When I worked my day job, I’d get paid once monthly from a single source. The money was the same every month unless I got a pay rise (yay!) and arrived on the same day. If the company wanted to get rid of me, they would have to give me notice/pay out redundancy/go through a termination process. I’d have time to adjust, pivot, find new work.
Now that I’m a self-employed creative, things are different. I can’t rely on a single source of income anymore, because as a self-employed person I don’t have the same employment rights. If a client didn’t want to work with me anymore, they aren’t required to give any notice. I also don’t have the right to an audience. If readers aren’t into my latest book, they won’t buy it, and that impacts my ability to pay my mortgage.
The idea that your livelihood could be pulled from under you in an instant is pretty scary. For a creative person who relies on their ideas to pay the bills, the fear can hold you back from taking risks and accepting opportunities. Most creatives attempt to insulate themselves against this fear with diversification – the go-to strategy of successful investors for generations.
The fact that I have diverse income streams is the reason I was able to quit my job and do this awesome thing full time. Some streams pay more than others, but they all work together to make sure that if something bad happened I’d still be bringing in some money to help pay the bills.
I’ve been pursuing diverse income streams since I got my first job in the examinations department at my local university, and not always to my benefit. Here are some things I’ve learned along the way.
For beginners, diversification is the enemy of getting shit done.
I believe that if you’re building a sustainable career as a creative, then diversifying your income is absolutely essential. Not exceptions.
If you’ve just starting out on the journey to becoming a full-time creative rebel, then you’re probably working on your craft in between a day job, a busy family life, and other commitments. You have very little time. You need to spend that time wisely, and the wisest use of that time is focusing on growing your core creative skills.
Also, no one knows who you are. You need an audience in order to build enough stable income to quit, and the best way to gain an audience is to give them as much of the same kind of content – the content they love – over a period of time.
During this stage, diversification is your enemy. You don’t have the time to do lots of things well. If you want to build momentum, you need to knuckle down and focus on the core of your creative business. Do one thing well. Become known for that. You can diversify later.
I’ve made this mistake SO MANY TIMES, which is part of the reason I’ve been writing this blog since 2009 but it wasn’t until nine years later when I was able to quit and do what I really wanted to do all along – writing books. I got distracted. I thought what I had to do was try lots of different things and wait for one of them to take off and then I’d have more time to write and grow as a writer. But the truth is, if I’d directed all my energy toward focusing on that one goal, I’d have got there a lot sooner.
Also, if you spread your focus across different projects that have different audiences, then you’re not being strategic. You’ll grow slower than if you just focused on doing one thing really well and getting it out there and finding your fans.
When should you diversify? I believe it should come after you have a big enough audience that the possibility of leaving your day job to do the thing is on the cards, but you’re feeling scared. If you’re like most creatives, you don’t go from nothing to superstardom – it’s a long, slow build and there’s a wobbly middle period where you’re making decent money but not quite enough money and it feels very precarious.
This is the time to start thinking about complementary ways to grow your business. Look for ways you can transform projects to grow your current audience, offer them something new, or get them to buy more at different price points. For example, if you’re a visual artist who sells originals, expanding into prints will enable you to grow your current audience as you’ll have more affordable products.
Can you build another income stream from your current portfolio of work? A visual artist could pitch mural ideas to large businesses and schools. A writer could use a backlist of successful books to offer ghostwriting services.
Instead of starting from scratch with a completely new audience, can you pivot an idea to work within your current business? I’ve had this idea for a cozy mystery series for a while, but it would involve starting a whole new pen name and building it from scratch. I’ve recently figured out a way to make the concept – with key changes – work under my current pen name so I’m not starting something completely new.
Don’t diversify just for the sake of it, and try not to land yourself with a huge long-term project when there might be a quicker way. Don’t lose sight of your end goal – making enough money so you can quit your job and feel safe that you don’t have all your income in one basket. This is where I say DON’T take on another pen name unless you’re 100% sure you need it and can keep up with it. Dividing your focus at this stage isn’t a great idea. Instead, maybe you could sell your current backlist in another format, or use it as a jumping-off point to secure some work teaching creative writing classes or ghostwriting.
Always consider passive diversification. For example, as an artist, if you can create an online store like Society6 where people can purchase your prints and work on other objects. Because these objects are print-on-demand, you don’t have to do anything except load designs and accept the checks. It’s a completely passive income stream you set up once and earn income on for the rest of your career. That income may only be a few cents a month to start with, but as your audience grows, so does the revenue.
For authors, thinking about additional formats – paperback and audio – is a good way to diversify. As is taking some or all of your backlist wide to build an audience in the other stores. Taking my backlist wide last year was one of the key reasons I felt safe quitting my job in Feb. If Amazon shut down my account tomorrow or tanked a release (please don’t do that!) I’d still have at least some income coming in.
Passive diversification is really the key to success as a creative. The more you can separate your income earned from your time, the safer and better off you’ll be.
Who do you want to be?
Always bring decisions about your creative business back to your creative direction. What do you want to be known for? What’s your ‘brand’ as a creative? How do you picture yourself in the market?
This means sometimes saying no to exciting opportunities and diversification ideas because they take you too far from what you want to be.
Don’t get so distracted by diversifying and new projects and opportunities that you lose track of your core principles, values, and joy as a creator.
Creating for Now, Soon and the Future.
Author Tim Leffel wrote a great article about writing for now, soon, and the future. When thinking about diversification, this is a really useful technique.
This is what I do. I have my now projects (New Steffanie Holmes books. They sell consistently and make up the core of my royalty income), my soon projects (new formats for Steffanie Holmes books, upcoming projects for S C Green, and Only Freaks Turn Things Into Bones, as well as random opportunities that come up like speaking gigs) and my future projects (some of which are top secret, but won’t bear fruit for another year or ten, if they even do).
Reassess and pull back.
A mistake a lot of creative people make – and I’ve been here many, many times before – is going nuts on the diversification and spreading yourself too thin. That’s why it’s really important to step back from your business and ask yourself if you’re happy. Have you moved too far away from your core goals as an artist?
I’ve done a lot of interesting things over the years. A webcomic! A sock business! Officiating weird weddings! Running a content agency! Writing for magazines! Running a business blog! I regret none of them, but I do regret the time they took away from my core focus as a writer – fiction. That’s why over the years I’ve dropped those projects as I’ve moved back toward what I really love.
At the end of 2017 I looked at my numbers and realised it was time to quit my day job. I made the conscious decision at that time to pull back on some of the non-writing things I’ve been doing – namely, working as an alternative wedding celebrant.
2017 was a stressful year for me. I had a day job, my book writing and freelance work that was basically another full-time job, working on the house, being a wife and a friend and a daughter, doing things I enjoyed that relieved stress – like hiking – that took me away from home for days at a time, and doing everything I could that earned money (weddings) even though they sapped energy and weren’t getting me closer to my goal.
I wanted 2018 to be different. I was away from home around 20 weekends last year, many of them at weddings. It was too much. I worked every night when I got home from work. I missed my husband even though we shared a house. He wasn’t super happy with things, either. We knew it was temporary so we could have the savings we needed so I could quit, but I also knew I hated it and I needed 2018 to be better. So I started saying no to weddings. And not feeling bad about it. I also made a rule for myself that I’d only be away 12 weekends in the year. That’s forced me to be pickier about opportunities and trips I take, and has been so much better on my stress levels. And my cats and husband are pretty happy about it, too.
I also paused my Patreon. I started the Patreon to create an additional income stream so that I was less reliant on Amazon. However, I believe because readers aren’t so familiar with ongoing crowdfunding, I had to sell them on the concept too much. The Patreon sucked time and energy, but it wasn’t growing. I decided to drop it and direct that energy to other avenues that ARE growing, such as promoting my books on the other retailers. I may pick it back up in the future if my audience grows and begs for that kind of bonus content, but for now, it’s not a sensible use of my time.
Right now, I have four income streams, and within those income streams is some diversification (books available across multiple retailers, for example). They are my two pen names, speaking/teaching about creative writing, and freelance writing for clients. I’m focusing on growing three income streams so I can eventually transition out of freelance writing and trading my time for money. I have a deadline for when I’d like to achieve that, but we’ll see how we go.
I’m not the only one talking about cutting back and refocusing. Joanna Penn of The Creative Penn recently wrote about how she was cutting back on some of her diverse income streams in order to get back to the core of what excited her about being an artist.
As a creative, have you diversified your offerings? Did you do what I did and diversify too soon? What ways can you move away from trading your time for money?
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Catch me Sept 21st at the National Writers Forum in Auckland on a panel with the fab Catherine Robinson and Lani Wendt Young talking about writing sex and romance!