I have been thinking a lot recently about the direction that I want to take my photography business, and this week I came across two really interesting ways of looking at career advice for creative professionals.
First, there is the “do what you love” genre of career advice for creatives. Then, there are statistics.
For the sake of this article, lets call them fantasy and reality.
Photographer Jenna Martin recently did a great job of selling “the dream” in her recent post How “Doing What You Love” Can Be A Realistic Career Option. It is an interesting article and definitely worth a read. If you’re a cubically contained aspiring creative professional, or an unemployed millennial with an arts degree – I guarantee, you’ll love it.
The problem for me as a crusty old Gen X’r with a family and, you know – responsibilities – is that this kind of “do what you love” career advice is essentially encouraging people to pursue a fantasy.
In other words, the stodgy business guy on LinkedIn is bang on with his piece: “Do What You Love” is Horrible Advice.
Homer: If you don’t like your job, you don’t go on strike. You just go in every day and do it really half-assed – that’s the American way.
If you’re a creative professional, your aspiration in life is likely some version of this narrative:
Sleep in till mid-morning. Get up and go for a latte at your local hipster coffee shop. Update your social media presence on your Mac device. Meet your wife/girlfriend/husband/boyfriend for lunch at a gourmet cafe. Plug away at some ridiculously creative personal project or go photograph some models for the afternoon. Hit the farmer’s market and prepare a gourmet dinner with expensive wine and all local ingredients. Relax and recover from your busy day with more wine and a novel. Sit down at the computer to get some “corporate” freelance work done and stay up really late.
Don’t be ashamed or angry – I’m not mocking (much) – that honestly describes my ideal day right there (although maybe its a symptom of my pending middle-age that so much of my idealized lifestyle revolves around really good food and wine).
But, in the real world “the dream” costs money – and making money takes hard work and a viable business plan.
Marge: Homer, when are you going to give up this crazy sugar scheme?
Homer: Never, Marge. Never. I can’t live the button-down life like you. I want it all: the terrifying lows, the dizzying highs, the creamy middles. Sure, I might offend a few of the bluenoses with my cocky stride and musky odors – oh, I’ll never be the darling of the so-called “City Fathers” who cluck their tongues, stroke their beards, and talk about “What’s to be done with this Homer Simpson?”
Which brings me to the real world statistics that show what type of lifestyle is (unfortunately) realistic for most creative professionals.
Yes, I am directly equating income level to lifestyle because unless you want to live your entire life relying on a precarious income stream, a comfortable lifestyle costs a significant amount of money. Even more so if you have the responsibility of providing for your family.
The Government of Canada publishes financial performance data from various business sectors. The reports are set up to measure business profit, not individual income, so it can be a little tricky to interpret the numbers as they relate to individuals. However, there are still a number of fascinating trends that can be gleaned from the data.
And yes, this is Canadian data and will vary globally – but I suspect that the big picture trends that we can see in Canada would be fairly typical for most global markets.
As a professional photographer, I’m going to start with the photography industry.
Homer: And you don’t think I made any money. I found a dollar while waiting for the bus.
Marge: While you were out “earning” that dollar, you lost $40 by not going to work. The plant called and said if you don’t come in tomorrow, don’t bother coming in Monday.
Homer: Woo-hoo! Four-day weekend!
Creative Professional Reality Check #1
75% of all photographers in Canada earn an annual net profit of $30k or less.
These businesses spend a minimal amount on ‘Wages and Benefits’ and ‘Labor and Commissions’, so we can infer that they are largely sole proprietors and their net profit is essentially their personal income.
In other words three out of four Canadian photographers take home less than $30k a year in pay.
In comparison, the average cashier at Costco Canada earns around $40k a year – and has paid vacation, and a dental plan, and other perks and benefits.
However, if we look at the top 25% of all photographers in Canada – their net profits are roughly 4x, 3x, and 2x the bottom, lower middle and upper middle quartiles respectively.
Further, the top performers spend substantially more money on ‘Wages and Benefits’ and ‘Labor and Commissions’ than than the rest. We can infer that a large number of these businesses would be incorporated, so a large portion of their labor expenses would in fact be salary that they pay themselves and (judging by the size of the business) maybe one or two other employees.
If we add the top performer’s ‘Wages and Benefits’ and ‘Labor and Commissions’ expenses to their net profit, they are earning somewhere in the order of $150k. If you split that as $100k for the business owner and $50k for a junior assistant or part time office manager – the good news is that we’re into a sustainable career income level.
Creative Professional Reality Check #2
50% of all photographers in Canada earn less than minimum wage.
So…..you could run your own photography studio….but half of all the photographers in Canada are actually making less money than the high school kid at Bestbuy selling cameras….and he/she didn’t need to invest thousands of dollars of their own money to get that gig.
Ya, I didn’t believe this one at first either – so lets do the math. Minimum wage = $11/h = $22k/year = working poor. Net profit for bottom quartile = $14.2k = van down by the river. Net profit for lower middle quartile = $20.7k = working poor.
Ok, admittedly, the person working for minimum wage would have to be working full time hours – or several minimum wage jobs totaling full time hours, and we are assuming that the photographers are working full time hours – but no matter how you look at it – this is an extremely low net profit for thousands of photographers.
Creative Professional Reality Check #3
The threshold to make it into the top 25% of Canadian photographers is a minimum annual revenue of $113k. The average revenue for the top performers is $345k.
The statistics are pretty clear that only the top 25% of all photographers have any chance of earning a sustainable income.
So before you quit your day job and burn your bridges – unless you have the client base and business infrastructure in place to generate at least $113k in annual revenue right now – chances are you will be living in a van, down by the river.
And while we’re at it – what is your business plan to increase that to $345k?
Creative Professional Reality Check #4
Over 12% of all photography businesses are losing money. The average annual net loss is nearly $20k.
While 12% doesn’t seem like too bad of a failure rate – especially when compared to restaurants which have a failure rate of nearly 40% – if your photography business does lose money, you stand to loose a pretty substantial amount of money.
For most creative professionals that means personal debt.
Given the investment in equipment needed to work as a professional photographer this is not entirely surprising.
However, I think what aspiring creative professionals can take from this is that if you plan ahead for funding gear purchases from your business income, slowly over time, there should be no need to go into personal debt to pay for it.
Business Efficiencies for Creative Professionals
Beyond profits and losses, there are some fascinating facts that we can learn about the expenses of running a creative industry business.
Again, lets look at photography.
First, excluding labor and wages, all Canadian photographers spend around 60% – or two thirds of their total annual revenue – on expenses. These statistics match almost exactly with this article “How Much Should Photographers Charge Per Hour” where I suggested that photographers need to bill at minimum 3 times what they expect their take home wage to be.
For example, if you want to take home $30 per hour, you need to bill at least $90 per hour.
These expenses don’t take into account vacation or retirement savings so a billable rate of four times your take home rate is probably even more realistic.
“Operating Expenses” account for around 50% of total revenue – compared to around 10% for the cost of sales. I don’t see any particular expense category that jumps out but this shows that if you want to increase the profitability of your photography business – the first thing to do is cut your operating expenses.
Next, the bottom 75% of all photography business spend a negligible amount on rent. I’d interpret that to mean that they are mainly home-based businesses.
However, the top 25% spend nearly $20k a year on rent – meaning that they are paying for studio space.
To me that implies that if you actually want to make a sustainable living as a photographer – you need to get out of your basement and into a proper studio space.
Finally, the top 25% of photography businesses spend much much more on ‘Purchases, Materials and Sub-Contracts’ than the remainder.
To me, this shows that lower performing photography businesses do the majority of their work in house – while the top tier relies substantially more on sub-contractors to offload labor intensive tasks – freeing up time to generate more revenue.
It also indicates that they are investing a substantial amount into professional level equipment every year. I guess if you’re working with the latest gear your work is more marketable and efficient – and therefore more profitable.
So, if you want to increase revenue, sub-contracting tasks such as post-production, accounting, book keeping, marketing, IT and social media seems to make good business sense, as does investing in quality equipment.
Other Creative Professionals
I am a photographer, so I am mostly interested in benchmarking my business against other photography businesses.
However, for comparison we can also look at the financial performance data for other creative professional industries.
The statistics for Individual Visual Artists and Artisans are very similar to those for photographers with slightly lower revenues but higher net profits. Essentially it looks like it is less expensive to work as a visual artist than a photographer so the profit margin is better – go figure.
For Graphic Designers, the overall trends are also fairly similar to photography – with the exception that the top quartile of Graphic Designers generate slightly more revenue and earn higher net profits than photographers.
Its the same story for Motion Picture and Video Production. However, in this case the top tier statistics seem to be skewed by a few outliers that must have lost a ton of money in 2012 (the year these stats relate to).
Realistic Career Advice for Creative Professionals
We all want to believe that “do what you love” will inevitably lead to “the dream”.
Only 1 out of every 4 creative professionals earn enough money to maintain a sustainable career.
But, the point of this piece is career advice for creative professionals – not to crush dreams and condemn creatives to a soul crushing 9 to 5 corporate job.
Because the good news is that the statistics prove that it is indeed very possible to make a good living as a creative professional. The only problem is that you have to be in the top 25% of revenue earnings for your industry to have any chance of long term success.
This trend seems to apply to all creative industries: photographers, video producers, visual artists and graphic designers.
If you are a young creative professional just starting out, you have the luxury of time and minimal personal responsibility. With a sound business plan you can transition from starving artist to sustainable career at your own pace. Its not a failure to have a day job to subsidize your creative ambitions – if nothing else the statistics should prove that a day job is a necessity.
If you are a corporate warrior dreaming of the day you can quit the rat race to pursue your creative passion it is even more critical that you plan a viable, realistic transition strategy.
To me there is no point in quitting a perfectly good job to pursue “the dream” only to struggle for a few years earning minimal income and accumulating debt then eventually return to the world you left…less a few years of career advancement.
Homer: Thanks for giving me my job back, Mr. Burns.
Mr. Burns: I’m afraid it’s not that simple. As punishment for your desertion, it’s company policy to give you the plague.
Waylon Smithers: Uh, sir, that’s the “plaque.”
Mr. Burns: Ah, yes, the special de-motivational plaque to break what’s left of your spirit. For you see, you’re here… forever.
[Smithers screws the plaque to the wall]
Mr. Burns: [reading] “Don’t Forget – You’re Here Forever.”
In other words, you need to have a viable part-time creative industry business in place before you quit – so that you can seamlessly transition to the top quartile of revenue earners. That means learning the skills, developing the networks, building the client base and business presence needed to run a legitimate creative industry business.
Building a viable creative industry business part time will require a ton of time and commitment and will likely take years to accomplish. That is advice nobody really wants to hear – but that is reality.
The Bottom Line
The funny thing is that I think Jenna Martin and I are saying pretty much the same thing – a sustainable career in the creative industry is a realistic goal.
All I am saying is that sustainable success in the creative industry is very tough to actually achieve – and you need a very well defined and realistic business plan to get there.
First off, I am thirty five years old.
I am divorced.
And I live in a van, down by the river.
Matt Foley – Motivational Speaker
What Do You Think?
Are you surprised that 75% of creative professionals earn less than a cashier at Costco?
Have you successfully transitioned from the corporate world to a top revenue earner in the creative industry? What was your strategy?
Have you given up on the creative industry and gone back to a stable 9-5 job in a cubicle?
Did Matt Foley’s wife leave him because he quit his job and bankrupted himself while pursuing a career in the creative industry?
Leave a comment below and let us know!