Money is such a sore, private subject in the business of creativity. The “starving artist” myth pervades despite efforts on many fronts to fight it (what’s that saying about fighting a battle on two fronts?). Controversies have arisen around the allocation of monies raised through successful crowdfunding campaigns, yet consultants and coaches often tout “six-figure” or “multi-six-figure” banner years to illustrate the effectiveness of their practice. What of their business expenses? Chants of “Charge what you’re worth!” and “F*ck you, pay me!” have been increasing, while we simultaneously idolize those we view as “successful”—often a direct effect of that blurry, postured lens of social media and online persona.*
In the last year or so, I’ve developed a growing interest in financial transparency when it comes to independent creative business, partly a result of the responsibilities of running a nonprofit whose finances are publicly accessible. It's curious, that feeling of accountability and responsibility for the “greater good” that comes with running public benefit business. But how can we know the value of our work if we don’t know the actual value of the work of others? What kinds of advocacy can we provide for those who are trying to make a living following a creative pursuit without data to back up our assertions? In a culture that is so open to sharing knowledge, advice, and mentoring others to help them succeed, why are we still so tight-lipped about what income we make and where our financial goals lay?
Thankfully, a handful of voices have bubbled up to the surface, casting a hot light on the realities of what makers—artists, creatives, designers, and musicians—pay and get paid (or sometimes don't). Many people have talked about business failures and successes, but fewer have actually let us peer into what those failures and successes actually cost, and whether they’re making ends meet or truly making it rain. Here are seven prime examples:
Jen and Omar's "Say Yes To Failure" slide from their Pioneer Nation talk.
1. Jen and Omar of These Are Things have a “successful” design business that has earned them pop-up displays in major retailers, speaking gigs, and customers all over the world. But their path to success has been a rollercoaster of emotions, profit, and loss that few are willing to acknowledge publicly. In addition to jumping into the world of professional trade shows (costs for which they outlined in detail for both 2013 and 2014), they also dealt with an incredibly difficult decision to walk away from an aesthetically beautiful but dramatically unsustainable urban lifestyle, scale back their distribution and production systems, and re-focus on what really matters to them. Also worth watching: their talks at WMCFest and Pioneer Nation.
2. Marco Arment is an independent web and iOS developer (his portfolio includes Instapaper, The Magazine, and he was the lead developer for Tumblr back when it was first launched) whose most recent podcasting app, Overcast, has been “popular” and “well-received” since its much-anticipated launch in July 2014. He recently published his sales and expense reports for the year, contributing alongside a number of other developers who have done the same. His reason for doing so? "I’ve decided that the potential educational and market-research benefits to others of adding Overcast to the mix will be greater than the risk of people thinking I’m an asshole for doing so. I hope this is helpful to anyone researching the indie iOS market or thinking about entering it.” This also spurred some deeper analysis of the state of the App Store for independent developers.
3. As a designer and purveyor of sewing patterns for plush toys, Abby Glassenberg also maintains a very popular blog and podcast about her business and creative business in general. She’s often viewed as a craft business “success story,” but the reality is, like most things, relative. She began publishing her own quarterly income reports and opening up her ledger in an effort to help her fans and readers understand what goes into building and maintaining a creative business. The initial numbers were a double-edged sword, but watching this year’s report show substantial growth is fascinating and rewarding. She says about the process, "Out of everything I’ve done since 2005, when I began selling what I sew, this was the best move I’ve made. Seeing financial data every week transformed how I approach my work."
4. Jack Conte is half of the indie music duo Pomplamoose (and co-founder of Patreon), and got sick hearing how pleased their fans were that they’d “made it” during their recent North American tour. In response, he took to Medium and detailed the expenses of a very costly multi-city, mid-tier venue itinerary, as well as the salaries that he and his counterpart, Nataly, insist on paying themselves for the year. The result? An equivalent of $30,000 a year, or a little more than $15/hour if you’re only actually working for 40 hours each week, which any creative business owner, or musician, would tell you is ludicrous.
5. What about writers? “We do an enormous ‘let them eat cake’ disservice to our community when we obfuscate the circumstances that help us write, publish and in some way succeed,” writes Ann Bauer about acknowledging privilege and alternative sources of income that fuel our creative pursuits. In her case, she doesn’t dive into hard numbers, but reveals that her husband generously supports (both financially and emotionally) her career, which allows her to focus on writing what she writes best. “Pretending otherwise doesn’t help anyone,” she argues, and rightly so.
6. AC Rayburn, a Portland-based graphic designer and art director who recently opened the doors to his own creative studio, drew upon his own experience as a freelancer working at studios and agencies across Portland to outline a creative compensation guide that addresses which salaries are ridiculous, decent, and wonderful at various stages of experience, employer size, and field or practice within the world of creative services.
7. Lastly, illustrator and educator Kate Bingaman-Burt started a project in 2004 where she drew each of her monthly credit card statements until she became debt-free six years later. Who does that? Kate does.
Walking the Walk
All this transparency can be a tough pill to swallow both from the earner’s and audience’s point of view, and exercises in divulging personal or business income are truly exercises in vulnerability. Capitalism encourages us to maximize profits, and big business has successfully shrouded the related world of finance in a veil of secrecy using plenty of smoke and mirrors.
But we can do better. Let’s be more financially transparent. Does everyone need to do it? I don’t think so. Should we take each example with a grain of salt? Yes. But should more of us do this? Absolutely! It’s makes us squirm and opens us up to criticism, but I believe it does more good than harm. By expanding our knowledge of how other people do this, we’ll make better decisions when it comes to pricing our work or services, making business decisions, and keeping our books with nothing to hide.
Of course, if I am to advocate so loudly for such transparency, I feel compelled to walk the walk. I do this not only to help expose my own little corner of self-employment income as a project/production manager, but I also hope this will benefit my own personal accountability and help me proclaim, when 2015 draws to a close, that the "Year of Debt Reduction" was a success. (I’ve also been inspired for several years by the beautiful and intricate data exposed in Nicholas Felton’s annual reports.)
Without further ado, here’s my big picture look at my wholly self-employed finances for year-end 2014:
- Gross Income – $27,950 (incidentally, my salary at my former day job was $40,000/year)
- Business Expenses – $3,960 (includes home office expenses)
- Net Income – $23,990
- Student Loan Debt – $22,755
- Credit Card Debt – $2,944
- Other Debt (Auto) – $6,644
- Retirement Savings – $9,099
- Other Savings – $439
Now, as with most things, it’s important to understand some context about my personal situation:
- The majority of my income in 2014 was billed far below market rates because I’ve made deliberate decisions about the type of work I do to ensure that it’s rewarding, aligns with my personal values, and benefits my professional experience. I must acknowledge that I am privileged to be able to make those choices, thanks in large part to the emotional and financial support of my partner.
- I spend a disproportionately large amount of my time working pro bono as the founder of Maker’s Nation. If I were to substitute that time for additional client work, I anticipate my earnings would be closer to $45,000).
- My monthly expenses are drastically mitigated by the fact that I don’t pay rent (we own our house free and clear, a privilege that most people our age don’t share and a result of some very deliberate financial priorities).
- I don’t have a traditional auto loan (we own both our vehicles outright), but instead I pay Justin back for my half of our car bit by bit by paying for insurance, gas, and maintenance.
- I only started tracking mileage for business-related car expenses in October, and I kick myself for not having done it sooner.
- My gross estimated income was just over $30,000, so I came in at 7% below what I expected.
My top five monthly bills for 2014:
- Student loan – $351 (combined payment)
- Auto Insurance – $125 (two vehicles)
- Utilities – $107 (combined, averaged, includes internet)
- Cell Phone Plan – $72
- Health Insurance – $66 (includes tax credit)
So there you have it. I make two-thirds of what I made at the day job that I left over a year and a half ago, I have a $350/month student loan payment for a degree I never came close to finishing, and I spend most of my time doing work either for free or far below market rates. But more importantly, I love what I do and where I'm headed, and at this point, I wouldn't trade it in for a better paying gig. I'm grateful for how far I've come and what's in store for my future. And this year I expect my income to grow and what I feel to be my "success" to grow with me.
Does looking at other people's financial info make you queasy? Do you find this kind of information helpful or reassuring related to your own pursuits?
* Speaking of "charge what you're worth," you should read Tara Gentile's and Tad Hargrave's rebuttals to this oft-touted business mantra.