A few weeks ago I decided to change my business model to Pay What You Can (PWYC).
Maybe it’s because I’m a Yorkshire woman that I’m careful with money – and it’s certainly got a lot to do with my formative experiences. I’m definitely not money-led, but I keep a close eye on my finances and do a lot of forecasting, planning and monitoring – and saving when I can. I think from an early age it was drummed into me that if you don’t manage the money, the money manages you.
Whilst I grew up in a house with no money worries (but definitely not rich), I was aware my grandparents had grown up in real poverty. My maternal grandfather was only one able to stay in school after 14, and only after his mother had pawned her wedding ring to pay for his uniform. By the time I knew my grandparents they were no longer poor, but they still were incredibly careful with their money – but also very generous towards others. So I get more than a little bit cross when people say money doesn’t matter and that’s it’s vulgar to talk about it – because that’s only true when you have enough of it.
So money does and doesn’t matter to me. It isn’t what drives me, but I recognise it needs taking care of. Since I can remember in my career, the inevitable tension between money and mission has interested me. As an idealistic postgraduate student and young curator I was fascinated by how contemporary artists navigated the tension between making work and making a living. I was drawn to artists like Bethan Huws who’d walked away from commercial success in favour of artistic integrity or artists such as Christo and Jeanne-Claude who rejected sponsorship and patronage for their projects – preferring to raise income through sales of editions so they could retain complete artistic control. I even spent four long years researching a PhD around how public patronage inadvertently shaped artistic practice; in other words how money influenced art, despite the ‘arm’s length principle’.
Over the past 25 years working in arts organisations I’ve seen what happens when funding has too strong an influence on what happens and how. I don’t underestimate how hard it is to avoid this; but when I was working with artists as a curator and later running art galleries I understood ‘bringing home the bacon’ so the work could happen well, without being limited in ambition or pandering to public or private patrons, to be the most important part of my job.
So, it’s important to me now – as a sole trader – that I earn enough to do work that matters to me, to a good standard, and at a rate that means I don’t have to work 365 days a year to makes ends meet. ‘Enough’ for me personally will be different to others as it is linked to my family’s lifestyle choices e.g. we moved from London back to the better-value county of Yorkshire 13 years ago; I have two children to feed, a responsibility I share with my partner who works full-time. This means ‘enough’ for me at this stage in my life equates to earning around £28K per annum – pro rata (I work a 4 day week) that’s roughly the UK average salary.
I’ve been thinking a lot about my business model in the light of CV19 – partly because like many self-employed people in the arts my work has been (and will continue to be) badly impacted by CV19, especially the training work I love. There are some opportunities too – but I’m under no illusion though that in the medium-term the sectors I work with are in recession and resources are shrinking.
A business model isn’t just about how you control costs and generate income – most importantly it’s about how you create value. And that’s another area that is in flux for me in the wake of CV19 – like many I’m keen to have a bigger social impact and do what I can towards tackling the many injustices and inequalities I see around me. I’m still working out how I might do that – at the moment I’m donating more of what I earn to charity and doing more voluntary work, mainly as a Trustee but also some consultancy and coaching. I began to feel a bit conflicted around pro bono work as I worry this undermines another person’s ability to earn. Currently I’m seeing a lot of larger organisations in receipt of grant funding offering free or very low cost courses – which on one hand is great for the recipients but on the other totally undermines my ability to sell training. So if I offer coaching for free, what does that do to other coaches?
So I decided to pilot making my services Pay What You Can – starting with my coaching, but I’ll be extending that incrementally across all I do. In some ways it’s a not a massive change – I always offered a sliding scale of what I called ‘Robin Hood’ prices (the richer organisations paid more so I could charge the smaller ones less). In terms of training courses, I’ve always offered free and low cost places (credit here due to Deb Barnard of RD1st – I took my lead from her on that when I was working with her company). And I was inspired to try the PWYC model by my experience as a customer of Slung Low’s Wild Conference last summer. Their model is slightly different – it’s Pay What You Decide – but I liked their ethos and the transparency about their costs as I was somewhat puzzled about what would be the ‘right’ price for me if I wanted to be ‘fair’. And that has to be part of the equation too – as a customer paying what you can to be ‘fair’.
I’m finding already there’s a big difference to stating a price and inviting people to say if they want to pay less, and really putting up front that choice about what to pay and making it clear that zero is fine. I’m finding far more people are paying less than the suggested rate than before, but often they are booking more sessions. So this might even out if I spend less time generating work and marketing and more doing paid work (albeit at a lower rate). Of course, if everyone pays zero I’ll be out of business pretty quickly, so I trust people will pay what they can and that some can still pay.
I’m offering suggested rates – as people told me they wanted some guidance – and these are based on my calculations of what it costs to run my business to a professional standard whilst paying myself the equivalent of an average UK salary (and average UK employer pension contribution). If you’re not self-employed then you could be forgiven for thinking the day rate or hourly rate sounds high. It’s a lot more complicated to calculate than dividing a salary by the number of working days in a year – for a start there are plenty of days you won’t have paid work because you are writing tenders or talking to potential clients. If you’ve never run your own business you could be forgiven for forgetting to factor in the costs of having a phone; wifi; email provider; web site hosting; URL registration fees; software licenses (MS Office, Survey Monkey, Zoom etc); buying your own laptop and other gadgets; stationary; professional services (accountant; professional liability insurance; coaching supervision); membership of relevant professional bodies; travel and subsistence for meetings and interviews; training; conferences and of course you have to pay your own sick pay; holidays and pension contributions.
It’s not an easy calculation to make and there’s a lot of assumptions in my budget which might not prove accurate, so I’ve allowed for a contingency and been conservative in my estimates. And I’ve decided that if I’ve been too cautious and if at the end of the financial year I do better than projected (and needed) that I’ll donate any surplus back to charities I already support. That feels important to me – when you have enough, you support those who don’t – like my grandparents did.
So I’ve taken the plunge! It’s too early to say how it’s working – I’ll report back at year end if I’m still trading and share what I’ve learned. But already I’m preferring this way of doing business in many ways, just feels like a responsible and fair way to work at this time. I’m hoping it makes business-sense too…