Contrary to popular opinion, starting a clown business is not all fun and games – it takes hard work and a sound business strategy to get your company off of the ground and running strong. You can only deliver the kind of enjoyment your services bring if you can keep the lights on. That is why it’s important to plan thoroughly and take deliberate steps to build a sound business that will support you and your employees while also serving your greater community with entertainment services.
Starting a Clown Business – The Basics
1. Make a plan.
Once you have your business idea locked in, you’ll need a plan. Every successful entrepreneur will tell you that planning is everything. You have to plan to succeed, and starting a clown business is no exception. Some questions you want to answer with your plan include:
- How much is it going to cost? Luckily, the initial startup costs for a clown business are pretty low. It could cost you as little as $1,000 or less to get the equipment you need and the right licenses and insurance to get started.
- What market are you going to target? You probably already have a good idea of who you are going to try to sell your services to – children’s birthday parties, social gatherings, holidays, corporate events and so on.
- What are you going to charge? If you have already been working as a clown you know what the going rate is for hiring a clown. Just remember that you need to account for your operating costs when pricing your services – you need to charge more than just what it takes to pay for the clown to cover business costs.
- What name are you going to choose? You want to choose a name that tells people what you are about – which means balancing interesting and exciting names with practical concerns like making sure they know you are selling clown services. You also need to make sure the name you use is available in your state and not being used by another company.
2. Decide what kind of business entity you will operate.
If you just start offering services, you will be classified as a sole proprietorship. While this route is definitely the easiest, it is not necessarily the best for your long term business needs. As a sole proprietorship, your personal assets are at risk if your business is sued. If you lose a lawsuit for something your business did, you could lose your personal home, savings and other assets. These risks can be avoided by forming an LLC.
If you form an LLC, you will benefit from what is termed the “corporate veil.” The corporate veil is the barrier that you put up between the assets of your business and your personal assets. If an LLC is sued and loses the lawsuit, only the assets of the LLC are at risk – no the personal assets of the owner.
If you are going to form an LLC, do some research on which business formation service you want to use. You might be surprised to discover that some formation services offer exactly or nearly the same services for significantly different prices.
3. Register for taxes.
As a business, you are going to need to pay taxes. Exactly how your tax situation will play out depends on different factors, like whether you formed an LLC or some other type of corporation, but you can guarantee that some taxes are going to have to come out of your earnings. The first step to getting your tax situation in order is to register for taxes by applying for an EIN.
4. Open a business bank account.
One of the most important things that you need to do to protect your personal assets is to keep them separate from your personal assets. The most basic way you protect yourself is by opening a business bank account and handling your business finances through that account. Even with an LLC, if you mix your business and personal finances too much your personal assets could be at risk if you are on the losing end of a lawsuit.
Having a business bank account also makes it easier to do your business taxes. Everything is already separated so you don’t have to figure out which income and expenses were for the business and which were for your personal needs.
5. Take accounting seriously.
It is so very easy to skip the accounting part of business when you are first starting out. Accounting can seem complicated and unnecessary when it’s just you and maybe one other partner or employee trying to establish yourselves. Unfortunately, failing to conduct proper accounting puts you at risk in multiple ways. You won’t be able to see how your finances are really doing because you won’t have accurate or complete records. You also will struggle to do your taxes come tax time because you have to figure out everything about your business’ finances after the fact.
Avoid all of these problems by setting up your business account right to begin with. Consider hiring an accountant for a few sessions to show you how – or you can likely find some accounting courses at your local small business organization.
6. Get your permits and licenses.
Municipalities take permitting and licensing seriously and so should you. Failing to get the right permits and/or licenses sets you up to be shut down by the authorities and possibly fined or sued as well. Find out what permits and licenses you need in your area and get them before you start operations.
7. Get insurance.
Insurance is another layer of protection that every business must have. If you are the victim of a lawsuit your business could be on the hook for large sums – but if you have the right insurance, your insurer will pay the bill so your company doesn’t have to.
8. Offer the best clown services out there.
If you follow the above steps to establish a firm foundation for your business, you can then focus on delivering the best clown services out there. Then you will be well on your way to success.