The Business of Being Creative

"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.

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.

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.

Growth vs. Expansion

I had the distinct honor of being able to speak to a veritable plethora of creative business owners last week at Engage '09.  One of the recurring topics of discussion was what the next step was going to be.  Most wanted to grow geographically -- do the same thing they were currently doing, just somewhere else.  A few were doing things related to their core business, but only tangentially (i.e., a floral designer opening a retail flower shop).  Only one person I met with was working on expanding his core business (through vertical integration).

Growing the core business into other markets is an ok idea -- so long as you have saturated your current market and have a road-tested operating structure in place.  For instance, if you are a high end stationer serving Seattle, have reached a plateau in sales (but are stable) and find that your staff can handle most, if not all, of the business without you, then considering marketing your product to Portland could be the right move.  Too often though, the creative business has neither saturated its market nor has the operating structure in place to be able to enter a new market without risking its place in its existing market.

All things being equal, I am lukewarm on geographic growth.  The reason - it ignores the value of the creative business' brand equity in its market and, ironically, undervalues the business' core.  Take the same high-end stationer in Seattle.  If he/she really is the best high-end stationer in the market, think about how much time and energy went into building the business' reputation both at retail and to the trade.  How difficult do you think it would be trade off of that reputation to expand into another business line altogether?  Perhaps, graphic design, papery beyond life events (and life events beyond weddings), interior design fabrics (wallpaper, textiles, linens, etc.), and flooring (dance floors, tile, carpets).  The new business line would legitimize the core of the stationer's business and thereby support additional expansion. 

The mistake is to think that your creative business' reputation will immediately translate into another market.  Not to diminish the value of your art, but there ARE other artists already doing what you do in the markets you want to get into.  Your art may or may not be superior to theirs, but you WILL have to prove yourself all over again.  Which, of course, begs the question, why compete in the same arena again when so much opportunity (and new challenges) await you where you are THE big fish?

For me, it is the difference between growth and expansion.  Growth is doing the same thing bigger.  Expansion is using the current platform to develop other areas of business, which, in turn, grows the current platform.  Know your art transcends its medium.  The audience that already loves your work is far more apt to embrace (and value) a new expression than a new audience will the old.

A Client's Perception Is Subjective, Your Reputation Is Not

We all work so hard to get people to see us as we want them to.  You and your creative business are no different.  Your website, advertising and social media efforts are aimed at getting the right people to be interested in you.  A client's enthusiasm for your end product is the goal of the business.  Ultimately, though, how a client sees your art is how they are going to see it and is largely beyond your control.

The mistake is to confuse a client's perception of you and your art as your reputation.  It can happen on both sides of the equation -- if a client swoons over your art, but you are a jerk or if your client goes flat, but you are unflappable, kind and professional.  For all creative businesses, assuming your talent, reputation is EVERYTHING.  You might think that your success will be based on the strength of your art.  In the (very) short term, you might be right.  But, long term, if you sacrifice your integrity or are anything but professsional you will be lost.  Whatever your personality, a well defined business with process and commitment, coupled with talent, will win the day.

We all know how to cut corners and to play the games that are more about ego than business.  Acquiescing to an unreasonable request by a client or vendor (i.e., getting paid in cash) in the name of customer service is something I hear of all the time. 

Taking the high road is hard.  You might lose clients to those that are willing to compromise.  And, in the times we are in, that could be the difference in paying your bills and not.  Given the alternative, better to flip burgers. 

Faith is knowing who you are, the value of your art and its ability to sustain your business into the future.  Your reputation will be based largely on how much you are willing to compromise your faith.  For all of you, I hope that amount is zero.

Your New Paradigm

Paul Krugman's Op-Ed piece in last Sunday's New York Times talked about how we should not stop all of the unconventional government interventions into the economy now that we are a few inches back from the edge of the abyss.  Stopping now, he argues, would put us right back where we were a few months ago and maybe even over the edge into a full-fledged depression.

Paul's piece is equally applicable to creative businesses, large and small.  Strategies and structures you may have put in place when the economy went south are still necessary, even if business is looking up.  The temptation to go back to what was comfortable (and maybe what you even liked better) is significant, but needs to be resisted.  The world that was will never be again.  If your new paradigm IS working for you, then it should be your new baseline from which you should operate.

I look at it this way -- a rising tide carries all ships as does a falling tide lower them.  If you have figured out how to float in a lower tide, you will rise faster and further when the tide comes back.  The changes you had to make were based on the new (and grim) economic reality your business confronted starting a year ago.  You probably had to outsource more, be more creative in how you stretched your marketing dollar and focus on only that which was most valuable and profitable for you.  In short, you had to bring as much efficiency to your business as you could just to survive.

Abandoning that efficiency now belies its true light. You might be on the other side of the crisis, but you have no idea how far the changes you have made can take you if you do not embrace them as permanent.  I do not believe you will fall into the abyss as the American economy will if we stop our interventions now, but you will miss the rewards that leverage and efficiency bring to any business.

Your Brand Can Stand On Its Own

I am all for strategic alliances and other marketing/co-branding efforts, if everybody brings something to the party.  Too often though, creative businesses sign up to "represent" or be a "preferred vendor" for a well known, large (maybe even huge) corporation without any real obligation on the part of the corporation to DO anything for the creative business.  The creative business does it on the hope that just being associated with the corporation will bring legitimacy to the brand (and more business).

Never works.  Why?  There is no such thing as a free lunch -- if your brand doesn't have a singular reputation and meaning on its own -- no business association is going to magically make that happen for you.  The likely result in such lopsided relationships is that you and your business will have to commit enormous resources (likely to the point of distraction) just to support the corporation and its brand.  In the end, you will be invisible and your art will be wholly commoditized.

If you know the value of your brand and your art, you know you bring something that will help the corporation achieve a goal it has set for its brand.  And, even if this is true, you still need real compensation -- whether it is in the form of financial guarantees, PR/Marketing/Advertising commitment or both.  Without risk, the corporation will literally not be invested in your success and it will be all too easy for them to ignore the Dip that is inevitable in any business relationship.

I know how enticing and even sexy it is to be courted by a corporate partner.  The fantasy of what it could all mean for you and your business is intoxicating.  Some of you in this position might feel that if you turn down this once-in-a-lifetime opportunity it will never come again.  You are wrong.  If you continue to do what you do, your brand will only get stronger and your value to the corporation, everything being equal, will only continue to grow.  From there, you will be able to make the deal that helps everybody.

The Air Your Business Breathes Isn't Free

There are things we all do as human beings that have nothing to do with money.  We do them because they feed our soul, hopefully bring us joy and mostly because we feel it is the right thing to do.  Your creative business probably does all those things for you too.  However, that is not its purpose. Your business' purpose is to make money and your mindset should PRIMARILY be based on analyzing the cost-benefit of EVERYTHING your business does.

You are investing your time and money every day, all day.  The investment has to yield a definable return, regardless of whether that return can be quantified financially or not.  We are all taught as children to not be selfish, to not think of what's in it for me.  However, as a business owner, that is the ONLY way you can think.  Quite literally, your job is to take 2+2 and make it 5.

The cost-benefit mindset will also help you embrace the concept of finite resources.  Every business on the planet has finite resources -- some much more than others, but still.  You only have so much time and money at your disposal at any one point.  A dollar or hour spent one place NECESSARILY means that it will not be devoted someplace else.  Therefore, if you are to make 2+2=5, your goal has to be to use those resources as efficiently and effectively as you know how.  That means placing a value on all that is being done and why.  Usually this mindset stops your ego from getting in the way.  For instance, where you spend money to promote the business will be where you get the biggest bang for your buck, as opposed to where you think you have to be.  Spend thousands advertising on the Knot, WeddingBee, shelter magazines, etc. or use the same money to photograph your work in a relevant way with someone (or some place) that can take advantage of the images.  Spend an hour doing the books or an hour drawing.  Keep an employee in a job because they are "loyal", but incompetent, or find a place where they can really help you (including working for someone else).

You certainly don't have to take cost-benefit analysis to its logical extreme -- you are an artist; but you do have to have a sense of proportion and profitability in mind.  After all, the last thing you or your business needs is to have 2+2=3.