5mistakes of Creative People

8/6/2019 5mistakes of Creative People

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5 Big Mistakes Creative PeopleMake with MoneyMark McGuinness


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Feel free to republish short excerpts from this ebook, as long as you link

back to http://lateralaction.com/moneymistakesfor attribution.

And feel free to share this ebook in its entirety with

anyone you think might be interested.

Copyright 2011 Mark McGuinness. Some rights reserved.

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http://lateralaction.com/moneymistakeshttp://lateralaction.com/moneymistakes


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Creative people are terriblewith moneyWere dreamers, pie-in-the-sky merchants.

Were no good with numbers.

Were an accountants nightmare, turning up with a shoebox full of receipts - and half

the receipts missing.

We dont have a head for business. So we end up working for peanuts.

What money we do get, we let slip through our fingers.

And secretly, this is the way we like it. Better a starving artist than a suit or a sellout.

At least, thats the received wisdom.

But if you like challenging conventional wisdom, you might enjoy this story about two

creative people and their relationship with money (and other things)...

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4/35

London, 1997The Blue Note, Hoxton Square

A kid of about twenty is sitting on the steps in the corridor. The stripes on his t-shirt and

trainers are ultraviolet. From the main dance room comes a sound like gigantic pistons

churning underwater. Leftfield.

Oscar!

A young woman in trainers, skirt and Reni hat flops down beside him. Flashes an

ultraviolet smile.

Everyones looking for you.

Got a bit hot.

Thats the point, silly! Come and dance.

Just want to chill out here for a bit, Ill come soon.

Okay Ill wait. You okay?

Yeah, Im fine. Actually Im fantastic.

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5/35

Of course youre fantastic, youre top of the class.

Yup, cant deny it. You werent far behind though.

Yeah just a teeny bit behind you. Swot.

Im not a swot, Im just a better designer than you.

No youre not. But you are a better arguer than me, so Im not going to argue.

She leans her head on his shoulder.

What you going to do now then? she asks.

I just told you, sit here for a bit and chill out.

She giggles. No, I mean what you going to do for work, now youve finished?

Set up my own shop of course. Arent you?

Kind of. Ive got some freelance work lined up for the summer.

Thats what I mean, start freelancing, running my own show. No point working for

someone else.

Same here. Is that Underworld?

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6/35

Its hard to tell at this distance.

Its only next door.

They crack up laughing. After that, everything gets a bit sketchy. In a good way.

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7/35

London, 2000Hogarths Cafe, Shoreditch

By the time Jay arrives, Oscar has finished the football section and is reluctantly

scanning the front page headlines.

Youre late.

Am I? It feels horribly early. Didnt get to bed till five.

What kept you up? Or shouldnt I ask?

Oh God, it was only supposed to be a quiet one. Few pints at The Bricklayers then

home. But Liss and Em showed up and I got press-ganged into 333.

Worth it?

I imagine so. Wish I could remember.

You really are hungover arent you? You shouldve called, I could have met you later.

Got a meeting later.

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8/35

On a Saturday? Who with?

My accountant.

Oscars coffee sprays the table.

Dont do this to me. Please promise me youre kidding.

Its the only time I could find. Too busy the rest of the week.

And whats his excuse? No hang on, dont tell me - elderly gent, balding, pinstriped

suit, glasses. Could spend Saturday morning with his model train set, or meet

twentysomething female client in flattering dress and accessories, for an intimatebusiness luncheon. Tax-deductible of course.

Oscar, hes my accountant.

Exactly. Lunch with you will be the highlight of his week.

I really dont need this now.

No, you need a bloody Mary and a full English. Hang on -

No, just a bacon sandwich and a tomato juice. Cant turn up smelling of booze.

Of course not. What would - let me guess - Cyril? Arthur?

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9/35

Cuthbert.

Fuck off! Cuthbert?

Mm hm.

Oscars eyes are actually watering with laughter. Okay so what the hell are you and

Mister C going to talk about over Saturday lunch?

What the hell do you talk about with your accountant?

Nothing. I dont have one.

Jay blinks. Nowyoure joking.

What do I need an accountant for? I never really worked out what they do.

Clues in the name.

It only takes me a day to do the books. I save a few hundred quid while Im at it.

You spend a day a month doing your accounts?

Course not. A day a year. In January, same as everyone else.1

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1 January 31st is the annual deadline for UK businesses to submit their accounts to the tax office.


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But how do you know if youve got enough for your taxes?

Oscar looks over her shoulder. Not usually a problem. What happened to your

sandwich?

But if you wait until January, how do you know how your business is doing the rest ofthe year?

Oh come on, its not rocket science. Ive got plenty of clients. As long as theres more

coming in than going out, its not a problem. So why worry?

But -

Look Mum, Im a designer, not a bean counter.

Right. So why are you counting the beans?

Ha ha very funny. I thought you were no good at arguments.

I get a lot of practice with you. YES! The bacon drought has ended.

Technically, its a bacon famine, not a drought.

Technically youre a pedantic git, so we shouldnt be friends. Arent you glad I have

low standards?

Not as glad as Cuthbert will be.

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11/35

Oh give it a rest. Anyone would think you were jealous.

I am. I hear he has an original 1936 Hornby Flying Scotsman. A bit rusty now, but it can

still be coaxed into a full head of steam.

Right, Im off. Im late.

Okay, dont forget to text me to let me know.

What?

If hes wearing aftershave.

Loser.

Loserer.

Bye.

Bye.

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12/35

Tokyo, 2003Tokyo Dome Hotel, Bunky-ku

Thirty five floors up. The windows dont open. Through the glass, red lights pulse in the

dark, as if the whole city were on standby.

The TV is showing Sumo. At the end of the fight, all the Japanese businessmen in the

crowd jump up and start throwing their cushions about. Like a surreal pillow-fight.

Oscar is wearing a light summer kimono emblazoned with the hotel crest. He sips a

Yebisu lager from the minibar and turns back to his laptop. Flips open Yahoo Messenger.

Greygirl1999 is online.

Grouch236: Hey!

Greygirl1999: Hey.

Grouch236: Guess where I am?

Greygirl1999: In ur jim jams, with a glass of hot milk.

Grouch236: Theyre jim jams Jim but not as we know it. Guess again.

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13/35

Greygirl1999: Somewhere exotic. Bournmouth? Minsk?

Grouch236: Getting cold. Heres a clue: Konbanwa.

Greygirl1999: U hammered?

Grouch236: No! Not on a business trip. ;-)

Greygirl1999: Whos the client?

Grouch236: Yoshida.

Greygirl1999: Not in Japan?? :-()

Grouch236: Hai! :-)

Grouch236: U still there? Or just envious?

Greygirl1999: Very cool. How long for?

Grouch236: A week. Research. Have to drive some fast cars tomorrow.

Greygirl1999: No!! :-()

Grouch236: Well look at them anyway. And Tokyo Disney afterwards.

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14/35

Greygirl1999: Hows the food?

Grouch236: Pretty good so far. Fusion tonight - mix of western/japanese. think they r

easing me in gently...

Grouch236: What u up to?

Greygirl1999: That proposal. Was going to ring u today actually. About ur rates. Afraid I

cant put those figures in.

Grouch236: Why not?? U said the budget was burning a hole in their poket.

Greygirl1999: It is. But ur rates r a bit lower than mine. Will look odd if we dont chargethe same. Even when I add on my 20% it looks lopsided. OK if I bump u up to 400/

day?

Grouch236: No! How dare u pay me more money. :-)

Greygirl1999: Wasnt expecting a protest. :-)

Grouch236: U seriously charge that? To everyone?

Greygirl1999: Sure, they can afford it. And Im worth it. ;-)

Greygirl1999: U there? Ur worth it too yknwo. ;-)

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15/35

Grouch236: yeah Im here. I didnt know u could charge that much. I get arguments all

the time over 250/day. How come I meet all the tightwads? :-(

Greygirl1999: Surely Yoshida r paying u more if they r flying u to Tokyo?

Grouch236: Its a big job, 3 months work.

Greygirl1999: So they can pay u properly for 3 months!

Grouch236: Plus its an awesome name for my client list. Cant wait to see Ems face. :-)

Greygirl1999: True. Itll be a picture. :-)

Greygirl1999: Got to go. Propsal wont write itself. Sayonara.

Grouch236: Sayonara.

Greygirl1999: Give my regards to Mickey-san. ;-)

Grouch236: Bye.

Greygirl1999: x

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16/35

London, 2006Oscars flat, Hackney

The curtains are drawn. A mobile is ringing. Oscar leans out of bed to fish it out of his

jeans on the floor.

Hello.

Hi Oscar, Im so sorry I missed it. Congratulations!

Thanks, its okay.

I had a flat viewing at the last minute and they were really late.

Its okay, Em told me.

How was the ceremony? Bet JC was jealous.

Bet he was. Em tells me youre moving to New York with Ed.

Shit. She wasnt meant to tell you that.

I know, she didnt mean to. She let slip and I got it out of her. Dont blame her.

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17/35

Im really sorry Oscar, I wanted to tell you in person. I was going to ask if youre free

for lunch in Cantaloupe today? My treat.

Well I know now, whats the point?

Not just to tell you that! Celebrate your award.

Im meeting Steve.

Oh, what about tomorrow?

Got to work.

You always used to tease me about working weekends.

Yeah well I dont have much choice at the moment. We cant all go swanning off to

New York at the drop of a hat.

Dont be like that Oscar. I thought youd be excited for me.

Im too busy to be excited at the moment.

Well thats good, sounds like business is going well.

Business is busy, doesnt mean its going well.

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18/35

Okay I did my best. Im sorry I missed your awards ceremony. I wanted to celebrate

with you because I know how much it means to you, and you deserve it. But I cant be

sorry Im going to New York. I dont know why youre being so funny about it.

Forget it. Have a great trip.

Its not a trip. Were moving there.

Yeah all right, dont rub it in. Go and enjoy your big apartment in Manhattan.

I dont think there are any big apartments in Manhattan.

Whatever. Wherever.

Are you judging me Oscar?

Bye.

Bye.

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19/35

Sydney, 2007The beachfront, Manly

The apartment is basic but clean and spacious. The far wall of the living room is plate

glass, opening onto a scrubby lawn, which opens onto the beach. Waves ripple above

the sand like a mirage.

Jay sits cross-legged on the floor, sipping coffee and looking out at the sea. Glancing

down at her MacBook Pro, she sees Oscars Skype status is online.

Jay: Hey.

Oscar: Hey.

Jay: How r u?

Oscar: OK. U?

Jay: U free to chat?

OSCAR ZAMORA IS CALLING.ACCEPT.

Hey, whats up? Hows New York?

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20/35

Like a busy London.

Whats the weather like there?

Dunno, Im in Sydney.

La-di-da. The jet set lifestyle.

Not exactly.

You there for business or pleasure?

Neither. Recuperation.

You okay?

Im fine. Well, not fine. I split up with Ed.

Oh, sorry. Thats a bummer.

Never easy is it?

No, it never is.

You okay there on your own?

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21/35

Yeah its cool, Ive got friends here. Got an apartment on the beach for a month, get my

head together.

What about work?

Taking it easy for a bit. Couple of projects ticking over, but I can talk to clients on Skype

and email, so I might as well be here as in New York.

Clients okay with that?

Yeah, they think its cool.

Wish my clients thought I was cool. They seem to think Im a janitor with a Mac.

Hows that going?

Dont ask. Why dont you depress me by telling me how sunny it is down there?

Would you believe me if I told you it was wet and miserable?

No.

Well, I tried.

Oscar chuckles. So what you going to do?

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22/35

Right now, I dont know. I need a few weeks to decide.

Sounds like youve found a good place to do it.

Yeah, all the fresh air I can eat.

Thats the spirit. Any chance of enticing you back to London? Theres more to life than

fresh air, you know.

Maybe. Thats one option.

Would be great to have you back. No-one puts up with my moaning the way you did.

Now you tell me.

Listen I gotta go, client throwing a wobbly in my inbox. Lets talk properly soon.

Thanks Oscar, that would be really nice. Its really nice to talk to you.

You too, honeybunch.

See you later crocodile.

In a while alligator.

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23/35

London, 2009The Bricklayers Arms, Shoreditch

Oscar leans on the bar, scrutinizing the taps. Jay checks her lipstick.

What you having?

Grapefruit and soda please.

But its after six.

Not drinking at the moment.

Wow. It really is the end of the world.

Cheers.

Cheers.

God Im sick of this.

But weve only just got here.

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24/35

Ha de ha. I mean all of this. He waves his hand at the papers, then slides them aside.

You know I had to let Steve go?

Yeah, you said. Bummer. How did he take it?

Well Ive seen him happier. But he was all right with me. Hed seen the figures for

months, so it wasnt exactly a surprise. He knows I cant make 2 and 2 equal 7.

Shame the clowns at Lehman Brothers didnt know that.

Yeah, theyre supposed to be the accountants. The worst thing is, it only solves half the

problem. Im stuck paying for an office thats twice the size I need.

Cant you negotiate?

Tried. They said I can sublet it, but its a two-year contract and they want their pound

of flesh.

Shit.

You can say that again. But it must be worse for you, didnt you let everyone go too?

Well three of them were freelancers. Steph had to go as well, but Jasons still there.

But what about that big office? How are you going to pay for all that with just you and

Jason rattling around in it?

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25/35

Flexible lease. Im only committed to the room with my desk in, all the rest was on a

need-to-use basis.

I didnt know you could do that.

Neither did I, it was Cuthberts idea.

The Flying Scotsman? Youve still got him on the go then?

Jay rolls her eyes. You should talk to him. Doesnt sound like your guys been much

use to you.

Yeah, maybe I will. We Hornby men should stick together.

Im serious. Here, Im texting you his number.

No, I will this time. Thanks.

Good.

So what you going to do?

Switzerland. Im going to finally write that book. I might as well make use of the time.

Switzerland? You sure it wont be too exciting?

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26/35

Yeah, well Im not going for the nightlife, am I?

Okay, so whats all this about? How come you stopped drinking? Youre not -

No, course not. Just thought I should lay off for a bit.

He gives her a hard stare.

Okay, apart from the Cantaloupe incident, the doctor said I should think about taking

it easy. No harm done as yet. Kind of a yellow card. And Ill be 35 this year.

Its hardly retirement age.

Do I need to draw you a diagram?

Okay I get it. Sorry.

Sokay. Sorry, Im a bit touchy at the moment.

But if youre in Switzerland, that just leaves Jason in the office.

I know. Im just going for three months to see how I get on. If I stay, Ill get rid of the

office, I can take the hit till then. A few hundred quid a month isnt my biggest problem

right now.

Oscar chuckles.

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27/35

Whats so funny?

Its okay. Its just that a few hundred quid a month is my biggest problem right now.

Sorry.

And Im trying to work out which of us that makes the biggest loser.

Thats easy, its me.

Why?

For hanging around with a loser like you.

Right, I need another pint. Someones got to keep the quota up. Another grapefruit

juice? Or are you moving onto the goats milk? I hear it did wonders for Heidis

complexion.

No Ill go wild and have a spicy tomato.

Thats the spirit.

While he waits to be served, Oscars fingers start absently drumming along to Phat

Planet.

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28/35

Reading between the lines...

As usual with friends, theres a lot between Oscar and Jay that goes unsaid.

There was never much to choose between them as designers, which sparked a healthy

professional rivalry. And its probably obvious why Oscar was never a fan of Ed.

But as the years go by, the biggest source of unspoken tension between them is the fact

that Jay is earning conspicuously more than Oscar. At first he teased her about it, telling

her shed never make it as a top designer if she sold out. But its been a while since hetrotted out that line.

For years he told himself it didnt matter, and hed rather be a great designer than a rich

one. But now hes working harder and harder just to keep his head above water, and

cant take time off to recuperate like Jay, even when life deals him a crap hand.

It felt like the last straw when he had to spend the weekend after winning his first major

award working flat out on a mundane job for a client he despised. If Im such a greatfucking designer, he moaned to Steve on the Saturday night, Why am I slaving away

instead of driving round all the clubs in a stretch limo full of champagne?

Recently Jay is even starting to pull ahead of him in the (unspoken) awards league.

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29/35

He cant deny the quality of her work. And of course he wants her book to be a success.

At the same time, he cant help thinking he could produce a killer book ifhe had time for

blue sky thinking in the Alps or on a beach down under.

He knows Jays life isnt a picnic either. She never seems to have much luck withrelationships, and he was starting to get concerned about her drinking. So he wouldnt

exactly want to swap places with her. Money doesnt make you happy, he said to

Steve, but it sure gives you some better options for dealing with misery.

Then the global financial storm struck, and everyone was scrambling for lifejackets.

Like Oscar and just about everyone they knew, Jays business took a hit when the

recession came. But she seemed to have not just a lifejacket but an entire inflatable liferaft stowed away, where she could comfortably ride out the storm for a few months, and

emerge with a shiny new book (and presumably a thankful liver).

Its a time for blaming people - bankers, politicians, the rich and greedy. And Oscar did

his share of moaning to begin with. But he soon realised that was a mugs game. Hed

spent years complaining about how hard he worked, and look where that got him.

On sober reflection, he concludes that the gap between his situation and Jays hasnothing to do with talent, hard work, integrity or creativity. Its simply down to their

different responses to the money question.

Taking a pen and paper, Oscar makes a list of the five big money mistakes he has made

in his career, which Jay has managed to avoid.

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30/35

Within a few months of starting out as freelancers, both Oscar and Jay were introduced

to the brutal realities of the marketplace. They found themselves working long hours for

not much money, and what did come in took a lot of chasing.

Oscar was stubborn. He was a designer, not a bean counter, and he was damned if he

was going to sell out. So he blotted out the money issue as best he could and tried tofocus on design.

The trouble with this attitude is that - just like with a design project - if you dont define

the problem clearly at the outset, its really hard to come up with a great solution.

And Oscar had to admit that when it came to money, he didnt have a clue what the real

problem was. He didnt have a flash lifestyle, but even during the good times the

struggled to pay bills and taxes, let alone think about savings or a pension.

But Jay decided early on that she wasnt going to let money rule her life. She got a good

accountant, read up on small business finance and put in the time and effort - often

through gritted teeth - to find answers to the problems she faced.

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1. Burying your head in

the sand


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Oscar wasnt the first creative to put off his annual accounts until the last minute, just in

time to submit them to the tax office. But that doesnt make it a smart move.

As the years went by he found it more and more stressful to be operating on vague

guesstimates of how well the business was doing, always expecting - and sometime

receiving - a nasty surprise.

Running your business without doing regular monthly accounts is like driving a car in a

hailstorm with the windscreen wipers off. You cant see where youre going or the

dangers rushing towards you.

And trying to do everything yourself can be a false economy. Oscar thought he was

saving money by not hiring an accountant. It was several years before he realised

Cuthberts advice saved Jay more than she paid him - some years, several times more.

When she started doing her accounts monthly, Jay had to force herself to keep at it. But

it became easier when she started spotting unpaid invoices and ways to cut expenses.

Now she can afford to pay a book-keeper, and her system runs on auto-pilot.

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2. Doing the bare minimum,

at the last minute


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3. Not charging enough

Oscar was shocked when he learned how much Jay charged per day. But even after that,

it was several months before he raised his rates. And when he did, just as he feared, he

heard squawks of protest from some of his clients.

He was always anxious when quoting his fees to a prospect, and often encountered the

resistance he expected. Whenever a client accepted his quote straight away, he felt like

hed got away with something - then wondered if he should have asked for more ...

Over time, it became obvious even to Oscar that the easiest way to boost your income is

to raise your prices.

Jay was pleasantly surprised when she first learned about the big gap between the rates

charged by the highest- and lowest-earning designers.

The first clue came from Cuthberts raised eyebrows when he saw her accounts. He put

her in touch with a creative industries business adviser, who had an eye-opening set ofbenchmarking data for the design sector, and was only too happy to share it.

These days, she knows her fees are above the industry average, but she also knows how

to get clients to pay them ...

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33/35

One book Oscar could have written standing on his head was the Encyclopedia of Crap

Clients.

It would be divided into sections headed Skinflints, Philistines, Time Wasters, Late

Payers, Moaners, Shouters, Vanishing Acts, and Mentally Unstable.

Whenever Jay asked him why he bothered with them, Oscar said he couldnt afford not

to. It felt scary to turn down work, and once hed taken on a client and realised theywere a nightmare, he didnt see how he could extricate himself.

Once in a while he landed a fabulous client like Yoshida, but it was frustrating having to

sandwich them in between his other commitments, to the point where he wasnt really

giving them the stellar service he knew he was capable of.

Meanwhile, Jay took delight in telling him each time shed just sacked another one.

Theyre just not worth it, she said. Her headspace was her workspace, and shecouldnt have it occupied by riff-raff.

Jay could afford to let some clients go because she had done the analysis that told her

which ones werejust not worth bothering with. And which were pure gold.

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4. Working with crap clients


34/35

The thing that finally got Oscar to do his accounts every month was the year he sat

down and worked out how much he had wasted on unnecessary expenses in the past 12

months - from a mobile phone plan that gave him far too many minutes every month, to

subscriptions to trade mags he never read, to a state-of-the-art printer he hardly used,

and a PR agency that brought him few column inches and even fewer clients.

He thought hed learned his lesson, but it didnt even cross his mind to negotiate

flexible terms when it came to expanding his office space. Even if it had, he couldnt be

100% sure he would have bothered, as he hadnt worked out all the implications of

adding a permanent member of staff to his costs.

You dont need to have an extravagant lifestyle or a fancy office for your business

expenses to get out of hand. So its critical to not only monitor your current costs, butalso to think ahead and work out how your future costs will be affected as your

business grows (or shrinks).

This is exactly what Jay has done. When the recession hit, she scaled down her team and

office space reasonably smoothly, in line with the drop in income. And she has a plan for

scaling them up again while preserving her profit when the good times come back.

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5. Letting expenses get out

of hand


35/35

Okay, I wont labour the point.

If youre a creative, youre probably never going to be a financial wizard, but you can

build a business that is as profitable as the creative work is pleasurable.

And contrary to Oscars fears, its possible to do this without compromising yourcreative integrity.

Money doesnt buy creativity but it does buy time, experiences, equipment and

materials - all essential ingredients of amazing creative work.

So to help you grow a business that looks less like Oscars and more like Jays, Ive

teamed up with Sarah Thelwall, an expert on finance for creative businesses.

Sarah and I have recorded an audio seminar where we go through the mistakes Ive just

described, and provide you with practical, actionable solutions to each of them.

More good news: you can listen to the seminar for free. Visit this page to claim your

copy of the audio seminar 5 Essential Money Skills for Creative People.

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Time for the good news!
http://lateralaction.com/moneyskillshttp://lateralaction.com/moneyskills

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5mistakes of Creative People