Today is my third and final post in a series on choosing the path of an independent contractor (IC) vs. that of building a formal studio. In part 1 I wrote about the benefits of being an IC. Last week I wrote about the importance of branding. Today I want to write about why it's actually a bad idea to pursue the IC path…but why it's also okay if you don't and some suggestions for dealing with it.
It's Still a J-O-B
The #1 reason the IC path ain't that great is because bottomline: when you're an IC, you still have a j-o-b. That's right. A job. You may have left one 9-5 job to start your own “business” doing what you love. But in the end, you just ended up with a 9 to 9 job (or maybe 9 to 10, or 6 to 10, or maybe you're one of those 6 am to 1 am the next day kind of guys). Technically you are in business for yourself, but you are not creating an asset that you can sell. This is something that Robert Kiyosaki, best-selling author of “Rich Dad, Poor Dad” talks about. There are four quadrants of working people in the working world:
As an IC you fall within the “self-employed” quadrant. As a studio owner, you would fall into the “business owner” quadrant. The best side to be on is the right side. This is where you have other people or money working for you. These two quadrants (B and I) give you the most freedom in life. If you stop working, you still make money. On the left side, if you stop working, you stop bringing home a paycheck. The hope is that during the times when you are working, you're making enough money to save that would allow you to do things like take a vacation with your family, etc.
I know what you may be thinking. “Oh great. NOW you tell me this. I just quit my job and became an IC because of your last two blog posts. Thanks a lot Ron!” Well, I have good news. All is not lost. There are things even an IC can do to put a foot or two into the right-hand side of the cashflow quadrant.
- Products. The most popular strategy I've seen employed by ICs (and this would include high-profile photographers and cinematographers) is to create products they sell to their followers. Thanks to social media, if you're really good at your j-o-b, people may actually follow you and your work. They will want to be like you. They may even worship the ground you walk on. If you get to that level, you can capitalize on it. Perhaps you create a training video you sell via DVD or download. Perhaps you write a book. Make an indie movie then package and sell it. License and sell some of your footage as stock footage. If you're really popular, so much so that people want anything that has your name on it, then partner with a world-class vendor and get them to put your name on one of their products.
- Advertising. Here's another strategy that can work if you've amassed a large following. If you have the discipline and talent, write a blog with consistent content then start to earn ad income. This doesn't put you completely in the B or I quadrants because you still have to write the blog posts. But, if your blog gets big enough, perhaps you can get other people to write for you. If it gets really, really big, perhaps you could become the next Mashable.
Another way you can generate ad revenue that is more in line with your j-o-b would be to become a YouTube content creator. Again, this takes discipline. But if you're able to consistently produce content that people actually want to watch, you could join the ranks of the likes of Freddie Wong or Julian Smith. Again, you wouldn't be completely in the B and I column because it requires consistently making the content. But you'd at least have content that, even if you stopped producing videos, would continue to generate income for you.
- Invest. It should go without saying that you could also be wise with the money you earn and start investing in assets that can generate additional income for you (e.g. real estate, stocks and bonds, etc.)
Naturally, all the things I mentioned above are not easy to accomplish. If they were, everybody would be doing them. But if you work hard, plan, and don't go out and spend all of your money on every new camera and rig that comes out, you could balance your income nicely between S quadrant money and I quadrant money.
Lastly, I leave you with this. Ultimately, do what makes you happy. There is no shame in having a j-o-b if what you're doing is something you enjoy—whether you're employed by someone else or self-employed. Don't start a business just because it has the possibility to make you a lot of money. In the long run, if you're not happy, who cares? Was that not the lesson we learned from the greatest movie of all time?
(cover photo credit: snap from Rich Dad, Poor Dad)