How can creators create more financial security in their businesses? What is the future of work and technology? How many revenue streams should every creative business have? In this conversation with Jay Clouse, we’re going deep into running a creative business. From managing cash flow to adapting to technology, he’s giving us a behind-the-curtain look into his success.
Jay is the founder of Creator Science, which helps you become a smarter creator. He previously led the community experience team for Pat Flynn and Smart Passive Income, designing their paid membership community and cohort-based course programs.
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Managing cash flow when starting a business
Managing cash flow comes with a learning curve when you are a new independent business owner. When Jay first started selling mastermind courses, he made the mistake of setting his prices high enough to cover his living expenses, but not high enough for taxes and savings. Another thing to factor in is seasonality and how to manage cash flow through slow seasons. You don’t want to be left with no money if people aren’t buying for reasons out of your control.
When the pandemic first hit in 2020, many service-based businesses did not have savings or emergency funds to get them through the year. The sooner you learn to manage the cash flow in your business, the more prepared you can be for unexpected things to happen, like an illness or having a baby.
Changing the narrative about consistency
Consistency is preached in business workshops all around the world, and sometimes it gives independent business owners the wrong idea. Consistency does not have to be about publishing content every single day. Instead, it should look like:
- Providing others with a consistent experience with your business and work
- Consistently providing value every time you show up
- Consistently improving and challenging yourself
Consistency also looks like putting in the time and effort to put systems in place that will help you focus on your creative work. The more infrastructure you set up in the beginning of your business, the more you can focus on what you love to do later. Jay advises new business owners that it’s always the hardest at the beginning. As you continue to grow your business, find what works, and learn new skills, daily operations become smoother and easier to manage.
The future of work will shift where human intervention and creativity are needed
Jay feels both pessimistic and optimistic about the future of work and technology. When used with good intentions, technology will create a future where people do not have to work as much to earn their living. However, where people are needed could begin to shift as technological tools advance. The more AI can handle the client services such as copywriting and photo editing, the more humans will shift into QA roles.
He recommends that independents in service-based businesses use this time to get comfortable with the new tools and learn how to work with them instead of resisting them. There is a huge window of opportunity to become an expert at new technology and offer help to businesses that lag behind.
Jay’s must-have technology for independent business owners
- Notion for task management, content planning, and notes
- Riverside for podcast production
- Ghost for website hosting
- Dropbox for file sharing
- Slack for team communication
How to build multiple revenue streams
In addition to using multiple tools to streamline Jay’s clientflow, he used multiple income streams to generate revenue. In the debate of influencers vs user-generated content (UGC), Jay encourages creators to focus on direct streams of revenue over indirect streams. Direct streams do not have a third party involved. Sponsorships and brand deals fall under indirect revenue streams, which are great to have to diversify income, but should not be the basis of revenue generation in a creative business.
In 2022, Jay had 41 separate income sources. They broke down into seven buckets of income:
- Affiliate partnerships (26 affiliate partnerships, with three of them making up 80% of his affiliate revenue)
- Memberships
- Digital products
- Sponsorship
- Royalties
- Patronage
- Services
The benefit of having multiple revenue streams is that you can predict a consistent income each month even though the amount that each bucket brings in ebbs and flows. For example, digital products may have a record-breaking month in March and down months in April and May. With multiple revenue streams, there is always another source of income to balance out the seasonality of business.
However, building multiple revenue streams at the same time can become distracting and cause them all to underperform. Jay recommends focusing on building one strong direct revenue stream first before introducing other direct and indirect streams.
Is it a good or bad time to start a business?
With doomsday news articles about the economy crashing, many people are wondering whether now is even a good time to start a new business or not. The reality is that there is just as much risk in a W2 job, and not as much reward.
In Jay’s opinion, there is cultural conditioning to think that employment is a binary thing. You are either employed or you are not. However, there is no real job security in a W2 job because it can go away at any time. Working a W2 job is the same thing as being a service-based freelancer with only one client.
Being a creator and doing work on the side makes you infinitely more employable. It builds skills and equity that compound over time. If you are willing to put in time upfront and do more administrative work, creating a business of your own is far more secure and lucrative than working a W2 job.
The biggest differentiator between the businesses that succeed and the ones that fail
Jay believes that businesses that succeed are willing to take in new information, adapt to it, and constantly improve. They are unwilling to fail the same way twice, which gives them no choice but to innovate and create the inevitability of success.
Important sections of the conversation
- [3:39] Get to know Jay
- [8:58] How to learn from peaks and valleys in business
- [12:11] Learning as you scale your business
- [18:02] The future of work
- [25:41] Must-have technology for independent business owners
- [27:33] Direct vs indirect revenue streams
- [32:29] How to build multiple revenue streams
- [40:15] Why it’s a good time to start a business
- [48:08] The biggest differentiator between the businesses that succeed and the ones that fail
Sources mentioned in this episode
Connect with the guest
- Website: creatorscience.com
- Instagram: @jayclouse
