Arts Business Tool Kit for WA Business Tool Kit... · 55!! ©Auspicious!Arts!Incubator! % There are at least 92 discrete skills required to run a successful small business! Planning

Arts Business Tool Kit What you need to know to make a go.

Auspicious Arts Incubator

PLUS

The 30 most common mistakes artists make when starting a business

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© Auspicious Arts Incubator

Arts Business Tool Kit

Table of Contents

Small-‐Business Models ........................................................................................ 3 The entrepreneurial mindset ........................................................................ 4

Planning & Research ............................................................................................ 5 Research ............................................................................................................... 5 Five Steps to Success ........................................................................................ 9 SMART Goals .................................................................................................... 10 Results ................................................................................................................ 11 Business Plan vs. Strategic Plan ................................................................ 12 Vision and Mission Statement .................................................................... 14 Planning Tools ................................................................................................. 17

Business Structures ........................................................................................... 18 Employment / independent contractor .................................................. 19 Insurance .......................................................................................................... 21

The Money Stuff .................................................................................................. 21 Sales .................................................................................................................... 21 Grants ................................................................................................................. 22 Fundraising ...................................................................................................... 22 Crowd-‐funding ................................................................................................. 23 Donations and Sponsorship ........................................................................ 23 Arts Philanthropy ........................................................................................... 24 Record keeping ............................................................................................... 25 ABN (Australian Business Number) ......................................................... 25 GST (goods and services tax) ...................................................................... 25 Tax ....................................................................................................................... 26 Tax deductions ................................................................................................ 26

Branding and Marketing .................................................................................. 33 Sharing not selling ......................................................................................... 34 Value and Benefits not Product or Service ............................................ 35 Publicity vs. Advertising .............................................................................. 35 The customer journey ................................................................................... 35 Marketing Campaigns = Audience Development ................................. 36

Creating Work ..................................................................................................... 38 Co-‐ops ................................................................................................................. 38 Profit Share ....................................................................................................... 38 Grants ................................................................................................................. 39

Getting Work ........................................................................................................ 40

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Small-Business Models Small Business Model

Arts Model

Market

Need

Product or

Service

Market

Need

Product or

Service

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The entrepreneurial mindset

You can leverage every opportunity! What can you re-package and re-purpose? Stick with it. Most businesses take 3-5 years to turn a profit.

Mistake #1 But I’m an artist not a business person.

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There are at least 92 discrete skills required to run a successful small business!

Planning & Research Who is your market? Why do they need you and your art? Planning –

a business plan / a strategic plan researching your industry establishing timelines

Before you launch into a project or new business make sure you do your research. I bet you someone has done it before and you can learn from what they have done. Modelling their steps, behaviour and success is a great way to get further faster.

Research Don’t make the same mistakes. Learn from those that have succeeded. You don’t have to invent the wheel all over again.

Are there key organisations? (Larger businesses who do what you do and often have a mandate to help start-ups in the industry)

Mistake #2 Success just happens.

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Who else does what you do? Does what you do fill a gap in what is already being offered? Conversations = wealth Talk about your idea. Recruit fans, supporters, mentors, advisors. What will it cost? What resources will you need? What will it cost you? How much can you make? How big is the market?

Make sure someone needs what you have to offer! Meeting a need (and knowing what that need is) is the key to business success and growth.

Mistake #3 If you build it they will buy it..

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Your art isn’t for everyone. Identify your markets Primary markets – Who will buy it? Tertiary markets – Who will enjoy it? Niche is good. Who will love you the most? Who will get it the most?

Create the customer avatar. age, living arrangements, gender, interests, purchasing behaviours, marital status, location, tastes, habits.

Mistake #4 Everyone will enjoy my art.

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Gender age living arrangement interests

where do they eat what are they wearing

what movie did they just see what TV show do they watch What Social Media do they use

political leanings income education

Create your marketing avatar

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Five Steps to Success

Success requires thought and planning

5. form your teams Founders, Management, Directors & Advisors

4. Write your initial verson of the business plan

3. Develop your marketing plan

2. DeTine a viable market segment for your product or service

1. Develop your personal and company goals

Mistake #5 floundering for too long

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SMART Goals

Have some!

Specific - Be as specific as possible. Who / What / When /Where / How? Make sure your goals outline who is affected, what it aims to achieve, when it will happen, where it will happen and how it will happen.

Measurable – How will you know you are going in the right direction? Establish how you will measure the progress of your goals, track your progress and be sure to use units of measurement wherever possible.

Achievable – Do you have what it takes to accomplish it? First, consider the resources you have available (funds, manpower, time). Are your goals attainable given those resources? If you have a big project that you striving towards, try to break it down into smaller, more manageable goals.

Able to enlist others – What will draw others to help you? A goal needs to be bigger than you can achieve alone. Is this something others can support? Can others see where you are heading?

Realistic - Would you bet on yourself reaching this goal? A goal that is achievable must also be realistic. Are you actually willing and able to reach this goal? Make sure your goals are challenging enough to make a difference to your practice, but not so difficult that you think it is impossible to achieve.

Timed – When will you have this goal? Your goals must always have a time frame. This will ensure you stay on track to achieve them.

Mistake #6 not setting any goals for your business

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Results

Goals are good but knowing the result helps to anchor and inspire you. Jump forward in time. What will you have when you achieve your goal? Where will you be?

What will you be wearing?

Who will be in your life?

What will you be doing?

How will you be feeling?

Mistake #6 no picture of success

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Business Plan vs. Strategic Plan Do you need one?

Business Plan The most important thing about doing a business plan is actually not the plan itself but the thought processes that happens when doing it. 1. Have a written plan. Without a plan, it is merely a dream. It doesn't have to be a book, but you need a few pages outlining specific objectives, strategies, financing, a sales and marketing plan, and a determination of the cash you need to get things done. 2. Don't marry your plan. Every great military general in history has known that even the best-laid plan sometimes has to be thrown in the fire when the bullets start flying. 3. Keep your ego in check and listen to others. Advisors are crucial because you need people to bounce ideas off, inspect what you're doing, and push you to greater accomplishments, holding you accountable for what you are committing to do. This isn't about you; it's about the business. Don't take things personally and stay out of emotion. Do not let your ego take control.

Plan the work

then

work the plan

Mistake #7 I don’t need a business plan.

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Eventually your business plan document it will include

1. Summary -- This section Includes information such as your business name, ABN and date established, a brief description of the product or service, your business vision, goals and objectives.

2. SWOT -- Consider your internal and external business environments. What

are your strengths? Where do your weaknesses lie? What opportunities do you have? What might threaten your success?

3. Market research --In this section, include descriptions of your key markets.

This may take into account demographic information such as age, location, purchasing behaviours and interests.

a. Competitors --This should list your key indirect and direct competitor groups and should highlight why they are competing for the same resources as you.

4. Marketing Plan – This section lays out your pricing, promotion, image and

brand information. 5. Organisational Information – This section lists all your business details,

including owners, legal structure, advisors, and insurances.

6. Operational Plan – This section explains how you conduct your business. 7. Financial Plan – This section includes revenue targets and capitalisation

needs and plans. 8. Appendices – This is where you include any certificates, marketing

materials, and supporting information or endorsements.

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Strategic Plan

Where are you now? Where are you going? How will you get there?

Vision and Mission Statement With out a vision, how do you know where you are heading? Without a mission, how do you get there? Vision Statement It is 5 years in the future… What does your business look like? Where are you? What are you doing? Who’s on the team?

Mistake #8 I don’t need it. I don’t want to do it.

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Mission Statement It is 5 years in the future… How did you get here? What were the major turning points? What were the big successes? Who was instrumental to the success? Eventually your Strategic plan will include

Vision Mission Time Line Business Streams Goals / Action Items Resources

Activity Create Vision and Mission

statements

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Vision - What are you aiming for? The best way to arrive at your vision statement is to have a bit of fun and jump into the future and describe your amazing successful business. Here are some questions to help you.

• It is the year 2023 What does your business look like?

o What products and services are in demand? o Where are you? Think venues? Countries? Scale?

• Looking back at the last 5 years (2018 – now 2023), what were the highlights?

• How often are you delivering your products or services?

• What is the audience reaction?

• What do your biggest fans say about you? o Why do they love you? o Why do they want more of what you offer?

Mission – How did you get there? What do you do that makes you so successful?

• How did you get to this level of success?

• What is it you do to stay successful?

• Who is your best audience?

• What drives you to keep doing this?

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Planning Tools

Facilitation

Diagrams

Templates (on-line)

Mind Maps

Timing

Short term Long term

Mistake #9 I don’t know how to do it.

Mistake #10 only focusing on what’s in front of me

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Business Structures

Sole trader • Simple and cheap to set up. • May operate under their own name or a registered business name. • Controls and manages the business. • Is responsible for all debts and liabilities.

Partnership

• Formed when two or up to 20 people go into business together. • Created using a partnership agreement. • Partners operate under their own names or a registered business name.

Incorporated Associations

• Easy and inexpensive to set up. Incorporated in a specific State • Governed by Rules and Purposes through an elected Committee of

Management (Board) • Lodges annual statements via the Public Officer

Company limited by guarantee • Requires a solicitor and more expensive to set up. Able to have offices

nationally and internationally. • Governed by a Memorandum and Articles • Must be audited, lodges annual return and minutes of meetings with ASIC

Mistake #11 I was too busy to think about it.

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Company • Has tax benefits (lower tax rates) • Complex and most expensive to register • Can do business in its own right as an independent entity • Shareholders own the company. Directors run the company Directors and

employees can be shareholders • Is responsible for all debts and liabilities • Shareholders exposed to limited liability to pay debts • Registered with ASIC. Must submit reports to ASIC

Employment / independent contractor

It is important to determine if you are engaged as an independent contractor or an employee. It is also important to be clear when you engage others to determine if they are working for you as an employee or as an independent contractor.

Mistake #12 letting some one else determine it

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Worksafe Victoria Indicative Test For the financial year 20__ __ Yes NO 1. Did the contractor perform the same services for two or more businesses as a contractor?

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2. Did the contractor usually enter into work agreements where the contractor was free to work for more than one business at a time?

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3. Did the contractor usually employ staff or subcontractors?

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4. Did the contractor usually provide significant tools, equipment or materials?

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5. Was the contractor usually legally liable for rectifying faulty materials or workmanship?

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6. Did the contractor usually quote competitively for work?

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7. Did the contractor usually quote a business name? 1 0 8. Did the contractor regularly advertise a business or promote the contractors services to two or more businesses?

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9. Did the contractor usually submit invoices for the contracted work?

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Total points WorkSafe may usually be satisfied that a contractor carried on an independent business where the contractor:

• Scores 9 or more points for the given year; or • Scores at least 4 points in the given year and 9 or more points for the year preceding the given year. That is the answer provided by this test does not appear to be inconsistent with the substance of the working arrangements.

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Insurance Eventually you will need to understand the options and the limitations.

Public Liability Volunteer Equipment

The Money Stuff Funding is insecurity

The market is security

Sales Fair exchange

• What are you worth? • Do you know the award rate? • Do you know the real time to deliver your service?

Premium pricing.

• Is there some value add you can include? • Is there a limited supply? • Is there VIP access?

Revenue vs. Expense The rule of business is

increase revenue (raise the price or increase the number of customers)

reduce expenses (cut costs, automate, eliminate waste, Tind cheaper supply)

Mistake #13 All artists are starving.

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Grants Grants are good for the capitalization of a project, product or service. Grants are NOT GOOD as the source of sustainable revenue.

Finding the right grant Arts Health and Education Community Small business Do your research… Who got this before? What are your chances?

Fundraising Think of different ways to raise the money you’ll need.

Mistake #14 I’ll just get a grant.

Mistake #15 I’ll get someone else to write it for me.

Mistake #16 The fundraiser costs more than it

earned.

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Crowd-funding

Pick the right project – exciting, unique and inspiring Set a realistic target amount – 10% of your friends and family would give you $50 if they thought you really needed it and believed that you would succeed.

Create a marketing strategy that will drive pledges – video, email and facebook updates

Donations and Sponsorship

Donations are given with out receiving any benefit. Sponsorship is an exchange of benefits.

# of friends in your data base

10% $50 realistic target

Mistake #17 I’ll just put it out there and people will

give.

Mistake #18 There are so many wealthy businesses

out there.

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Arts Philanthropy

Funding from philanthropic sources is building a relationship over time. On average it takes two years of relationship work before you receive significant support. Meet with Creative Partnerships Australia and discuss your potential.

Mistake #19 There are so many wealthy people out

there.

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Record keeping

1. Get an accountant.

2. Be clear about expenses that are business related.

3. Become a good record keeper.

4. Software packages such as Excel, MYOB or Quickbooks

ABN (Australian Business Number) Register:

� Online Australian Business Register: <http://www.abr.gov.au>.

An ABN helps you: � to claim goods and services tax (GST) credits � to claim fuel tax credits � clients may hold amounts due to you as pay as you

go (PAYG) withholding if you don't have one � it confirms who you are.

GST (goods and services tax) $75,000 threshold but registering is good business discipline. GST is professional credibility BAS – (Business Activity Statement) Track GST collected against GST paid.

Mistake #20 It’s too complicated.

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Tax

When your arts practice is no longer a hobby If you are running a business you can claim deductions that you incur from earning your income and you can offset losses against other income you are earning.

Tax deductions Here is the list of deductions that are common for artists.

Agents fees You can claim a deduction for commission paid to agents or managers. This also includes other agency payments incurred on your behalf e.g. couriers, postage, web site etc. You cannot claim a deduction for up-front or joining fees.

Audition expenses You cannot claim a deduction for the cost of preparing for or attending auditions as they are incurred in getting work rather than doing work.

Bank fees You can claim a deduction for Financial Institutions Duty that relates to the direct depositing of salary, wages, allowances or payments into your bank account. You can claim a deduction for government duties tax or debits tax charged on any outgoing from your account where the outgoing can be claimed as a deduction – e.g. work related expenses.

Capital allowances (previously known as depreciation) You can claim a deduction – called a capital allowance – for the decline in value of equipment used for work – eg.CD player etc. If the equipment is also used for private purposes, you cannot claim a deduction for that part of a decline in value.

Mistake #21 I haven’t filed for 5 years.

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Clothing and costumes You can claim a deduction for the cost of conventional clothing bought or hired as a costume for a role. You can also claim a deduction for the cost of buying or hiring costumes. You can claim a deduction for the cost of special tights and pumps worn by dancers etc.

Coaching classes – e.g. acting, modelling, dancing You can claim a deduction if the classes are taken to maintain existing specific skills to obtain work. You can claim a deduction for the cost of lessons to acquire specific skills for use in a particular role or performance.

Computers and software A deduction is allowable for depreciation on the cost of computers and related software, if purchased together, which are used for income-producing purposes. If the software is bought separately from the computer a deduction is allowable in full in the year of purchase. The deduction must be apportioned between work-related and private use Conferences seminars and training courses A deduction is allowable for the costs of attending conferences, seminars and training courses to maintain or increase an employee performing artist's knowledge, ability or skills in the profession. There must be a relevant connection between the conference etc. and the current income-producing activities of the employee performing artist

Course costs You can claim a deduction for the cost of self-education expenses if there is a direct connection between your self-education and your work activities.

Equipment costing $300 or less If you purchase equipment costing $300 or less and you use it mainly for work, you can claim an immediate deduction for the work related portion of the cost

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Fares A deduction is allowable for the cost of using public transport for work-related travel

Fitness expenses You can claim a deduction for fitness expenses if you are required to maintain a very high level of fitness and physical activity is an essential element in your work. You cannot claim a deduction for the cost of maintaining general fitness or body shape.

Glasses and contact lenses You can claim a deduction if lenses are required to alter eye colour for a required role. You cannot claim a deduction for prescription glasses or contact lenses.

Grooming You can claim a deduction for a particular hairstyle if it is required for a role. You can claim a deduction for the cost of hairdressing specifically to maintain a required hair length or style as part of a costume for continuity purposes. You can claim a deduction for the cost of stage make-up, including the cost of cleansing materials for removing stage makeup. You cannot claim a deduction for the cost of general hairdressing, makeup or facials.

Home office or studio You can claim a deduction for the additional running expenses associated with a private study or studio that you use for income-production activities – e.g. additional lighting, heating and cooling costs incurred by a performing artist rehearsing in a studio at home. You can keep a diary to work out what part of your running expenses comes from doing work in your private study or studio. Running expenses do not include occupancy expenses – e.g. mortgage interest.

Insurance of equipment You can claim a deduction for the cost of insuring the equipment you use to the extent that you use it for work.

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Interest costs You can claim the cost of interest on money borrowed to purchase work related equipment. If the equipment was also used for private purposes, you cannot claim a deduction for that part of the interest.

Laundry and dry cleaning If you can claim a deduction for your work clothes, you can also claim a deduction for cleaning them. You can claim laundry expenses for washing, drying or ironing such work clothes, including Laundromat expenses

Motor vehicle expenses A deduction is allowable for costs associated with using a motor vehicle for work-related travel Parking fees A deduction is allowable for parking fees (but not fines), paid by an employee performing artist while travelling in the course of employment, e.g., between work venues

Photographs You can claim a deduction for the cost of maintaining a photographic portfolio for publicity purposes. You cannot claim a deduction for the initial cost of preparing the portfolio.

Professional library: A deduction is allowable for depreciation of a professional library that includes books, tapes, compact discs, records and videos, to the extent of its work-related use. The content of the reference material must be directly relevant to the income-earning activities of the performing artist Repairs You can claim a deduction for the cost of repairing tools and equipment used for work. If the equipment were also used for private purpose, you cannot claim a deduction for that part of the repair cost.

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Research expenses You can claim a deduction for the cost of researching a role or character that you have been employed to play – e.g. the cost of reference material containing information on a character, era or event.

Self education expenses A deduction is allowable for the cost of self education if there is a direct connection between the self education and the current income-earning activities. Self education costs include fees, travel, books and equipment

Social functions You cannot claim a deduction for the cost of attending award nights or other social events, even if there is an entertainment industry connection, as it is a private expense.

Sunscreen, sun hat and sunglasses If you are required to substantially work outdoors in the direct sun, you may claim these protective items.

Tapes, compact discs and cassettes You can claim a deduction for the work related part of the cost of audio ,videotapes and compact discs – e.g. CDs used for rehearsal.

Tax return preparation fee Fees charged by a registered tax agent for the preparation of income tax returns are deductible.

Technical or professional publications You can claim a deduction for the cost of journals, periodicals and magazines that have a content specifically related to your employment as performing artist/actor/model – e.g. the magazine Encore.

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Telephone calls, telephone rental and connection costs You can claim a deduction for the cost of work related telephone calls. You can claim a deduction for your telephone rental. If you also use your telephone for private purposes, you must apportion the cost of telephone rental between work related and private use.

Television receivers, video recorders and compact disc players A deduction is allowable for depreciation of these items to the extent of their use for income-producing purposes

Theatre and film tickets You can claim a deduction for the cost of theatre and film tickets if the show has content directly related to your current work. You cannot claim the cost of tickets for shows you attend for general interest, entertainment or other private purposes.

Tolls A deduction is allowable for bridge and road tolls paid by an employee performing artist when travelling in the course of employment, e.g., between work venues

Travel and car expenses You can claim a deduction for the cost of using your car for work related travel where:

•You travel for work related purposes from your normal workplace to an alternative workplace and back to your normal workplace or directly home – e..g.if you need to travel from your normal job to a performance venue or casting. You can claim a deduction for the cost or using your car to travel between home and work where:

•You have to carry bulky tools or equipment that you use for work – e. g. large wardrobe and there is no secure area for storing them at work. You cannot claim a deduction for car expenses just because the items are valuable.

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•Your home is a base of employment – you start your work at home and travel to a workplace to continue the work.

•You travel from your home to an alternative workplace for work activities and then to your normal workplace or directly home – e.g. if you have to travel from home to a country performance venue.

You cannot claim a deduction for the cost of using your car to travel between your home and work if the travel is a normal trip between your home and your workplace. It is a private expense even if you do small tasks on your way to or from work – e.g. picking up scripts.

If you have been paid a per diem that is less than the amount that you have actually spent, you can claim the difference.

Union and professional association fees You can claim a deduction for these fees. If the amount you paid was shown on your payment summary, you can use it to prove your claim.

Activity Mark the deductions

above that you can claim

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Branding and Marketing

Own your name on all social media

You have a brand. It’s you! Do you know what it is? Start asking your friends, fans and supporters. How do you describe me / my work to others? Have them complete these sentences: I like your work because you ___________________ When I watch you (your work) I feel ______________________ You (your work) remind(s) me of _________________________

Mistake #22 hiding under a clever identity

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Marketing

Best Practice is 30% of your time and 20% of your budget. It’s sharing not selling - leverage every opportunity Use Value Based Language Develop a Facebook page Develop a youtube channel Video is KING. Create lots of 30 second and 1 minute glimpses into your world. On line Show reels, Bio, Resume Everyone involved is marketing it. Everyone is selling it.

Sharing not selling

• Don’t sell o Talk about your passion, your struggles, your triumphs.

§ Pull marketing is more effective than push marketing • Brand you

Mistake #23 too little too late

Mistake #24 I’m not good at selling.

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Value and Benefits not Product or Service Get in your avatar’s shoes. What do they want and need? Learn what the benefits of your product or service are?

Publicity vs. Advertising

Press – editorial and reviews Press release – goal: to get them to contact you – a news-worthy angle Testimonials – are key because it’s their words not yours. Pay per click – works! Ad words – Facebook and Google advertising Social Media – is essential Listings – need a long lead time

The customer journey

Email Google On-‐line check in Facebook Facebook YouTube Ticketing take photo Twitter YouTube Facebook Telephone shoot video Pinterest TripAdvisor website Instagram Vine TripAdvisor

Awareness Research Booking Attend Share

Activity Tell a story of

transformation related to your work.

Mistake #25 wasting money

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Marketing Campaigns = Audience Development Independent artists typically put something in the market once every 12 months. Why would you build an audience from scratch every time?

You have 3 Opportunities to engage

What happens for people who experience you and your art?

Value = the sum of all the benefits associated with an arts experience, (real or imagined)

1. It occurs before, during and after the experience

2. It is experienced by an individual / family / community / society.

3. It can be experienced consciously or sub-consciously . . . so you can communicate it explicitly or implicitly.

IF PEOPLE EXPERIENCE VALUE IN YOUR PROGRAMMES, YOU CAN'T KEEP THEM AWAY!

Mistake #26 We didn’t get any email addresses.

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Plan to engaging with your audience / fans three times (not just once) Build Anticipation -‐ Before they attend Manage Expectations – After they book Sustain Relationships – After they attend

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Creating Work

Co-ops

All players are equal. Everyone puts in the same energy. Everyone controls the result.

Profit Share

Be realistic about the chance for profit Be transparent about the split or percentage. Manage expectations of your contributors.

Mistake #27 I’m sure everyone wants the same thing.

Mistake #28 We’ll sell out and make stacks of cash.

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Grants

A grant is a great way to capitalise the premiere presentation. What is your plan for the continued life of the work? Is your marketing budget big enough? Types of Grants

Creative Development Production Professional Development

Mistake #29 no plan for second life

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Getting Work

Creating opportunities vs. seeking opportunities Conversations = Wealth Sharing not selling Networking Meeting needs NOT pushing product.

Mistake #30 Waiting for the phone to ring.

Documents

Arts Business Tool Kit for WA Business Tool Kit... · 55!! ©Auspicious!Arts!Incubator! % There are at least 92 discrete skills required to run a successful small business! Planning