Financial Issues Creative Entrepreneurs Often Neglect
I get it. You’re busy painting masterpieces, whipping up innovative designs, or writing that next catchy jingle that’ll have everyone humming. So, money is the last thing that's on your mind, but if you are trying to, not just be creative, but make money and find financial independence while you do so, you sometimes need to let your creative juices give way to your financial acumen.
Sure, money might be one of the most boring subjects imaginable for you, but if you do not want to end up as the cliched starving artist, then this contributed post shows you a few financial aspects of your creative business that you really do need to pay attention to, including the ones below.
1. Multi-Currency Payment Gateways: More Than Just Fancy Tech Lingo!
If you’re reaching clients globally (go you!), you've got to think about how they’re paying you. It's not just about dollars, euros, or yen anymore. A multi currency payment gateway allows your business to accept payments in various currencies without the hassle of currency conversion which ultimately will make life simpler for you. Not using one? You might be inadvertently turning away international clients who find your payment methods cumbersome, which means it will take you longer to build the financial freedom you seek.
2. All That Glitters Isn’t Tax Deductible!
A new glitter pen set? Deductible. That mocha-latte-choca-yaya coffee you had during your brainstorming session? Probably not. It's essential to know what counts as a business expense and what doesn't. Blindly claiming everything can land you in hot water come tax season.
3. Forgetting the (Sometimes Boring) Business Fundamentals
Remember, you're not just an artist; you're a creative entrepreneur! So, although it’s undoubtedly fun to focus on creating, you also need to ensure you're setting up bookkeeping in the right way, monitoring expenses, and managing cash flow as best you are able. Using tools or hiring someone to help isn't an admission of defeat; it's smart business and a great way to financial independence.
4. Neglecting Contractual Matters (Because They're Yawn-Worthy)
Yes, contracts can seem tedious with all that legal jargon, and they aren’t exactly in the creative spirit, but they protect both you and your clients. A handshake or verbal agreement won’t cut it if things go south. Be sure to have clear contracts for commissions, collaborations, or any other business agreements. (If you need a great lawyer for small businesses, let me know! I have an awesome one.)
5. Undervaluing Your Work (You're a Gem, Darling!)
It's the classic artist's dilemma: "How much do I charge for this?" While it might be tempting to undercut prices to attract lots of customers who are hungry for your work, don't undervalue your hard work and talent because being an artist is not easy! Research market rates, consider your experience, and price fairly. Your talent is worth it, after all! (Check out that link because the way the artist prices her art could be useful to you, if you're a painter.)
6. Not Preparing for the “Dry Spells”
Creativity can ebb and flow, and so can the people who want to buy your stuff. Not every month will have booming sales or high-paying commissions, which is why, it’s fair to say, it's essential to save during the good times so you can weather the leaner months without stressing. Saving is the key to financial freedom.
7. Ignoring the Power of Financial Software
"Who needs software when I have this trusty old notebook?" you might say. While scribbles and notes have their charm for creatives, in particular, they don't offer the streamlined efficiency, reminders, and analysis that financial software does. And no, using MS Paint to draw your financial charts doesn’t count!
8. Forgetting About Licencing and Royalties
If you're in the business of producing content, whether it's music, artwork, or written pieces, you might be entitled to royalties each time your stuff is used by another person or company. Ensure you understand the licensing agreements you enter into and that you're getting your deserved cut from reproductions of your work.
9. Being Too Casual with "Friendly" Transactions
Lending your artsy friend some funds for their project? Or maybe they're lending you some? (I don't personally recommend it.) However, if you have the means to help out a fellow creative in need, you need to always document it, even if it is between friends. We all know that memory can be fuzzy, and so it's best for both parties to have a clear record of any transactions, so there are no fall outs or money issues as a result.
So, fellow creatives, while these financial matters might not be as exhilarating as splashing paint on a canvas or penning a novel, they're crucial for your ongoing financial health. And let's be real, when you are on top of your finances, you’ll be less stressed and better able to focus on those creative projects that will help you to financial freedom too!