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.

3 Easy Ways to Build Contacts in Your Artrepreneurial Network

Here are 3 easy ways to build contacts in your creative space, even during the time of the Coronavirus.

#1 Take advantage of free resources in your community

Free? That’s right, free! In every state there are organizations that exist for the sole purpose of stimulating the local economy through small business growth. One of these organizations is very dear to my heart: the Small Business Development Center!

Myself, Kayla Banda, providing free business counseling to an SBDC client – Photo courtesy of the Nevada SBDC

Small Business Development Centers are non-profit organizations that exist all over the country. There are 13 in Nevada alone! At the SBDC, business counselors are waiting to help you develop your business model, find funding, develop marketing strategies, assist in your research, and ultimately help you grow your creative business! All you have to do is sign up and make an appointment. Not only do counselors act as your business advisors, but they can help connect you with the rest of your local entrepreneurial community. So click here to locate an SBDC near you!

Another nationwide organization that provides business advising for free is SCORE. Their team consists of retired executives who have extensive experience in all kinds of industries. Check out this site to see if there is a SCORE counselor in your area who has the experience you need.

NOTE: Both organizations are offering virtual counseling through the time of the Coronavirus.

#2 Find out who the leaders in your industry are and connect with them on social media

Social media offers a great way to stay in the loop on all things happening in your field. Find and follow your industry members and experts to start building relationships with them and learning from the content they post. Work hard to engage with them authentically.

But first, make sure that you are providing helpful content on your social media pages so to encourage others to follow you. If you’re a painter, maybe you post content about your process or mistakes/lessons you’ve learned that could be helpful for others. Give people a reason to remember you so that when you meet them in person, they’re already familiar with you and the value you bring.

Social media is a great way to learn about in-person events that are happening, especially in your area. If one of your favorite local artists is hosting a gallery, go and support them. If an expert in your field is hosting a webinar, join! Supporting your local network is the easiest way to get support back.

#3 Go to local events in your creative space

Again, supporting your local artrepreneurial community is one of the best ways to gain trust with potential contacts in your field. When you support others, they’re more likely to support you. Try to maintain a benevolent spirit, meaning that you are there to truly support them. Keep a learning attitude–you never know what tidbit of advice might be a huge learning lesson for you in your artrepreneurial journey. One of the easiest ways to find local events is to search online for people and organizations in your field and stay up-to-date with the information they post. Often they will share information on events, meet-ups, and openings.

Connecting with potential customers, mentors, and partners is a huge part of developing your artrepreneurial network–but you must stay genuine! People are much more willing to work with others who they feel are benevolent, well-meaning, and honest. So try your best to support without a hidden agenda. Ego is not welcome here!

Remember: Building a network takes time and benefits are not always immediate. Stay with it. Becoming a recognized name in any community takes time and effort, so consider this a strategy for the long-haul.

Peace, Kayla

Challenge! Visit your social media pages right now and start searching for local members of your creative field–they can be people or organizations. Then, think about the value you can offer them through your own social media page. These two steps are the core of starting to develop your artrepreneurial network and can be done now, even in the time of COVID-19.

Resources To Help You Understand Your Ideal Customer

“Know thyself” is one of the most important pieces of advice for artrepreneurs who are starting to build their creative business and brand. But advice I think is just as important — “Know thy customer.”

Photo by Zane Aveton

“Know thyself” is one of the most important pieces of advice for artrepreneurs who are starting to build their creative business and brand. But advice I think is just as important — “Know thy customer.” Your customer is the heart of your business and the one who will recognize and pay for your value. So, it’s time to learn about thy customers!

Before starting your research, jot down some ideas or hypotheses you might have about who your ideal customer is. Include demographics (age, gender, location, family size, etc.) and psychographics (interests, hobbies, buying preferences, etc.). These hypotheses will help guide your research.

So where can you go to research your potential customers?

Census data

The United States Census Bureau has tons of demographic information that can be crucial for your research. Want to market to individuals who make over a certain amount of money? This data source can tell you which zip codes have the most of this type of consumers. Want to market to families? This data source can tell you about households that report having kids. There’s a lot of information here, so just take some time to browse around and make sure to copy and paste information helpful information into your own research document.

Free services from America’s SBDC

I might be a bit biased here, considering that I work for the organization, but the nationwide Small Business Development Center is such an amazing, free resource. Not only can you work with counselors on every aspects of your business, but some centers also help with research work. For example, in my office at the Nevada SBDC in Reno, we have access to databases that provide us specialized, in-depth information that could be crucial for developing your business model. We receive access to reports from hundreds of databases that provide information that would normally costs a pretty penny to obtain. There are SBDCs all around the country, so visit this page to find one near you!

Free market reports

Mintel is a highly respected data source that provides research on all kinds of markets and people. Single reports can cost up to $5,000, but Mintel offers some reports for free. Check out this page to see if they have free information that might be helpful for you. For example, Mintel is currently featuring two free reports titled GLOBAL BEAUTY AND PERSONAL CARE TRENDS and THE AUSTRALIAN CONSCIOUS CONSUMER. These titles might seem quite specific, but if you’re targeting these particular industries or markets, these reports could be a huge win for you. There are more reports and resources, so go check it out for yourself!

You can also use sites like Quora to get a better idea of trending topics and opinions of those who you think are your target market. This kind of research is less structured and takes a bit more digging, but can be helpful nonetheless.

Surveys

If you have an idea about who your target market is and want to learn more about their preferences, surveys are a good way to collect that information. Of course, you have to actually get your survey to your potential customers, so think about how you are able to reach them. SurveyMonkey is a popular service that can be used to deliver surveys, along with Google Forms (which is free!).

If your survey is going out to people you do not know the age, gender, location, etc. of, it can be helpful to collect this information as part of the survey. You want to make sure you understand the demographics of your potential target market. Other important questions to ask might be: “How do you access ____?” or “How much would you pay for ____? or even “When do you think about/buy ____?” Try using scales and multiple choice options to get more clear and concise answers. The goal of this survey should be to understand the habits and preferences of your customers. From this exercise, you want to learn how and when to reach them.

Google’s Consumer Barometer

Google provides some free resources that can help you understand your ideal customer, such as the Consumer Barometer. This tool helps you learn about how your potential target market behaves online. Understanding how your potential customers use the internet is critical for tailoring your marketing strategies and business model around their habits and preferences.


Once you feel like you have a good grasp on who your potential target markets might be, consider creating a customer profile for each type of person you want to market/sell to. An example might look like this:

Tonya: Tonya is a stay at home mom who is apart of a household that makes over $100K per year. Her average age is 38 years old. She loves fashion and is drawn to exclusive purchases. She likes to show off her purchases to friends and family. She loves her kids and even spoils them. She exercises often and engages in repeated purchases. Once she finds a brand she likes, she sticks with it. She is very active on Pinterest and Facebook, but doesn’t seem to bother with other social media platforms. She acts as the decision maker in her house when it comes to travel decisions, household products, and purchases for the kids. She likes to online shop, but often engages in weekend shopping trips with friends.

As a mural creator, Tonya might be a great target customer for you. Knowing as much as you can about her helps you to understand where to reach her and how to express your value to her in a way that will convince her to buy.


Do some research of your own and then try creating a customer profile for your potential customer type(s)!

NOTE: Some businesses might have multiple target markets. For example, as a mural creator, you might offer high-end home murals to well-off families and fun, funky murals to small businesses. Learn about each and understand how your value and marketing shifts between them.

Research might not be your favorite, but try challenging yourself to find new ways to understand your potential customers. The more you know about them, the better you’ll be able to communicate and work with them. You’ve got this!

Peace, Kayla

P.S. Follow Artrepreneurship – where ‘art’ and ‘entrepreneurship’ meet to make your artrepreneurial journey easier!