Creative entrepreneurs can’t patent their talent. We simply have to contend with the reality that the creative marketplace will always be offering up young new talent that’s willing to work for rates that established creatives can’t match. So how will you protect your creative practice from the competition?

Keeping a careful eye on your burn rate can make the difference between managing growth on your way to success, or crashing spectacularly when you reach the end of your runway, never having gained sufficient momentum to take off.

If you have ambitions to grow your freelance practice into a small firm, or even into a larger agency, then you need to be aware of the costs associated with scaling a creative practice.    

When creatives enter into business they often fail to consider the longer-term soft-costs involved in running their businesses, which can end up dragging them under.

For creatives establishing the value of your business can be quite difficult, especially since the biggest cost center is your own time. And what’s that worth? In today’s episode we’ll consider how to calculate this critical part of the valuation equation—and some of the serious consequences that result from getting it wrong.

Equity is ultimately established through calculating the retained earnings of a company—its revenues less all the costs that were expended to produce those revenues. Investors are interested in a company’s total sales, but what they really want to know is their profit margin. This week we’ll evaluate the profit margins of a typical creative practice. 

What exactly does an investor buy, when they make a deal with a founder? They buy equity in the company, and so the value of that equity is essential to the transaction. This week we ask the question—what’s the equity of my creative business worth today?

Have you ever dreamed of being on Shark Tank? Well, those dreams will have to remain mere flights of fancy since venture capitalists don’t invest in professional service businesses—creative practices are simply not scalable enough. But what if there were a Shark Tank for creative entrepreneurs? Would you be ready to answer all their scrutinizing questions? 

Since most creatives rely on referrals, it’s critical to understand the downside. Though referrals deliver clients without any extra effort on your part, the biggest liability is the flip side of that benefit—that no effort on your part controls when you get a referral. If you decide to ride the referral train, you don’t get to choose where you end up, and if it breaks down—you can be left in the middle of nowhere.

Creative entrepreneurs frequently suffer from feast or famine cycles. Fixing the famine problem is what effective marketing is all about. But how do you fix the feast problem? Granted that’s always a better problem than the alternative, but it is still a real problem. And if you have not thought through how you might respond to an extended feast season, what may at first seem like a dream come true—could soon turn into the nightmare you never expected.