005: The Time & Income Connection (Episode 1 in the 4-Part "Time & Income" Series)Nov 29, 2022
If you are a creative entrepreneur, your time is the product you are selling. Automating, systematizing, outsourcing, and hiring will only get you so far. When someone hires me to play a concert, there is no getting around the need for ME (not someone else) to spend time practicing and rehearsing and performing. If a publisher hires me to narrate an audiobook, they expect to hear MY voice on the files I submit, meaning I have to be the one sitting in front of the mic, putting in the hours to record that audiobook. Time and income are directly related for creative entrepreneurs. But once you have sold all of the time that you can reasonably sell, how do you keep your business growing? How can you increase your income? We’re going to dig into that conundrum today.
Hi there, thriving artists! Welcome to episode 5 of the Starving Artist No More podcast. This is your host, Jennifer Jill Araya, and I’m so excited about today’s episode.
Today is the first episode of a 4-part series. We’re going to take an in-depth look at the relationship between time and money for creative entrepreneurs, and how to scale a business when your time is the product you are selling. This is a tough nut to crack! In most creative businesses, the business’s product is created through direct investment of the artist’s time. And as humans, we are all limited to just 24 hours a day, 7 days a week, 52 weeks a year in which to do all of our living and working and playing. We have limited time! Where do you go with your business when you’ve sold all the time you can reasonably sell? We’re going to discuss some ideas today and over the next 3 episodes.
This entire series, all four episodes, is based on the info shared in a free guide that you can get on my website. The concepts are addressed from a bit of a different angle, but the info is all there in the free guide, “Say Goodbye to “Feast or Famine”: Three Financial Must-Haves for Creative Entrepreneurs.” If the topic of this series of episodes interests you and you want to get a better handle on the finances for your creative business, just visit my website, www.StarvingArtistNoMore.com, and fill out the contact form to receive the guide, for free, no strings attached. This series of podcast episodes and this guide are all about helping creative entrepreneurs build the business they want, and I think the guide will help you move your business finances in the right direction. www.StarvingArtistNoMore.com, and fill out the contact form.
So with that, let’s dive in.
I’ve worked as a creative entrepreneur for my entire adult life. I actually started my first creative business before I was officially an adult, while I was still in high school, teaching private music lessons to beginning music students in my hometown. I’ve worked as a full-time and a part-time freelance musician, both as a cellist and as a vocalist. I’ve taught music both privately and in classroom settings. For several years, I worked as a fulltime artisan, working the craft fair and art show scene. And now I’m a full-time audiobook narrator, with a healthy dose of freelance music work on the side. I’ve worked in a lot of different creative industries and built creative businesses with many different formats and structures, but the one thing that ties them all together, to my frustration, is the seemingly unbreakable connection between my time and my income.
This is an unavoidable conundrum for creative entrepreneurs, for artists. No matter your medium or your specific creative field, if you are an artist – a creative – then the product you are selling in your business is your creative energy. And there’s a soft limit on how much we can charge for that creative energy, on how high our rates can be. Now, exactly how much you can charge for your artistic endeavors varies widely depending on where you are in your career and which specific creative industry you’re working within, but regardless of your specific position on those two factors, a limit is there. I can’t charge more for a performance or for an hour of an audiobook just because I want to; my experience and skills and the market all have to support that higher rate. Rates are flexible – in fact, they’re a lot more flexible than many artists believe them to be – but they still have limits.
So if you want to give yourself a raise, make more money in your business, you need to work more, right? Except creation, by its very nature, is what author Cal Newport calls “deep work,” work that requires time and focus to produce. Deep work cannot be rushed, and one of its core characteristics is that it requires TIME to produce. Creating your artistic masterpiece requires time. Practicing to learn all of the music for an upcoming concert takes time. Sitting in a small, padded room (aka a recording booth) and speaking every single word of an entire novel into a microphone to produce the finished audiobook version of that novel takes time. Preparing and painting a canvas takes time. Composing, shooting, and editing a photo takes time. The work of a creative can be made more efficient, but it cannot be rushed. It takes TIME.
And as humans, we only have so much time to sell. Once I fill up all of my available time at the highest rate that is supported by my experience and by the market, what’s next? How do you grow your business – grow your income – from this place? If you’re in this situation, you may be wondering: is growing your income even possible for a creative entrepreneur?
YES! It absolutely IS possible for you to grow your income as a creative, even if you feel like you’re running up against this same old time vs. income conundrum. But increasing your income, which we could describe as one important part of finding financial fulfillment from your business, looks very different for creative entrepreneurs than it does for any other business type.
This is the point where a traditional business coach would start talking about automating, systematizing, outsourcing, and hiring. And I don’t want to minimize just how helpful these things can be for creative entrepreneurs. I began my search for an answer to the time/income conundrum in January of 2020, after YET AGAIN bumping up against this stalemate in YET ANOTHER creative business. I decided that this time, I was going to find a solution. I began devouring every resource related to small businesses and entrepreneurship that I could find. A lot of those resources talked about managing task lists and streamlining your processes and finding the right people to support you in your work. And those things have been and still are incredibly helpful to me, helpful enough that I will be talking about them in future episodes. I don’t want to minimize the value that can come from automating and outsourcing for all entrepreneurs, including creative entrepreneurs. I work with several different contractors now to handle parts of my business that I was successfully able to outsource, which adds time back into my weekly schedule – time I can then use making money by narrating or performing. I developed an organizational task management and project management system that works really well for me, refining it over the years so that it meets my needs. And so now I’m able to quickly and easily manage the administrative tasks that I still need to complete to keep my business running smoothly, again adding time back into my weekly schedule that can be used to perform my core creative tasks, which for me are narrating audiobooks and performing music.
But even with those optimizations, I am still limited. I still hit an invisible but incredibly frustrating ceiling: I optimized, systematized, automated, and outsourced all I can, and I used the time gains from those processes to add to my creative time. (which, as a quick sidenote, is an AWESOME place to be from a creative fulfillment perspective. Spending 90% of every workday doing incredibly fulfilling creative work is a dream come true for me! I get to spend almost all of every day doing the artistic work I love, and it’s fabulous.) But I am still limited. I still can’t take advantage of “scale” to truly grow my business and benefit financially. If you are a creative entrepreneur, automating, systematizing, optimizing, and outsourcing will only get you so far. They will help, but in creative fields, they won’t get you to the ever-elusive goal of creating a business that scales.
And right now I can almost see my fellow musician entrepreneurs looking at me like I’m crazy. “What do you mean, a business that scales? I practice scales every day! How is that part of growing my business?”
Obviously, musical scales are not what I’m talking about. Let’s take a moment to define what “scale” means, in a business sense. Merriam-Webster defines the use of “scale” in a business context as “to grow or expand in a proportional and usually profitable way.” In other words, a business that grows in a way that is profitable to you, the business owner. I find Wikipedia’s definition to also be helpful. “A scalable business model implies that a company can increase sales given increased resources. For example, a package delivery system is scalable because more packages can be delivered by adding more delivery vehicles.”
In order for a business to be scalable, in order for your creative enterprise to scale, you need to be able to grow the business in a profitable way. In traditional businesses, you can grow the business by adding more resources to serve more customers. That’s where you get the “outsource and hire” advice that you hear so often from business coaches. And again, I don’t want to downplay how important it can be to get the right people working with you. But the Wikipedia article about scalable businesses points out the problem pretty well. Remember, the Wikipedia definition I just read uses the example of a package delivery business to describe what it means for a business to be scalable. So, quoting from the article, the very next sentence is this: “However, if all packages had to first pass through a single warehouse for sorting, the system would not be as scalable, because one warehouse can handle only a limited number of packages.”
In this scenario, you (the artist) or me (the artist) are the “single warehouse” that every package has to go through before it can be delivered. Every single project that comes into my business must come through me, because the product I am selling is my creative time and energy. My business produces nothing without that creative time and energy. Adding more resources to the administrative tasks or the booking or the scheduling or the emailing doesn’t change that my time is required to create the artistic works that I sell. And there’s only one of me. I’m a chokepoint in my business. The same is true of every creative business. The artist’s time and creative energy is the limiting factor.
So where does all this leave us? I’ve just spent a while outlining a huge problem: as creatives, our income is directly proportional to the amount of time we spend working, and no matter how much we automate or outsource, we will eventually run into a situation where we’ve sold all the time we have available to sell. And worse yet, we can’t scale our businesses the way a traditional, non-creative small business could scale. We can’t “resource” our way out of this problem. What do you do? What can you do?
I’ve got three suggestions for you. None of these suggestions is a cure-all, and they won’t completely end the connection between your time and your income. To some extent, a close link between time and income is an innate characteristic of a creative business. But if you follow these steps, you will move a long way toward making that connection as loose as possible. I’m going to go into much more detail on each of these three steps in future episodes. In fact, the next three episodes of this podcast series are going to be an in-depth look, a full episode’s worth of time and discussion digging into each of these suggestions. But for today’s episode, the starter episode of the series, we’ll begin with a general overview of all three.
So, here we go. Step 1 of breaking the connection between your income and your time is to Pay yourself first.
Already, as I said the three-word instruction of the first step, I can hear your objections. “Paying myself first doesn’t increase my income!” you protest. “Paying myself first doesn’t change anything about what’s coming in!” And some of you may even be questioning what paying yourself first even means. Don’t worry, we’ll go over all that. And if you still have questions after listening to this introduction to the concept, just listen to episode 6 of this podcast, which is a full episode’s worth of info on paying yourself first.
While you are technically correct that paying yourself first doesn’t increase your income, I’m still including it – and including it first – because it is that important. If you adjust your business money management so that you are managing your business finances well, if you begin paying yourself first, then you will feel as if you have given yourself a raise, as if you are making more money, because the money will go further. Have you ever noticed how a well-managed resource seems to last longer, to be used more efficiently?
My real-world example for this is sort of a cliché, but it absolutely applies, so I’m going with it. Think back to the week before you last took a vacation. (And if you haven’t ever taken a vacation because you are a workaholic creative who is absorbed in the hustle, first I see you, and I used to be you, and second just think back to the week before the last time you had to travel out of town for a business performance or to see family. For this exercise, any event that required you to not work in your normal way and in your normal place will do.) If you’re like most people, meaning almost every working person on the entire planet, that week before you left for your vacation or commitment was one of the most productive weeks of the year for you. The last week of October, I traveled to Boston to attend Johnny Heller’s New England Narrator retreat, and the week before that trip was insanely productive for me. I recorded, start-to-finish, two complete books, plus wrote and recorded the first few episodes of this podcast, in addition to participating in more-than-usual family commitments for the week. Even though my creative workflow has been systematized and optimized the absolute best I can, I still was able to find gains when the pressure of a looming trip out of town was combined with deadlines that had to be met before leaving on the trip. That week, my time was an extremely well-managed resource, and so my time stretched farther than it normally did.
The same will be true for your money. If you manage it well, if it becomes an “extremely well-managed resource,” you will use it more efficiently, and it will go further than it used to. And the first step of that is paying yourself first.
YOU are the most important asset your business has. As I’ve outlined almost ad nauseum so far in this episode, without you, your business ceases to function. Taking care of that most important asset is vital to making your business run. Think back to the package delivery business analogy from the Wikipedia article, where you are comparable to the single warehouse through which every package must travel before being delivered. If you owned that package delivery service and if that warehouse was your limiting factor, wouldn’t you make sure that that warehouse was in the best possible condition? That the workers in that warehouse had the best and newest version of every tool they needed to get their work done? Wouldn’t you take care of that warehouse as the #1 priority of your business? Of course you would! Everything in the business relies on that warehouse.
Well, if you’re analogous to the warehouse, you need to apply that same care and attention to yourself. Taking care of YOU is the #1 priority of your business. And that means that when money comes into your business, taking care of your financial needs is the absolute highest, most important consideration. And in order to do that, you need to manage your money well.
In the next episode of this podcast, episode 6, I’m going to go into tons of detail about how, on a practical level, you can pay yourself first. I’ll get into the weeds on what it means to use your finances well and to use your finances to take care of you, the #1 priority and the most important asset of your business. So if you’re still confused about how to do this, just listen to the next episode, which is being published December 6, 2022. But for now, just know that managing your money well and paying yourself first, which is part of managing your money well, are the first “box to check” when it comes to increasing your income as a creative entrepreneur.
If you manage your money well, if you pay yourself first, your money will go further and be used more efficiently, and it will feel like you have more of it, even before your income actually starts increasing.
Now for Step 2: Work in your creative and financial sweet spot.
This is where you will be able to start actually increasing your income. Focus all your efforts – all your marketing efforts and your networking activities, everything you do to get new projects – focus all your efforts on projects that hit your financial and creative sweet spot. These are projects that (1) pay you the very best and highest rates you make, AND (2) that you personally find creatively fulfilling and enjoyable.
Imagine a chart with a continuum of how much you were paid for the project on one axis, and a continuum of how creatively fulfilled you felt while working on the project on the other axis. This would make a kind of chart called an Eisenhower matrix. You’ve probably seen one of these before. They are simple charts with four boxes, and they’re often used to chart tasks as important and urgent, important and not urgent, not important and urgent, and not urgent and not important. I want you to think of an Eisenhower matrix that measures whether or not your projects fulfill you creatively, and whether or not those projects fulfill you financially.
Now think back over your projects for the past 6-12 months. On each project, if you could rate them on a scale of how well you were paid for your work, where would they fall? Which projects paid you the best? If you were paid for every project the way you were paid for your highest paying projects, would it meet your financial needs? That’s the “financially fulfilling” part of the equation. Now let’s look at the creative side of things. On each project, think about how creatively fulfilled you felt while working on that project. Where you excited to work on this project? Did you feel rejuvenated by the work you did? Were you invigorated by the creative process with that project? When the project was complete, did you feel like it drained your creative reserves, or did it replenish them? On a scale of 1 to 10, with 1 being complete and total drudgery and 10 being the best and most exciting project of your entire creative life, where would each project land?
Find the projects that rank high in both categories: the ones that both paid you the best and that you found creatively fulfilling. That is your creative and financial sweet spot. The more work you can do in this area, the more you will be paid your highest rate for an ever-increasing percentage of your projects, and the more you will be doing your best work on every project, because you will be doing work you enjoy and that you find creatively energizing. For those projects that you rated as both creatively and financially fulfilling, how did you land them? Did they all come from a particular networking contact, or from the same kind of networking contact? Did you use a particular marketing strategy that resulted in those projects coming your way? Are they all within one particular category of work? What do they have in common? Find the common threads that tie these projects together, and you have found your blueprint for getting more work like this.
When your work creatively fulfills you, you are living in the place where you are your absolute creative best. You will find your work energizing, and you’ll be excited about the work and the process of the work. You will be producing the absolute highest quality of work, truly doing your very best and being your very best. And this is also the work that will, over time, allow you to raise your rates and increase your income. Doing your best creative work and being paid the best possible rate for that work will increase your income in a way that absolutely nothing else can. Increasing your rates doesn’t actually break the connection between your income and your time, since you still need to invest a set amount of time doing the deep creative work of your business, but it will ensure that you are paid the absolute highest rate possible for every hour of time you invest.
The free guide on my website, which I’ve already mentioned a few times, goes into way more detail on working within this creative and financial sweet spot, and it also addresses what to do about the work you’re doing that doesn’t fall within your sweet spot. If you’re interested in this process, check out that guide. Or, wait until episode 7 of this podcast drops on December 13, 2022, which will be all about finding and working within your creative and financial sweet spot. But for the purposes of this first episode in the series, in which I’m addressing how to handle the time and income relationship within creative businesses, it’s enough to urge you to focus all your efforts on working within your creative and financial sweet spot so you are making the highest rate possible for the work you do, and so that the work you do is your absolute best, most creative, most visionary work possible.
Which brings us to Step #3 of breaking the connection between your time and your income: Develop asynchronous income.
First, a definition. What is asynchronous income? Asynchronous income is what everyone else calls “passive” income, but I have a really big problem with that term. “Passive” income implies that it is money that comes to you passively, without you doing any work. In fact, Merriam-Webster defines it as “business activity in which the investor does not actively participate in the generation of income.” But my problem with the term “passive” income is that it’s not actually passive. You do have to participate in the generation of income! Income doesn’t just appear – it doesn’t come out of thin air. Money doesn’t really grow on trees. You have to work to build an income stream that pays you gradually over time. Even if you are investing in the stock market, the stereotypical source of passive income, you have to first work to make the money that you then invest. Passive income requires a LOT of work; you just aren’t paid at the time that you do the work. It’s not actually passive. It is asynchronous. I know I’ve used lots of definitions in this episode, but here’s one more. Merriam-Webster defines asynchronous as “not simultaneous or concurrent in time.” Asynchronous income is income where you put in the work up front and then are paid for that work over time, hopefully at a rate much higher than your normal rate. You do the work, and then you get paid for that work on a recurring basis into the future. Anytime you do work that will continue paying you far into the future, you are building your asynchronous income.
Developing asynchronous income is where you finally get to break the connection between your income and your time. You invest a set amount of time up front to set up whatever income stream you’re pursuing, and then over time, that investment of time pays you back without needing much, if any, additional investment of time. You do the work once, and you get paid for it many times. All of a sudden, your income isn’t dependent upon you completing a set number of projects per week or per month; income is coming in regardless of whether or not you worked that week or month.
I have good news and bad news about asynchronous income. The bad news? Asynchronous income does require an upfront investment of time. And if you’ve already sold all of your time and feel overbooked and overworked and overwhelmed, it can be really hard to find the time to make that initial investment. That’s why asynchronous income is the third step in this process. If you begin by paying yourself first, so your business money becomes a well-managed resource, and if you then focus your work within your creative and financial sweet spot, so you’re paid your absolute highest rate to do your absolute best work, then you have literally bought yourself enough margin to invest time in developing asynchronous income streams. You’ve separated your income from your time just enough to begin the process of really separating your income from your time.
Are you ready for the good news, the really good news? As creatives, we have an almost infinite amount of asynchronous income streams available to us! First, we are creatives – we are artists – which means we are used to problem-solving. We are used to creating something out of nothing. Figuring out what types of asynchronous income to pursue is the perfect place for you to use every creative bone in your body. Get creative! Dream up ways to take your work into the asynchronous realm. What ideas can you come up with? What new avenues can you explore? You’re a creative, so be creative! And second, this is really good news for us as creatives because we, by definition, sell work that we have created. That work is ripe for development within asynchronous income processes, things like royalties, licensing fees, online courses, downloadable or digital content. In the 4th episode of this series, which will be published on December 20th, 2022, I will go into a lot more details on various asynchronous income options that are perfect for creatives and how you can begin to pursue those options. It will be a full episode’s worth of asynchronous income ideas and inspiration. But right now, even before we get to that point in this series, you can start looking for those opportunities yourself. Use your creativity! How can you use the artistic, creative work you already do to develop ongoing income for yourself? If you intentionally approach this problem with the same creativity that makes you an amazing artist, you can develop asynchronous income streams for which you do the work once, up front, and you are paid repeatedly over time.
And that’s it. Those are the three big steps you can take to address the time vs. income conundrum that has haunted every creative artists to ever hang out a shingle and attempt to start a business. Pay yourself first, so that your business finances become a well-managed resource and so that you feel like you have more income because your money is being used so efficiently. Do the thought-work necessary to figure out where your creative and financial sweet spot is and focus all your efforts on getting more work within that sweet spot, so that you are both paid your absolute best for the work you do and doing your absolute best, most creative, and most innovative work on every project. And with the extra time margin you have in your schedule, thanks to steps 1 and 2, use your creativity to develop asynchronous income streams that will pay you over time into the future.
These three steps aren’t easy, but they are straightforward, and they are powerful. If you commit to following these three steps, you will find yourself well on your way toward building a business that scales, a business that gives you what you need personally, creatively, and financially. You will have started the process of building a creative business that works. I can’t wait to see what you create.
Thanks so much for listening. I know how precious time is to creative artists, and I can’t tell you how much it means to me that you spent your time with me today. I hope thinking through these three steps has opened your mind to new possibilities for your business. As I mentioned earlier, I’m planning to go into much more depth on each of these three steps in future episodes. If you have questions about how to implement any of these steps, reach out and let me know. That way, I can be sure to answer your questions in those upcoming episodes. You can always reach out to me via my website, www.StarvingArtistNoMore.com
If you found today’s podcast helpful or informative, please take a moment to rate this podcast and to leave a review for me, using whatever podcast player you prefer. Ratings and reviews help new listeners find me, and they really make a difference. And, of course, don’t forget to subscribe. New episodes drop every Tuesday. Thanks again for sharing your time with me. May you have a day full of creativity and joy.
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