Why 5 points, in my 5 point business plan?

As I’ve interacted with creatives about the business side of creativity over the years, asking them about their biggest pain points almost always comes back to marketing. Or, if not marketing, it’s money. But that pain point is usually connected back to marketing, in as much as not having enough work, or steady enough work, leaves them without sufficient revenue. The assumed answer to their problem is that they just don’t have enough consistent new business.

Are Unstable New Business Pipelines Really the Problem?

And no doubt, failing to market effectively will lead to unstable pipelines of new opportunities. My 5 Point Business Plan does focus quite a bit on marketing. There are real problems there, and effective solutions. But while marketing might be the biggest perceived pain point of most creative entrepreneurs, there are other aspects to their business model that may be more fundamentally flawed. If you could wave a magic wand and generate unlimited streams of new business, you might find yourself with even greater problems than you thought you had in the first place.

That’s why my business plans are full-orbed evaluations of a creative practice’s Money, Minutes, Marketing, Management, and Motivation. Problems in all five of these areas need to be uncovered and fixed before you increase your volume of work.

What is Your Product? And is it Profitable?

What if your fundamental “product” were essentially unprofitable? If, on a per unit basis, your margins are so slim, or even perhaps negative—the more you sell, the more money you’re going to lose. Or, as it is most typically experienced by creatives—the harder you work the further your cash flow falls behind. Sony can afford to lose money on every PS4 they sell because they make it up game licensing. Gillette can sell its razors at a loss because they make their money on the blades. But creative entrepreneurs have to sell their “inventory” with margins capable of sustaining their practice over the long run.

Calculating Your True Margins

Only when we do the math, and figure out what your margins are and what they need to be, are we ready to establish prices for your services that make sense. Only when we’ve taken a realistic look at how many hours you can work in a week—your long-term sustainable production capacity—are we ready to determine how much work you can actually take on at these prices. These fundamental, fact-based, measurable business realities undergird your business, whether you’re paying attention to them or not. And they need to be rightly structured before you press on the gas with your marketing.

Taking this bigger, more holistic, view of your entire business model requires you to spend a sufficient amount of time on these fundamentals. And when you integrate these activities, you will need to become a better manager of yourself and how you use your time. Which is why evaluating your management style, and management roles, is another part of running your creative practice like a business, and not merely a passion-fueled mission.

What it Takes to be a Creative Professional

As you take all this in, recognizing the need to be a creative professional, you will inevitably find that there are parts of running your practice like a business that you love and parts that you hate. Everyone has different work habits and tendencies. Everyone has different motivators and demotivators. Everyone will have different strengths and weaknesses. Becoming more self-aware of your own habits, tendencies, and motivations can help you compensate for the times when you have to do things you’re not so inclined to do or face aspects of running your business that you’d rather avoid.

One of the barriers I’ve found in offering my services to creatives is that dealing with so many aspects, all five areas of business, feels a bit overwhelming. Instead, they want to jump right to the marketing part.

You need to fix all of the broken parts of your business. If you continue to diagnose all of your pains as sales problems, you might be repeating the mistake my sister made when she was eight years old. She started a neighborhood newsletter, which she sold for 5 cents each. Problem was, the library copy machine charged a dime per copy. When my dad pointed out this disparity, she confidently replied, “Yeah, but I’m going to sell a lot of them!”

Are you ready to take the struggle out of finding new clients?