Creative sector investment: March industry updates
// budget // creative growth finance // investment
The creative brain is a funny thing. One minute, it’s dreaming up a stream of dazzling and potentially-groundbreaking ideas and the next it’s struggling to untangle even the most basic behind-the-scenes aspects of running a business. On the surface, it may seem a bit paradoxical – but many creatives who embark on the journey of making their big ideas a hard reality often hit a roadblock when it comes to understanding the more mundane (but just as crucial) elements of the job. It doesn’t have to be hard though. In fact, it’s this area that Alison Grade – author, creative consultant and freelance extraordinaire – is helping us to demystify, once and for all.
“Lots of the creatives I work with are from very creative backgrounds – whether they’re fine artists, directors or filmmakers – they’ve got skills and they don’t always identify as somebody who organises things or counts the beans,” Grade tells us shortly after delivering her Screen Growth seminar on Financial Forecasting for Screen Businesses in late August. “I think that’s where there’s a disconnect and where some of the challenges often arise.”
Starting her career in the production management departments of film and TV, Grade quickly honed a skillset that helped her turn lofty show concepts into tangible products, alongside understanding the various steps and practical challenges that the task involved. It was an experience that heavily influenced the multi-faceted role she finds herself in today: “What I do is transform creative ideas into a business reality,” she says, explaining her love of helping others crack the trickier aspects of creating a sustainable business. “The seeds of that were really planted in those early production management days because that’s exactly what I was doing.”
Understanding, organising and pre-empting the finances of your business is one sticking point that many creatives often find themselves struggling with. During her recent virtual seminar, Grade shed some much-needed light on this seemingly-inaccessible topic before offering some practical take-aways viewers could immediately implement. “What I like to do is give people an access point and a way to get into it – because it can feel quite daunting to start,” she reasons. “Doing a budget for a show or a cash flow projection for your business… Where do you start? What does it mean? I like to break it down into lots of little steps, simple rules and small questions. When you’ve put all of those answers together, you’ve got the picture you need.”
By using a hypothetical case study, Grade took participants through the process of mapping out both a fixed-term and variable-cost cash-flow sheet – and while her example may have been fictional, the circumstances impacting her imaged costs were very much based in reality. This was a key factor too – because as Grade rightly points out, uncertainty surrounding an emerging company’s projected outgoings and potential earnings can cause many to freeze up. However without attempting to figure things out, you really are doomed to fail. “If you’re going to be running any kind of company, you’ve got to own the numbers first and foremost,” she suggests. “You’ve got to know what might be coming in and when you might be spending. It’s of primary importance because if you run out of cash, you’ll be dead in the water.”
Grade’s best advice? Just get going: “I always like to get people started by asking them: ‘What’s the list of things we absolutely need to spend money on – even if we don’t know the amount?’ Then, fill that in.’ For example, I know I need broadband so I can write that on the list and go and get some quotes.” Once companies have done the same for their variable costs (those expenditures that are a little harder to accurately quantify), they’ll end up with a framework that can help guide and influence their financial plans moving forward. “You just have to do some very simple modeling,” she attests. “Then you’ve got a kind of marker in the sand that you can model against. I think people can get quite stuck when they think ‘well I don’t know how much business I’m going to get’ – but you kind of have to make that decision for yourself. Decide on those sales targets or whatever it is you’d like to do and then model the costs against that.”
Those already worrying that their projected costs and guesstimate returns might not be 100% accurate during this initial planning stage needn’t fret. Grade’s quick to remind us that precision isn’t the most important factor in this exercise. Instead, it’s the exercise itself: “It can be a really paralysing moment for people,” she admits. “People say, ‘Well I can’t put those numbers down because I don’t know what I’m going to get’ – but it doesn’t have to be right. It’s going to change at the end of the day. The business is going to fluctuate – you might get more, you might get less – but at least it gives you a sense of ‘Okay, if I need to invest in these fixed costs, these variable costs can be covered as well.’”
It’s a technique that can be applied to a variety of different businesses, regardless of their focus or expertise. However, as this is a seminar series with a specific focus on screen businesses, Grade continued to elaborate on how her financial forecasting cheat-sheet could be applied to those looking to get productions up and running: “You can work it out,” she says, before using another hypothetical as a jumping off point. “If I have a screen production company working in scripted [entertainment], then I know I’m probably not going to be in production for two years, give or take, as it’s going to take a little bit of time to get going from a standing start if I haven’t got a script and I’m going through ideas. However, if I’m in unscripted, I could go from having an idea one week to being in production in just a few months. You’ve got to know the timescales of your business and model accordingly.”
With more advice available on her personal website and via her all-encompassing book The Freelance Bible: Everything You Need To Go Solo in Any Industry, Grade is an avid supporter of any outlet that seeks to make running your business pain-free. What’s more, she’s convinced that gaining insight from those already working in your industry – much like the type offered in our Screen Growth seminars – is critical for success: “It’s absolutely vital that creative and screen-sector businesses have bespoke support,” she suggests. “If I put a bunch of film or TV creatives into a traditional business support programme, they’ll look around the room and run a mile because people aren’t speaking their language. You’ve got to have people delivering these programmes that really understand the challenges and the mindset of the creatives running these companies – and I think that’s where Creative England is really strong,” she adds. “That’s how you take people on the journey.”
