It is imperative that a creative business be creative yet profitable. As a creative entrepreneur it is sometimes difficult to build a business that is respected for its creativity while generating profits. It is however absolutely necessary to do so and build a highly regarded brand. So how does one go about being creative and at the same time, build a profitable business?
Approach your label as a business right from inception. You must have a business plan with strategies for the short term, the medium term and the long term. This is the first step towards being creative yet profitable.
What is your vision and mission for your label? Why is your label different? What do you want to be known for and what are your goals for your business in the short, medium and long term?
In creating your business vision and mission, research businesses similar to the type of business you envisage to help you drill down:
• The options available
• How to carve out your own niche and be different.
• Which products/services to offer your target market.
Develop strong business skills and acquire a very good understanding of budgets and retail concepts.
Start sourcing suppliers and identify potential collaborative opportunities in the industry and with industry influencers.
A good example of an industry influencer for Afrocentric products and services is www.bellafricana.com. The website is a marketing tool for Afrocentric businesses. The site will provide your business with visibility to a wide international audience at no cost (save the small fee for verification as a genuine business).
Explore industry meet-ups in your locality and join the conversation. Connect on social media and get a mentor. Establish a presence on social media and find ways to confirm that there is a market for new products as part of your product development process. These are low cost methods to build a business that is creative yet profitable.
Be consistent, honest and reliable and be determined in the face of all odds. Be disciplined about your schedule. As a creative, your natural inclination is to put off the parts of your business that are not particularly creative in nature.
However, to be creative yet profitable, you need to plan ahead – get a planner. Be intentional and detailed a month and a week ahead of time as to what needs to get done. Remember also that you will need to innovate to be a step ahead in the game, so your creativity will come into play in the business aspects too!
Don’t launch your label with too many products. Grow organically as the label becomes more established. Don’t expand too quickly – lay down a strong commercial foundation and build on that foundation. Try out your ideas on a small scale and if you get a positive feedback you can escalate to a larger scale.
Educate yourself about the intricacies of merchandising from sourcing to manufacturing to retail. Do your best to get your pricing right. How much is the customer willing to pay? (Your target market research comes in useful here.) Knowing this will help you determine how much you can spend on your materials and manufacturing and still turn a profit after all the costs have been taken into consideration.
You must offer products and services that are unique but still offer value for money. A great part of being creative yet profitable is to have a good balance when it comes to expenses and income.
Pay attention to the feedback from your customers. Remember that although you need to express yourself creatively, you must produce items and offer services that your target customers want to buy so that your business can be successful.
Every product in your collection or service package must have commercial appeal. (Again the target/customer research is very important).
Have a proper understanding of your finances. It is impossible to be creative yet profitable if you cannot determine or understand your financial status.
Determine how to obtain the funding needed for your business and also how to control your cash flow. You may have a high turnover in terms of sales but poor cash flow, which will harm your business.
Poor cash flow occurs when more money flows out of the business than comes in. This could be either from high overheads or because revenue is yet to come in from retailers and customers.
It is very easy to fall prey when selling wholesale, on consignment or on credit. Keep an eagle eye on your overheads. If your overheads are too high, your business will continually struggle to break even. If a business does not break even it cannot proceed to make a profit.
Please log in again. The login page will open in a new tab. After logging in you can close it and return to this page.