Starting from Scratch

When I started my business selling the work I make from polymer clay, I had a bit of a head start. It was not my first business. I knew some of the basic steps that one needs to take to get a business going. But when I started my first business, I was clueless about much of it. But a friend of a friend, who used to be in the business I was planning to enter, spent some time on the phone with me one afternoon, and explained the many basic steps, saving me days and months of learning.


So how do you begin? Once you have a product, and an idea for how or where you are going to sell your work you need to take care of some details to make your business official.

1. Decide your business structure. Are you going to operate as a sole proprietorship? A corporation? or a Limited Liability Corporation (LLC)? Each structure has it's advantages and disadvantages, including cost, ease, and protection from liability. Figure out what works best for your situation. Each state has different requirements for each form of business.

2. Once you decide, on the structure you can, Register with your state to get a tax identification number, or a resale certificate. This obligates you to collect and pay sales taxes, if appropriate, in your state. But it also helps you be able to purchase goods without paying sales tax, and in some cases, have access to wholesale pricing from suppliers. With the internet, this step has gotten easier. Most states have an online application form, and within thirty minutes or so, you are done. To find your state's site, Google your state, and "Department of Revenue".

3. Get a business permit or license with your town. This usually involves a small fee as well as filling out some paperwork. But it legally establishes your business. It will also let you know if you have any potential local requirements to meet, or zoning regulations to conform to.


4. Opening a business checking account. This is a step many people put off because they don't want to go to the expense or aggrevation. But it is necessary if you want to accept credit cards (and you do!), and it helps you keep a clear eye on how your business is doing. Call around. Invest some time here. I found a wide range of costs. I ended up at a local credit union, and have a no fee checking account. I have been very happy with the service I receive from them.


5. You do not need to do this right away, but if you are in business today, you need to be able to accept credit cards. Our world runs on plastic. Even McDonald's accepts credit cards. There are many options to explore. I know of several different service providers that various artists use. I use Teamac. I know others who use Propay on Paypal, or Costco, or the bank where they have their checking account. This will take time to explore and understand. Each provider will have a different set of fees. It is not an apples to oranges comparison in many cases. You will likely be expected to pay a monthly fee, a percentage of sale charge, a per charge fee, and perhaps a yearly membership fee. Look into other possible charges. If a customer disputes a charge, will you be charged just for them to investigate the dispute, even if there is no problem in the end? Talk with others who use the service if possible and find out their experiences. See if you are committed to a long term time period, or is it month to month? It is an added expense, but artists will tell you that they see a significant jump in sales when they make the move to accepting credit cards.

6. Figure out how you are going to do your bookkeeping. Starting out from day one with a bookkeeping system in place will save you lots and lots of time in the long run. You will be spending money long before you make money, and you want to keep track of those expenses. There are plenty of accounting and bookkeeping software programs that are available. There is the old fashion ledger book. Determine a system you are going to use, and put it in place right from the beginning. I have been using Quicken to track my business sales, expenses, inventory, etc. I have tried other programs briefly, but I like Quicken, and have used it for so long that it is the easiest for me to use. And in the end it is more important that you use the system, than how many bells and whistles it may have.


These are some of the basic steps to formally get a business off the ground. They will make running the rest of your business smoother. I know I will get this question, even though I did not address it...."How do I come up with a name for my business?" The best name you have for a business as an artist is your own name. It is the brand you want to establish. It is how people will come to know you. Couldn't be any easier, could it?

I hope this simple overview might help a few of you who have been hesitating making the leap. One more piece of information may mean one less obstacle to moving forward. And with the internet, it is easier and faster than ever before.

Is Your Business Insured??

I have spent a few hours today trying to find out about product liability insurance. A catalog company that wants to carry my cranes, requires this coverage. Product liability insurance covers you again injury or damage caused by your product. Seems a bit silly, given the product, but then again, remember when someone sued McDonalds because they got burned by coffee spilled while they were driving, and holding a cup of coffee between their legs? Reasonableness does not always apply when it comes to these things. I am working on language for a warning label. Isn't this why we become artists, so that we can avoid these kinds of things?? We might want to avoid them, but the reality is, we can't without assuming some risks.

Insurance is one of those things many artists try to ignore. Cross their fingers, throw salt over their shoulders, watch out for black cats. Anything other than trying to figure out the insurance puzzle. Whenever there is a collection of arcane terms, it is easy to feel your brain shut down, and suddenly find other work that urgently needs to be done.

But, there are way too many stories out there of artists who have lost everything, absolutely everything, to some natural disaster. Just a few weeks back, the fires in California destroyed homes,........and studios and businesses of artists like you and me. Some had no insurance. Look online, and you can find scary stories of tents made airborne, inflicting damage on work, and/or people at a show. You don't want to wait until after something happens to recognize the need to be insured. Without it, you are relying on the goodness of strangers.

If your studio is in your home, you can begin with your homeowner's or renters policy. Talk to your agent about adding coverage for your business. You need to cover your inventory, tools, and supplies. And you need to have liability coverage. If someone visits your studio and trips and gets hurt you could face a liability. If someone gets hurt in your booth at a show, you are potentially liable. Make sure your coverage will extend to when you are doing shows, and perhaps to when you are on the road, traveling to a show. If you can't afford to replace what you lose, you should insure it.

If you are not sure where to begin, and you want to learn more about insurance for your business, check out the website of CERF, The Craft Emergency Relief Fund. And if you are feeling a bit generous, make a donation. Right now they are coming to the aid of artists in California hit by the wildfires, and could use any help you could offer.

Crossing your fingers, chanting rhymes, and other superstitious actions might make use forget the risks. But getting insurance means we can forget the worry and get back to work. Promise yourself to do this right away, if you haven't already. If you are lucky, you will never have to use it. But, if something happens, you will be glad you had the coverage you needed.