The final step in this part of the game, kind of involves looking backwards. See, the venues and the details required to turn them into winners is not free, and I’m not just talkin’ about money either. There is something equally important as money here, in economics it is called “opportunity Cost” or the cost of choosing a course of action that when added to the monetary cost tells you the actual cost of what you chose to do.
Now once again this is important for Artists. But why? Bill Why… are you picking on us? Well, I know how easily it can creep up and grab us. See, in our quest to succeed as business people we often decide to be Mcgiver and consider our time and energy to be free as we take hours to figure out something that could have been done easily another way. And why is that? Without going into a whole lot of detail it seems to built into our DNA. Research done by folks working in the field of behavioral economics have discovered we are hard wired sometimes especially around money to do things that are not exactly in our own best interest. So instead of saving ourselves the time and turn our taxes over to someone who knows what they are doing, we brag proudly about our savings by doing it ourselves. Of course conveniently leaving out the fact that we spent the better part of a week trying to decipher the tax form and finding all of our receipts…but hey we did save ourselves a hundred bucks by burning up all those days. And that my friends is an opportunity cost.
Back to our programing
As I was saying, when you look back at the path you have decided to take make sure you actually see the path and all the bumps, and holes along the way. While you don’t need patch every hole or smooth over every bump right away you will need to find the path of least resistance and make sure it is smooth. Then you can go back and gradually fix the rest as you have time.
Where is the money going to come from to support this habit?
Setting up your system is important and your income streams are also key elements as well. In fact it is a key element of why I write what I write…the time of relying on one source of income as an artist is gone replaced by diversity. That’s the reason for the little diversion above, your cost are going to increase as you develop other avenues to sell your stuff but don’t be seduced by thinking you are saving by buying cheap or discounting your own time because it’ll just give you a false sense of security.
After you have your system sketched out, step back and take a look at the costs including the opportunity costs of each stream, then and only then add up your costs. Now, balance those costs against your income and don’t just focus on the short term and think you have a handle on things but also don’t leave out the short term. Once you have everything listed take out your magnifing glass and look closer at each from the point of view of return on investment (ROI) and remember to look at real costs. As you do this match these against your goals for short term and long term growth.
A simple example would be a reluctance to to use on-line shopping systems like Paypal because of their fees. Losing sales because you don’t want to absorb the small percentage fees associated with such a service or for any credit service is an opportunity cost. Including that opportunity cost gives you a clearer view of your total costs so you can make a better decision.
So, instead of saying you’re going to start selling on-line and then jumping into it, take the time to look at it as an investment. Look at both the long and short term implications of everything. Let’s say your primary income stream has been art fairs and we all know how dicy that can be from both a cost vs income point of view. So before you apply for those shows scattered about the nether parts of the country sit down and look at all your possible show venues from the point of view of income potential (something you should be able to do if you have done your homework). Now balance the costs of that show in East Timbuktu with its potential income, if you’re never done that show you may have to estimate, in any event don’t short cut the costs. If you come up short look at your other shows and income sources and see how they measure up both against potential income from the Timbuktu show or their ability to absorb any losses such a venue might produce.
At this point you’ll end up with a picture of how you’ll be able to pay for your decisions and better yet you’ll be armed with information to make entry decisions.
One last thing…
Look at the benefits of your choices in the same manner as you did you costs because benefits also have their “invisible” side. For example, sending out e-mail announcements using a good auto-responder is a benefit because it gives you the time you’d normally use licking an sticking stamps onto postcards. Time you can use for doing what you really would rather be doing.
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