The inroads e-businesses have made into creative businesses have driven most creative business owners to the idea that scale — diversifying revenue streams is the only way they are going to survive. Whether it is some sort of e-design services for interior designers, day of/month of services for wedding planning, even drop-off rentals for special event rental companies, the goal is always to generate extra revenue and to somehow reduce the seasonal feast/famine cycle.
I have talked a lot about analyzing potential opportunities with A Perfect Egg analysis and also to focus on the strength of your creativity versus the low hanging fruit that you are good at, but not necessarily great. Both The Perfect Egg and focusing on strength are still vital to this discussion but this post is focused on the foundation underneath.
What are you getting paid for, why and when are questions I STILL see creative business owners across the board struggling with. When clients push back that you are too expensive, colleagues band together to effectively blame the client. What does not happen is to ask why? Is it the wrong client? Is the model off? Is it confusing? Does it not pass the smell test?
And here is where I am going to make a huge statement. If creative businesses do not as a whole, get exponentially better at defining value for clients, colleagues, hey, the general public, they are going to be marginalized out of existence. Why? The aim of every toolmaker is to convince the world that the tool is the artisan so that it will reap the rewards of that role, not the artisan. When tools were effectively in the stone age (nobody would think Excel would be your designer) no-one thought twice about this idea. Now, when the tools are as powerful as they are and the lines blurry (hello, Havenly, Modsy, All Seated), the gap is almost closed. Make no mistake, the issue is not going anywhere. Just wait until 5G becomes universal —- next year. The speed of relationships and the leveraging of personal information will take these tools to an entirely new stratosphere. Listen to Seth Godin’s parable(?) about a smart refrigerator and you will get the idea.
So go ahead, focus on scale, diversifying your revenue streams to prevent your feast/famine cycle, see how that works out for you. I say it with tongue and cheek because unless you have the capital being devoted to these tools (e.g., last week Havenly raised another thirty two million dollars), competing with them will be a very steep uphill battle. Instead, let’s focus on value and, as an industry, demanding to be paid for what gets delivered relative to other things.
Sounds obvious right? Not so much. Here is a thought. If you charge by the hour as so many of you do, how come you charge the same hourly rate regardless of what you are doing? Have you contemplated what that means for your business? Oh, and presumably you have gotten better at what you do as you move forward with your career. Has your hourly rate grown at the same rate? Likely not. Do you know what THAT means? If you have the same rate that is less than your efficiency, you are telling everyone that you have to work on things that do not matter to you to make what you need to make. See, what you need to make has not changed (in fact, what you need has probably gone up) but you get done in a fraction of the time so you need to do more tasks to justify the hours — less valuable tasks.
The hourly example is how we all live with canards in deference to expediency regardless of the compromise. Simply, this is just not good enough any more (not that it ever was btw). How you do things has to make sense to you, your clients and colleagues alike. Moreover, we all have to defend those value points as intrinsically valuable even if they are not yours. Because I said so or because that is just the way it is done is over if only we all commit to making it unacceptable for ANY creative business owner to just mail it in. Clarity requires education on both sides and confusion is the ally of those who want to dismiss your value altogether.
Opportunities will abound with a stronger foundation for all creative businesses. I am all for diversified revenue streams and scale, but not as an answer to structural flaws. First things first.
