What is the difference anyway?
I remember this question during my creative entrepreneurship training at the British Council. It is this question that had me sitting at the edge of my seat. It jerked me straight out of my sunshiny romantic notion of running a business.
So what is it that sets one apart from the other? It is all in our perception. An extremely powerful attribute, perception determines the way we relate to and experience every aspect of life.
When you think about the creative activity you are currently involved in- be it crafting, photography, the performing arts- do you perceive it as a hobby or as a business? The reason why it is vitally important to address this question is that it will literally scale the heights of your success. How, when and where you work, how much you charge, how you track the money you make (or lose)- all these will be influenced by your perception of the creative activity you are engaged in.
Let us take a closer look at tracking your money. IF you are pursuing a hobby, your primary motivation is unlikely to be profit. You could be engaging in it because it is the ‘in thing’ or to occupy the tonnes of free time you have- either way, monetary rewards don’t go beyond the need to meet costs of production. IF on the other hand, you perceive your creative endeavor as a business, there are certain things you need to take into consideration.
When it comes to passing judgement on whether you are running a business or pursuing a hobby, how you manage your finances becomes the judge, the jury and the executioner. It is the one definitive way to tell if you are dabbling in fantasy or working a business.
I have to say that of every ten creative entrepreneurs i meet, only a third keep financial records. Awareness is apparent, but implementation a challenge. Reasons vary, but here are the 3 most common-
1. Lack of know how: Profit and loss accounts, balance sheets, fixed costs…the list is endless, confusing and yes, plain boring. Creatives find their time most profitably spent creating, talking philosophy and trying to change the world- not jabbing at numbers on a calculator, looking for a bottom line.
2. The bitter-sweet relationship between creatives and money: We are in no doubt about the value of tracking money, but we don’t want to seem greedy, hankering after the shillings and cents. As Mark Mcguinness puts it, the starving artist cliche didn’t come from nowhere.
3. Ignorance is bliss: “I don’t know if what i am doing makes or loses money, but i have money for my day-to-day running around and an occasional drink with friends. So that is OK Right”? Wrong! The only thing this escapist attitude does, is prolong the sinking process.
These are excuses, barely admissible if you are pursuing a hobby; completely inadmissible if you intend to run a business. The truth is, serious businesses track money. And not in some storage compartment inside the brain. On spreadsheets and balance sheets and profit and loss accounts.
Playtime is over folks- its time to take a long hard look at what we are doing. Otherwise, we will be chasing tails a long time.