Artists, writers, musicians, and creative types in general tend to have a horror of the mechanics of business. Terms like “cashflow forecasts,” “spreadsheets,” and “tax returns” stir up feelings of, at best, boredom, and at worst, pure terror.
We artists would like to be free of the tawdry world of commerce. We want to lie about on a richly embroidered ottoman smoking a hookah pipe while discussing Oscar Wilde. We want to be free. We want to get loaded. We don’t see ourselves evaluating a marketing strategy and spending an away-day in an air-less office with a flip chart doing a SWOT analysis, still less carrying out performance reviews, firing staff, and producing mission statements.
Can you really be a bohemian in business? Surely the bohemian — the freedom-seeker, the contemplative soul, the poet, the philosopher — floats above the everyday world of commerce and competition, all that vulgar shouting, and bustling, and shoving, forever trying to make your voice heard above the din?
Well, yes. It would be nice to be free of vulgar trade. But most of us need to earn some sort of income. Throughout the noughties, I was a full-time writer. But toward the end of the decade, the world of publishing and journalism began to look decidedly inferior. The money did not seem to be there any more. So I decided to go into business. And that has been decidedly tougher.
In March 2011, my partner and I opened a combined coffeehouse, bookstore, and events venue in London called the Idler Academy of Philosophy, Husbandry and Merriment. Nice idea. Let’s sit around in a bookstore like Lawrence Ferlinghetti at City Lights and run jolly little salons for the wits of the day.
Erm, it wasn’t quite like that, I’m afraid. I was thrown from a four-hour workday writing books to a fourteen-hour day serving customers, ordering books, trying to do journalism, sending weekly newsletters, stressing about dirty toilets, and moving furniture around for events. For two years, I woke every morning at 5:30 a.m. in a blind panic and lie in bed worrying for two hours before crawling to the laptop in my pajamas.
We found that, while money came into the business and went out again, we owners — my partner Victoria and me — were the only people not seeing any of it. Staff, suppliers, tutors, landlord, government, bank, the IRS: all had to be paid before us. At times, it is easy to think that you are working only for the banks and the landlord.
Well, this is reality. If you want freedom, then you have to take responsibility, and that means opening the boring post and dealing with it; it means filing your tax return on time.
Victoria and I, then, took on most of the financial risk ourselves when setting up the Idler Academy. We did approach a couple of investors at an early stage, but they said no. And who could blame them? An independent bookstore in an obscure corner of west London did not exactly seem like a hot money-making opportunity.
“I see, mid-life-crisis center,” said my tycoon friend John Brown when I showed him the store. “Marginal at best.” We would have to pursue this dream alone, at least to begin with.
Four years on, we attracted our first serious investor. At the time of writing, we employ three members of staff. And now we are busy moving on to the next stage by raising money from angel investors and from our readers and fans. We have turned a hobby into a small business.
Now we want to grow to medium size, by which I mean a business which is turning over annually $400,000 or more.
For me, going after investment was a good idea, as it suits the expansionist frame of mind I increasingly find myself in. For the 10 years up to now, I ran the Idler pretty much as a hobby. That suited me at the time, because I was writing books and Victoria and I had young children.
But investment brings responsibility. The investors want a business which, in their words, will “scale.” That means: “has enormous potential for growth.”
What investors want is to put in a million dollars now and withdraw a billion dollars in ten years’ time. They’re looking to get massive returns. Most of their investments, they say, tend to fail. Therefore, paydays from businesses which succeed in “scaling” are what they live for. In order to secure this payback, though, investors might force you to make tough decisions, or even make them for you.
The founder of Office shoes, Richard Wharton, complains that investors sacked all his friends, the ones he’d started the business with. Investors can be a pain. Even small investors can turn out to be more trouble than they’re worth. You’ll get a load of unsolicited advice from someone who doesn’t necessarily know what they’re talking about.
You’ll also essentially be indebted to them; and one of our purposes here is to escape indebtedness, because being debt-free, rather than actually having money, leads to happiness. However, having surveyed the business landscape, it is pretty obvious that businesses that grow quickly attract investment. So we’re now launching an equity round to fund our next stage.
Bohemians and idlers often, paradoxically, have this in common: their work is the most important thing in their life. This was true for Picasso, and it is true for Richard Branson. It is true for me. I will never retire. I will continue reading and writing till the day I die.
Yet Bohemians affect disdain for Mammon. They live for art and life, so they say. But if you don’t address financial issues in a grown-up fashion, you’ll end up poor, which is no fun at all. You’ll be paying absurd fines and interest charges to the bankers, debt collectors, and the IRS. They might not burn down your straw hut, but they will knock on your door. It has happened to us. Your chaos will do nothing but profit your oppressor.
So, you need to get comfortable, before you start, with the idea of making money. Respect may be nice but, as punk poet John Cooper Clarke once wisely said to me, “Respect don’t pay the rent.”
Making a profit is good. It means that you are creating a sustainable business that can last for many years, employ people, and spread joy. If you don’t make money from your business, you’ll either be bailing out the business from other funds or you’ll go bankrupt. And either outcome will be preceded by a truck-load of stress. I keep hearing that 50 percent of new businesses fail within the first five years. It’s like the Kentucky Derby: steep odds.
New online course, Business for Bohemians with Tom Hodgkinson. On sale till Friday https://t.co/27KTTgszib pic.twitter.com/Vb1kej1zu4
— Idler (@idler) December 7, 2016
When we launched the Idler magazine in 1993, I raised about $800 from family and friends. I sold six-month, twelve-month, and lifetime subscriptions. A couple of well-to- do friends put in a hundred bucks. That gave us enough to print a thousand copies of the first issue. We had a magazine.
This was a good starting point, and it might work for you, too, but it inevitably comes with a downside. Family and friends can be tricky investors because they want to advise you, and they may change their mind about wanting to help you. Banks, on the other hand, just collect the interest and leave you alone.
The great management guru Charles Handy reckons that, whatever your bohemian ideals, the bank is your best source of finance. I managed to get a loan from the bank. I had opened an account some years previously to run the Idler magazine, which at that time was a very small business, earning about $33,000 a year.
Luckily, I had run that account well and the bank lent us $17,000, to be paid back over five years. This loan came at a price: we paid about five grand in interest. In the same period, we earned zero percent on a nine-grand deposit we had paid on day one.
Clearly, we should have become bankers, not booksellers.
Adapted from Business for Bohemians by Tom Hodgkinson. Copyright © 2018 by Tom Hodgkinson. Published in 2018 by The Overlook Press, Peter Mayer Publishers Inc. www.overlookpress.com. All rights reserved. The book can be purchased via Barnes & Noble, IndieBound and Amazon