering would be more valuable if you modified it. For example: Lots of artists are taking full advantage of online classes and online formats to help deliver their value. Consider revisiting each portion of your business model and asking yourself what has changed and what you can expect things to look like in the future.

Are you financially prepared?

Let’s say you’ve decided that the need does still exist, and you’ve thought of ways to adjust your services to match the impacts of COVID-19. There are still a few important questions to ask about yourself: How has your financial situation changed? Do you still have a solid source of income to help you get by in the first few months? Emergency savings? A solid funding source? Re-evaluate your current financial situation to understand if starting your art-based right now is the best choice for you.

Are you emotionally prepared?

Lastly, it’s important to make sure that you are emotionally prepared to take on this already challenging endeavor amidst a global crisis. Becoming an artrepreneur is hard work and building a business takes time. Do you have the emotional capacity to launch your art-based business right now? Entrepreneurs often struggle with putting the brakes on starting a business–but sometimes its needed. Your business will not be successful if you’re not ready to take on the artrepreneur role. It’s okay to take some time to prepare yourself and your business before taking the ‘big’ leap. Remember: Direction is more important than speed.

So should you still start your own creative business in the midst of COVID? It depends on your answers to these questions. Be honest in your dialogue–the success of your creative business relies on your ability to coordinate your vision with reality.

If now isn’t the right time to start your business, that doesn’t mean your artrepreneurial journey is over. Timing is important in the world of artrepreneurship, and you’re doing yourself a favor by evaluating how COVID-19 will affect you and your future creative business.

Peace, Kayla

Follow Artrepreneurship – where ‘art’ and ‘entrepreneurship’ meet for more straight-to-the-point information that can help make your artrepreneurial journey easier!

Monetize Your Art By Finding the Blue Ocean

There’s a phenomenon in the business world that’s all about red and blue oceans. Some of the world’s leading business strategists cite the “blue ocean” as the frontier of hope for new businesses. So what is the blue ocean?

Photo by solarseven

The blue ocean is an open market free of competitors. The red ocean is a crowded market filled with competitors, or sharks, constantly attacking one another. The barbaric nature of competition leaves businesses bleeding, and oceans red. So business strategists Renée Mauborgne and W. Chan Kim wrote a whole book about the importance of finding a blue ocean.

“The only way to beat the competition is to stop trying to beat the competition.”

In saturated markets, its hard to compete on much more than having the lowest price. And as an artist, I would bet that you don’t want to just compete on price–you probably want to compete on the creativity and quality of your artistic abilities. This is where the blue ocean comes in. If you can find a new ocean to swim in, you don’t have to worry about other sharks, other competitors, driving down your price. Your value stands so far apart from competitors, that you’re in an ocean of your own. Of course, easier said than done. Finding a blue ocean isn’t easy, otherwise everyone would do it–and that would defeat the purpose.

The first step in finding a blue ocean is understanding what’s already happening in the marketplace. Ever think of an awesome invention, only to find out that its already been invented? Don’t let that happen to you in your artrepreneurial journey. Do your research to understand what other people/companies are doing, and think about how you can offer a value that’s truly different.

The authors of Blue Ocean Strategy urge readers to look beyond demand that already exists and think about how new demand can be created. Sometimes people want something that no one offers. Sometimes people don’t even know they want something until someone else offers it to them. New demand can come from many places. Think about how you can “innovate” your value to help create a blue ocean, free of competitors.

What do you think about the “blue ocean strategy”? Would you like to read more about the tools that are presented in the famous book? Leave a comment below.

Peace, Kayla

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The Importance of Execution

You know the famous Nike slogan – Just Do It! Execution is all about just doing it, and doing it strategically.

You know the famous Nike slogan – Just Do It! Execution is all about just doing it, and doing it strategically. Image by Gerd Altmann from Pixabay

Business plans? Crucial. Marketing research? SO helpful. Financial projections? Yes!

But in order to accomplish the things you plan, or to put that research to use, or to meet those sales projections, you must be able to execute. Sounds obvious, but execution can be one of the hardest parts of artrepreneurship.

Businessmen Larry Bossidy and Ram Charan co-wrote an entire book about execution. Let me paraphrase some of the most helpful tidbits of information below, so that you can spend your time executing instead of reading! Much of what they discuss revolves around two common execution struggles:

#1 – You don’t have the necessary time, resources, or partners to execute what you’ve planned.
#2 – You don’t have the habits or system in place to help you execute timely and well.

So how do you overcome these struggles?

#1 Robust conversation: You must be willing to have conversations with your partners (or friends, or yourself) that revolve around digging deeper into what the situation is and how it should be approached. Honesty is key here–you must be able to face reality. In order to set goals that are achievable, you must truly understand what your capabilities and resources are. 

#2 Set clear goals and prioritize: Be explicit in what you want to accomplish. Create deadlines for yourself. Think about what actions will result in a successful project and prioritize those actions. Try thinking both long-term and short-term here. And by short-term, I mean even one day. What will you execute today?

Some other things to think about:

To-do lists
Writing down your tasks for today, or even for the entirety of phase one of your plans, can be so helpful in helping you get past slumps and lazy days. Don’t get me wrong, rest is important. But on those days when you’re feeling lazy but really want or need to get something done, to-do lists can make it easier to choose where to start. Plus, it feels great to cross something off your to-do list, which can give you motivation to tackle the next item!

When’s the most productive time for you?
You should also think about when and where you work best. Although at its core, execution is really all about doing things even when you don’t feel like it, it’s also important to know when you do feel like it. These are the times to take advantage of. Remember, these aren’t necessarily the times when you are used to working, but rather when you are truly most productive. For example: I’m used to working in the evenings, but I really get more done in the late morning. In accordance with #2 above, execution is really all about knowing yourself.

Align your planned tasks with your strengths and interests
Often, we have to do things we don’t want to do, and this can cause us to procrastinate. There’s no real way around this aside from will-power. However, you can plan your tasks around what you know you like and dislike. For example: I plan to do things I like on the weekends. Otherwise, I’ll procrastinate, cram my least-favorite tasks in on Sunday night, and dread it the whole time. If I plan to do things I like on the weekends, I’m way more likely to wake up in the morning and be excited to get to work on a Saturday or Sunday.

My husband and business partner always says: Eat the frog for breakfast. For him, doing his least-favorite things in the morning gets them out of the way and sets him up for a productive afternoon of executing tasks he really likes doing. Again, it’s all about knowing yourself. 

Remember:
– To truly execute a larger vision, sometimes we have to do things we don’t love doing. Do them anyway.
– You must know yourself in order to set goals that are achievable. That means we can’t shy away from the reality of things.
Direction is more important than speed. Having a plan makes your time working worthwhile, because you’re working on things that are truly going to help your plan come to life. It might take you a while to reach your goal, but all that matters is that you reach it.

Challenge: Make a plan for today or tomorrow. List one or more things that you’ll accomplish, and make a note about why those things are going to help you reach your larger goal of becoming an artrepreneur. Then, execute!

Peace, Kayla

P.S. Follow Artrepreneurship – where ‘art’ and ‘entrepreneurship’ meet to get straight-up information on how to make your artrepreneurial journey a success!