I felt what is referred to as “the shock of recognition” while reading this first-person account on Newsweek.com about life in The Industry during the current recession: This sounds a lot like what our life was like just a few years ago. Although we work(ed) in the motion graphics side of the business rather than production, it was a similar situation: we lived from job to job, every job was paid in full, and we hoped another job came in before the money ran out. During the good times, we had a steady stream of jobs, with very little breathing room in-between. But as the years went on, the highs got higher (more jobs in at the same time), and the lows in between got longer. Fortunately, Trish is a wizard at calculating cash flow (hint: it’s not about knowing how much money you have in the bank today, and spending based on that; it’s about knowing the date when the money runs out, and throttling your expenditures based on that), so we managed through the lulls just fine before the phone rang again – but the trend was disturbing.
Then we had the dual instances of the tech bubble crash of 2000, which made our corporate clients afraid to spend money (hard to build an extravagant trade show booth when the stock price is going through the floor), and 9/11, which made the networks afraid to spend money (sorry, but an upbeat redesign would look a bit out of touch). Oh – and no one wanted to fly, which hurt both the trade show and hands-on training industries that much more. The phone simply stopped ringing for a while. (Did I mention that Trish is a cash flow wizard?)
Those dual blows taught us to cut expenses (okay, maybe we don’t need our own DigiBeta deck – but maybe we don’t need those cute little trinkets either) and to find new ways of generating income. It was no longer safe to identify yourself narrowly as “I do this job” – you had to broaden out and think “I have these skills; how can I make money off of them?” Rather than thinking about creating cool motion graphics just for video and film, you had to also think of creating graphics for new media such as mobile and web, as well as look into selling graphics without a specific job – i.e. as stock footage. Rather than just use your hard-won skills for a client, teach others your skills at seminars and sell it as articles or online training. We found that royalty-based and recurring income – rather than just aperiodic paid-in-full gigs – were the secret to financial security, along with diversity (a drip may be small, but a thousand drips can still fill a bucket).
That mindset prepared us well for the deep financial downturn our economy is now in. Half of our income this year will come from jobs we didn’t even do just two or three years ago. Pro bono work has become a new “business line” for us with paying clients. And biggest of all, we moved from Los Angeles to New Mexico, where many of our expenses are half what they were back in California. As a result (and lest you think this random late-night blog is all doom and gloom), we might be looking at one of our best years business-wise in some time.
I’m not saying I have all the answers. But maybe the answers (and the questions) are worth exploring. Care to share how you are getting through the current recession? How are you turning turbulence into opportunity?
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