Why Creative Businesses Work: The Four Noble Truths - Red Lemon Club

Why Creative Businesses Work:

The Four Noble Truths. Every day, we hear of creative businesses that people love, that simple succeed

Many others more fail to build any momentum, and are sadly closing up shop, daily. This sucks

It's a reality, but it can be fixed. I've been at the mercy of many failed projects and businesses; learnt a boatload from personal experience, and from others, and now run a business that works.

I also know that there is no blueprint to success, especially in the creative industries.

In the end, what makes one creative business work depends on the sum of its parts: Something that cannot be replicated.

What I have found, however, is that there are some things that, when applied, get pretty close to providing that 'formula' to succeding

If you understand these 'truths', you are already a cut above those creatives risking failure by ignoring them...

The Four Noble Truths of Creative Businesses:

Noble Truth No. 1 Your product should make you proud

Forget the nonsense about pride being a sin. Businesses that work provide things that inspire pride in those running it. This means having a product and a business that...

Is valuable or truely helpful to others. Is different. Serves a purpose or vision beyond the business. Is always pushing the boundaries of excellence.

When I speak to Google employees, for e.g. you can sense huge pride in everyone that works there. And this is a big reason why the company does so well.

Noble Truth No.2 Real businesses are business systems

Meaning... At any point in the lifespan of your business, whether it consists of just you, or a larger group, all the parts that make up a business MUST be cared for within the whole.

This includes elements like: Sales, Marketing, Accounts, Production

There are others, like Research + Development, and Logistics, and it's up to you to understand what needs more or less of your attention

All of these, under careful management, work together to create a system. If it's just you, you need to think about ALL of them (or outsource or employ others). Often, businesses fail because one or more of these

business elements are not cared for.

* Make sure you have such a system in place on day 1 of your bix. This is NOT something you build towards.

E.g A freelance urban photographer putting in time each week to check his balance sheet (accounts), reach out to 5 potential new clients (marketing), update his payment systen (sales), and take nw shots (production).

Noble Truth No. 3 No cashflow means no business.

even if it simply means paying yourself enough to get by, running a business inevitably involves expenses. Having money coming in to cover them each month

is absolutely critical. Especially in the lead up to breaking even, it's important to know that you have a defined source of cash to stay afloat.

This money could come from the business itself, but may require prior saving. Work out how much you need each month, and

make sure it gets covered each month. I.e. The amount of money coming in each month is at least the same as the money being spent.

Any money beyond this is good and can be invested back in.

Noble Truth No. 4 Know your buyer

Creative businesses work because they know themselves from the point of view of the buyer or client.

Before you even go into business, you've got to know who your buyer is. These are the people that will ultimately pay and support you, and so are crucial.

Dreams, Wants, Needs, Help

If you know WHO they are, then you are in a good position to know what they NEED, and therefore WHAT to provide. Make it as easy as possible for prospects to find you and work with you by really knowing them.

Once again... The Four Noble Truths of Creative Businesses:

Noble Truth No. 1 Your product should make you proud. Noble Truth No.2 Real businesses are business systems

Noble Truth No. 3 No cashflow means no business. Noble Truth No. 4 Know your buyer

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"Your blog inspires me so much, and helps me feel somehow not as insignificant, despite the plethora of artists around the world."Natalie, artist

http://twitter.com/mazakiiz Jing Zhang

Lovely infographics/illustrations, and valuable facts! Thanks for sharing.
http://twitter.com/MoonApe Alex Mathers

thank you Jing!!
Benoit Cesari

Love the “infographic” way to present your ideas. I never thought that I could lead my art as a business. My major problem is that there is so many things that I want to do, that it’s hard to focus on the main goal of my business.
http://twitter.com/MoonApe Alex Mathers

Thanks Benoit! You’ve just identified one of the major obstacles separating the successes from the not so successful :)
Benoit Cesari

I should really search what can turn my work into a niche business.
Choosing is giving up… especially hard in a world with so much competition, when you think that if you do everything and that you don’t specialize, you’ll have more clients (and more money). But it’s wrong…
http://www.facebook.com/carole.manley.921 Carole Manley

As a visual person I really love the way you have laid this out in the simplest of terms. My business is exactly this, to support artists in the things they don’t want to do ie the businessy stuff. Its a fine balancing act though to get to a place where they can afford to take the leap of faith and employ someone to take the paperwork and marketing off their hands.
http://twitter.com/MoonApe Alex Mathers

thank you Carole! It sure helps to hire that out, but by keeping it simple and prioritised, also can be straight forward to do as an individual.
http://twitter.com/genunlimited Michael Obremski

I really love the way this post is set up, large fonts and graphics… easy to read. That being said, as a sole proprietor this post brings some things to mind that I know, but never act on, especially Truth #3. I get so busy with day to day tasks that I forget about running the business like a business. Thank you for the reminder.
http://twitter.com/MoonApe Alex Mathers

A rule pleasure, Michael
Guest

Alex, bro, you are killing it with these new illustrated/infographic/cartoon blog format. I can’t stop reading it. Penetrative content as always. RLC creatives rise to the top!
http://twitter.com/physicalorigami Dan Clugston

Alex, bro, you are killing it with this new illustrated/infographic/cartoon blog format. I can’t stop reading it. Penetrative content as always. RLC creatives rise to the top!
http://twitter.com/MoonApe Alex Mathers

haha – thank you bud!!
http://www.th-digitalmarketing.co.uk/ Hackneyed

Great stuff. A point (or observation really) I wanted to put forward is that so many organisations don’t understand your point 2, that all businesses are business systems. They tend to operate heavily weighted towards sales and production, as that’s where they perceive all the value to be, and grossly underestimate the importance of for example marketing, and as a result they flounder, when they could have been so much more successful.

So what’s true for a creative business also seems to be true for any other business (or better put, the points above apply to businesses, full stop).
http://twitter.com/MoonApe Alex Mathers

Thanks for this comment Hackneyed, great point. This certainly applies to all businesses. If you’re in business as an artist, it isn’t any different to the system behind any business organisation.
http://www.facebook.com/NeilGee Neil Galang

Hi Alex, I am an avid follower of your posts. Thank you for writing such great and informative articles. I have been in the design field as a freelancer for 15 years, and recently I decided to put up a design studio with my friends, but we are having trouble coming up with a product or a niche– would you happen to have any advice or steps on how to identify which area we can specialize in? Everyone seems to be doing everything and often that not I find it disappointing that the market is getting harder and harder to penetrate, and yet it is too late to switch careers. After all, this is what we love to do. Any advice would be appreciated!
http://twitter.com/MoonApe Alex Mathers

Thanks Neil. I would really say it comes down to deciding on something you (and your team) get excited about, more than anything else.

Think about something wider than just what service you will provide (WHY you are doing this), then thinking about what work you could do within this WHY.

Don’t be afraid to be ruthless in how narrow and defined you go, just make sure there is a suitable handful of prospects out there that would want that service and share your excitement in what you do. Good luck!
nedux

Thanks Alex for sharing from your experience, I’m taking notes and understanding what actually involves running a business. Even if it’s only one person freelance business, it makes so much sense now to begin to see it in the way you present it. But how can I switch between sales, accounts, marketing and production effectively?
Alex Mathers

Thank you for reading Nedux – and great question. If you’re a one man band, then all you can do is to manage all of these areas as well as you can, allocating real time for each of them, rather than putting all your time into just creating. The alternative is to hire other people to help. Keep learning!
http://www.bluesmokecreative.com/ Daniel Dogeanu

Alex, could you provide a PDF version of these infographics to download?
Mimmiroo

Will you be making share buttons for Tumblr as well? I know a bunch of illustrators there who would greatly benefit from your posts.
Alex Mathers

Great to hear that – I’m not sure we can share to tumblr as this is a wordpress blog, but I’ll look into it!
http://www.ronanshaw.photoshelter.com Rónán Shaw

But is it entirely wrong?
This is something I’ve been dealing with too…so many ideas and areas of interest to invest time in. It seems a shame to ignore those interests and focus all of your energy into one area. And, does a client really want to work with someone whos area of expertise is so refined? Sure, they may have that speciality down to a tee, but they could also be viewed as somewhat limited.