Start an entertainment business by following these 10 steps:
- Plan your Entertainment Business
- Form your Entertainment Business into a Legal Entity
- Register your Entertainment Business for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Entertainment Business
- Get the Necessary Permits & Licenses for your Entertainment Business
- Get Entertainment Business Insurance
- Define your Entertainment Business Brand
- Create your Entertainment Business Website
- Set up your Business Phone System
There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your entertainment business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Exploring your options? Check out other small business ideas.
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 much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening an entertainment business?
Entertainers can typically get started without a lot of capital. The main costs will be taking care of their normal living expenses as they attempt to build a steady clientele. Direct costs are usually administrative (e.g., Wi-Fi, website domain-name, advertising. etc.) Performers will also need to factor in how much it will cost for them to maintain/replace their equipment.
What are the ongoing expenses for an entertainment business?
Entertainment companies will need to account for travel, equipment maintenance, and employee salaries. They may also want to invest in ongoing education, depending on their specialty.
Who is the target market?
Most private clients who hire an entertainer will be financially comfortable enough to absorb the expense. However, entertainers can easily be employed by schools, commercial operations, and even government organizations who may be on more limited budgets.
How does an entertainment business make money?
Performers will usually charge a specific fee either per hour or per show. Entertainers set their rates based on not only their time but also any business expenses they may have, such as supplies, employee salaries, etc.
How much can you charge customers?
Performers can charge based on their popularity as well as their business expenses. It’s not unusual for an established company to charge hundreds of dollars an hour or more a performance. Realistically though, an owner should set their rates based on their direct competition. If there is nothing like what you’re offering in an area, then work out a reasonable hourly rate that you believe people in the area would be willing to pay.
How much profit can an entertainment business make?
Because ongoing expenses are so little, most of the money made by an entertainment company will be pure profit. A person with a two-hour act making $45 an hour for their services would need to work 20 shows a week to make around $93,000 a year.
How can you make your business more profitable?
Entertainers should consider experimenting with different types of acts and audiences to appeal to more people. They can also consider doing community events where they give mini-lessons to people who want to learn a magic trick or a guitar skill for a small fee. Or they can start doing private lessons for more dedicated people.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Entertainment Business Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your entertainment business is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
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?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
- LLC Taxes
- Sole Proprietorship vs LLC
- LLC vs Corporation
- LLC vs S Corp
- How to Start an S Corp
- S Corp vs C Corp
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
Besides being a requirement when applying for business loans, opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.
Open net 30 accounts
Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.
NetMany net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our best net 30 vendors, guide and start building business credit.
Get a business credit card
Getting a business credit card helps you:
- Separate personal and business expenses by putting your business' expenses all in one place.
- Build your company's credit history, which can be useful to raise money later on.
Recommended: Apply for an easy approval business credit card from Divvy and build your business credit quickly.
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.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
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 an entertainment business. 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.
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.
Certificate of Occupancy
An entertainment business is generally run out of an office. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a entertainment business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your entertainment business will be in compliance and able to obtain a CO.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
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.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market an entertainment business
Marketing needs will vary based on the neighborhood an owner serves. A community that’s mainly filled with young families may be most likely to hear about the business via the school or another community stronghold. Traditional paper flyers may be old-fashioned, but the right one could catch the right eyes. Websites like NextDoor or Craigslist also offer community-specific information. Finally, social media (whether via paid ads or organic content) can make it easier for people to find and share information about the company. Websites must be professional but personal enough to attract the desired audience base.
How to keep customers coming back
The goal is always to make clients happy and be memorable enough to stand out in their minds. With all of the available entertainment in the comfort of people’s living rooms, it’s the performers job to connect with their audience so they understand that it’s not always as fulfilling to turn on a TV as it is to have a live person in front of them.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2022 to find the best phone service for your small business.
Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.
Start a Entertainment Business in your State
- District of Columbia
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
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Is this Business Right For You?
The person who chooses this business must either love to be in the spotlight or have a knack for spotting people with talent. Owners and employees should have an inherent love of entertaining to thrive. If the owner is the performer, they should be willing to work on their craft constantly and change it according to audience expectations as time goes by.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at an entertainment business?
The bulk of the work of an entertainer is their actual time spent on stage, but an owner also has to be willing to devote time to advertising and marketing their services, as well as organizing the administrative end of things (e.g., payments, scheduling, etc.)
What are some skills and experiences that will help you build a successful entertainment business?
Entertainers should have some level of expertise before getting started. A comedian doesn’t have to be equal to Jerry Seinfeld to strike off on their own, but they should have enough of a following to justify a transition. Most won’t need formal training to do what they do, but it helps to have logged plenty of professional hours mastering different types of routines.
What is the growth potential for an entertainment business?
Entertainers may be more in demand than they think because they can perform anywhere from a school to a home to a business. Who they end up working for will depend on the entertainment company’s rates, but entertainment companies serve enough needs in a community for there to be some flexibility in the business model. Ultimately, that flexibility can translate to better growth potential.
Take the Next Step
Find a business mentor
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.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
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 an entertainment business?
Most people will begin offering their services on a part-time basis to understand more about the demand of performers in their area (and hopefully stoke the fire for demand as well.) Owners must be prepared to alter their routines based on who’s hiring them. An engineering company who wants a comedian for a black-tie dinner will want very different material than a company who wants to reward their sales team after a record-breaking month.
Part of being a performer is creating a need for your services in a community. It’s ultimately a luxury good no matter how you look at it, so it’s about showing people that their dollars are well spent. A good performer can turn a dull gathering into the place to be. This is also the time to look for angles that may not be readily apparent. For example, a guitar player could play a couple’s song on their anniversary, or a magician can be hired to perform a disappearing act during a company retirement.
If choosing to hire performers, an owner will need to catch people at the beginning of their careers before they turn into the competition. To keep them happy, they'll need to be well-compensated for their time. Owners should ideally be able to convince their employees that the day-to-day business drudgeries aren't worth becoming their own boss.
How and when to build a team
Entertainers don’t necessarily need to hire anyone initially unless they truly don’t believe they can handle the more tedious parts of their business, such as collecting money from clients and staying on top of various commitments. Once the entertainer reaches critical mass, they can either hire an assistant or additional performers to meet the demand.