How to Start a Creative Business: Setting Up for Success
Building a successful creative business goes beyond artistic talent and slick branding. From finding a suitable co-founder (and a great accountant) to building your reputation and voice, Koto's creative director and co-founder, James Greenfield, shares some solid advice on how to get off to a winning start. No-one said it was easy...
While I carried thoughts of starting my own business round with me for years, I found the first step of making it really tough. I would say I was afraid of failure, I felt I had one shot so every decision, however simple, felt pretty damn big. In hindsight this wasn't the case – and it isn't the case for you. Like any seemingly monumental task you face, the best thing to do is break it down into a series of decisions and goals you can achieve bit by bit. The following isn't a cast iron approach. It isn’t a guide to finding work, nor is it exhaustive, but it's my experience on key things to strongly consider as you start. I would suggest looking at most of this list – in whatever order that works – during the first few months of your endeavour, even if you aren't working on it full time.
Just remember, if starting a business was easy everyone would do it, so give yourself a break.
1. Make it real; create a name for your business
A name can make things real, it moves you on from talking about your plans in the abstract – something you will do “one day” – and brings it into the here and now.
If your business is successful and takes off, you will probably say this name every day for your foreseeable future, so it deserves some attention and thought. I have worked with and for businesses named in a hurry in the past and it has always blown my mind a bit, especially when I have had to explain names over and over. Names can be hard though (just ask any prospective parent) and unfortunately they are getting harder. Over 800,000 new businesses were started in the US in 2020, but the Oxford English Dictionary only contains full entries for 171,476 currently in use words.
The easy solution here is to use the name you already have: your surname. Don't do this. It will limit the business to just you (and any partners you have), people will only want to work with you (the person whose name is above the door) and your future team might never feel ownership within the business with your name hanging above them. It's the default for boring hierarchical law firms for a reason. Be creative and move beyond this old-fashioned idea.
Before you start naming, remember a name can only do so much; it can say a little about what you do, it can have emotive qualities, it can be abstract with a clever story, but it can't do everything and it’s not the whole brand you are building.
The next thing to do is think about how and where this name needs to be present. Where will it be used? What channels do you need as a business? How will you market yourself? Make sure you also look at available social media handles and URLs and make sure you're not using a name that's trademarked. Lastly, think about its cultural and linguistic acceptability, make sure people feel comfortable pronouncing it.
With all this in mind, the best place to start is by writing some ideas down. The late art director Paul Arden said "Give away everything you know and more will come back to you".
Write every idea down, however silly, and then live with them. You'll know which ones sound right and which ones don't by talking them through with someone you trust.
Have the list always on you on your phone in case inspiration hits. One business founder I know sent his friends a list of 20 names he liked, and at a random point a week later he rang them up and said simply "Which name do you remember?" This caught them off guard with a simple and effective approach that had most of them choosing a name he’d added as a silly idea.
If you feel really stuck then there are online resources like Onym, a handy guide to naming, packed full of information and inspiration. My advice, though, is to read a lot of varied content. You'll start to see words coming to life and it will help you narrow. Be open to any idea that pops up, write it down and share it when you can. Over time, things will stick and your name will reveal itself. Inspiration will find you hard at work. For Koto, I had been working through a lot of ideas for a long while and then it hit me reading an article someone else had sent me. As soon as I saw it, I knew it was it.
2. Halve your problems; find a co-founder and build a team
However great you are as a talent, a team will always be better. Having someone to share the joy and the pain of starting a business will make it all much easier. That said, it's not always that easy to find a partner, especially if you're looking to make such a major life step as starting your own business with them, but it really can be a key step towards success. Think of it as doubling or tripling your brain power and output, reducing your risk in the process, and building a bigger network.
The challenge is finding people you effectively work with as a team and there is no one way to find these people. For me it was two people I really trusted that I had worked with previously. I had to bring them together to trust each other as they didn't know each other before our business, but we have good complementary skills and it made us so much more powerful from the off.
The best place to start is reaching out to your network. Think of all the people you know who might know someone that fits your needs.
Go back through your working and education life and consider people you’ve worked well with, what did they all have in common?
If you don’t want to find a co-founder, that can also work, but maybe you can find a level of support from your team as well. Include them in decisions and use them as a sounding board for your troubles to support you.
3. There is more than creativity to this business; set yourself up the right way
For many creatives, money is a topic they never prioritise; we work not for the money, but for the love. As admirable as that sentiment is, we can often ignore how important an aspect of our businesses it is. All businesses have overheads and paying attention to them is the smart thing to do if you want your business to thrive. Yes, you can survive on instant noodles, but that doesn't mean you should. That said you might need to start by paying yourself less than you previously had in the beginning.
The first step is to find a decent accountant, it is the best money and time you can spend. To do this, fire up your network and ask a lot of people what they think of theirs. Someone will have a great one they like. Take the time to tell them how you want the business to work, what your goals are and it's their job to tell you what you need to do to be successful. Discuss the working capital you plan to use to start your business. Is it personal savings, a loan or an investment? Where possible, try to self finance as much as you can. We saved a little money to start, buying some laptops and screens and renting a small studio space. I know people who have early investors they are stuck with, who own reasonable percentages of their businesses and they lent them what a lot of banks would have done without the strings. Check in with your accountant regularly and make sure they are working for you, this isn't an ambient role to talk to only when taxes are due.
Once you’re up and running, spend time on having a clear idea in a spreadsheet of what your business costs. Rent, software, hardware, the coffee in the cupboard, everything you spend. Use this to calculate the fees you charge, work out what it costs to run your business every month and then make sure you have the team to do that much work and not just to keep the lights on. You should look to have a 50% profit margin above your operating costs, this will cover projects overrunning, unforeseen issues and non-paying people. You should also update this again and again as things develop in the business.
Be ready for rough days: every young business will have cash flow issues at some point or another, and however much you read that and know it to be true, it will still be surprising when it happens.
The first time it happened to us it was something as small as a big client paying us with a cheque which took ages to come in the post and then clear. We had the money, but we didn't have the money, so we had to borrow some and we were so lucky that someone would lend to us. You need to be prepared so you have the apparatus in place to survive this bump.
You'll need to chase people to get paid, it's painful but it's a reality you have to face. Be sure of your payment terms, try and ask for money up front for work if it feels appropriate, and put time aside to chase people. Have your terms of business written up and have a contract with everyone you work with. Sadly, you won’t always be able to spot the bad eggs before it’s too late. However trustworthy the people that work with you and for you are, you need to be covered. Set out clearly in work proposals the work you are going to do for clients and get them to sign something to say they have read and understood it. Lastly, get insurance for your stuff and the work you do, especially if it involves possible liability.
A creative business that is well run will be less stressful for you and will give confidence to your team and therefore make for a happier culture and, in turn, better work.
4. Build your brand; find your voice
I am a great believer in the "Build it and they will come" school of belief; the idea that if you do great work you will be discovered and more great work will come as a result. But that doesn’t mean you shouldn’t drive your own PR. Everyone can use the channels out there to help further your exposure. Creatives can tend to be elusive, for it to just be about the work, but in this decade we have some amazing promotional tools and you should use them all, as long as they feel right. Most of them will expand your network and get your work in front of new sets of eyes, and even if those people aren’t looking to hire a company that has that skillset right now, they now know you exist. Don’t just make an Instagram for other creatives, however fun that is.
When I look at where our clients come from they often are connected through relationships around key clients or recommendations from investors we know, but they will look at our work and the thoughts we share to validate that we are the right people to reach out to. We spend time, when we can, on making sure our story is out there in the world through talks, press, podcasts and events.
Say yes to anything that builds your profile at first, because however small the audience is you want to start to be known.
Kevin Kelly’s 1,000 True Fans is a good study on how having an engaged core audience is more powerful than a larger, less interested group. Though his model is more aimed at creative individuals, you can port the thinking into your part of the creative industry by asking how you can make these mega fans who will drive your business. One CEO we worked with years ago has recommended us again and again and that kind of recommendation is gold dust, but our story being out there is also part of the reason people that pick up the phone based upon his recommendation.
Suddenly it’s day one
I can remember the start of my business very clearly, I had left a good job I enjoyed and my salary dropped to a quarter of what it was overnight. But I was the co-founder of something new and exciting and I had some cheap business cards with our new logo on which I enjoyed looking at.
If your business has a name which you’ve registered with your country’s tax authorities, and you maybe have a co-founder and you’ve started to talk about the team you’re going to build, then you are a business owner. You’ve set up the less exciting stuff and you know what it takes to keep the lights on. You’re getting customers and you’re telling the world about the work you’re doing. You’ve not made it, but you’ve made something so once all that is in place, take a minute to be proud.
Finally, if you have any doubts about any of this then this quote by Parkrun founder Paul Sinton-Hewitt rings true to me: "You never have to be the best to get the job, you have to be the most excited".
Bottle that day one excitement and carry it with you.
James is the Creative Director and Co-Founder of Koto. Leading the strategic and design efforts across three studios, James has led the team working with Airbnb, Coca-Cola and PayPal. James has over 20 years of experience working at some of London’s leading studios, for the world’s biggest brands. He delivers talks globally and writes regularly for Creative Review about all things branding.
Also in this series
How to Keep Business Creative
What does it take to keep creativity flowing through the veins of a business? In his final instalment of this series, Koto's creative director and co-founder James Greenfield delves into how to keep the energy and avoid "creative rot".