💡Problem - My business isn't working...

Published 4 months ago • 3 min read


May 21, 2024

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My business isn't working...

Read time: 4 Minutes

Weekly I hear from independent creators about the things they wish they were experiencing in their life and career. Most don't want a specific business, they want the outcomes from the business they've built - freedom, money, relationships, opportunities.

But the business isn't delivering those outcomes. The business isn't "working".

So, how do we fix it?

The answer is found in chapter 4 of the book So Good They Can't Ignore You by Cal Newport. In it, he compares the passion mindset to the craftsman mindset. The passion mindset is where you "pursue your passions" and hope that it somehow generates those outcomes I just mentioned.

If the business is not working, passion-minded people think the answer is more passion or do more art. But it rarely works that way.

The alternative is the craftsman mindset - an "outcome-focused approach to creative work". The craftsman mindset resonated so much with me that I named my business Craftsman Creative, and I set out to help others get the outcomes they want in their business, by starting there and working back from that point.

Let's take one of those outcomes - money - and work backward to where we are. That gives us three important points:

  • where we are
  • where we're going
  • the distance between those two points

One thing I've done over the last two years with my clients is start with a simple temperature check, very similar to what you'd experience at a doctor's visit.

Why do they take your temperature? To see how serious your illness is.

The temperature check for a business is a measurement called Revenue Per Person, or RPP. A healthy RPP is $200k or more per person. An unhealthy one is $150k or less.

Here's why...

Say you have an employee you're paying $80,000 a year to. To comfortably afford that employee and cover all of the overhead, expenses, taxes, and more, you need to make 2.5 times their payroll, or $80,000 x 2.5 which is $200,000.

(If you're a company of one you can multiply by 1.5)

So you need a business that is doing $200k per year in revenue for each person it employs. 6 people? You need $1.2m RPP. Simple math.

So, we have the destination, a business that pays us a healthy amount of money and makes a profit each year.

How are we going to get there? Say you are a video production company that charges $10,000 per video. You need to do 120 videos per year or 2-3 per week.

That's how much capacity your business needs to make $1.2m per year. If you can only deliver four per month, you can only make $480,000 per year, much less than you need.

See how the destination informs the directions?

You start with where you are, define where you're going, and chart out the path you want to take to get there. Want to take the scenic route? Or the freeway? (Do you want to increase your prices? Or increase your capacity? Or both?)

This email is very numbers heavy, and that's by intent. Most creators don't spend any time thinking about the numbers that make their business "work" in the way they want them to work. Without those numbers, they don't have enough information to get somewhere new.

So, start with where you are, define the outcome (the destination), and use that information to plan out how you want to get there.

This is a big part of day one of the upcoming Craftsman Creative Event. Join me at the event for three days of workshops where an entire session is devoted to helping you make these mindset shifts.

I'll be back tomorrow with another problem/solution email to help you design and build the profitable business of your dreams this year. See you then!

Missed the earlier emails in this series? Check them out here:

1/16 - I'm not doing the type of work I want to be doing...

1/17 - Overcoming imposter syndrome

Daren Smith

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Check out my new book, BLOCKBUSTER

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