An authoritative voice in business and news media and an on-air contributor for CNBC, Carol Roth is a highly sought after panel moderator and emcee who always ensures that “business is never boring”, making her a time and time again favourite with all audiences. In this recent column for Entrepreneur magazine, Carol looks at the little-understood problem of creativity being a curse for entrepreneurs:
Over the course of a two-decade-long career advising and strategizing with entrepreneurs, I have noticed a trend, particularly amongst those driven by creativity and passion. For these creative types, it is that their biggest strength — the incredible creativity that sets them apart and drives them to pursue an opportunity — is often also their biggest weakness in their business.
I have gone deep with the owners of some of the coolest and most interesting business concepts around — the type of entrepreneurs who are doing phenomenal, creative, impactful things with their businesses. From the outside, it looks like they have a veritable gold mine. They are the businesses that others look at and go, “Why didn’t I think of that?”
However, as I get to peek behind the business curtains — i.e., look at their financial statements — many of these innovative ideas are not being executed in a way that makes the entrepreneur enough profit to get by. Some aren’t making any profits at all.
High-touch versus systems
For many of the high-touch or creative businesses, the uniqueness that sets them apart is what keeps them from growing, reaching the next level or in some cases, even turning a profit. Instead of being focused on creating something that is perhaps slightly less unique, but scalable and repeatable, the entrepreneur is married to the complexity. They feel that it would compromise their vision to streamline what they are doing. Often, that is at the expense of making money.
When a business has high-touch services that are so specialized, it is also difficult for them to be replicated — even by team members. This leaves the owner burnt out, because he is working too many hours or is having a hard time teaching his staff to deliver on the value proposition. This also leaves the entrepreneur with a job instead of a business.
For some entrepreneurs, their unique product or service is in demand, but only at a price point that won’t support the business’s viability. By requiring that certain elements are done by hand, by a particular artisan or with a particular material, they have priced their product or service out of the market. It’s a needed product or service, just not at the price that it would require to keep the entrepreneur’s vision intact.
So, what does an entrepreneur do when the vision that drives you is what’s keeping you from being successful?
In these circumstances, compromise has to happen. If you are in this position, are you willing to let your creative vision inform you, but also to scale back some of the uniqueness for the sake of growing the business — or staying in business? That is the million-dollar question.
I hope that you can make that mindset shift. You don’t have to give up your values or your mission, but you may have to implement them in a way that cuts out some of the smaller details in order for the business to thrive. The challenge is to do that in a way that is still appealing to the customer as well as to you as an entrepreneur.
Ask yourself, “Is what’s setting me apart holding me back?” If it is, you need to decide whether passion or profit is your priority.