In case after case where artists have had to prove their art as a business rather than a hobby, the Tax Court has given substantial weight to one particular factor—whether the activity is conducted in a business-like manner. The good news is this factor is completely within every writer’s control. The bad news is many writers don’t take the time or feel they have the competence to pen a solid business plan. We’re going to debunk both of those myths right now.
A business plan doesn’t have to be complicated. It shouldn’t involve PowerPoint or rob days from your life. The best business plan is agile; it reflects your changing goals and how you plan to meet them, and can be structured into four basic parts.
Think of your strategy like a mission statement. What do you write and who are your readers?
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Creating goals and measuring progress.
This is your action plan to execute the strategy.
Budgeting for your expected income and spending.
If you need a bit of help to get started, here are some templates for a simple business plan and budget.
Fill them out and change them as your business changes. After the year is over, go back and see how you did. Celebrate your progress, learn from your challenges, and then create more strategic goals and plans for the next year.
In case you haven’t noticed yet, this is about a lot more than taxes and the IRS. Writing and enacting a business plan is how you track the health and robustness of your writing career. In short, a business plan should serve you and help focus your efforts to make your career more successful.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting services. Presentation of the material does not create a tax-professional-client relationship. The material is provided on an “as is” basis and is accurate and true to the best of my knowledge, but no representation or warranties of any kind are given about the material, and there may be errors, inaccuracies or omissions.