Creatives are those who, by and large, would much rather be dreaming up inspired and imaginative strategies and designs than sitting down looking at P&Ls or dealing with staff issues. Driven to create, they believe that structure and rules will negatively impact the space and freedom they need to explore their creative gifts. They focus on their craft, not on the numbers.
When we talk about creatives, most people automatically think about those who work in the art or design sectors such as fashion or graphics, but this article address all kinds of creative entrepreneurs; it speaks to anyone who colors outside of the lines, who brings imagination, design and creativity into his or her business through clever branding and innovative strategies.
Rather than focusing on the business side of their enterprise, creatives are often more inclined to sacrifice their financial security at the altar of their artistic integrity. They invest their time, capital, and energy in an unbalanced manner that all too often results in the failure of businesses positively overflowing with unrealized potential.
To unlock this potential, you'll need the key, which is a business structure built upon organized, unshakeable financial foundations.
The world of business moves at an incredibly fast pace with new ideas and new trends emerging constantly. Add to that the global financial crisis, the emergence of new markets of competitors, and the rising cost of raw materials, and it becomes apparent that the creative who wants to succeed and be recognized needs to understand precisely what this business climate demands.
Running a successful creative business requires 90 percent business savvy and 10 percent artistic ability -- a fact overlooked by many of those creatives whose businesses fail in their first few years. No matter how talented you are, if you focus the lion's share of your energy developing and utilizing your creative skills at the expense of the financial foundations of your business, the failure of that business is almost guaranteed.
Look at the most successful creative businesses: behind each there is a business-savvy partner whose left-brained logic and critical thinking skills balance out the right-brained intuition and artistry of the creative partner or partners. The reality is that many large and successful creative businesses are as corporately structured as are those found in the banking industry -- don't let appearances fool you. Securing a solid financial base for your business will deliver you more freedom of both time and capital with which you can indulge your creative talents.
Having worked with hundreds of creative business owners over the last 25 years, there are five common challenges that they all face in their attempt to live a life of successful creativity.
Mindset - What most often comes between creatives and financial independence is precisely that which sets them apart from the business community at large. Their natural gifts, often highly specialized, too often lead creatives to excel exclusively in their area of expertise, leaving them unable to transfer their skills into those areas that will guarantee them a financially sustainable business. Having the right mindset, and an understanding of the keys to profitability is critical to creative success.
Visualise and Plan - Most people view their business as a means to an end. Others (especially those in creative fields) view the business as an end in itself. If you are one of the former then it will be helpful if you understand how much your dreams (and the freedom to pursue them) will cost. If you don't know how much that is, you are flying blind. Not doing so only complicates and confuses the path to freedom. The actual cost might be less than you think.
Funding - 80 percent of businesses fail due to cash flow problems -- and 75 percent of them are profitable businesses. Starting and maintaining a successful business is a full-time job; it requires a committed mindset -- there is no such thing as overnight success. Often you will read about or watch a show that features a business that started from the owner's bedroom, and now, seemingly overnight, it has grown to employ hundreds and to make millions. The truth is, there is only one way that meteoric success like that happens: outside investment. Fast growth quickly brings with it big cash flow issues, a factor often overlooked, so be aware that rags-to-riches success stories almost always include a lot of back story that you won't hear about. Chances are, the success that appears to emerge out of nowhere is, at least in part, the result of a massive investment of capital from either business partners or outside investors.
Automation - For so many of the creative businesses that I have helped, automation is the cornerstone of a viable financial strategy. It is easier than ever to work remotely; instantaneous communication between you and your customers or collaborators is seamless and instant; social media users, who number in the billions, can turn good ideas into viral campaigns that can turn start ups into multi-million dollar brands almost overnight, however, the constantly flowing tide of new technologies can leave even the most tech-minded creatives feeling overwhelmed. It is important to spend some time and get some clarity around what is on offer and what is going to work for your business success.
Streamline - Once you have set up the financial foundations of your business, ensure that you have a team and systems in place that will regularly evaluate your performance and keep you on track. Your work can become a monster that you have to keep feeding as your business grows. Suddenly, you find that all your time is spent juggling administrative and financial issues. As these begin to crowd the mind, less and less space is afforded to your creative talents. It can feel like the tedious day-to-day business affairs are blurring the vision that led you to start your business in the first place. If this is where you find yourself today, or if you can see yourself there in the not-so-distant future, it is time to look at a few of the ways you can free your hands and your mind for the creative tasks to which they are best suited.
Sophie Andrews is the author of The Creative Collection, Director of the Australian Bookkeepers Association and CEO of The Accounts Studio, a bookkeeping and cash flow consulting agency specializing in working with creatives and entrepreneurs.