The Fosbury Flop http://bit.ly/30ny9hF
I believe all creative businesses are scarcity businesses, meaning you do defined projects per year and they are all of the same value. Each client pays you what you need to do the project and gets your very best regardless of when the project happens. The price does not (or should not) vary depending on seasonality. Scarcity means do you, the client, want to be one of ten or not? Scarcity never means use it or lose it.
In comparison, a capital asset business (i.e., a factory, a hotel, an airplane) operates under the notion that some revenue is better than none as otherwise you are just wasting the asset. Seasonality has a ton to do with capital asset businesses then. Better to sell the room that goes for five hundred dollars a night in June for one hundred and fifty in January than let it sit empty.
A few notes. Scarcity businesses and capital asset businesses are BOTH great businesses. They just cannot be great businesses at the same time. The reason is simple: you break your promise if you try to act like what you are not. A hotel has to monetize an asset (i.e., beds) so letting the asset lie fallow breaks the promise. Likewise, being part of a select few makes no sense if the season dictates the price of being part of the discernible group. Scarcity businesses are set up to make sure there is parity everywhere — each client gets your very best no matter what. Capital asset businesses are about leveraging the asset according to demand — the asset itself does not change.
Here is the rub: over the last twenty or so years, creative businesses that used to be able to operate as capital asset businesses no longer can and have now been forced into a scarcity model they are not really all that comfortable with — yet. Think about photographers, DJs, even graphic designers for a second. It used to be that the equipment necessary to be part of these businesses as well as the expertise and expense necessary to operate this equipment was significant and a definite barrier. So the capital asset mentality ruled the day. Want me to bring all of my equipment and materials to perform at your event? That will cost $x. Everyone understood that a big part of what was getting paid for was the use of the equipment and that the artist was entitled to earn a return on this use.
Of course, for the vast majority of creative business, the cost of equipment and expertise necessary to enter has evaporated. Welcome to the power of the digital age. You might get paid a little bit for what is between your hands, but mostly it is about what is between your ears — wisdom, experience, talent, expertise. Welcome to scarcity. What is between your ears is most certainly not a fixed asset and of course not a use it or lose it proposition.
This then drives almost all creative businesses to be focused on niche, the power of the outrageous promise coupled with the outrageous demand, the one thing that matters and its manifestation everywhere. All of it leads to the ability to place intrinsic value on the journey as you, the artist and creative business owner, determine. Where were you? Where are you? And Where are you going? If you are accustomed to a discounting, capital asset way of being, this sucks. You are having to learn a new language and paradigm every day. Scarcity means the right yes matters far more than a compromised yes. Your vision, your art, your resonance.
Of course, I might be wrong and your ability to sell with a capital asset mindset when you are now all about scarcity will be just fine. But what if I am right? Or even half right? You will be left with the dregs of clients — bottom feeders who refuse to see your value other than what you can provide, which they believe just about anyone can. In other words, you will be working for less and less and less mostly because you refuse to identify value when you deliver it. If you tell me your ideas are included in your mark-up, you are turning over the determination of that value to clients and they will increasingly value it at zero. Or you can learn the language of scarcity and get to work on the one thing that matters, solving different problems for the people that care the most, getting paid what you need without compromise or explanation other than it is what you need to do what you do. Usually I would say, your choice. However, in this instance, I will go further, and say you do not really have a choice. You are a scarcity business whether you like it or not. It is beyond time that you embrace all that that means and do all that you can to act like one.
