It’s common for creative business owners to neglect fine-tuning their business systems. You may even worry that too many processes could stifle your creativity, or destroy the excitement of finding innovative solutions for each problem and project. But, in fact, having weak or no systems at all is taking valuable hours away from more important aspects of your business. By fine-tuning and revising certain business systems, you can invest more time into serving your clients, growing your business, and achieving consistent results.
Here are three areas where a bit of planning and structure can go a long way.
Choosing your projects
No matter what type or scale of creative you are, from a solo freelance photographer to a million-dollar marketing agency, choosing which projects you take on has a massive impact on your business. If you’re still making a name for yourself in your industry, you may be tempted to accept any job that comes your way. Or, even if you’re capable of being more picky, deciding which projects you accept and which you deny is pure guesswork.
The system we recommend creatives use for choosing which projects they take on is a 3-lever machine. The levers are:
Money: How much money is this client able to put towards solving their problems? What is the budget? What could my potential fees be?
Time: How urgent is this project? Would I need to drop everything else to complete it? And how long would it take?
Creative Freedom: Will this project be exciting and challenging for me as a creative? Will the result be something I’m proud of that goes into my portfolio? Or do I already know that this project wouldn’t reflect my best work?
A worthwhile project for you to take on would be one that has pretty high scores on at least two out of these three levers. For example, a project that would take a lot of time could still be worth taking on if you had a huge amount of creative freedom and it would earn you good money. Or you could take on a project that you know wouldn’t be reflective of your best work but that you could complete quickly and earn a solid fee for.
It’s up to you how to scale these levers, and what the minimum threshold you’d have to meet would be. You could rank them from 1 to 10, or a grading system from A to F. The important step with this system is to plan time to reassess it. After six months, review all the projects you took on. Which proved worthwhile? Which, in hindsight, were not worth it? How did you score them? Review, reflect, and adjust your process.
Understanding job profitability
Not all jobs are created equal, and understanding each project’s profitability could be the difference between growth, stagnation, and loss. Understanding profitability will also help you with that money lever we talked about above.
Your profitability is the amount you make in revenue minus the cost of your expenses. One really helpful way of looking at profitability is calculating what percentage of the cost you charge your customers is going to cover your expenses. You could have a more profitable year by doing $100,000 worth of work at a 50% profit margin ($50k) than if you did $200,000 worth of work at a 10% margin ($20k).
To systemize your job profitability, we recommend using an accounting app like Xero to track your expenses. By recording the cost of things like labor, materials, and other expenses within each project, you’ll be able to determine exactly how profitable that project was. Then you can tweak other “upstream” decisions, like only selecting jobs that promise good profitability or adjusting your prices to better reflect your cost of service.
Productizing your services
Even the most creative and bespoke design practices can find ways to productize their services. This doesn’t mean forcing all your projects to conform to a template or limiting your creative expression. It simply means getting a better understanding of the services you provide and defining certain parameters within them. For example, you might decide that one of the services you provide includes three days of discovery work, three days of planning, and one week of design work.
Productizing your services can give you two huge insights:
It can improve your pricing by specifically defining the processes that go into providing a service and attaching values to each of them.
It can help you manage your team’s needs, workloads, and which projects you take on by allowing you to better understand what’s specifically required for each of your services. You’ll no longer have to worry about not being able to deliver something to a client because you didn’t have the people or time for it, OR you can add urgency fees to your pricing and give yourself enough preparation to recruit additional help.
Productizing your services can also help you make sales. When a prospect comes to you, they’re going to have questions: not just will you solve my problem, but how long will it take and what goes into it? You’ll be better equipped to answer these questions and give your prospect exactly what they need to get on board.
All of these business systems will help you produce consistent, reliable results, and give you the boost you need to start seeing more growth. If you’re struggling with scaling your creative business, and still aren’t sure where you’re going wrong, check out our blog on it here.