creative sector | Numbers Knowhow

10 Tips For Creating A Sustainable Creative Business

Mahmood Reza — Tue, 02 Jan 2024 08:25:01 +0000

It can be challenging to build a sustainable creative business. Every year, I see more and more businesses in the Arts struggling to remain profitable. It’s a fine line between doing what you love creatively and balancing the books. It can be done – but you’ll need to invest some time and energy into the support functions in your business. Here are 10 tips for maintaining your creativity AND your profitability. 1: Establish a clear vision for your creative business Artistic and creative business owners go into business to do the thing they love doing whether that’s photography, sculpture, expressive arts such as dance, music and so on. It’s a passion business which can often mean that the support tasks can get overlooked. Without a clear vision and plan, you can get caught up in the creative side of your business. You forget to give enough time to manage your numbers. Develop a long-term vision that incorporates both creative aspirations and financial sustainability. It’s wonderful to create stunning pieces of art or music. But if you can’t pay your bills on time, your business won’t survive no matter how talented you are. Regularly revisit and refine your business vision. Adapt […]

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5 Benefits Of Digital Accounting For Arts & Creative Businesses

Mahmood Reza — Fri, 24 Nov 2023 11:24:45 +0000

Let’s delve into the benefits of digital accounting for arts and creative businesses. These benefits extend far beyond simply using a piece of software rather than doing your accounts on the back of an envelope or a spreadsheet. Arts and creative business owners who come to us for help with their numbers often aren’t very familiar with the range of tech now available to simplify bookkeeping and accounting processes. They just don’t realise how much time and stress they can save by moving to digital accounting. The benefits of digital accounting include: Save time You might think that recording your financial transactions on a spreadsheet keeps things simple. However, in the long run, the benefits of digital accounting outweigh the downsides. Yes, you’ll have to spend time learning how to use new software, but that’s a one-time activity. Overall, bringing your bookkeeping online will free up more capacity to provide your core services and products to your clients. This is especially true for creative business owners with many receipts and significant volumes of payment transactions each month. Reduce errors We all make mistakes with admin from time to time – we’re only human. Problems with your bookkeeping can lead […]

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Navigating Cash Flow Challenges In The Arts: A Step-by-Step Guide

Mahmood Reza — Tue, 21 Nov 2023 09:13:34 +0000

Arts and creative organisations may be at higher risk of running into cash flow challenges than other businesses. It’s common in the creative industry to be at the mercy of unpredictable and volatile income streams. Many creative businesses work on a project basis with little opportunity for retainer contracts which bring predictable and sustainable income each month. That’s why it’s even more important to stay on top of your business finances. Try to identify cash flow challenges as early as possible. Here’s a step-by-step guide to managing financial and cash flow challenges: Assess your financial position Identify common cash flow issues Implement cash flow strategies Create a budget Create a ‘rainy-day’ fund Use financial tools Monitor and adjust Get expert support Assessing your financial position Before you can take steps to mitigate any cash flow challenges, you need to understand your current financial position. This means looking carefully at your profit & loss statement, your balance sheet and, crucially, your cash flow forecast. Identify your various income sources and revenue streams. You should know how much of your income comes from which clients and how those clients were sourced. Next, look at your fixed and variable expenses so you […]

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Cloud Accounting For Creative Businesses

Mahmood Reza — Fri, 17 Nov 2023 11:48:47 +0000

You’ve probably heard the term ‘cloud accounting’. But you might not be sure exactly what it is or how it could benefit your creative business. In this article, we’ll explore what you can do with cloud accounting. We’ll also consider why you might switch if you are currently using a paper or desktop-based accounting system. What is cloud accounting? Cloud accounting is simply accounting that’s managed online. The ‘cloud’ is a network of remote computer servers hosted on the internet that store and process data. As it’s all online, your data is backed up and always available. You can access it wherever you are and whenever you want to. Why is cloud accounting a good fit for creative businesses? Creative business owners are often out and about, away from your desk or office. You may be travelling for business, on a film or TV set, in the theatre, performing in concerts or gigs or supporting others at creative events such as fashion shows or exhibitions. When you spend a lot of time on the road, you want easy access to your business data. What sort of cloud accounting packages are available? When we think of accounting, we often think […]

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Choosing Your Business Structure To Save Tax

Mahmood Reza — Fri, 19 May 2023 09:49:21 +0000

Sole trader or limited company and Choosing your business structure to save tax ? Previously I talked about the differences between a sole trader and limited company. What you need to consider when deciding what business structure, you should adopt. You cannot make that decision without looking at tax. Moreover, how it works and how much you pay, and which is better. When it comes to crunching the numbers, I have just the thing for you! FREE online business and tax calculators. More of that later. Sole traders and taxation HMRC refers to sole traders as self-employed so that’s the term I will use. In normal speak self-employed refers to working for yourself. As a sole trader, or you pay pay Income Tax and National Insurance on your tax profits. Furthermore, the tax people (HMRC) see your profits as your income, just as they would see wages and salaries as income. The good news is that some of your tax profits are free from income tax and National insurance. Most people in the UK get a Personal Allowance of tax-free income. That tax free pot applies to income from all sources, for example self-employment, rental profits, wages and salaries. What is […]

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Why A Business Must Make A Profit

Mahmood Reza — Tue, 21 Feb 2023 10:33:27 +0000

Making profit must be at the top of your business goals – ignore that at your peril. Firstly, I am going to tell you why making profit is vital for you and your business. Secondly, I will tell you how you go about making profit. But before we go into that, let’s think about another very important question: Why are you in business? We all have our reasons for being our own boss. It could be financial independence, being more in control, helping others, freedom and flexibility. Maybe it’s life circumstances, a change of scenery, grabbing opportunities – and making money! For myself, I went into business over 28 years ago, started from my own back bedroom, because I wanted more control. I wanted to help people, I wanted to make an impact on their lives, I wanted to have that independence, make my own decisions, and make money. Why a business must make a profit – overview Making a profit is vital for your business. It is the fuel that keeps it going and helps you to grow. Without a profit, your business will eventually fail. And if you’re not making enough of one, then it’s time to […]

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