Since few creatives are motivated by the dream of acquiring multiple vacation homes, or fancy yachts, we’re going to need to come at the fundamental issue of profitability from a different perspective. Because at the end of the day, without strong profits, your business will eventually run aground. So let’s consider how running a profitable creative practice can benefit you in additional ways—besides simply having more money to spend.Subscribe on: iTunes | RSS feed | Google Podcasts
Are you ready to take the struggle out of finding new clients?
What would you do with a million dollars? What if your creative business suddenly became extremely profitable? For many creatives this hypothetical question may seem as remote a possibility as winning the lottery—but what if you did find more success than you ever imagined? Creatives don’t go into their line of work because they want to strike it rich—we generally have other motivations that drive us. The creative drive can be so powerful that we would likely keep working, even if we made more money than we ever needed. Could it be that this relative disinterest in wealth is part of what undermines the profitability of so many creative practices?
As we’ve been exploring the topic of profitability in the creative service business model, we’ve identified both external and internal barriers. There are serious external challenges to converting creativity into revenue primarily through selling the time you spend on projects. Then there are internal issues such as the general discomfort or distaste many creatives have with the notion of pursuing profits. With so many struggles, inside and out, pressuring creatives, it’s no wonder so many practices fail due to unprofitability.
Since few creatives are motivated by the dream of acquiring multiple vacation homes, or fancy yachts, we’re going to need to come at this fundamental and critical issue of profitability from a different perspective. Because at the end of the day, if you run your practice without strong profits, it is going to eventually run aground. So let’s consider how running a profitable creative practice can benefit you in additional ways besides simply having more money to spend.
First, let’s consider how profitability can improve the creative process itself. And to see this, we actually need to recognize how the effects of unprofitability hampers your creative output. When you’re living under financial pressures, when you feel desperate to finish projects, and quickly onboard new ones—in a perpetual cycle of simply trying to stay ahead of your bills—that stress is certainly not optimal for the creative process. Anxiety and desperation rarely generate great creative output.
Likewise, since the relationship between time and money is so integral to the creative service business model, low profits mean you’re perpetually strained for time to complete the assignments you already have. Rushing because of mounting deadlines is also a real creativity killer.
But if you build significant profit margins into your rates and fees, that will correspond to having more time, less rush, and therefore less stress as you engage in your work. Imagine if you had more time to think conceptually, and explore options in your process. That luxury of time, only comes when your profit margins are high enough to sustain it.
Another way that profits convert to better creative output is that it allows you so much more control over the clients and projects you take on. When you’re desperate for work you can’t afford to be choosy. How often have you known that a new prospect was not likely to be a good fit. But you ignored all those early warning signals and took the work anyway because you needed the money? Bad clients lead to bad processes, and never your best work. And they also tend to be your least profitable projects as well—only deepening the cycle of desperation and dependence on more unqualified clients.
But if you had profits, and sufficient savings enabled by profits, you could afford to say no when tempted to take on a bad prospect. You could hold your ground and only take on the best opportunities. And that underlying confidence flows over into the projects themselves. Clients that recognize your value will allow you to lead, and they will appreciate your best work.
Profitability is essential to any business. And profitability is key to the best outputs of any business. If you waiver on profitability because you’re not seeking money for its own sake —consider holding out for greater profits for the sake of control and better creative output. So that you can produce your greatest work.
Until next week: don’t let the business of creativity overwhelm your creative business.