Creative business feasibility

A creative passion is at the heart of every enterprise. Many entrepreneurs have developed their creative talents into successful businesses in the creative and cultural fields.

It’s creative, but is it a business?

Creativity is necessary, but not sufficient. It’s fatal to assume that creativity alone deserves or guarantees business success.

For many creative people, their creative passion is not part of an enterprise at all – and they don’t want it to be. This means that they can allow their creativity to flourish without the constraints of business or the requirements of the marketplace.

They have the freedom to create without having also to calculate prices, promote their work, deal with customers or keep an eye on the accounts. This option is valid in artistic terms, but is not a business option.

As soon as the creative person decides to make money from their creativity and enter the marketplace, a range of business factors immediately come into play, including pricing, marketing, financial management, organisational structure, intellectual property and other matters.

Creativity is one element of a business formula which also involves key decisions about which particular creative goods or services to provide – and which particular customers to serve. For example, Rob Kinsey is an artist with a passion – and a focus.

Can you be creative and commercial?

Being creative in a totally non-commercial way is fine – as is being a creative businessperson. However it’s possible to ‘fall between two stools’, playing neither role well.

The pricing structure is appropriate for the economics of a ‘paying hobby’ but totally unworkable for a real business.

Often people find themselves in this position by selling to friends and family. This is understandable, but in commercial terms can be fatal.

Why? Because this approach is usually combined with setting prices simply to cover direct costs of materials but not including their labour, because at this early stage they still regard it more as a hobby and perhaps also have a day-job.

Business overheads are ignored because they use their back bedroom, the family computer and their personal mobile phone. At first, it seems to be working, but in reality this enterprise is heavily subsidised by the individual concerned. This is why prices are low and customers are happy – at first.

The pricing structure is appropriate for the economics of a ‘paying hobby’ but totally unworkable for a real business. Prices often need to be multiplied five times or more to make the business work and pay the entrepreneur a living wage.

Increasing prices like this is a great way to fall out with family and friends who have been early customers! All of a sudden they don’t want to buy any more.

The creative entrepreneur then needs to find a new set of customers who will pay the necessary prices. This amounts to little short of destroying and rebuilding the enterprise, at least in terms of its economic structure.

Even worse, it often reveals that their endeavour is not feasible at all in commercial terms. Prices are now as high, or higher, than established competitors who have better products and services. It’s just not going to work.

Back to the drawing board

So it’s a matter of ‘going back to the drawing board’ and using a technique I have developed called ‘Designing Your Creative Business’.

Starting with a blank sheet of paper, the creative person has lots of options. In fact there is a problem of too much choice. We need to generate lots of options, in an imaginative way, but then have a method to identify those possibilities that are feasible.

In other words, to find the ‘unique business formula’ which will achieve your own version of success.

Is your business feasible?

To find the most feasible business formula, each creative entrepreneur will need to answer two questions:

1. Out of all the creative goods or services I could provide, which one(s) do I excel at, in relation to competitors out there?
2. Out of all the potential customers I could serve, which are the ones that really want the things I excel at – and are prepared to pay well for them?

As soon as the creative person decides to make money from their creativity, a range of business factors immediately come into play.

More information about finding your feasible business formula can be found in the article Making a Business Plan.

The most successful creative entrepreneurs have built feasible businesses based on their creative passion – but also combined with competitive advantage and the right customers.

You have to build your enterprise around your unique strengths to make the creative contribution only you can make. As artist and businesswoman Lynne Hollingsworth emphasises: your difference is your strength. Find that creative talent that you excel at – and then find the customers who value your unique creativity.

This topic is discussed further in the chapter on Business Feasibility in my book ‘T-Shirts and Suits: A Guide to the Business of Creativity’. The book is available as a free download. Copyright © David Parrish