You have the ideas, you have the motivation–but the money isn’t all there yet. Fortunately, there are plenty of ways to fund your creative business if you know where to look.
But before you rush out on your search for money, you’ll need to spend some time figuring out how much you will actually need to set up shop.
What essentials do you already have, what do you still need, and what can you do without for now? Crunch the numbers and find out how much time it will take you to become profitable. Also an important question: how much money do you want to make? What is your goal? Because that will make a big difference in how much work you will be doing and how many clients you need to secure.
When you have your business goals clearly mapped out, you will have a much easier time moving forward and making your business successful.
Crowdfunding can be used to raise an impressive amount of money, in exchange for rewards, and to raise awareness of your business. But crowdfunding platforms are specifically for the funding of your products and not for help with the basic operational costs of your business.
As a photographer, for example, you can ask for funding for the creation of a coffee table photography book that showcases your best landscape shots. Crowdfunding will work for you if you have a very specific project in mind, to be delivered within a specific time frame, that you haven’t been able to complete due to lack of funds. And of course, the way you present and describe your project is key to meeting your fundraising goal.
Since there are many platforms out there, you’ve got to know which ones are right for you (luckily we have a class for that). The biggest platforms used by artists, Kickstarter (about 13 millions monthly views) and Indiegogo (about 9 million monthly views), both offer similar services and charge fees of 5% and 4% respectively on the money you’ve raised if you reach your goal.
Paypal or credit card processing fees are between 3% to 5%. If you are hoping to reach an international audience however, Indiegogo offers more flexibility in payment options compared to Kickstarter. And, most importantly, with Indiegogo you can still use the partial funds raised, even if you don’t fulfill your fundraising goal by the expiration date.
Then there’s the more recent platform Patreon, which takes a 5% fee (plus payment processing fees) for its unique subscription service that allows fans of your work to donate per month or per creation. This is great for sharing with the social network you already have in place.
Across the country, various arts councils are catching onto the growth of creative entrepreneurs as a powerful cultural and economic force in their community and offering funding opportunities specific to creative entrepreneurs.
Here are some examples of creative entrepreneur grants in the real world:
The City of Chicago’s Individual Artist Program offers up to $2,500 under its Professional Development track, with the goal of supporting “professional artists and creative entrepreneurs to develop or deepen artistic, administrative or organizational skills to become more competitive in the creative marketplace,” according to the website.
In June, Colorado Creative Industries, the state’s arts agency, awarded 12 grants totaling over $22,500 to support self-employed creative entrepreneurs.
The Creative Economic Development Fund in Los Angeles will offer $100,000 in grants to those, including self-employed artists, whose work will make a positive economic development impact in the city.
You can check here for arts councils at the state and regional level, here for national level art councils and private arts foundations in the US, and here for arts councils all over the world.
To apply for any of these grants, you’ll need to figure out how to correctly and convincingly fill out the grant application forms. The Ohio Arts Council offers more advice for successful grant-writing here.
And don’t forget to find out if your grant is considered taxable, although the grant giver may provide you with that information and can direct you to the appropriate tax forms.
Everyone loves free money, but if the grants don’t come through, a reasonable amount of borrowed money is also a feasible option to help get you going in your creative venture.
Unless you’re a startup offering equity, you probably won’t need to seek out venture capital money to fund your business. You could hit up a family member or friend for a small loan, but that could potentially land you in an awkward situation.
For a small-scale creative business, a micro loan may be a more fitting solution if you are seeking a limited amount of funding. Micro loans can be anywhere from $500 to $50,000—and you don’t need perfect credit history. However, keep in mind that the interest rate may be a bit higher on micro loans compared to larger loans, and there may be extra fees involved. The Small Business Association (SBA) offers a micro loan program, as do private lenders like Accion and CAN Capital.
Especially when you are starting out, a loan, even a micro loan, isn’t something to take lightly. Be sure to carefully read the details of the loan program and ask plenty of questions before you start an application with any lenders. The Denver Office of Economic Development offers a helpful 10-step approach to setting up and financing your small business.
Grants and loans aren’t the only way to fund your creative business. Initially, you may have to rely on your own financial resources. You’re a creative person, so it’s time to get creative about how you can uncover hidden cash in the different facets of your life…
It’s not a new idea, but minimizing your lifestyle can truly open up more mind space for your art to flourish and free up some major cash that you can invest back into your business.
If you aren’t ready for dramatic changes like cutting up your credit cards, getting roommates, moving into a smaller home (a tiny home perhaps?) or ditching your car for a bike, you still have plenty of money-saving options.
You can de-clutter your home and sell off items you no longer need, disconnect your cable service and use Netflix (or watch nothing and spend that time on your growing your business), borrow library books instead of buying them, enjoy meals (straight from your own garden) and drinks with friends at home instead of going out and use clever apps to help you save money in every aspect of your life.
Although it may not be your ideal scenario, working a side job on top of your full-time freelance gig or business could give you that much-needed financial security in the early stages of your creative business. Some creative entrepreneurs like to pick up part-time jobs or gigs within their industry as a way of getting in extra practice, learning new skills and even connecting with potential clients. Need a pro tip? Develop an extraordinary web presence with tools like Brandcast – a free end-to-end web design platform for professional designers.)
Don’t have the cash to buy new chairs and desks in your photography studio? There might be someone in your community (a furniture shop owner, a furniture maker, a business owner getting rid of used office furniture) who has just what you need and is interested in your photography services to help them promote their own business. Go forth and make a trade! Don’t be afraid to ask around in your business community. After all, which business owner isn’t interested in saving money?
If you have a professional blog or website with a decent amount of followers, put in the time to write a few posts about the process of setting up your business, and then add a donation button to your site.
To help attract more attention to your site, you can try a few marketing tricks, like running a contest and offering the winner your services for free or a free item from your online shop. Having an active social media presence across various channels (Instagram, Twitter, Facebook page, etc) will, of course, help you bring in more donations.
Being an artist might feel like the complete opposite of being a “business owner,” but if you want to earn a living doing what you love, you’ve got to figure out how to set yourself up in a way that will connect with those people who are just waiting to throw money at you and your art (obviously).
It’s true that there is a lot of competition for funding out there, and the process of applying for grants and loans isn’t always simple. But the most important thing to remember is that there are always more ways to scrounge up some cash than you think!
Those same creative powers and that entrepreneurial drive that got you this far in your creative business will also help you in your hunt for funding.