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In a weak economy, many are tempted to lower fees to obtain work. That’s a dangerous game @carolsankar

In a weak economy, many are tempted to lower fees to obtain work. That’s a dangerous game @carolsankar

The creative economy, which includes occupations like artists and composers, is bigger than you'd think. In 2017, it contributed $880 billion or 4.5%

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The creative economy, which includes occupations like artists and composers, is bigger than you’d think. In 2017, it contributed $880 billion or 4.5% of U.S. gross domestic product. That’s larger than industries like construction, transportation and warehousing, travel and tourism, utilities and agriculture, according to National Assembly of State Arts Agencies (NASAA).

How many creative workers are there in America? The federal government doesn’t have recent figures. But in 2012, the Bureau of Labor Statistics (BLS) put that number at 1.1 million individuals, although others suggest it’s between 10-20 million people, depending on how you define creative work.

We’re talking about artists, animators, art directors, graphic designers, photographers, editors and writers. Without a good strategy and planning, they can be vulnerable in a bad economy.

Here’s how creative professionals can thrive during a recession.

Stop racing to the bottom.

Certain creative occupations tend to be gig work: 59% of animators, art directors, painters and illustrators are self-employed, according to BLS. That number is even higher for writers (64%) and photographers (68%).

In a weak economy, many are tempted to lower fees to obtain work. That’s a dangerous game.

The problem with racing to the bottom is there’ll always be thousands of rivals who can offer cheaper rates. How can you attain financial stability when “winning” a (low-paying) project means foregoing basic necessities? Bidding desperately prolongs a cycle of desperate circumstances.

If you live in a big city, invoicing below $50 an hour makes it difficult to afford rent and health insurance. For a project that requires 20 hours a week, that’s only $4,000 a month.

Which leads to our next tip.

Diversify your revenue stream.

Great talent that operates without a business mindset can still cause you to go under.

Creative gig workers are on their own, and without multiple income streams you’re one broken laptop away from a financial emergency. Diversified cash flow is absolutely critical to reducing risk and making one’s gig sustainable.

The urgency depends on income level. Multimedia artists earn $70,530 a year but craft artists only make $34,940 according to BLS. Industrial designers’ median wage is $65,970 but floral designers only bring in $26,350. Technical writers rake in a healthy $70,930 but photographers only earn $32,490. 

Diversification bumps up cash flow while making you less reliant on any single employer or client.

Spend 20-30% of your time seeking big and/or stable clients. Even if your pipeline is busy with upcoming projects, you should still devote this much time marketing your services via LinkedIn, portfolio website, industry associations and referrals.

I spoke with Jeff Minnichbach on how to attract good clients in a competitive but fragmented industry. He’s the founder of No Limit Creatives, a Maryland-based creatives agency that offers unlimited design, video and graphics services. 

Minnichbach says his team works with growing enterprises and non-profits that have ongoing requirements. Thus, No Limit charges a monthly subscription to stabilize cash flow. Prospects can quickly see portfolio samples through an updated website, which he says is important for acquiring new accounts.

Always Send Letters of Introduction.

Seek and ye shall find.

A key strategy is to send letters of introduction to juicy prospects such as big-city media agencies, growing and/or large companies, and state and federal government departments. The letter should be one or two pages, have formal language, and feature your best sample work. 

Make sure it’s a customized letter and not a general one that’ll only go to the trash. After a couple of weeks, follow up with a phone call, LinkedIn message and/or virtual meeting. Most managers won’t be hiring right now. The sole objective is to place yourself in their radar when a hiring manager finally needs an illustrator, designer or writer.

Big-city media agencies work with Fortune 500 conglomerates and you should always do business development with these agencies (and even Fortune 500 contacts) no matter how good you think your current situation is. If they like your work, the pay can be double or even quadruple your current income.

Remember: You’re not serving future clients by charging rates so low that you’ll eventually go bankrupt. How can you let God-given talent shine if your business model is unsustainable? By stabilizing your gig business, you can do what you love without sacrificing your family’s basic needs.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

This article is from Inc.com

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