Are you building your dream business?
image credit: John Madere, permissions by Sagmeister Walsh
I've been thinking a lot lately about the very real Cult of Business Growth in the consulting space. Everywhere I turn these days, it feels like I'm being swarmed with sales pitches about "scaling to six figures", "scaling to seven figures", "how to be fully booked in two months", etc.
These messages can be compelling for small business owners. On the surface, that's totally understandable. Business growth means more money, and that your talents are being recognized ... right?
But there is another model that creative business owners can take to their work, and to their business. It's an approach embodied by the graphic designer and artist Stefan Sagmeister. Sagmeister is by all appearances living his best life. He's an Austrian ex-pat living in New York; co-owns a design shop that gets to handpick its clients; and he takes lengthy sabbaticals when he begins to feel uninspired by the client work. He spends his sabbaticals traveling, reading and exploring topics of personal interest, and then creating exhibits, books and/or movies on these topics of his choosing.
Sagmeister’s company website has a very interesting Answers section, within which he shares his thoughts on a number of topics, including his business.
He explains that he intentionally never grew his firm big. As a result, he can be choosy about clients. In his words, "We tend to work with clients who have products and services we do use or would use ourselves (this way we don't need to lie), who are kind people and who have appropriate deadlines and budgets."
Welp ... can we all agree to cut and paste that response into our business plans under Target Client??
In response to the question "What's the best part about maintaining a small agency?", Sagmesiter answered,
“We are not financially dependent on our clients, we have the freedom to pursue unusual directions, we are nimble, we are focused, we are responsible, we all get to design, and be involved in all aspects of the job, so we are not bored. There is little need for meetings. There is rarely any misunderstandings internally so what we design mostly gets produced.”
Sounds pretty dreamy. I'm drinking that Kool Aid.
Sagmeister’s experience with his work and his business is both exceptional ... and not. It's exceptional in that it's amazing, but it's un-exceptional in that there's nothing stopping any of us from taking his approach and adopting it for our own small creative business.
I've seen it firsthand with my own clients, some of who scaled their teams (because that's what you do when you're an emerging firm, right?), hiring before the business revenues could fully sustain the headcount. Then they feel like they need to scramble to win new work, including work that is low margin, low revenue, and low strategic value. Some of their clients were truly awful and/or didn't have the necessary money to finish the projects.
Through analysis of my clients’ past and current financial situations, and by creating a much-needed cash flow forecast and business development pipeline report, the truth becomes apparent. They can’t afford the team at its current size and configuration. They are wasting so much time and so much talent chasing work they didn't even want, and more time managing staff than on the creative side of the business (or, quite frankly, the business side of the business).
In shifting the mindset away from growth (more revenues, more clients, more work) and back to how you want to spend your days; back to why you went into business for yourself in the first place; and back to margins (AKA how much money you have left in the business at the end of the day), you can get on a path to greater success; greater happiness; less stress and more profits.
So before drinking the Kool Aid of business growth, might I suggest you carefully consider the flavor?