Business Plan Basics Every Art Business Owner Should Know

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Courtesy of Neil McKenzie from Creatives and Business LLC

Why do I need a business plan?

Just like an architect needs a plan to turn an idea into reality you need a plan for success in your art business. 

The main and best reason to develop a business plan is so that you have a blueprint to run and grow your business. Imagine trying to build a house without plan. If you are starting a new art business, a plan will help you organize your thoughts and help you tackle the challenges faced by startup businesses. If your art business is established a plan will help you in building a great team and allow you to focus on your most pressing problems, opportunities and initiatives.

A business plan will also be required if you are seeking some type of financing either from a bank or investors. Your plan will show what you intend to accomplish, how you will do it and how much money will be required. More often than not a business will prepare a plan with the sole purpose of getting financing. Your plan is an important tool in the success of your business and should be much more than a document just to raise money.

One of the most often overlooked benefits of a business plan is that it forces you to think about your business in new ways! The skills you develop in creating a business plan are universal and transferable to businesses of any kind or size. Perhaps one of the most important benefits of preparing a business plan is that you will start to think strategically, look at the big picture and develop a critical way of thinking about your business.

What is a business plan?

A business plan is a road map formal (formal in the sense that you should write it down) document where you state the goals, objectives and expected results for your art business. You plan can be very long and detailed or it can be just a few pages – it is really up to you to decide what your art business requires. Developing your business plan will make you think about all of the things that affect your art business and what you intend to do to make your art business a success.

Your business plan can be created an internal audience such as yourself and your team and for external audiences such as your bank or investors. You should seriously consider including both audiences in developing the plan for your art business.

The basic questions of business planning
The overall idea behind business planning is really very simple if you consider the following four questions:

Where are we now?

This part of your plan is called a Situation Analysis in that you are trying to get a feel of where you are today and to identify the internal and external factors that affect your business. In answering this question you will be looking at your own strengths and weaknesses, opportunities and threats in the marketplace and analyzing your competition.

Where are we going?

The answer to this question will be wrapped up in your overall mission or vision for your art business as well as the goals and objectives you have developed. You should develop goals for the various business functions such as marketing, finance, creative direction, production and operations, management and organization and your studio and facilities.

How are we going to get there?

Once your overall goals and objectives have been defined it’s time to develop strategies and the steps required to achieve them. Strategies are generally broad and need to be further broken down into the day to day activities or steps that are needed to accomplish a particular strategy. These steps are commonly called tactics, action plans or action steps. No matter what you call them these are the things that you will do to make your overall mission and goals a reality.

How will we know when we have arrived?

An important part of the planning process is to track and measure your progress and take corrective action as needed as you move towards accomplishing your goals. This is an ongoing activity that ranges from analyzing your monthly financial statements to reviewing detailed project plans. How do you measure success?

Reasons to create a business plan:

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