Start-ups – The creative entrepreneur

There are hundreds of organisations and individuals out there in the world of business helping businesses. But where does someone with a burning ambition to set up a new arts, craft or design business start? Chris Ward-Brown offers some advice.

No business ever started itself. Someone or several people turn their ambition into a successful enterprise. Imagine the scene: a young, highly talented person, with tons of enthusiasm, a towering ambition to succeed and a willingness to work every hour there is. What do they need to survive as a business?

Starting any enterprise requires a range of skills generally not taught in most arts or design schools. Although many of these organisations are getting much better at supporting people who want to start their own businesses, in the past this has not been one of their greatest strengths. Business placement opportunities for young graduates or undergraduates are a growing feature of the courses offered by colleges and universities. Often, these are most successful when they are tackled laterally ? the graphic designer working in a hospital may learn more than in a more traditional setting, for example. The widest experience that the budding business owner can get will always provide a healthy reward. Even at this early stage, building the required set of skills is absolutely critical if one is to succeed

Skills base

Entrepreneurs need a very wide set of skills. They will need to understand how to access finance ? to persuade other people that their ideas are so strong that others would be foolish not to invest in them. They need to understand marketing: knowing who their customers are and what they want as well as being able to persuade them to buy. They will need a range of technical skills relevant to their chosen area of endeavour ? the potter will need to know about pots, the ceramicist about colour and so on. They may eventually have to understand the law, equal opportunities, environmental legislation and information technologies. And this is only a partial list.

If this sounds daunting, that?s because it is. And it goes some way to explaining why there so many organisations offering support. Here in the East Midlands we identified over 600 organisations and agencies of one sort or another offering some kind of business support. Why is there such a proliferation of business support agencies? Certainly to help steer smaller businesses through this maze ? and also because for many of them, doing so presents them with their own business opportunity.

Motivation

Of all the skills needed, motivation is the main one. Many organisations are reluctant to support new arts and craft-based businesses precisely because they are suspicious of their motivations. An accountant or lawyer may not care very much about the type of business you are operating, but the same is not true of banks and other sources of investment. The term ?lifestyle business? is often pejoratively applied to arts-based businesses. This simply means that while the arts business may be able to sustain itself, the owners? motivation to grow the enterprise into a substantial operation employing more than a couple of people is often not established. This can result in doors that could be open being closed or worse slammed in the faces of creative entrepreneurs.

Where the public sector pays for the business support there is often an even stronger reluctance to get involved. From the Chancellor?s point of view this approach may make sense: not everyone engaged with the arts understands the reason and many don?t agree with it. The facts are that in many cases it is simply pure economics. One measure of a high growth business is sometimes characterised as one that is likely to be turning over £250,000 in its second year. And by its fifth year it should have the potential to employ four or five people and have a turnover exceeding £1m. How many new start arts-based businesses are able to demonstrate with any degree of confidence that they will be turning over this sort of money? A word of caution: turnover is vanity, profit ? or, if you are an arts organisation, you may prefer the term surplus ? is sanity.

On the subject of money, getting hold of it at the right price is often the first major barrier that any new business faces. This is often one of the main issues that any arts or creative business can face. There has been a great deal of research into the barriers facing creative companies and the most frequently cited is access to finance. It?s worth looking at the work done by Arts Council England (ACE) and the National Endowment for Science, Technology and the Arts (NESTA)(1) if you want to know more.

Knowledge is power

The second key skill relates to knowledge. Obviously a new start company needs knowledge of the ?craft? ? whether that?s theatre, glass or iron ? but knowledge of the markets, competition, networks, key players operating in the same arena is also essential. Successful entrepreneurs generally know how to get first rate information about all these things and more. This is worth more than a little effort and will need to be kept in place all through the life of the business. If you don?t know where you are, how can you know where you are going?? The knowledge any business has of its market and what is happening to it is key to its success or failure. Understanding the market for arts and crafts businesses involves thinking about a set of issues rarely raised around the green room, kiln or forge. Galleries, exhibitions, retail, public or private commissions, overseas markets, commercial sales, design for manufacture, mass production, batch production, direct sales at fairs, on the web, mail order? all represent either opportunities for new markets or ways of getting to markets. They all need to be assessed against what the business wants to achieve ? in other words, what its motivation is. Business networks(2) ? whether they are formal or informal – are absolutely vital as routes for any business wanting to gather this knowledge.

Chris Ward-Brown is Business Growth Manager Creative Industries at East Midlands Development Agency. e: [email protected]

(1) http://www.nesta.org.uk/assets/pdf/creativeindustriesresearch.pdf
(2) http://www.shoutout.info or http://www.showusyours.co.uk/creative.php for more information.