Fortune favours the bold or err on the side of caution? Will fast and furious win the race, or is it better to be slow and steady? These are the constant internal arguments of self-employment.
Freelancing for a living is a risky proposition in the first place. There is an inherent illusion of security with working for somebody else and a continuity that most people thrive on. The paycheck twice a month, two or three weeks of vacation every year, and if you’re lucky, a benefits and pension plan to make some of life’s expenses a little easier. Despite what many aspiring entrepreneurs think, especially creative ones, just being good at something is not reason enough to quit your job and go into business for yourself. As much as people complain about their jobs, having somebody else make the decisions is a safety net that most people rely on.
A short time ago, I decided against getting a booth at the Calgary Comic and Entertainment Expo, which starts today. The justification for doing so was two-fold. First, the cost was pretty significant for the inventory I would have to buy and bring with me, and second, I really haven’t done enough research in order to know what I’d need in my booth so that I didn’t come off looking like an amateur. My wife and I, along with a good friend of ours will be heading to the event today and tomorrow to check it out, both for enjoyment and to gather information. I’m still not convinced it’s the right venue for my Totem paintings, so I need to get a better look at some of the other merchandise being sold.
This event is going to be huge this year. Somehow they managed to get the entire principle cast of Star Trek: The Next Generation to attend, the first time they’ve done so as a group in 25 years. With those and many other big name guests, they’re expecting 50,000 people this year. While I’ve never been one who goes after celebrity photos or autographs, I still expect to be standing in a few lineups this weekend, for everything from entering the event each day to using the bathroom. That’s a LOT of people at an event like that.
The questions that have popped up in the last couple of months more than once are, “Did I make the right decision by not getting a booth this year? Am I missing out on a big money making opportunity or was I smart not to overextend myself?”
These are the types of decisions freelancers are constantly faced with, and the choices made can make or break a business. On one hand, I could have doubled my workload over the last month, and spent close to four thousand dollars getting and stocking a booth, sold out everything I brought and made a tidy profit. On the other, I could have come home with a ton of inventory that would sit in the basement, selling over a much longer amount of time in the galleries. Meanwhile, the debt incurred buying too much inventory all at once would be shrinking my profit margin on each painting until it was paid off.
This week, I placed an order for the largest number of prints to date from my supplier in Calgary. For a Spring launch of four new paintings, (the ones you see throughout this post) into the galleries in Canmore and Banff, I needed to buy new canvas prints and matted paper prints in various sizes. The cost was fairly significant, 70 prints in total, and it is inventory that may or may not sell quickly. We’re approaching the busiest season in this area, however, so this is a risk well worth taking. My work is already selling in the Bow Valley, and the style of work is proving popular with tourists and visitors. Past evidence shows that there is a market for my paintings in this area. While the money spent on this inventory isn’t necessarily a ‘sure thing’, it’s an investment that shows more promise than a brand new venue with a much different demographic.
The money spent on the local inventory was still a bit of a financial hardship, but it’s also funds I can recoup relatively quickly, and it doesn’t cripple my other plans and obligations in the long term. With a couple of new computers to buy in the next few months, my budget will have to stretch, but it won’t snap. Had I added in the more significant expense of the Calgary Expo on top of that, and sales didn’t materialize, the bills would still get paid, but it would be a very stressful year and other plans would be sacrificed.
But then again, if I’d had great sales, it could have made the rest of the year a little easier and broadened my customer base, too. There’s just no way of knowing.
You occasionally hear of those entrepreneurs who risk everything and the wheels come up all 7’s on their gamble. Director, writer and actor Kevin Smith financed the movie ‘Clerks’ completely on several maxed out credit cards, and it paid off very well for him. He now says that wouldn’t work in today’s movie industry, so it was very much a matter of his timing, too. But for every one of those, there are thousands of people who lose it all. Some research shows that 8 or 9 out of 10 businesses fail in the first two years, and half of those remaining businesses fail in the first five. Those individual stories don’t make the news because nobody wants to hear them. We want to be inspired that just having a dream will guarantee success.
The harsh reality is that motivational quotes won’t carry you through the dark times when you’re wondering if your mortgage is going to get paid or if the noise outside one night is the repo man coming for your car. Each person has to make their own decisions about how much they’re willing to risk, despite the frequent unsolicited advice from friends and acquaintances who think nothing of saying, “you should just go for it.”
Those folks are usually working a 9 to 5 job with weekends off, by the way.
For my own part, I seem to be taking enough risks that my business does better every year. As I’m now in my seventh year of full-time self-employment, and have beaten the start-up odds, I’m obviously doing something right. I sleep at night, the bills get paid, and I move ahead. Still, there are times when I wonder about the really big gambles, the ones that could pay off huge, if only I had the temerity to step up and put it all on the line. There is a massive grey area in between the unknown blackness of total risk and the bright white light of safety.
The best and worst part of it is that with every decision you make, you’ll just never know if you missed the boat or dodged a bullet, and you have to make peace with that.
2 thoughts on “Risk and Reward”
I think there is a distinct line between risk and planning. It sounds like you need a solid plan/budget you can work with when there is a ‘risk’ you want to take on. In that year you budget for the worst outcome while having a plan to make it all balance out. Smart if you weren’t comfortable with the unknown – so take notes this year, have fun and dream. It is from the dream that reality is born.
I didn’t plan on you publishing my last comment, BTW. email me back.