You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your cartoon service. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a cartoon service?
The best news about this business is that your start-up costs are usually quite reasonable. And while a fancy studio would be nice, you can start out working from a spare bedroom or even your kitchen table. Here’s an idea of what you might spend upfront.
Digital Hardware and software -- Zero to $1,500 or more. You might already have all of the digital equipment you need. Most cartoonists use Mac computers and a suite of software that can include Adobe Photoshop and Adobe Illustrator. Director Suite and StoryboardPro are among programs used by animators. This cartoonist has an interesting blog post on his digital equipment.
Non-digital tools -- $250 or more. This includes vellum paper, pens, markers, erasers, table and good lighting.
Professional services -- $500 or more. Learn all you can about copyright and licensing laws, but be prepared to hire an attorney to review contracts or answer legal questions as they come up. An accountant or tax preparer can help you meet your tax obligations.
What are the ongoing expenses for a cartoon service?
Your largest ongoing cost will be for art supplies. You’ll go through those at a rate determined by how busy you are.
Who is the target market?
About the only way of defining your clientele is that it consists of anyone or any company that has an interest in your art. This could include publishers, newspaper syndicates, non-profit or political organizations, website owners, bloggers, merchandisers, Hollywood studios and consumers.
How does a cartoon service make money?
You’ll charge a fee for your work. In the case of cartoonists who sell online, they might provide art to enliven blogs, newsletters or websites. You might sell your products on a per-cartoon basis or by a monthly or annual fee or even in bulk quantity discounts. Here’s one example of a price list provided by a cartoon service that sells via a subscription model.
How much can you charge customers?
That will vary greatly according to the types of clients you attract. For instance, a syndicated cartoonists working for newspapers and websites can make anywhere from $5 to $50 or more per media vehicle--but that must be split with the syndicate, which acts as your agent. Major publications such as the New York Times can pay $700 or more for a single-panel cartoon. On the other end of the scale, web brokers such as Fiverr seek cartoonists who’ll work for $5 per assignment.
Before you set a rate, ask plenty of questions about the needs of the client and how the work will be used. Then consider how long it will take you to complete the project and how much you want to make on an hourly basis. Here’s an online directory of cartoonists with their hourly rates listed, for comparison.
Also, consider joining the National Cartoonists Association. In networking with your peers, you’ll be able to find out what others are charging for similar services.
How much profit can a cartoon service make?
There are a lot of ways of answering that question because there are seemingly endless directions you can take your business. But let’s look at several numbers from a variety of sources. Here, you'll find a general salary range for print cartoonists estimated to be between $30,000 - $60,000 a year. The website Glassdoor indicates an average salary nationally for illustrators of under $54,000 and almost $105,000 for animation storyboard artists. Another salary survey website posts cartoonist/animator salaries of around $50,000. Just remember that the relatively small number of respondents to the wage surveys means that the averages could be skewed. Also, there’s no differentiation here between employees and freelancers.
And of course there are a handful of famous cartoonists who generate annual revenue well into the millions.
How can you make your business more profitable?
Don’t be afraid to step into unfamiliar territory. There are so many different ways of selling your services as a cartoonist that you can find an array of customer bases to broaden your appeal and boost your profit potential.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your cartoon service is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a cartoon service. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Cartoon services should require clients to sign a services agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership. Here is an example of one such services agreement.
Trademark & Copyright Protection
If you are developing a unique product, concept, brand, or design, it is prudent to protect your rights by registering for the appropriate trademarks and copyrights.
The nature of legal requirements is ever changing, especially in regards to copyright laws. Here is a frequently updated resource, which can help keep you aware of the legal requirements.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a cartoon service
Your website is important both as a portfolio for your work and possibly as an ecommerce site to sell your services through PayPal or other online pay services. Instagram, Facebook and YouTube can also be critical tools for showcasing your art. Nothing can describe what you can do for a client better than a display of what you’ve done for others.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
The quality of your work and the satisfaction of your customers will help you retain the existing business and branch out through referrals.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Cartoon Service In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
First and foremost, you must have a talent for cartooning. For many kinds of assignments, the ability to write—especially in a humorous vein—is also necessary. Beyond that, your marketing skills and self-promotional instincts will help you commercialize your talent in a number of ways.
What happens during a typical day at a cartoon service?
Your typical day will look very different depending on the direction you take your talent. But regardless of direction, your activities will fall into three basic areas.
- Marketing your services and constantly soliciting business and originating new markets and ways of doing business
- Working on your commissioned or speculative projects
- Invoicing clients and keeping your business afloat
What are some skills and experiences that will help you build a successful cartoon service?
You must have an artistic talent and, more importantly, be able to creatively find a way into the business through sales channels that fit your work.
What is the growth potential for a cartoon service?
That would depend on the direction you take your business. Since newspapers are an endangered business model today, the market for newspaper-based syndicated cartoonists is quite tight. However, online markets continue to open up (though the pay can be low). If your talent can find an audience, you can thrive, but most cartoonists have day jobs to pay the bills while their cartooning is completed on a part-time basis.
TRUiC's YouTube Channel
For fun informative videos about starting a busines visit the TRUiC YouTube Channel or subscribe below to view later.
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
What are some insider tips for jump starting a cartoon service?
Identify one or more markets that you think you can serve and initially focus your energies there. That might mean submitting your captioned concepts to greeting card companies and magazines, drawing caricatures at an amusement park or submitting your spec work to animation studios, among other endeavors. You can add markets as you find acceptance and gain confidence. Since your career will probably start slowly while you build your portfolio, you might want to keep your day job for salary and benefits and moonlight as a cartoonist.
How and when to build a team
Chances are, you won’t have a team. Cartooning tends to be a solo enterprise for most, although those at the very top of the field might have assistants or even other cartoonists creating art in their style. You might also consider collaborating with a writer whose talent in that area is stronger than yours if you’re submitting greeting cards, comic books, animation or captioned cartoons to magazines, publishers, studios, ad agencies or websites.