How to create a business that thrives and survives

Creative companies bring so much delight, excitement and insight about ourselves, and the world. They transform cities and neighbourhoods into places people want to be. Yet it’s rare for them to benefit from what they create, and people are all too happy for them to work for very little or for free.

In my work, I come across many creative founders fearful of being seen as too commercial. Many don’t feel comfortable even talking about the business side of their work, considering it an inconvenient and necessary evil. Yet, I’ve seen too many creatives hoping to get a grant to support their core work, and despairing when they aren’t successful.

That’s why working on your business model is essential. It’s a structure that connects the different parts of your business. It connects audiences to what you make, to what you offer, and to what you charge for it.

Crucially, it helps you see your business as a whole. Think of it like a beating heart, taking oxygen and nutrition inputs, flooding the body with the blood it needs to function and creating revenues as the output.

 Working in partnership

At Upstarter, a design-led incubator, we use creative processes in business thinking to help creative founders thrive faster. As an example, since 2016, I have been working in partnership with Watershed in Bristol to develop new business processes designed to strike the right balance between a founder’s artistic vision and how to run a sustainable business. Instead of focusing on acquisitions and exits, we balance value with values.

Research and development programmes like Bristol +Bath Creative R&D and Watershed’s Sandbox model realised early on that for R&D to make its way into the world, it requires creative and business development support to take the next steps, to succeed. Formulating, customising and innovating business models is crucial to creating a business that survives and thrives.

I’ve seen many innovative models, produced by creative thinking people applying their talent to their business – from makers in Cairo and social enterprises in São Paulo, to design-centric digital startups in Pittsburgh, and spirited creative founders in Hackney Wick. Each of them has forged a business model that’s not only desirable but feasible and viable – that doesn’t just generate income but builds a sustainable future.

Creative value

In conventional product-based businesses, the model focuses on generating and capturing value provided to customers. This approach looks to make the most from internal resources to deliver high value to the customer at the lowest possible cost to the business, generating profits through the work of talented staff.

Creative business models differ from this conventional format in a number of ways.

• Deep connections

Creative founders put their audiences/customers/users at the heart of everything they do, focusing on creating deep relationships. This allows them to develop insights not available to companies with a purely commercial focus. Consider MAYK’s Pay What You Can initiative which took a leap of faith and opened work to new audiences. They found audiences were attracted by the initiative and more tickets were sold.

• Co-creating value

Creative businesses generate genuine value with and for audiences. They understand that the audience is as much a part of the work as they are. A great example is Kaleider’s Arch performance. The audience patiently engages with and witnesses this slow, deliberate arch-building, aided by exquisite harmonic work, co-creating the atmosphere.

• Values-driven work

Creative businesses often work from a purpose or a set of values extending beyond income generation. They often produce work to create societal impact, not just to make money. Creative studio Anagram for example creates VR work that embeds trust and care in experiences for participants as they explore real life characters who have learnt to cope with being ‘different’.

• Multiple possible adaptations

Creative businesses generate ideas, through products, services or experiences that can take multiple forms. Consider how just one character can become a repeatable feature in a set of works, an element for merchandise, or have multiple spin-offs in other formats. Not only do they create new ‘things’, but also an abundance of ideas which could generate multiple income streams. 

How can the sector embrace this approach?

Business models once felt like an exclusive, secret club only open to seasoned business folk. Yet while they are now part of everyday speak, they are not yet commonplace or fully activated in the creative sector.

Now there are tools available to help you see how your business works as a system, observe where it’s not working so well, and actively design a model to serve your core purpose, while also generating profit.

The original Business Model Canvas is very useful to help you break your business into easily understandable segments, which together can be seen as a business model, as a system producing value.

The canvas asks for details about who you are making for and details of your resources. At its heart is the value proposition: what value does this create for customers? Once completed – this canvas as a picture of your business as a system of inter-connected parts – you can consider how these different parts work together – or not.

You can examine audiences you are not serving, but could. Or consider other purposes you can put your profits to. You can explore new ways of getting your ideas to people, such as by subscribing to a set of shows, or renting something that people normally buy as a service.

Business models are a vital tool in providing an instant snapshot of how a business works to create value – what it makes and for whom – and how it captures this value, by what it charges, who pays for it, and how it manages the money.

Creative business models make much more than profit. They go a step further and actively design regenerative business models, in which you give back more than you take.  Applying business model thinking makes creative companies more aware and more profitable, in line with their purpose, enabling them to reinvest that value back into their work.