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 custom portrait business. 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 custom portrait business?
The startup costs for a custom portrait business are notably low. This is because there is no need to lease a separate space, pay for attendant utilities, and so on. The only real costs are the costs of your artistic tools, which will vary based on the exact medium that you specialize in. However, you can typically get a selection of canvases and materials such as graphite pencils or oil-based paints for under $500. Advertising your business via traditional methods as well as a website and social media should cost no more than $1,000, and your ongoing advertisement after you open your business will likely be via social media, which has extremely low cost.
What are the ongoing expenses for a custom portrait business?
Using the recommendations above, almost all of your ongoing expenses will be built into your sales. That is, an average painting may have a cost in materials (canvas, brush, and quart of paint) of about $250, but you should be factoring this cost into the price you place on your art, allowing you to merely replenish supplies as you go. Assuming you work from home or at clients' homes and offices, you have no real overhead, and while you may continue to advertise via traditional media, most of your best advertisement will come from social media as well as painting in parks and other public places—both of which can be done for free!
Who is the target market?
While you will likely have a diverse array of clients, young families will generally be your best clients. They will be interested in creating portraits featuring spouses, young children, or the entire family.
How does a custom portrait business make money?
On the most basic level, your business makes money by charging people for custom portraits. Typically, the price per portrait goes up if the medium is more complex, the portrait more realistic, and the overall project more time-consuming.
How much can you charge customers?
A number of factors can inform how much you charge clients. One good formula to abide by is to charge customers for the cost of material as well as how long it took you to complete the work, giving yourself a fair price such as $20 an hour. This pricing may be sufficient if you are selling the work directly, but if it is being sold by a gallery, you may want to double the price to account for the amount that the gallery will get from the sale. Finally, if you provide professional framing services, don't forget to charge the customers for the time and materials involved!
How much profit can a custom portrait business make?
The exact profit potential of your business varies on the area and the number of clients you have in any given year. However, using the formula written earlier for what to charge, even a modest portrait that takes twenty hours to complete should net you a minimum of $650, and that is before you factor in additional costs for professional framing or additional market value factors. Thus, someone painting multiple portraits a week can turn a tidy profit with almost no overhead. It is also very easy now to sell portraits and artistic services through online venues such as Etsy, which can help you find clients beyond the confines of your specific region or metropolitan area.
How can you make your business more profitable?
Create a digital newsletter or mailing list so you can keep clients and prospective clients in the loop about your business. Don't neglect your website—make sure that it showcases some of your best work while offering clients the most pertinent info they need. Finally, don't discount featuring your work in galleries—while it can be annoying to split the profit with a professional gallery, the amount of exposure (and, thus, advertising for those who are most likely to buy) is more than worth it.
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 custom portrait business 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 custom portrait business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
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.
A services contract will outline the parameters of each project, including price, terms, and client expectations. Here is an example service agreement.
Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your custom portrait business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
Trademark & Copyright Protection
When 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 custom portrait business
Often, the first step in marketing a custom portrait business is to stand out from the competition by specializing in a certain type of portrait and developing a really unique style. One great bit of free publicity is to do free portraits in a public park, which lets people see the quality of your work and get to know you.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Consider offering extra perks and services to retain customers. For instance, framing and matting portraits for an extra cost, and offering special promotions throughout the year to correspond with special holidays and events. Finally, never forget to sign your work—it makes customers feel special and happy to buy more portraits even as it helps build your brand.
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 Custom Portrait Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Obviously, this is a business designed for an artist. However, not just any artist: you must be comfortable doing a lot of interaction with many kinds of customers (especially if you are doing portraits on the spot), and you must be able to work quickly, both to achieve customer satisfaction and to increase your margin of time and profit.
What happens during a typical day at a custom portrait business?
The daily activities of the custom portrait painter are simple: you will communicate with current clients and work on advertising to and communicating with prospective clients. Otherwise, much of your work day is taken up by practicing your craft and working on the portraits your clients have ordered.
What are some skills and experiences that will help you build a successful custom portrait business?
Any previous artistic experience is helpful, and specific portrait experience is still more helpful. A formal education is not a requirement, but having a higher degree in art or a related field may help you both advertise yourself to customers and charge a higher price for your work. Finally, any experience selling your art (in person or via online methods such as Etsy) can be helpful.
What is the growth potential for a custom portrait business?
The growth potential for a custom portrait business is modest when looking at industry projections for the next few years. However, it is worth noting that such a business has extremely low ongoing costs and a low investment to start, meaning that the majority of each sale translates to profit for the artist.
TRUiC's YouTube Channel
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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.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a custom portrait business?
Several methods can help you jumpstart your business. For instance, you can do portraits of your family and friends, both for practice and so that you can feature them in your advertising. You may be able to make (or use) connections and feature your work in a gallery, which is a great way of showing off what you have created and recruiting clients. Finally, mentally prepare yourself to juggle several projects at once so that you do not become overwhelmed when your opportunities pick up.
How and when to build a team
Typically, a custom portrait business is a solo business, as it reduces your overhead and makes it easier to generate a personal profit. However, if you truly have more orders at any given point than you can personally handle, it may be time to take on a partner or develop a small team. However, you do risk losing the appearance of a personal touch that comes from being the only artist operating under your imprint.