management
How to Motivate Creative People (Including Yourself) workshop
Mark McGuinnness is hosting his popular How to Motivate Creative People (Including Yourself) workshop at Cockpit Arts Holborn on evening of Wednesday 14 July 2010.
He will be giving advice to designer-makers and creatives on how to motivate yourself to overcome obstacles and create amazing work – and a sustainable career.
Topics covered include:
- Why motivation is crucial to creative success
- The four fundamental types of motivation
- What Iggy Pop can teach you about work
- Why focusing on rewards can harm creative performance
- How to write 47 novels before breakfast
- Why some people seem so weird — and how to deal with them
- The positive side of peer pressure
The numbers are limited to 25 places, so book early.
There is an special offer price if you purchase the Time Management for Creative People workshop at the same time.
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Time management for creative people workshop
Mark McGuinnness is hosting his popular Time Management for Creative People workshop at Cockpit Arts Holborn on evening of 7th July 2010.
He will be giving advice to designer-makers and creatives on how to:
The numbers are limited to 25 places, so book early.
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As a taster to the workshop, you can read Mark’s top tips to stop email killing your creativity over at Cockpit Arts Making It blog.
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Investment Matters – Creative Industries meets Investment Finance
This summary video gives an overview of the challenges of connecting Creative Industries to Investment structures that were covered at Investment Matters in 2008. The message of the need for a bridge or a translation between the values of the creatives and the values of the investor clearly came across fairly strongly the question is what will people do differently as a result … watch to find out.
Investment Matters, British Embassy, Brussels, 2008 – courtesy of CIDA and the ECCE programme
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Using statistics to get the most out of your clients…(among other tricks)
This post is a case study from Phil Nicholas, a music industry professional managing Emily Barker (a folk artist) and running a record label to release her music.
It is a time of rapid change in the music industry. Tried and tested ways of reaching customers, the products themselves and income streams for artists and record label have largely been replaced over the past five years and whilst the internet now boasts myriad ways of monetising your music product, many of these business are still in relative infancy.
The challenge is varied: people are buying less CDs and downloading instead, thus margins for labels and artists have been slashed. The piracy of music versus legitimate downloads has been a big issue, but coverage of this phenomenon often misses the wider point that now customers have experienced ‘free’ music, it is difficult to get them pay for music, even when legitimate outlets gain huge worldwide status (how many of you, for example, know that Amazon.com’s mp3 download store offers better quality mp3s for the same cost as iTunes, the market leader by a long stretch?)
Although reaching your current customers as well as gaining new ones still occurs via traditional methods such as press & radio campaigns to promote album & single releases and live touring, these are crowded media. Massively increased use of the internet has spawned new methods of fan contact and nurture via social networking sites, targetted content delivery (signing up for RSS feeds and email newsletters) and data collection at point of sale. The beauty of online trading is the ease with which data can be collected and presented to the user.
An example of this is online store Bandcamp.com, which is still in development but with tens of thousands of users. It allows the artist or label to sell both digital music downloads alongside physical product. The neat management tools supplied to the store owner include a stats page which lists the number of visitors listening to tracks on your page, purchasing items and importantly, from whence they arrived upon your page. Thus we can tell that over 50% of net traffic to our bandcamp page (http://emilybarker.bandcamp.com/) during the month of January has come via an embedded widget on the number 1 Wallander fan site (http://www.inspector-wallander.org/index.html). Needless to say we will be placing future advertising with them.
In order to widen our customer base (potential CD or download buyers and gig-goers) we employ a service at Musicglue.com which simply captures customer emails and location in return for a free download. The advantage of grouping your fans by location is to be able to inform them of events taking place in their area, a live show, for example.
These websites and other like them are becoming evermore simple for users to customize and exploit. So whilst a playlisting on Radio 2 and a national headline tour remain the most powerful ways of promoting an artist and generating merchandise sales at gigs plus CD sales over the internet and on the high street, a new artist looking to maximise earnings from lower-priced items sold in small quantities, can confidently monitor customer behaviour and collect payments on a global scale from the comfort of their home studio.
Phil’s next post will centre on how to fund the recording of an album when record companies are spending a tiny fraction of their previous expenditure in this area…..
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What’s the difference between your ideal rate and the minimum you’ll accept?
In the last post on the subject of how you price time, we looked at what your ideal daily rate would be.
In this post we’ll look at how you might actually offer a range of rates (you might not publish this but you might negotiate it) depending on what the work is and how busy you are. We’ll also look at how you move this range upwards over a period of years.
Using the same example as before, where you want to:
- to charge £750 per day
- to sell 100 days of time in a year
- therefore to turn over £75,000
- assuming £25,000 of costs achieve a taxable income of some £50,000
In reality you may not be able to charge this top rate for every job. There are a number of reasons for this:
- the market rate for your skills and your level of experience may not be as high as this so if you charged it you’d price yourself out of the market
- you may take on work for which you are over-qualified, particularly if you’re not as busy as you’d like to be and need the income … but you may therefore not be able to charge top rate for the work
- you may choose to over-deliver. .. spending more days on a project than actually budgeted for
- you may have some clients whose budgets are simply smaller, yet they offer exciting work so you drop your rate in order for them to be able to afford you (in these cases the work had better be exciting!).
In practice you may well need to have a range of daily rates, and the rate you quote to the client depends on what the work is, what sector they are in, how much you need to the income etc.
So if £750 is at the top of your range what is at the bottom? Only you can answer this – what fee is so low that you’d rather spend that day having a lie-in or a holiday?
For the purposes of this post let’s say that the minimum rate you’ll accept is £250/day.
Now your range is from £250-750 per day.
How can you move this range upwards over time?
Well for a start always quote your top rate when you’re busy. If you’re not really earning enough consider what projects you might take on at lower rates … one of the keys here is not to burn your bridges with cheaper clients when you’re busy and to be humble enough to go asking for work when you need it 
Over the years move the range upwards so that both your top and bottom rates go up! This may require you to drop some of your least well paid work and perhaps the clients that offer it simply because they may not be prepared to pay more for that work and may prefer to hire someone else without changing the rate. Such is the price of success!
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How much time can you sell?
This post is aimed at those businesses who essentially sell their time (and the time of others) and looks at what assumptions you can make about how much time you can realistically sell per annum.
Q1 – What would you like to earn per annum?
Let’s start with the simple version i.e. a freelancer or sole trader. The more precise question is what taxable income would you like to earn? The answer to this question is different from ‘what turnover are you aiming for?’
To demonstrate:
If you’d like to have a taxable income of say £50,000. This is after the costs of running the business have been taken into account. And these business costs come to £25,000 (travel, rent etc). Then, in order for your taxable income to be £50k you need to turnover £75k.
Q2 – How many chargeable days are there in the year?
The answer to this question is crucial as it will determine the daily rate you aim to charge. If you’re already in business then look back at a few months and see how many full days in each week are chargeable times … see if you can get to an average.
We reckon that the conservative answer is 2 days per week. We’d rather be conservative than optimistic on this figure because if you go for the optimistic end of the spectrum e.g. 4-5 days/week but never achieve it then you’ll find yourself needing to sell a lot of days of time just to achieve a basic level of income … a headless chicken comes to mind.
So, on two days a week that’s roughly 100 days per year.
Q3 – so what daily rate am I aiming to charge?
Well, divide your goal income (£75k) by the number of chargeable days (100) … to get £750/day.
Another way of looking at the daily rate you charge now e.g. £250 is to say how many days do I need to charge in order to achieve my goal of a taxable income of £50k … in this case 300 days … nearly 6 days per week … not likely!
You could also consider what your turnover will be if you sell 100 days at this lower rate – £25k. Once you’ve taken the cost of running the business into consideration there won’t be much left to pay you with.
Can you now see why there is little virtue in being cheap and a definite need to manage how much free or cheap time you give away? (and by the way there will probably always be a need to give away some time as you invest in new working relationships or do early work on new unpaid ideas/projects/products).
In the next post on this topic we’ll look at how you compare this rate to the market rate (i.e. what customers expect to pay), and how over time you can raise your rates as you get busier.
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How to create a budget (plus a free tool)
Do you know how much money you make? Or is it a case of “I don’t know – it depends on how the business is doing”.
Whether you are starting a business or growing, you need to know what you are trying to achieve within the business and qualify how you are going to reach your goals, then you can set a budget to help you reach your goals.
Setting goals that affect your bottom line or personal finances are often more motivational than setting a sales target.
This is not a glamorous job but necessary for your business – to control costs, identify problems and ultimately achieve profitability. Creating a budget should have an effect on your business … in particular it should enable you to:
- Set challenging but achievable goals for the turnover of the company and the payments to you the business owner(s) and the staff you employ … you want to be clear on how success in the business becomes success in the team’s bank accounts
- Plan for investment of profits into the ongoing growth of the company … be it investment in R&D, intellectual property, more staff, different skills, board members/advisors etc
- Plan for tough times … knowing in advance where you would make cuts if revenues drop and what the markers are for needing to implement these tactics helps make it easier to do this if the situation arises
- Manage the day to day costs … all the things that are almost invisible except when they are all added up … phone bills for those with international clients, travel in general, last minute couriers. These items can tell you quite a lot about bad business habits and offer the chance to cut costs without reducing the value delivered to clients
- Manage the cash flow challenges that come with projects, temporary staff or product manufacturing … if you have prior warning of when the cash flow hole between needing to pay others and getting paid is likely to occur, then you can negotiate an overdraft or manage the chunks in which you pay/are paid
- This is not an exhaustive list but will probably give you enough to be thinking about (i.e. if you’re not convinced by these reasons we don’t think you’ll do a budget whatever else we may say).
A budget is not written in stone – it is critical to be flexible and adapt to circumstances, have a plan B budget just in case. Indeed for those who come to enjoy excel spreadsheets (honest, some do) then we’d recommend doing an ‘optimistic’ and a ‘pessimistic’ version of both income and expenditure for the year. For those who are less keen you’ll find a ‘what if’ calculator in MyCake which allows you to use sliders and dials to set these assumptions, ne’er a spreadsheet in sight (though we think you should write a few things down as you do this otherwise you’ll forget).
I have laid out a few simple tasks to help you get control of your finances and make the numbers valuable. You will also find a free tool to download at the end of the post to assist you.
TASK 1 – analyse the information you have to hand
- Evaluate every penny going in and out of your business so you fully understand what is going on
- Make sure costs are classified in correct budget lines so you have all the data in the right place
- Look back through the last TWO years and pay special attention to fluctuations. What is your biggest sales month? When are the low periods? When do you hit an expense high? Where do you blow your money? What percentage increase have you seen in specific supplies, overheads and in your sales? If you are a MyCake user, not only can you run a bunch of reports on your own business , but the benchmarks will show you where you sit versus the best and worst in your sector.
TASK 2 – do a first pass at a budget
- Create a base line budget as a guide to work from – start by separating your fixed and variable expenses
- Fixed items include rent, debt interest, insurance and other expenses that cannot be avoided and are predictable
- Typical variable items are salaries, materials, transport, and marketing. Don’t forget the associated costs – for example salaries should also include cost of hiring new people, benefits, NICs etc.
- Do use last year’s books as the start point for creating the budget for the coming year. You can vary it to account for changes you plan this year as a next step.
TASK 3 – take a look at the top line
- Your customers are the best source of information about sales projections – are your customers cutting back or growing? What are they predicting for the year ahead?
- Examining your sales can be by customer or by product depending on how you operate
- Remember that past sales, based on the booming economy or credit crunch, may not give the best prediction for the year ahead
- Build a buffer into your budget to allow for fluctuating prices in materials or loss of a big customer
- Estimate conservatively and create an average price you can apply through the year – eg basic monthly spend on travel or phone
TASK 4 – reconcile your costs and expenses
- Look for relationships between specific expenses such as marketing and your top line so you know where you can save at short notice.
- This also helps to plan a three month cash reserve to cover droughts in cash flow.
Having a budget allows you to be flexible. You can see what the actual numbers are and if you are achieving your goals – it allows you to be able to make changes if you are missing or exceeding your goals. Monitor the budget at least once a month, make mini revisions and change your spending quarterly to make sure you’re on target to reach the goals.
Alternatively have a best case, worse case and happy medium budget so you can fall back or move up as necessary.
At the end of the day you may want to be able to compare your expenses to other businesses, via a professional association, to see how your spending compares to benchmarks in the industry. The more you can do to construct ‘norms’ for your company the easier it will be to compare these to the best in your sector.
MyCake has created an empty budget spreadsheet for you to use for your own business budget – click to download it: sales & cashflow. Feel free to email us if you have questions and please note that we accept no liability for the way in which you use this spreadsheet. I mean, we think it’s sensible, we’ve checked that the inbuilt calculations look right to, but no absolute promises!
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Configure your overview page in bookkeeping
You can now choose what sales data you want to see on your bookkeeping overview page within MyCake. To do this, look for the spanner in the bottom right hand corner of the sales graph and make your selection from the following:
- Sales growth over the last 12 months
- Profit and Loss for the past 6 months
- Income by Source for the past 6 months
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Improved function: multiple items on invoices
We have improved the ‘Add Item’ function within MyCake invoice creation. Until now, after adding the first item, you had to return to the invoice screen and click the ‘Add Item to this Invoice’ button.
Now, once you create a new invoice and click ‘Add Item to this Invoice’, you will see an option to check ‘Add more items to Invoice’. This means that you will keep adding items to your invoice without returning to your invoice screen. Once you’re done with adding items just click cancel to return to your invoice screen.
A very good feature if you have lots of small items to enter on your invoices.
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How not to tie up your cash in stock
Looking at the benchmark data for 2008-9 for those of you who make ‘stuff’ it looks to me like quite a few of you hold substantial amounts of stock. We reckon that holding too much stock is bad for cashflow, is a whole load of risk (there’s no guarantee you’ll sell it) and is not an efficient use of scant resources.
Whilst there is no single right answer to the question of ‘how much stock should I hold’ there are a few questions you can ask of your business to see what answer is right for your business, your customers and your suppliers.
- how soon do your customers need their orders fulfilled? 2 days, 4 weeks, 12 weeks? ie do you need to hold stock or can you order it in response to their orders
- how big are the orders? if they are small you will have to hold stock because your manufacturer won’t want you placing tiny orders but if they are large i.e. big enough to justify a production run of their own then there’s no point holding lots of stock
- can you separate out main line products where you need volume vs. made to order items … really you need to build this in to range planning so that you have as few constituent parts to main products as possible, this means you’ll hold more stock of fewer things rather than have a couple of each of a gazillion parts or products
- what are the sensible minimum order levels with your manufacturers and how long does it take you to sell this amount of stock?
There are also a number of stock related traps you should plan to avoid. These include:
- buying in quantities far larger than you need in order to get a bit more discount … this just reduces your working capital and changes your money from a flexible asset (ie cash) into an inflexible risk (ie stock is only worth what you can sell it for and there’s rarely a guarantee that you’ll sell it)
- buying parts that you ‘might need at some point’ or ‘will find a use for ‘ … chances are that if you don’t have something in mind it could be years before you find a use for such things! … again this just ties up cash into inflexible assets you can’t use in other ways
- allowing retailers to hold substantial amounts of stock on a Sale or Return basis … instead you want to allow the minimum of SoR and if retailers want volume of any item (even two pieces of the same pair of earrings) then they should buy this … after all they want it because they believe that they’ll sell the second piece before you have time to restock with them so they’re wanting to avoid loss of sales due to lack of stock.
- holding on to old stock with a plan to sell it for full price at some point … instead just sell it at a discount and release the cash
So:
- work out how many units you sell of your main products per annum and don’t buy more than a year’s stock of anything … preferably hold 3-6 months stock
- talk to your suppliers about your planned orders for the coming 12 months … see if you can negotiate pricing scales based on total annual order levels rather than individual order volumes
- do sell off old stock, discount as necessary
- limit the volume of SoR stock any one retailer holds, limit the number of SoR retailers you work with
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