At The Margin

by seanlow on October 17, 2017

How you see your world matters.  Do you see things in context of the immediate?  Like a puppy or a toddler who will have five different focuses/thoughts in a minute.  Distractible by the latest beep on your phone?  Or do you see the world as somewhat fixed?  This is just the way it is done.  Plod along and we will keep on using our paper planners and Excel spreadsheets because, hey, they work.

Here’s the thing:  you have to put aside your bias about how you see the world and get down to fundamentals. The concept of margin is all that matters.  Margin is the incremental value (cost/revenue) of the next project and/or opportunity.  In economics speak, if marginal revenue is greater than marginal cost you should do the project.  If not, you should not.  This works for all businesses.  Our world of creative business, however, has a special twist.  Margin has to include brand equity and opportunity cost.  The twist exists because most projects last a long time and have implications beyond the project both during and after the project.

Let’s boil it down.  If you have booked several projects for 2018 already but feel like you are shifting or that you would like to shift, then taking the next project as you have the ones before means that you have ignored opportunity costs and/or real costs associated with doing business you no longer want to do.  Likewise, the revenue you are going to receive for the next project you book in the context of margin is not enough relative to the revenue/workload you already have.

I know I know, but what if business does not materialize, if the great client never calls, a bird in the hand is a bird in the hand.  Worldview, not margin.  Math does not care about your fear.  Margin lets you evaluate where you are today in the context of what has come before and what you would like tomorrow to look like.  It also makes you think beyond the fact that you have a client willing to say yes to you and your creative business.  Yes can only work if it is on your terms.  Margin defines the terms.

Does this mean there can be dry spell?  Watching real money, real projects leave?  Of course.  Who said margin was easy?  I only said it did not have emotion.  Reality always does.  Then again, reality is based on your worldview, margin is not.  Having the discipline to look at what each project will mean to you and your creative business keeps you on the straight and narrow.  Why? A series of effective micro decisions  almost always adds up to a powerful macro impact.

Here’s what I would love to have see happen: Appreciate and understand how margin works when you are looking at the next opportunity in front of you.  Will this project fit into where your creative business is just now?  Where you want to take it?  Will your client get your best?

The moment matters and the best way to appreciate the moment is to evaluate it as it is, with its own value and expense.  Each moment is different and means something different.  This is the concept of margin.  And the more you learn to love it, the more it will love you back.

Previous post:

Next post: