Understanding the risks of running a creative business
Running any small business includes an element of risk – managing a creative business includes very specific risks.
This ebooks analyses the potential risks founding and managing a creative business and what to do to avoid them.
The better we understand the risks, the easier it is to identify and understand how to avoid or minimise them.
Understanding the risks
Any successful small business has to take risks – without risk there is no growth. Innovation, growth, R+D all come with inherent risks. The skill is understanding what risks are worth the stress, and the ones that can be avoided.
In the world of risk management they talk four main strategies: avoid; reduce; transfer or accept.
This ebook is about how designers can avoid/reduce the risk to their creative business.
Identifying the risks
The 2020 Risk Management Survey by the Governance Institute of Australia found 60% of respondents saw potential damage to brand and reputation as their most immediate and serious risk. And while reputation is vital, it’s important not to overlook these areas:
- Risk of unplanned growth
- Risk to you or your employee’s health
- Risk of financial insolvency
- Risk to your intellectual property
- Risk due to failure to innovate.
How can too much work be a risk?
Too much work is the kind of problem every business owner would like to face. Problem is, rapid growth can capsize a business just as quickly as too little growth. Success in itself is not a problem. It’s usually the lack of planning around the rapid growth that causes run-on effects.
Risks involve
- leadership issues
- maintaining studio culture with new staff/contractors
- balancing the needs of new and existing clients
- managing escalating costs that come from growth while
- watching profits diminish through adhoc solutions.
Insurance - a necessary evil
Insurance is a necessary evil for many small business owners. Problem is, there are many pitfalls to avoid even when using good professional advice. This ebook defines the wide range of insurance available to designers including:
- Workers compensation
- General property or contents insurance to cover your studio possessions
- Public lability insurance to cover accidents to people in your studio
- Key person insurance to cover ill health
- Business interruption insurance to protect against loss of business income.
- Professional indemnity insurance.
“Understanding our businesses intimately is the key for every creative professional. Understanding the risks, both known and those on the horizon are what will help us unlock the greatest opportunities in our businesses. I read through DBC’s “What’s the risk” ebook and was nodding after each page. Yes it can get bad, and sometimes the ‘bad’ is hiding in plain sight and we subconsciously choose not to see it.
“This DBC book gives some really great insights into the areas where risk exists, and does a great job in lifting the rug under which we sweep all those things we choose to leave for another day. Read it, weep and then get on with building a great creative business.”
Jim Antonopoulos, Managing Director, Tank
The risk of copyright infringement
Intellectual property is a general term covering a number of areas of law, including copyright. Most of the risks around copyrights usually stems from a lack of clarity around ownership.
This ebook discusses
- copyright ownership
- exactly what the copyright protects, and what it doesn’t
- what a breach of copyright might look like
- using ©
- trademarks, passing off, patents and defamations
- FAQ’s and
- case studies
Risk of financial insolvency
Money, or lack of it, is a real risk to a small business and that risk can come from internal or external sources. We discuss the risk of insolvency through:
- not being insured or having the wrong insurance
- a mismanaged project through lack of planning or scope creep or budgetary or scheduling issues or a client relationship goes pear-shaped or a third party lets you down
- mismanaged finances like cashflow issues or bad debts or unprofitable clients or jobs or lack of finance
- bad clients.
And we include FAQ’s and case studies.