Foundational Pillars Under All Creative Businesses

by seanlow on August 2, 2017

It is August. Hopefully, time for a breather before a busy Fall is upon you and your creative business. While you are moving a little slower, perhaps it is a great time to reevaluate, perhaps even redefine your foundation as an artist and creative business. What follows is a discussion of the pillars of the foundation under every creative business: The Outer Boundary, The Design Statement and The Value Timeline. It might seem like high-level work that does not really impact your day-to-day reality. As you will find out in my next post, a solid foundation defines your reality and that of your art and creative business.

THE OUTER BOUNDARY – The bedrock of a successful creative business is a firm understanding of the outer boundary. The outer boundary is how much to do you want to work and how much do you want to get paid to do that work. You can argue with me all day long about starting from the bottom up – i.e., if I charge $2 how much business will come my way and if enough comes I will be ok. However, the essence of creating art that matters is doing only your best, not your best under the circumstances. If circumstance dictates everything (i.e., how many clients may or may not show up given a price), you really have nothing. Instead, outer boundary first. How much do you want to work and how much do you need to make to do the work. Thirteen projects and generate $500,000 (wrong assumption for sure, but assume $100,000 in expenses so you take home $400,000). Then your price has to be $40,000 give or take. I do not care (here anyway) how you get your $40,000 – fees, commissions, etc. – you just need to be able to get there, which, of course, leads to:

DOES IT PASS THE SMELL TEST? If you can appreciate that you need to take home $400,000/yr. and only want to work thirteen times per year, the question is NOT whether THE market can support that level of work, the question is whether YOUR market can support that level of work. For interior designers, if 35% is a good goal and your average project is $120,000 or $60/sf on a 2,000 sf house, you are right there. Not so much if the price is $30/sf or $120/sf. Goldilocks – too expensive for the $120/sf project, too cheap for the $30/sf one. If you pass the smell test for your market, move on; if not, then reconsider the outer boundary. No firm outer boundary, no creative business. And I really do not care whether you have been in business for a hundred years or a day, you go nowhere without a firm outer boundary and so you need to do the work regardless of what has (or has not) happened thus far in your creative business. Also, the outer boundary is not static, it is dynamic. It moves. You should reevaluate the outer boundary at least annually if not semi-annually. February will be here soon enough.

THE DESIGN STATEMENT Presuming we now have alignment with the type of art you want your creative business to create (i.e., you know your cost of production and level of production), we turn to filling everything in.

The first practical exercise is to write a design statement. Design is a statement of your art – I create this for you. This statement applies to ALL creative businesses. Whether you decide to share it with clients, potential or actual, is of no consequence. You need to write it down as it is the basis for what is valuable about your creative business. If you cannot fully and specifically articulate your art – why and for who far more than how and when, why should a client believe in you, your art and your creative business – why should your client hire you. You are not a convenience you are an artist. To be an artist, you have to consider yourself expert at what you do and therefore have an opinion about how you go about creating. Note, your design statement is NOT a brand statement. It is how you go about thinking about creating art for a client. More “we consider the ceiling first” and less “we love modern ethno-fusion.”

THE VALUE TIMELINE At one of the earlier Engage! conferences, I happened on a conversation between Marcy Blum and Tara Guerard. Both Marcy and Tara, of course, have had great success at what they do. They were arguing though about whether the band plays during dinner. Marcy thought it absolutely necessary otherwise everyone would get bored. Tara, on the other hand, thought the exact opposite – dinner was dinner and then we move on to entertainment. Ambient music only during mealtime.

It is irrelevant your personal opinion on the matter. What is relevant is that if you were building the relationship with your client, how and when conversations go would most certainly be different for both Tara and Marcy. With your design statement in hand, you then must create a value timeline. How do you go from the bottom of the mountain to the top and what is each stage worth to you and your creative business? Take everything you now know about who you are as an artist and creative business owner, who you look like (or want to look like) and then assign hard percentages to each phase of your journey with a client. Begin with commitment to each other and end with the end of the project.

What is your design worth (and, again, ALL creative businesses are designers)? If there are stages to design, what is each worth? Do they grow in importance? When does design end and production begin? Are there phases to production? What is each worth? In a perfect world, you would simply multiply the percentage times your fee (here $40,000) and get paid at each stage. Of course, this might be impractical given too many value points (too few is not an issue). Then the exercise is logical groupings so that a client is not writing your creative business a hundred payments along the way.

Notice I said logical groupings. That does not mean half and half or thirds – that is random. You have to be able to defend the value point groupings as making sense to you and your creative business’ process. Erase any idea of a “right” or “accepted” practice and, instead, substitute what makes the most sense for your creative business process. Why? Your process is your own and payment (both in terms of money and decisions) is the only way your creative business can move things forward. To round out the example, our designer is fee based and charges $10,000 to engage, $20,000 for design and $10,000 for installation.

FAILSAFES – Ok, now we have the outer boundary, a design statement, a value timeline and possibly value groupings. The last piece of the foundation is what happens when a client (and/or employees, colleagues or vendors) challenges any piece of the foundation. In some instances, it is full stop. You do modern, they want classic. You work at $60/sf, they want $200/sf. In other circumstances, it might just be a course correction. They want to talk about hard shell (paint, flooring, fixtures) first and you are all about décor first. Course corrections cost money as you and your creative business have to endure pain that your creative business did not cause. The questions are how much pain is caused, how much pain are you willing to endure and what is the price for having to endure the pain? Finally, what happens if the pain continues and becomes full stop – translation: when does your best become impossible? Putting in failsafes brings a sense of flexibility and rigidity where appropriate, but in all cases reaffirms the power of the foundation.

I want to stress to you that hubris hurts A LOT. All pipes get gunk in them, all boats need barnacles cleaned off. Putting more water in an impeded pipe makes the pipe burst as much as it might lead to more water coming out. My guess is that you have never really honored an outer boundary because, hey, if that juicy project appears (or any project when you are worried if there will ever be one), you are off to the races. Probably, none of you have a design statement and, if you do, it is static with lots of words that really express no opinion as to why and how you create art. If you have done a value timeline, it is probably not based on the design statement and, therefore, likely an exercise rooted in nothing related to your actual creative business.

You defend pricing and failsafes with your design statement in mind, not the other way around. No matter who you are, have beginner’s mind and do the foundational work described here. More than anything, you will be surprised by where you will want to go once you have done the work. Of this I have no doubt: it will be much much farther than you have already gone. Happy Summer.

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