Establishing financial boundaries for your creative business

is the theme of this week's From Passion to

Profit. Why, you might ask yourself, do I need to set myself

financial boundaries? Well, it has the impact of

protecting your time, your energy and your income. In this

week's episode, I'm going to be looking at setting financial boundaries, the idea of

creating separate accounts and also paying yourself on a regular

basis. Yes, I did say that. Paying yourself on a regular

basis, put all these things together and that's going to help you take

control of your creative business.

Now, before we dive into the episode in detail, it's really important

that you, as a freelancer, as a self employed

individual, see yourself as the employee of your own business.

Now, this isn't a legal framework we're talking about, but if you're operating as

a freelancer, you're operating as an individual, a self employed person,

then it's really important that you have in your mind a

separation of the business. The thing that you're providing to your clients,

your audience, the impact that you're making is one thing. You as the

individual are effectively the employee of that business. Now that's the theme

I'm going to explore in future episodes. But for now, see yourself as

the employee of your own business and it makes that distinction, those

boundaries less blurred. Now, the upshot is if you

are constantly dipping into your personal savings because you need to cover

your business expenses like rent home, hiring venues, buying art

supplies, then it's going to be really problematic and difficult for you to know

whether what you're doing is actually profitable. And profit is not a

dirty word. It's an essential part of your business operation

in order for you to survive, sustain, grow and keep

delivering your why? If you don't set boundaries, your personal and

business finances will blur and that will lead to chaos.

When you look at your bank account, it's going to be very difficult for you

to know if the business itself is going to lead to

prosperity. Now, setting boundaries sounds very complicated, but it's

not that complicated if you have the right approach to it. And here are

three steps that I'd recommend to get you started. Number one,

open up a dedicated bank account for your creative

income. Now, I'm not suggesting which specific bank account you should open up,

but if you have a bank account, some way of actually

saying everything that goes into that account and everything that comes out is

business related, it's easier for you to see what's going

on at a glance. Also, if you need to make decisions, if you need

to understand what's going on, it's going to be much easier to look

at something that's dedicated and therefore it doesn't create confusion in

your mind. So number one, open up that dedicated bank account

where all your creative financial activity is going to flow

through. Number two, track your income and expenses on a regular

basis. Now, I'm not talking Davy Crockett type tracking, but if you can't

say relatively easily what you're spending, what your income

is and whether your business is actually generating a profit, then how do

you know what you're doing is reaping benefits financially, let

alone artistically? And number three, pay yourself a

consistent amount. Now that might seem quite fanciful because your income might

be quite erratic, but actually paying yourself as an employer would

to an employee reinforces a lot of positives.

So let's get into this. Number one, as I said, separate accounts,

it's on non negotiable as far as I'm concerned. Every payment you receive for your

creative work goes into that business account. And every expense

connected to the business should ideally come out of that account as well.

Now I know many creatives understandably want to minimize the

outflow, minimize the costs. Modern banking is such now

that you will be able to find an account that does that separation.

Now it may also be a separate branch, a separate

account of your main account, but you want to keep them separate. So

therefore you can put your business hat on, look at that account and say this

is what's going on. The second step we talked about was

tracking your income and expenses. Now it doesn't need anything overtly

expensive or fancy digital systems such as Xero, even

a notebook, a spreadsheet will work perfectly fine. If you

need any support and help on that, then obviously check out the show notes

here and contact us and we can make some more detailed

recommendations. In fact, even better, join our free

community which is specifically for artists and creatives, and you'll find

resources within that. The key to all this is

consistency. Now step three is about paying yourself.

Now if you do not remunerate yourself, if you do not pay yourself, then

there will be some element of demotivation that creeps in at some point.

Even if you pay yourself a modest amount, a regular amount coming

out subject to the cash being there helps you treat your

creative business like a professional business. And it is a

business. The only financial activities, to my mind

that is not a business is if you are an employee being treated

under what's called paye. Every, every activity in my mind from

charitable artistically is effectively a business. Now

take the first step. Even if you just go out and open up a separate

account, you will find that separation between your personal

life and your business life becomes less blurred. You'll be able to

see more easily what's going on, and you'll be able to make some good

decisions about what's going on with your creative business as

well. A simple change that can make a massive impact.

Until next time, folks. Set those financial boundaries.