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THE 5 BIGGEST MISTAKES
CREATIVE BUSINESS
OWNERS MAKE
And Success Strategies to Use Against Them
What is a Creative Business?
A creative business is
born when a founder
has an artistic vision
and chooses to
interpret that vision in
products for sale.
Creative business products:
¨  Paintings and drawings
¨  Books
¨  Information products
¨  Crafts
¨  Skills ( such as woodworking
or cooking)
Creative Businesses are Popular Start-ups
¤  Work-from-home,
part-time venture
¤  Low initial costs
¤  Fun to work with ideas
and chosen media
¤  Feel good customer
engagement
Many Creative Businesses Struggle and Even Fail!
Even though you mean well
and have the best
intentions, you can be
drawn into making
key mistakes
due to: belief, inexperience,
fear, and more.
	
  
¤  There is risk involved.
¤  You will be responsible
for guiding your business
into a thriving, profitable
enterprise
And Success Strategies to Use Against Them
Mistake #1. You haven’t defined your purpose.
¨  When you don’t know what you’re
all about, you’re not going to know
what to do.
¨  Once you’ve defined what your
mission is and how your business is
going to affect the world it operates
in, you can do meaningful work.
¨  Work without meaning is
drudgery, and you will soon
tire of it.
¨  Meaningful work is more like fun, a
good thing considering you’re going
to be doing a lot of it!
¨  Some business owners mistakenly define
their purpose as “to make my art” or to
“practice my [specific] craft,” or even “to
sell my creative product.”
¨  While technically it’s true that any
business is in business to sell product to
customers, there is a higher reason
for you to be in business.
¨  Whether your purpose is to bring forth
better relationships for your customers, or
to introduce a higher quality, better
aesthetic option in accordance with their
needs, or to provide work for people in
your community - knowing it will define
the steps you take to nurture and grow.
Success Strategy: Ask Yourself These Questions
What mark do you want to
leave on the world?
	
  
¨  What is the driving force
behind your passion?
¨  What impression do you
want prospective clients to
receive?
¨  What long-term benefits
will your customers gain
from a business
relationship with you?
Mistake #2. You don’t treat your business like a business.
Because it’s so easy to get into a
creative business, it’s also easy to
treat it almost like a hobby.
You may settle for less
than mediocre revenues
and congratulate yourself
that you are “in business.”
But sidelining your business
indefinitely in this way guarantees
that eventually you will burn out
and close it, or it will wither through
lack of attention.
	
  
Many creative start-ups fail to do the most
rudimentary things:
¨  form the appropriate business entity (LLC,
corporation, sole proprietorship)
¨  have professional business cards with a
custom logo
¨  rent or designate office space
¨  get a business bank account
¨  hire tax and legal professionals
¨  take credit cards for payment
¨  take deposits to begin projects
¨  chase down slow-paying clients
¨  invest in their business and themselves
Success Strategy: Find and Allocate Resources
Plan for investments to
further your personal
competence and assist you
in building your business.
	
  
¨  Resources = creative +
financial
¨  Form the appropriate
business entity
¨  Obtain relevant
licensing
¨  Be legally and
financially compliant
¨  Establish good fiscal
policies
Mistake #3. You build obstacles out of fear.
Successful entrepreneurs:
¨  acknowledge risk
¨  swallow fear
¨  disregard naysayers
¨  forge ahead
¨  face issues squarely
There are always
uncomfortable things to face.
Allowing lack of expertise
to stall your momentum or
influence poor decisions is
a fatal mistake.
We all have to force ourselves
at one time or another to do the
thing we most fear.
Success Strategy: Become Fearful of Inaction
“I created more fear of not
starting than the fear of starting.
I realized that every day I
waited, a customer was not
getting my solution, and a
competitor was getting closer
to that solution before I did. I
even imagined my worst
nightmare if I’d failed to take
action. . . That was the kick-in-
the-butt I was looking for.”
Amir	
  Khella	
  
¨  Figure out what you need
to feel safe in moving
forward and put those
things in place.
¨  If you are continually
identifying or putting
obstacles in your own path,
be honest with yourself.
¨  Don’t try to account for
every potential
contingency. Just do it.
Mistake #4. You take off without a pre-flight checklist
and then fly without instrumentation.
Real businesses make money.
You need to know specifically how that is going to happen.
Three essential financial tools to provide information you’ll need to frame objectives:
¨  Break Even Analysis - This is the most basic: how much money are you going to
need to make in order to have some left over every month?
¨  Marketing Efficiency Analysis - How much does it cost you to bring in a customer
who will spend more than that cost? A customer’s lifetime value (meaning how
much they will spend over the course of your relationship with them) should be
at least two to three times the cost of acquisition.
¨  Financial Projections – Run basic numbers here and then adjust them with real
data as it happens. You’ll want to know how long it’s going to take you to reach a
certain size (“scale”) and how much money it’s going to take you to get there
(“capital requirement”).
Inc. Magazine
Success Strategy: Do the Math Homework
Make sure your overall
business plan’s foundation is
fact-based for the highest
accuracy in your expectations.
Understand the value of
knowing where you currently
stand, and where to
concentrate for the results
you want.
You need numerical data for a quick dashboard to judge your performance.
Know your way around a balance sheet: what is the difference between gross
and net profit, and what factors affect the two? If all this seems like too much
work, you may want to rethink your commitment to business ownership.
Mistake #5. You play with your product too much.
“If you build it, they will come” is the biggest fallacy creative entrepreneurs
buy into today. You will exhaust every resource you have if you fail to focus
on finding customers, listening to what their needs are, and only then develop
a product which provides a solution.
If you are an artist, you need to drill this down even further. You’re selling product
you’ve conjured up by your own self as opposed to providing a more consigned
product for a client. You will need to decide: 
¨  Are you going to create product that represents your artistic vision and make it
available for purchase in limited formats (original paintings vs reproductions,
hardcover traditional publisher only instead of e-book)
-  - OR –
¨  Are you going to elicit and respond to customer demand (licensing an image,
selling your work on swag, doing custom work)
Mistake #5. You play with your product too much.
You need an “MVP” – a Minimum Viable Product
Consider developing what Rob Kelly (a startup veteran who has built many
internet businesses over time) calls an “MVP.” This is a product that is
minimally acceptable to show as a sample, and then use it as a jumping off
point to develop with a customer’s specific needs in mind. Keeping it simple
ensures viability with the prospective client, who will provide inputs and
interest, signaling what they’d be willing to pay.
Mistake #5. You play with your product too much.
Understand the role of product in today’s business environment.
Viable businesses are based upon creating and maintaining good relationships and solving problems. People buy
from people they like, but they have to also trust the person they like to know what they need and make honest
recommendations. Because of this, you shouldn’t spend too much time on your product ahead of getting to know
your customer. Show the customer an example with the understanding that both of you will then work on tweaking
its aspects to provide a custom solution.
You do not need to account for every potential
scenario. This is exactly the mistake many
creatives make: they want to present a
comprehensive product line to address as
many needs as possible. This is backwards.
Mistake #5. You play with your product too much.
Playing with your product is a great procrastination assist.
We see this happening all the time with creative people. It feels “safe” in the design studio. They
don’t want to compromise their artistic focus by having to sell their designs to someone.
You want to address the needs of one customer at a
time, make the sale, and then move on to the next
customer. If you sense that there will be a high
response to a custom, one-of-a-kind product, you’ll
want to decide how you feel about declining potential
sales should you not want to entertain the idea of
reproductions or subsequent, related works.
Success Strategy: Get Comfortable with Sales
Even though you have
addressed other business
functions, they can distract
from marketing and sales.
Nowadays, a sale is almost
an afterthought within the
framework of good
customer relationship
management.
Good business is not about what you “could do.”
It’s about what you actually accomplish.
Successful creative
entrepreneurs are the
ones who prepare well
and then work to
execute their planning.
Perhaps you could use a little more help.
¤  Succinct evaluation
¤  Tools and procedures
¤  Strengthen success
factors
¤  Real-world “boots on
the ground” advice
Contact us!
Betsy and Pete Wuebker

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5 Biggest Mistakes Creative Entrepreneurs Make

  • 1. THE 5 BIGGEST MISTAKES CREATIVE BUSINESS OWNERS MAKE And Success Strategies to Use Against Them
  • 2. What is a Creative Business? A creative business is born when a founder has an artistic vision and chooses to interpret that vision in products for sale. Creative business products: ¨  Paintings and drawings ¨  Books ¨  Information products ¨  Crafts ¨  Skills ( such as woodworking or cooking)
  • 3. Creative Businesses are Popular Start-ups ¤  Work-from-home, part-time venture ¤  Low initial costs ¤  Fun to work with ideas and chosen media ¤  Feel good customer engagement
  • 4. Many Creative Businesses Struggle and Even Fail! Even though you mean well and have the best intentions, you can be drawn into making key mistakes due to: belief, inexperience, fear, and more.   ¤  There is risk involved. ¤  You will be responsible for guiding your business into a thriving, profitable enterprise
  • 5. And Success Strategies to Use Against Them
  • 6. Mistake #1. You haven’t defined your purpose. ¨  When you don’t know what you’re all about, you’re not going to know what to do. ¨  Once you’ve defined what your mission is and how your business is going to affect the world it operates in, you can do meaningful work. ¨  Work without meaning is drudgery, and you will soon tire of it. ¨  Meaningful work is more like fun, a good thing considering you’re going to be doing a lot of it! ¨  Some business owners mistakenly define their purpose as “to make my art” or to “practice my [specific] craft,” or even “to sell my creative product.” ¨  While technically it’s true that any business is in business to sell product to customers, there is a higher reason for you to be in business. ¨  Whether your purpose is to bring forth better relationships for your customers, or to introduce a higher quality, better aesthetic option in accordance with their needs, or to provide work for people in your community - knowing it will define the steps you take to nurture and grow.
  • 7. Success Strategy: Ask Yourself These Questions What mark do you want to leave on the world?   ¨  What is the driving force behind your passion? ¨  What impression do you want prospective clients to receive? ¨  What long-term benefits will your customers gain from a business relationship with you?
  • 8. Mistake #2. You don’t treat your business like a business. Because it’s so easy to get into a creative business, it’s also easy to treat it almost like a hobby. You may settle for less than mediocre revenues and congratulate yourself that you are “in business.” But sidelining your business indefinitely in this way guarantees that eventually you will burn out and close it, or it will wither through lack of attention.   Many creative start-ups fail to do the most rudimentary things: ¨  form the appropriate business entity (LLC, corporation, sole proprietorship) ¨  have professional business cards with a custom logo ¨  rent or designate office space ¨  get a business bank account ¨  hire tax and legal professionals ¨  take credit cards for payment ¨  take deposits to begin projects ¨  chase down slow-paying clients ¨  invest in their business and themselves
  • 9. Success Strategy: Find and Allocate Resources Plan for investments to further your personal competence and assist you in building your business.   ¨  Resources = creative + financial ¨  Form the appropriate business entity ¨  Obtain relevant licensing ¨  Be legally and financially compliant ¨  Establish good fiscal policies
  • 10. Mistake #3. You build obstacles out of fear. Successful entrepreneurs: ¨  acknowledge risk ¨  swallow fear ¨  disregard naysayers ¨  forge ahead ¨  face issues squarely There are always uncomfortable things to face. Allowing lack of expertise to stall your momentum or influence poor decisions is a fatal mistake. We all have to force ourselves at one time or another to do the thing we most fear.
  • 11. Success Strategy: Become Fearful of Inaction “I created more fear of not starting than the fear of starting. I realized that every day I waited, a customer was not getting my solution, and a competitor was getting closer to that solution before I did. I even imagined my worst nightmare if I’d failed to take action. . . That was the kick-in- the-butt I was looking for.” Amir  Khella   ¨  Figure out what you need to feel safe in moving forward and put those things in place. ¨  If you are continually identifying or putting obstacles in your own path, be honest with yourself. ¨  Don’t try to account for every potential contingency. Just do it.
  • 12. Mistake #4. You take off without a pre-flight checklist and then fly without instrumentation. Real businesses make money. You need to know specifically how that is going to happen. Three essential financial tools to provide information you’ll need to frame objectives: ¨  Break Even Analysis - This is the most basic: how much money are you going to need to make in order to have some left over every month? ¨  Marketing Efficiency Analysis - How much does it cost you to bring in a customer who will spend more than that cost? A customer’s lifetime value (meaning how much they will spend over the course of your relationship with them) should be at least two to three times the cost of acquisition. ¨  Financial Projections – Run basic numbers here and then adjust them with real data as it happens. You’ll want to know how long it’s going to take you to reach a certain size (“scale”) and how much money it’s going to take you to get there (“capital requirement”). Inc. Magazine
  • 13. Success Strategy: Do the Math Homework Make sure your overall business plan’s foundation is fact-based for the highest accuracy in your expectations. Understand the value of knowing where you currently stand, and where to concentrate for the results you want. You need numerical data for a quick dashboard to judge your performance. Know your way around a balance sheet: what is the difference between gross and net profit, and what factors affect the two? If all this seems like too much work, you may want to rethink your commitment to business ownership.
  • 14. Mistake #5. You play with your product too much. “If you build it, they will come” is the biggest fallacy creative entrepreneurs buy into today. You will exhaust every resource you have if you fail to focus on finding customers, listening to what their needs are, and only then develop a product which provides a solution. If you are an artist, you need to drill this down even further. You’re selling product you’ve conjured up by your own self as opposed to providing a more consigned product for a client. You will need to decide:  ¨  Are you going to create product that represents your artistic vision and make it available for purchase in limited formats (original paintings vs reproductions, hardcover traditional publisher only instead of e-book) -  - OR – ¨  Are you going to elicit and respond to customer demand (licensing an image, selling your work on swag, doing custom work)
  • 15. Mistake #5. You play with your product too much. You need an “MVP” – a Minimum Viable Product Consider developing what Rob Kelly (a startup veteran who has built many internet businesses over time) calls an “MVP.” This is a product that is minimally acceptable to show as a sample, and then use it as a jumping off point to develop with a customer’s specific needs in mind. Keeping it simple ensures viability with the prospective client, who will provide inputs and interest, signaling what they’d be willing to pay.
  • 16. Mistake #5. You play with your product too much. Understand the role of product in today’s business environment. Viable businesses are based upon creating and maintaining good relationships and solving problems. People buy from people they like, but they have to also trust the person they like to know what they need and make honest recommendations. Because of this, you shouldn’t spend too much time on your product ahead of getting to know your customer. Show the customer an example with the understanding that both of you will then work on tweaking its aspects to provide a custom solution. You do not need to account for every potential scenario. This is exactly the mistake many creatives make: they want to present a comprehensive product line to address as many needs as possible. This is backwards.
  • 17. Mistake #5. You play with your product too much. Playing with your product is a great procrastination assist. We see this happening all the time with creative people. It feels “safe” in the design studio. They don’t want to compromise their artistic focus by having to sell their designs to someone. You want to address the needs of one customer at a time, make the sale, and then move on to the next customer. If you sense that there will be a high response to a custom, one-of-a-kind product, you’ll want to decide how you feel about declining potential sales should you not want to entertain the idea of reproductions or subsequent, related works.
  • 18. Success Strategy: Get Comfortable with Sales Even though you have addressed other business functions, they can distract from marketing and sales. Nowadays, a sale is almost an afterthought within the framework of good customer relationship management.
  • 19. Good business is not about what you “could do.” It’s about what you actually accomplish. Successful creative entrepreneurs are the ones who prepare well and then work to execute their planning.
  • 20. Perhaps you could use a little more help. ¤  Succinct evaluation ¤  Tools and procedures ¤  Strengthen success factors ¤  Real-world “boots on the ground” advice Contact us! Betsy and Pete Wuebker