The Business of Being Creative

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Sean

Sell Who and What You Are

I speak with a lot of artists about their businesses (hopefully, with many more to come).  Too often, the stories are the same.  That is until they break out with "When I toured with "Wicked" last Summer..."!  Or that they have a Masters in Speech Pathology, a PhD in Neuropsychology, are a graduate of The Culinary Institute, have an MFA, MBA, MD, JD, etc.  When I ask why something so interesting and singular is not front and center, the response I so often get is that it really has nothing to do with their creative business.

Your clients are buying art, yes, but they are also buying the artist behind it.  The sum of your life experience bears on everything that you do.  To divorce those experiences from your business because you think they have no place robs your business of texture and context.

Vicente Wolf tells an amazing story of a time when he was in Ethiopia and saw a tribeswoman wearing an unbelievable necklace that had in it bottle caps, pen caps, pieces of discarded metal and other miscellanous items someone would find along a road.  There is a picture of her in his book, Crossing Boundaries, (which any one who considers themselves a designer should own).  Needless to say, when he offered to buy the necklace, she thought he was nuts.  It was just something she made and she liked, but valuable?  No way.  Of course, he bought the necklace and incorporated it into one of his designs where it looks like the art that it is.

What you hold yourself out to be may not be what your potential client sees (and loves).  If you think literal experience is all that matters, you belie the humanity behind your art.  Clients enjoy doing business with terrific brands whose businesses are run well.  However, in the vast majority of cases (and for ALL creative businesses), people do business with people.  The best businesses I know of make a connection on a human level first, brand level second.

Business Trends Vs. Fundamentals

Every creative business exists as a function of time.  Trends, technology, demand, fashion and economic realities are always changing and evolving.  Your business model may, in fact, exist only because of such a new reality.  Umm, the Internet is really only fifteen years old and its universality far less than that.  Let's not talk about digital photography, C.A.D. and other technological advances that have revolutionized the way most creative businesses produce their work.

However, please do not mistake the world we live in and the new new thing (i.e., Twitter) for what is necessary for the long-term success of your business.  The strength of your art and your brand as well as the way you manage your clients will matter far more than if you are a social media master or have the most advanced technology out there.  You only need to look at Zappos.com or The Flip to understand what I am saying.  In case you don't know, Flip was sold earlier this year to Cisco for $590 million and Zappos to Amazon last week for $900 million.  At first blush, both the Flip and Zappos look fresh and new to the market. They're not.  Zappos sells shoes online, just like hundreds of other sites (including Amazon).  The Flip's technology isn't all that much better than most cell phone video cameras.  The reason these businesses work is because of their fundamentals.  They know who they are (and who they are not) and they deliver that message across all areas of their businesses -- particularly in marketing and customer service.  They have created Tribes of customers that each become brand ambassadors instead of merely happy customers.  With brand ambassadors instead of happy customers, growth becomes exponential.

For those of you who think I am too far afield from creative business, I ask only this:  How much time have you spent working on your blog in the last month as compared to honing your brand statement?Have you looked to see if and how your message is being delivered in all aspects of your business?  Even more important, have you looked for how you might be contradicting yourself to your customer (i.e., are you a planner or designer, decorator or interior designer, graphic designer or stationer)?  You can't create brand ambassadors unless clients know what they are cheering for.  Yes, it starts with your art, but it ends with clients understanding and embodying your intention behind the art.  That intention is your brand and should pervade every aspect of your creative business.

"Package" Does Not Equal Custom

I Twittered a few days ago that I am on a mission to wipe the word "Package" from the vocabulary of every creative business.  Add to that list "Inventory", "Offerings" or any other descriptor that denotes a standard grouping or bundle of services.

I understand the impulse and desire to create an easily identifiable structure for clients.  I am sure your thinking goes that if they know what you offer, then the better chance you will land the right client.  Couldn't be further from the truth.

At Engage '09, Carly Roney, Editor-in-Chief of The Knot, Inc., discussed The Knot's study on wedding industry trends during the economic downturn and which vendor group was hardest hit as wedding budgets shrank.  Wedding planners were far and away the worst off category.  Carley did not go into detail as to why, but did say that brides felt the planner was most dispensible (as opposed to photographers who they felt were not).  In seeing so many planners sites with similarly bundled services (i.e., day-of, middle-tier and full-service), I understood what the statistics bore out -- the sea of sameness reduced THE most subjective, high touch creative business out there to a function of price.  All else being equal, who the client goes with is who will give them the best deal.

Just so sad to me.  In America, we do not have royalty and, therefore, no ultimate standard to which we can aspire.  Major life events, weddings in particular, are meant to set our own standard for our lives.  Essentially, those in the wedding business are tasked with making that vision a reality, hopefully BEYOND the couple's own vision for themselves.  When you talk about what you do in terms of "Packages", "Services", etc., you debase the connection you as an artist need to establish with your client and make it all about your ability to accomplish tasks.

Will it take more work to explain all that you do to every potential client?  Yes.  But the point is to communicate directly with them and establish a connection.  Will you waste a lot of breath on the wrong clients?  That is up to you.  If you don't define who you are and what your art is truly about, then yes.  Go all the way there, without apology or concern for your competition, then no.  Be an Eventiste.

Industry standard offerings belong where the underlying product and/or service is the same: your cable TV provider, utility or cell phone service. They have no place in creative businesses.

What Will Your Legacy Be?

The event business recently lost an icon: Robert Isabell.  Yesterday, the New York Times ran a full page story (in the Style Section, of course) memorilizing Robert and his work.  There will only be one Robert Isabell and his accomplishments were and are ground-breaking.  His passing, and that of Philip Baloun last year, got me to thinking about what, if any, legacy a creative business owner would want to leave.

Maybe the legacy has to be that of a singular artist with encapsulated work -- so when you are gone, everything is gone.  Certainly the case for Robert and Philip.  Philip's business was systematically dismantled within months of his passing and I suspect Robert's will be too.  Just not sure that it HAS to be this way.  There are legions of examples of artists and designers whose business transcends them.  Just to name a few -- Versace, Chanel, Dior and, among the living -- Phillipe Starck, Armani, Ralph Lauren, Calvin Klein.

What I am sure of is that the legacy of your creative business has nothing to do with whether the name of the business has your name on it.  Nor does it have to do with the breadth of the business (i.e., if it is regional, national or international).  It has everything to do with how far the brand has transcended the core of your art and whether the style of your brand has become engrained in the market as a lifestyle.  If it has, then there is a fair chance that the business can survive you.

Ask yourself to what end are you running your creative business?  If it is to simply practice your art, then stay true to that.  You don't get bigger than Robert or Philip, and their businesses are gone forever.  But if you want to build something bigger than the core presentation of your art, then you have to see your core for what it is -- the place to start (and to which all things will return).  

Going beyond your core is much easier said than done.  Establishing the essence of your art as a lifestyle should be your first step.  However, you do have to choose.  If you don't, you will be caught in the middle between doing what you do and focusing on leveraging your core.  This will dilute both your art AND your brand.  Like everything else, it boils down to living your own truth, both as an artist and business owner.  Your creative business can only be a reflection of that truth.

Own Your Brand

The endlessly fascinating part about creative businesses is just that -- their creativity.  And, at the end of the day, your version of what it is to be creative is what you are selling.  So many of you have incredible websites, blogs, marketing collateral, etc.  You are constantly investing time and money to keep it all up to date and relevant to your potential (and existing) clients.  Yet, when I look a little deeper, I see that very few of you actually own your brand.  By that I mean you are borrowing images and statements of your work from other people in order to tell your story.  The best example is of an interior designer or event designer using the images from a photographer not hired by them (i.e., the commercial photographer or wedding photographer) to display their work to the public.  Most often these photographers are friends or even vendors and there is little or no financial cost.

However, there is a huge cost to your brand.  First, you don't own the images and your use of them is subject to the photographer's discretion (or largess).  More importantly, you do not control the ultimate statement that is being made by the image.  By definition, it is a derivative use and most likely will not have the same point of view the next time.  For instance, if you are an event planner, one client might want a photojournalist style, while another a more formal staged look.

Your brand is your story and you should be the one telling it.  That means paying for someone to document your art as you want the world to see it.  And the more you document, the more stories you can tell.  Yes, this will cost you money.  However, if you are serious about building a leveragable brand, then it is an investment you really ought to make.  The larger your portfolio of images, video, renderings and other representations of your art, the easier it will be for you to move beyond your core, because of how compelling and consistent your story will be.

On a technical note, you need to own the images of your work and have the right to use them as you please.  If those images get commercialized, you can agree to compensate the producer of the image at that time.  However, you need to make sure that the producer can not ever stop you from using the images and that they can not ever use them without your permission.

Outsourcing

As an investment banker and financial executive, I learned early and often that a client with significant repeat business runs the show and can get FANTASTIC results by wisely dividing its business.  Spread the business too thin and no bank will care, too concentrated and other banks won't compete for the business, but among two or three key players and amazing what each will do to outshine the other.

For creative businesses, my underlying philosophy is this -- the value is in the art (i.e., the design) not in the production of the art.  Unless you are vertically integrated and specialized in production (i.e., Todd Events and Celebrations), I would argue that you would do better supervising those who are focused on production than actually doing it yourself.  It should only take you a moment or two to realize that, in most cases, YOU are the big fish -- if you would only let yourself be.  I hear all the time from creative business owners (i.e., planners, caterers, florists, event designers, interior designers, graphic designers, etc.) that if they outsource the production of their art , they will lose control and risk their entire business.  To which, I have two responses.  The first is that most creative businesses are not in a position to outsource.  They do not have the capacity to supply the information necessary to ensure effective production of their design, nor the capacity to properly supervise the production.  Think about what an interior designer has to supply to a client to produce its design for a hotel -- a spec book about six inches thick.  Next, most creative businesses see those focused on production as competition, not as a potential supplier.  My guess is that if you thought of your business as a client and concentrated on what would make the relationhip valuable to BOTH of you, you would come up with a powerful way to "wholesale" the producer's business as part of your own.

A creative business will actually have MORE control if it outsources well.  There is a limit to what you can do by yourself and only so far you can extend into daring design if your neck is truly on the line.  However, if you can make it that your business represents a SIGNIFICANT portion of a producer's business, then their willingness to risk that business by underperforming is negligable -- even more so if you are taking all of the guesswork out of production by providing extensive design information and supervision.

If you are in the position to outsource, be the artist that you are and give the rest to someone else.  Then let your art go whereever it can go.

What Is Your Next Step?

For those of you who have been practicing your art successfully, the question I am sure you are always confronted with is:  what is my next step.  I recently wrote about Growth vs. Expansion and will not rehash what I spoke of there, although it is definitely part of this discussion.  The focus of this post is to ask why you should undertake whatever it is that you are thinking about doing next.  The answer can't be that it just seems like a good idea.  Not a bad starting point, but you need to do a lot more work BEFORE you commit to extending (and distracting) yourself.

The first question HAS to be -- will it support my core brand and will the endeavor's success bring success to the other aspects of the business.  Presuming yes to this question, the next question is what is the purpose other than profit?  Is the endeavor going to provide leverage for the business, allow you to change your lifestyle, or even sell the business?  Leverage to me is another revenue stream whose product or service the business can use for itself and also sell to the public.  For instance, an interior designer opening a retail store whose items he can use in his designs but also sell to the public (VW Home).  Leverage is also about doing things that do not directly involve you as the artist (Laura Novak's Little Nest). 

Selling the business is an admirable and worthy goal for any business owner.  Whether you actually sell or not is irrelevant so long as you consider what a buyer might find attractive both in the core business and with what you are planning.  The key will also be what growth they will be able to extract from the business that you can't.

I can say that if what you are planning, even after getting past the brand enhancement hurdle, doesn't give you leverage, change your lifestyle or set the business up for sale, then I am not sure why you would undertake it other than ego.  Not to say that ego isn't a very powerful motivator, just that there are only so many hours in the day.  Your creative business exists to serve you, not the other way around.  Without purpose to your forays beyond your already successful core, you will be soon overwhelmed by the endeavor.  However, with purpose it will be very easy for you to keep your eye on the prize so to speak and know if it is appropriate to see your way through the inevitable Dip or not.

Commissions, Referral Fees and Markups

At Engage '09, during her speech Marcy Blum took the bull by the horns and said that she is a "reformed commission taker".  She said that she does not approve of the practice unless it is plainly available for the client to see.  There were a lot of nodding heads in the audience, but one person who argued the other way and said that those who refer business should receive compensation from the vendor receiving the referral.  I had to literally sit on my hands not to steal Marcy's thunder.

Commissions, referral fees and hidden markups (where your invoice is marked up by the planner or other vendor on their letterhead) are not in and of themselves evil.  They just have no place in today's market.  Without efficient access to information (i.e., without the Internet), customers are subject to the power of those who control the information.  So if a customer has no good way to find a reputable vendor and no way to discover what people really think about the vendor's work, the only real source of information is from a referral.  In this kind of market, a commission or referral fee is far more powerful and valuable to less-established players in the market.  However, with the Internet and the amount of information about ANY artist literally available at a potential client's fingertips, the closed system is now blown wide open.  Simply, there is virtually no value in a stand-alone referral from a vested source any more -- a potential client may take the recommendation but will research the creative business prior to choosing to do business with it.

I abhor the lack of transparency in any business, creative or not.  Unless you are willing to pay the commission or referral fee out of your own pocket, your client has the right to know what they are paying for.  I might be puritanical about things, but failure to disclose a commission to your client is this close to fraud.  It might not be illegal, but it certainly stinks to high heaven.

The biggest point though is not the ethics of the practice, but the impact it WILL have on your business.  The goal of your business is to deliver your art at a price point you consider to be fair value.  If what you are delivering is at an inflated price because you have to "bury" the commission, do less to be able to afford the commission or because someone else is marking up your invoice, your brand will suffer.  Clients know when they don't get what they pay for and they are not shy about saying so to you or everyone on the planet via the Internet.  And make no mistake, you are the one who will be singled out.  After all, it is your business that delivered an inferior product relative to price not the vendor receiving the commission.

Should you be grateful for a referral?  Of course.  But show your gratitude by going above and beyond for both your client and the vendor.  Overpromise and overdeliver.  In the medium and long run, the value generated by your actions will far outweigh any commission you might have to pay.

And to the person at Engage '09 who questioned why a florist shouldn't pay a vendor who sent her many, many referrals a referral fee, I respond with this:  why do you think the vendor was referring the florist in the first place?  Because she is a GREAT florist and she makes the vendor LOOK GOOD.  Your art needs to stand on its own.

New Clients vs. New Business

For most creative businesses, the focus is on a single moment in time.  If you are a planner, stationer, photographer, floral designer, event designer, etc. working on an event, you work with your client until the event is done and then the relationship ends.  Hopefully, you will get some nice referrals from both clients and vendors, but basically you are in a perpetual search for new clients.  Very little effort and attention is paid to extending the relationship with past clients.  In fact, the amount of time, money and energy devoted to finding the next new client is astounding to me.  Just thinking about what it takes to keep up with social media, advertising, industry events, and face-to-face networking makes me short of breath.  And the more competition that enters the market, the harder you are going to have to work to get the new client.

Why not rethink the strategy?  Your existing clients are fertile ground.  Presuming they were the right client for your business and you did your job well, they are your fans -- in love with you and your artistry.  The only reason they are not buying anything else from you is probably because you are not SELLING anything else to them; at least not in a meaningful, structured way that identifies the true value of the relationship (and your art).  Certainly, there are starts, like a wedding photographer doing portraits.  However, when I look at most of these photographers' sites, the programs seem to be completely distinct -- as if they were two businesses.  Not the way to communicate to the client that you want them for more than the moment.

Many of you might suggest that the client only really wants you for the moment in time they hired you for and offering more would alienate them.  My response is what I wrote in my last post:  your art transcends its medium.  It is you, not your client, that is putting limitations on its breadth.  Why can't a wedding planner develop a dinner party business?  An event designer become an interior designer?  A caterer a cooking instructor or table stylist?  A florist become a jeweler?

I do understand the urgency to feed the mill, especially today.  However, ignoring opportunities right in front of you, in the face of growing competition will put enormous pressure on your core.  It will also leave you vulnerable to those that have succeeded in diversifying the art they provide to a client.  You will be in the position of having to make all your money at one time; they won't be.  Uh-oh.