If you’re ignoring the legal responsibilities of owning your creative business, it’s like you’re swimming with sharks outside of that cute little cage that we all see on National Geographic. You can ignore the dangerous consequences for a while, but eventually you might realize you’re missing a leg. (Too dark?)
Protecting yourself, your business, and your assets is amustin this day and age. But legal talk is boring, and terms and conditions are way too long to read, so we ignore it all. Not a good move. You like your legs, don’t you? Cue the Jawstheme music.
Whether you’re just starting out or need to get your creative business in line pronto, there are three places you need to focus your legal energy right now.
We love seeing all the collaboration going on in the creative industry today. But we have to wonder if everyone is protecting themselves juuust in case things go south. A collaboration or joint venture contract is essential for creatives who decide to work together. It designates the responsibilities of each partner, helps to maintain confidentiality and outlines the liability each party has.
Of course, if you’re just starting out in business, you’ll also need a client contract that protects you if your client disappears without paying or is unhappy with your services. It can be difficult to know if you’ve done this correctly yourself, even if you’re the best Google searcher in the world. Our Client Contract Checklist will ensure your contract has everything you need.
Forming a limited liability company (LLC) protects you, the business owner, from bad stuff that happens during the workday. You know, like the time when you really shouldn’t have let your employee borrow your car.
It also protects you from debts, aka all the credit card bills you've been racking up with the latest online courses you just had to have. (No judgment, we’ve been there too.) So if your company is sued, you’re not dipping into personal bank accounts and assets to pay off the debt.
The bottom line? Choose the right business structure, and your entire world won’t implode if the worst-case scenario happens with your biz. You could lose your business, but still have a place to live and a car to drive.
Whether you’re raking in the dough or barely squeaking by in your business, you need to have a handle on your bookkeeping. We know, we know. Unless you’re an accountant, staying on top of your finances is every entrepreneur’s least favorite task.
At the very least, keep your business checking and savings account separate from your personal bank accounts. Save receipts from all of your business expenses and hire a bookkeeper if you have trouble reconciling your accounts. Your CPA will thank you (aka, you won’t spend so much money with them), and you won’t have to be surprised by an untimely audit.
When you’re a creative entrepreneur, you probably wanna spend most of your time and energy on, well, the creative side of owning a business. But trust us, the legal and logistical side is just as important! Focus on these three key areas — your contracts, business structure, and bookkeeping — to start, and you’ll find it less scary than you thought.
Haven’t launched your business yet? We have a resource for that. Our Turnkey Business Binder gets your business organized, started, and profitable in just days, not months. It’s designed to create a comprehensive business plan that not only sets it up correctly, but sets up a roadmap for you to follow. Get your Turnkey Business Binder and launch your business today!
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