Continue to Propel Your Creative Business Forward
Dreams and desire, particularly dreams you’ve had for several years, can create the illusion that your products and services will sell by the truck loads simply because “they’re great products and services.” However, the chance that everyone will be equally as passionate about your business offerings might well be slim. By exercising good financial sense as a creative business leader you can move through slow sales periods and continue to propel your creative business forward.
You’ve written a detailed business plan that includes data such as your line item budget, forecasted marketing efforts, dates you’ll roll out products and/or services and locations for your business. As a smart creative business leader you’ve also conducted market and economic research for your industry. Data included in market analysis are market size, growth rate, trends, success factors, cost structure and distribution channels.
More Financial Help for Creative Business Leaders
Keep in mind that if you don’t have prior experience conducting industry-wide market and economic research you can reach out to market analysts who specialize in conducting and preparing these types of analytical reports. Organizations that provide this type of support include the Small Business Administration (SBA), EconoSystems, Infiniti Research, Brand Institute Alexa Associates and REIS.
Using tools like the Breakeven Analysis tool featured at the SBA you can get a realistic idea on when you can expect to start earning a profit from your company as a creative business leader. Factors you’ll review as you complete the Breakeven Analysis include:
- Startup costs for your business (e.g. license and permit fees)
- Forecasted revenues (e.g. product sales)
- Nonexpendable costs (e.g. employee salaries, mandatory insurance coverage)
- Expendable costs (e.g. marketing costs)
Operate Your Creative Business with Your Eyes Wide Open
It’s important to realize that you’ll likely be unable to keep all of your gross profits. A portion of these revenues will be spent to pay overhead expenses like rent, utilities and salaries. Rather than operating your business with your eyes closed and your fingers crossed, take the blindfolds off and analyze how long it might take your creative business to turn a profit. After all, remember that it took Amazon.com, an online giant in the retail industry, at least five years to turn a profit.
Remember solid customer service combined with sound marketing and promotion practices may set your creative business apart as a firm of choice in the eyes of consumers. Yet, it’s good financial sense that may ensure your business has funds available to pay required and optional expenses in both high and low selling seasons. Good financial sense can also prevent you from having to reduce your workforce, diminishing your talent pool, as a creative business leader.
Get into Spiral online at: https://www.ebookit.com/books/0000000841/Spiral.html
Check out Long Walk Up online at: https://www.ebookit.com/books/0000000531/Long-Walk-Up.html
Sources:
http://www.bnet.com/blog/business-myths/why-the-small-business-failure-rate-is-90-percent-smoke-and-mirrors/117 (BNET: Why the Small Business Failure Rate is 90 Percent Smoke and Mirrors)
http://www.sba.gov/content/breakeven-analysis-know-when-you-can-expect-profit (Small Business Administration: Breakeven Analysis: When You Can Expect a Profit)
