For “Creator to Cover” to run there are four main elements that I would need to get started: a website, a domain, advertising/promotion and the software to create the designs. I would be running this as a side business alongside a part time job and spending free time producing content and keeping profits earned as payment for myself. I would run the business this way for the first 2 year until the business grew to be big enough it needed more of my time to keep up with the demand.
To start the business I will have 3 main costs to get established and running along with some promotional tasks to do. I would not need any equipment as my product is online and digital and I already have a sufficient computer to work from. The first thing will be creating a website, Wix offers Entrepreneurs & Freelancers pricing coming to £8.50 a month. Secondly I would be using Adobe Illustrator to create the cover designs for the clients, this costs £19.97 a month for the single app subscription on the Adobe site. Along with this I would create the social media accounts I need to promote my business through posts, stories and interactions. I would also use these social media accounts to run ads. I have set a £50 a month budget for advertisements on social media, this is the minimum you can spend on them to have a successful ad campaign. This brings the start up costs to £78.47 which is small enough that an investor wouldn’t be needed to start up the business.
For my costs for year 1 it would encompass the 3 main costs I laid out above. The first would be a website at £8.50 a month, Wix offers a free domain for the first year too so a domain would not need to be purchased as of yet. The site costs would total £102 a year and be the smallest cost for running the business. The second would be the subscription for the software. This being £19.97 would total £239.64 a year. The third cost is the ads on social media, as my ad budget is £50 a month (roughly £1.50-£2 a day) this would come to a total of £600 a year. This is a significant cost for the business but one of the most important ones to attract clients to the social media accounts and to the business’s website and is something that I think is worth spending money on. Most of the budget would go towards the instagram adverts as I think they would be more successful as there is a larger publishing industry on that platform and ads would be easier to target. This would bring the first year total to £941.64 in expenses.
For year 2 of the business the same costs would apply totalling £941.64 but there would be an additional £10 a year for a website domain. I found that on Google Domains I can get the domain I would want for as little as £10 a year so this cost would be added to my expenses as Wix does not offer a free domain in the second year of having your website. This would bring the second year expenses total to £951.64.
When working out if my business would be profitable with these expenses I started to calculate the sales totals I would predict getting in the first and second year per week. I estimated a weekly sale total of between £50 – 70 a week in the first year, averaging at £60 a week. As well as larger series cover projects totalling £1000 a year. This would come to £4120 in sales. This would be a good profit as it would cover the expenses required in the first year and leave £3178.36 in profit for myself. For the second year I estimated growth for the company and set the estimated sales at £100-150 per week, averaging at £125 along with larger projects totalling £2000 a year. This would result in yearly sales of £8500 a year which is a significant increase from the first year. Subtracting the expenses for the second year, which would make the profit of £7548.36.
This means that the total expenses for the first 2 years is £1893.28, the sales totals would be £12,620 and the profit would come out to be £10726.72. This would mean the company would be profitable in the first 2 years and make it economically viable. With these profits I believe by the 3rd year I would be able to comfortably and easily run the business as a full time endeavour.
References:
Adobe, 2020. Creative Cloud Pricing And Membership Plans | Adobe Creative Cloud. [online] Adobe.com. Available at: https://www.adobe.com/uk/creativecloud/plans.html [Accessed 18 November 2020].
Wix.com. 2020. Wix Pricing Information | Upgrade To A Premium Plan | Wix.Com. [online] Available at: https://www.wix.com/upgrade/website [Accessed 18 November 2020].
Domains.google.com. 2020. Google Domains. [online] Available at: https://domains.google.com/registrar/search?searchTerm=creatortocover&hl=en# [Accessed 18 November 2020].