1. Find the right partner
As in life, business should be viewed as in ‘opposites attract’ scenario. What you absolutely don’t need is a carbon copy of yourself, so take time to identify the areas in which you come up short and then find these abilities in a potential partner.
2. Agree a vision
You and any prospective partner need to have an agreed vision of the business. This means writing out and agreeing how the business will operate, what type of work you will take on, your plans for growth and a profit share scheme that factors in a sale fee should you ever receive a buy-out offer.
3. Get a pre-nup
Pre-nuptial agreements get a bad rep, but if the worst comes to the worst and you have to dissolve your business partnership, they work to protect all parties. So before you even begin to set up shop, ensure you have a legally binding partnership agreement that includes a dissolving clause covering who gets the rights to the company name, client list and more.
4. Draw up a detailed business plan
A well-executed business plan is vital to the success of any studio. You’ll need to explain your idea, location, identity, mission, services and market, and show where your position will be in it – include a SWOT analysis for this. You’ll also need to outline how much you’ll need in funding, and provide a realistic profit/loss forecast for at least one year, plus a cash-flow forecast showing how much money will come in and out.
For a full break-down of how to write a winning business plan, don't miss The Design Studio Handbook - on sale now.
5. Get funding
If you’re in the position to put some financial weight behind your new venture, you'll reduce your start-up debt and investors may be more inclined to buy into a business with financially committed founders. If not, sit down with your bank manager - make sure you know your financial situation inside-out before putting in a loan request. Look into whether you’re eligible for a grant (organisation like NESTA or The Princes Trust in the UK; or the SBA in
the US. Crowfunding site like Kickstarter and Crowdcube are also a great way to raise funds.
6. Set up a business bank account
You’ll need a business bank account, so ask around for recommendations. A good bank manager will help you through the initial steps of launching your studio, so meet a few before deciding which bank to go with. You’ll need an accountant and a solicitor, too, to advise on the best way to set up in terms of tax and legal liability.
7. Register your studio
In the UK you’re legally obliged to register your business with Companies House and HM Revenue and Customs (see The Deisgn Studio Handbook for full details of how to do this).
In the US, consult the SBA, state and local tax offices and check whether you need to obtain any federal licences or business permits.
8. Set up relevant payroll and tax status
Your accountant can register you with the necessary outlets for a small fee. This is by far and away the best way of going about payroll and tax administration, because liability for filing (that is, getting your accounts wrong and being caught out) lies with your accountant and not you.
9. Get insurance
Employers’ liability insurance is a statutory requirement in the UK, and most US states insist on some form of business insurance – so seek legal advice. Without it you are trading illegally. If your employees are injured at work or become ill as a result of their work while in your employment, they may try to claim compensation.
These tips are taken from The Design Studio Handbook - your definitive guide to setting up and running a thriving creative business, and a must-have for anyone thinking about launching their own studio. It's on sale now and you'll find full details here.
Image by Serial Cut, as seen in Computer Arts Projects issue 134.
