Okay campers, things are getting very ugly on the economic front. Now is the time to make sure you have your financial house in order for your business as well as your personal life. There are several things you should be doing. The following is a list, but I do want to make it clear that I am NOT a financial expert. These suggestions are culled from things I have gotten from various news and biz sources, as well as some ideas from my own brain. So take a deep breath, and get ready to tighten those belts some more.
1. Make sure you have your cash in FDIC (or the equivalent for credit unions) protected accounts and that you are under the protection limits for all your accounts. This may mean moving some money around, opening new accounts in other institutions, etc. More info here.
2. Look at your expenditures to see if there is any other place where you can rationally and reasonably cut back. Maybe you and some colleagues can go in together on massive quantities of office supplies, etc., to split the costs, for example.
3. Demand greater advances on ALL shoots. Cash is king these days and magazines, especially, are going to be dropping like flies if things keep going as they are now. Agencies, especially some of the smaller local ones, may be in trouble too. Advances will help keep you from losing your shirt. Demand immediate payment after the project is completed too.
4. Talk with your staff, if you have any, honestly about where things are for you and discuss what steps are needed to get through this mess. Don’t blow smoke at your employees–they deserve to know where things stand so that they can plan to take care of themselves. If you think you may have to lay off staff, think now about how you would handle it and what you can do to mitigate the pain. Consider asking for short-term pay cuts or shorter hours to keep them on staff but reduce your costs rather than completely cutting staff positions, if possible.
5. Talk to your insurance person about ways to save money. Maybe you can raise your deductible and save some cash on your auto insurance, for example. Talk to your financial planner about rebalancing your retirement accounts and other things to do too.
6. If applicable, take public transit whenever even vaguely possible (and get your spouse/partner/kids and employees to do so too). I’ve been taking the bus to school and I haven’t put gas in my car since September 1st, and I have over half a tank in it now.
7. Put off buying a new camera or computer or other major item. If yours works, use it. Spend money on smaller things like taking a favorite client out to lunch and keeping those connections fresh and positive.
8. Make sure every project has a signed contract with specific payment terms. If your client goes bust you’ll have a hard time collecting no matter what, but you’re more likely to get something if you have great paperwork to back up your claim.
9. If things are slow, take the time to go to museums and refresh your creative spirit. Work on your own work as much as you possibly can. Things will get better and if you have a great new body of work when that happens, you’ll be at the head of the line when the projects start happening again.
10. Remember that a lot of people are hurting already and, sadly, more are likely to. Take some time to be thankful for what you have–tangible and intangible–and to remember that you are an artist and a creative problem-solver. You’ll find a way through this hard part, no matter how hard it gets.
Finally, you are never alone in any of this. The professional groups, online forums, and people like me are all in this with you. As are your clients to some extent. Things will get better–they always do–but it may take some deep breaths before we come out the other side.
Having lived in Michigan during the 1970s and Pittsburgh during the 1980s, I know a thing or two about hard times. So, the current sad state of affairs isn’t as big a shock to me as it is to some.
The above being said, here is a bit of advice:
1. Take inventory of your skills. All of them. You may find that you need to develop skills in areas where people have needs, even in times like these. For example, do you like to work with your hands? If so, have you considered enrolling in some trades training courses? I’m looking at doing just that. You may be hearing about the emergence of Handy Martha in the coming months.
2. You know what lack of money does for your creativity? Quite a bit. When you’re short of funds, you can’t spend your way out of problems. You have to think your way out.
3. I’m all in favor of Leslie’s suggestion to ride the bus. And, when I can’t get there by bike or foot, that’s what I do. I don’t own a car. Never have, in fact. That decision alone has saved me many thousands of dollars over the years.
4. Remember that spirit of community that we used to have before we were so busy spending money we didn’t have on things we didn’t need to impress people we didn’t like? Well, it’s time to revive it. So, get involved at things on the neighborhood, city, and regional level. You’ll meet a much nicer set of people than you used to meet at those networking events. And, who knows, you just might find a client or two.
Great suggestions, Martha!
-Leslie