Business sense

Shanghai  14th June 2010

Left brain, right brain, creative, analytical…it is rare that we have all the yin and yang of life combined and working perfectly in harmony. Some people are gifted at sports, some are gifted musicians, and some are gifted designers. But most of the time these gifted people are not necessarily gifted business people. Reversely gifted business people are not necessarily gifted in other expressive areas. So how do we as lighting designers, supposedly creatively gifted, handle our business of successfully running a consultancy company? How do we make business sense out of our creative lighting design ideas?

Many designers I know struggle to make ends meet or just earn enough to turn around, but does that mean that we are just poor business people or is there little money to make in lighting design. From my experience there is probably about 10% profit to gain from lighting design, much less as in lighting supply which can generate over 20-30% profit, the same goes for contracting, the building and installation part of a project. One of the big differences is that we deal in something more intangible, an “idea or a concept”, while suppliers and contractors deal in something much more measurable, a product or a completed installation. As a result we find that clients have difficulty of appreciating the value of a work. I once had a client say to me: “Why should I pay such fees to you when you scribbled the solution on the back of an envelope?” But that is exactly the point…I was able to do that because of my years of experience and creative thinking abilities. That is what they pay us for.  

Profit margins vary a lot with each project because there are always a lot of unknowns. Also projects vary a lot in terms of exposure and potential returns. So does it make business sense to lower your fees because of potential future spin-off work of a high profile project? Or should you rather stick to your guns and let it be. I believe this business is very much “give and take”. You give some, you get some. The trick is to have the business acumen to make the right judgment call. Unfortunately we never know when we have to make that call….

14. June 2010 by Martin Klaasen
Categories: lighting design practice | Leave a comment

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