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A freelance career in the creative arts
A freelance career in the creative arts

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1 What funds do I need?

There are two key reasons for needing capital in your business or freelance career:

  • Investment capital – to set up or expand your business
  • Working capital – to fund the lag between buying materials and selling the end product, or paying for staff and collecting ticket revenue.

How much working capital you need depends on your business type. For example, a business that provides consultancy is likely to need lower working capital than a retail business that requires the regular purchase of raw materials.

Working capital is often obtained through borrowing, maybe via a bank overdraft or on a credit card.

A pile of British coins.

In terms of business set up, most freelancers start out by self-funding, also known as ‘bootstrapping’. Many choose to combine selling their products or services with part time work (as you saw in some of the case studies in Week 1) – testing the viability of their idea before they jump into it full time. Others will use savings or enlist the support of family or friends to cover start-up costs.

An important first step is working out how much funding you will need in order to get started, and you’ll consider this in the next section.