In college, there was a bit of a recurring joke any time anyone mentioned they were getting a business degree.
“So basically, you don’t actually have an idea of what you want to do when you graduate?”
Me and my friends from the arts, music, and philosophy departments would chuckle at their bland lack of creativity.
If they flipped the script on me, I would tell them I wanted to be a drifter—take a tour on a missionary ship, maybe hitchhike across South America...I even mapped out a route for a globe-circling solo boat trip.
When I was asked why (and everyone asked), I would answer with some sort of pithy statement about the world being too big and exciting to not see as much of it as I can. But in reality, there was a much deeper reason motivating my wanderlust.
I was terrified of responsibility.
Taxes were a mystery to me. I didn’t know the first thing about managing a checking account. People would talk about investments, and my eyes would gloss over. Any sort of official document would give me a panic attack.
It seemed much easier for me to radically reorganize my life to bypass all of that entirely.
Needless to say, my life didn’t play out that way at all. I got married. I’m a homeowner. Hell, I’m self-employed.
Obviously, I’ve overcome my aversion to paperwork.
But if you’re a free-spirited creative like me, you might feel a lump in your throat any time you hear words like “analytics” or “marketing strategies” or “tax liability.” You may have been trying to run from those sorts of words your entire professional life.
But in the last five years of being self-employed, Michelle and I have learned that the better handle we have on the boring business crap, the more freedom we have to do all of our creative stuff.
Every year, financial institutions collect over $100 billion in credit card interest and fees. Again, that’s just interest and fees. That doesn’t include money paid back from consumers.
And I can’t help but think that most of those consumers wouldn’t be too quick to swipe their credit card if they knew how much it was costing them.
Unfortunately, financial literacy is pretty low in this country. And the financial industry is literally banking on that.
Credit card companies make all of their profits on the backs of lay people who don't understand all of the terms and conditions. Do you think anybody chooses to borrow money at 17% interest? Sure, you mean to pay all of that back each month, but the unfortunate truth is that most credit card holders carry a balance month to month—collecting interest, and ballooning their balance into an insurmountable sum.
When you live under a pile of debt, it raises your monthly expenses by a huge margin. More expenses means more work, and more work means less time to focus on your creative goals.
On the other hand, if you know the tricks that financial institutions use to entrap customers, you can avoid them—giving you more freedom to do the things you actually want to do.
At the risk of oversimplification, business has a simple purpose: maximizing profits while minimizing expenses. This is just as true for self-employed artists as it is for giant corporations. And those corporations have huge departments filled with the best business minds money can buy—accountants, advertisers, HR reps, salespeople…
But you just have you.
Imagine if a company has an accountant that’s terrible at their job. They miss bill payments. Their books are never balanced. They miss valuable tax deductions that end up with the company paying more taxes than they need to.
Do you think that company will be operating as efficiently as it could be? Probably not. There’s a good chance their job will be on the line over it.
But if you look at your own creative business, you might be that terrible accountant. You look at your accounts and your expenses and you have no idea what you’re looking at. When tax time comes, you just fill in some numbers, hold your breath, and hope for the best.
Your negligence could be doing bad things to your profit margins.
On the other hand, if you have a good understanding of your business’s financials—or marketing or branding or web presence or whatever else—it can give you a huge boost.
And while it’s nice to make more money, that’s not the point. The point is that the more money you bring in through your creative business, the more independent you become.
You might quit your job so you can focus on the creative pursuits that actually matter, but having a good mind for business will allow you to keep doing it.
Let’s say you paint portraits of pop culture icons. You’ve been selling quite a few on Etsy—maybe you've even gotten successful enough to go part-time at your job so you can focus on your art.
Then an art blog reposts your painting of Captain America to their three million followers.
Your Etsy page gets invaded. You quit your job so you can spend more time fulfilling orders. You’re making more money than you ever dreamed of doing what you love.
But then one day, you get a piece of mail from Disney. It’s a lawsuit. They sent a cease and desist, but it got lost in the mail. Now, they’re suing you for using their intellectual property. You could either settle—which would bankrupt you—or you could try to fight it in court—which might cost even more.
Now, that’s a bit dramatic, but it’s not too unrealistic. After all, only 30% of businesses survive past their tenth year. And I’m sure the other 70% didn’t just close down because they wanted to.
Making poor business decisions doesn’t just get in the way of your potential profit. It could also run you into a proverbial brick wall.
You might end up under a mountain of debt that you can’t get out of. Or you might completely forget to set anything aside for your taxes, and when the tax bill comes due, you’re nowhere near to affording it. Or maybe you’ve spent thousands of dollars trying to advertise to the wrong market, and now you have no more money to pay your expenses.
Suddenly, you’re crawling back to your old boss to beg for your job back.
If only you had paid more attention to the business side of things, you could still be making your living by doing what you really want to do.
The boring parts of business might seem like an annoying disruption to your creative process. But in reality, doing those things well is exactly what allows you to keep working for yourself doing what you love.
You might rather have a root canal than deal with market analytics or profit-loss reports. And I get it. Spending hours hunched over a spreadsheet isn’t my idea of fun.
But these business strategies are merely tools. And if you use these tools well, it will open up worlds of opportunity for your creative business.
If you feel overwhelmed when you think of the business side of running a creative business, don’t worry—we’ve been there. And we want to help.
That's why we built our webcourse, which will walk you through everything that we've learned in the last five years of working on our creative work full-time.
Join our email list for more info.
In the meantime, keep killing it.
We want to send you the best tips, stories, and inspiration to help you on the way to becoming a killer creator!
To keep up to date with blog posts, news, and other valuable content, enter your info below.