Why Small Studios Struggle | RevThink

Do you run a small creative studio that has been struggling (along with your work/life balance) for some time?

I’ve been there and I recall exactly how it feels. Running a small studio (below $500K US in annual revenue) is exhausting. It’s why RevThink calls this the Push Season: you have to push like mad just to get through it.

Remember how excited you were to finally step up and run your own studio? Now you are responsible for all Seven Ingredients of a Creative Firm™ (any one of which can take down your business) but unable to pay for all the support you need. You might even find yourself missing the good old days when you were a freelancer!

Obviously, no one enters this season – or aims to stay there – by design. Because in addition to being overwhelming, it’s also unsustainable.


As a consultant to top creative firms, we connect with creative entrepreneurs from around the world. Owners of small, young firms who feel stuck often ask us for our advice:

  • Should I hire a salesperson?
  • Should I lease office space to take on bigger projects?
  • Should I get more projects to increase revenue?

The answer to each of these questions is “no.”

Why? Because growing your business without first implementing healthy habits, you will grow your current problems, too. Amplifying those problems will inevitably have you falling (or better said, failing) back to the devil you know: the painful Push Season. It can be a vicious cycle.

Instead, I recommend first fixing the underlying problems. Nearly every small studio that is stuck below $1 MM needs to stop doing two things:

  1. Stop taking on every project.
  2. Stop giving it away.

I know, this sounds unrealistic. I can hear you, the owner, protesting, “I must accept every project or else I’ll go under!” Or “I must over-deliver or else my clients will take their business elsewhere!”

Growing your business without first implementing healthy habits will grow your current problems, too.

Instead of lecturing about problems to avoid, let’s take a look at this from the positive side. There are two key habits you can adopt right now, which together are proven to consistently move small firms forward.


To help you stop taking every project that comes your way, use the concept of The Three R’s™ to decide – in advance – what types of projects are right for your firm. So before you accept any given project, it must deliver on three things:

  1. Reel: this project will increase our portfolio and reputation.
  2. Relationship: this project will increase repeat business from this client.
  3. Reward: this project will generate increased profits.

If a project only hits on two of these, take pause before you accept it. If it only hits on only one, turn it down. (If it hits on none of these, I recommend the fourth R: run!)

How does this habit propel your firm forward? Because it cures you of your addiction of taking on projects simply because “that’s what we do.” And it lays the groundwork for your firm’s next season where you will unquestionably need a strong, narrowly focused portfolio, a loyal client base, and profitability (which are some of the very goals you’ve already set, right?).


When being awarded a project, make sure you get as much money as possible out of your client. Then throw your proposal in the trash.

Now, to stop giving it away (i.e., chronically over-delivering), create a new production plan where you split the money: spend about half of the money on your firm (your salary, overheads, profits, and so on) and the remaining half on the project.

All high performance firms master this habit while smaller firms tend to spend upwards of 80% of revenue on project costs. No wonder they cannot afford the resources they need to get past the Push Season.

RevThink calls this “Maintaining the Splits.” It is so critical, we work closely with our clients to set proper ratios then monitor projects accordingly as part of our weekly routine.

How does this habit propel your firm forward? Because it puts pressure on you to creatively charge more (and keep more) while still solving your clients’ problems. This helps you run a healthy, profitable business so you can afford the support you need to focus on your genius. And charging higher fees forces you to up the quality of your creative and process (which are more goals you’ve already set anyways, right?)


Here at RevThink we’ve been receiving feedback from small studios that have followed our advice and are making – or have made – the transition. Here is what some owners are saying:

Implementing The Three R’s™ took us from 250 projects one year down to 50 projects the next year. And we made more money.

Maintaining strong Splits on projects and running each project through The Three R’s has been huge.

In our first six months (of adopting these habits), we tripled our average project revenue.

It’s incredibly rewarding to see our knowledge helping the industry become stronger. It can be done and you can do it, too.

‘The Three R’s™ took us from 250 projects down to 50 projects. And we made more money.’


Putting The Three R’s™ and The Splits into practice won’t be easy. But the results these habits produce will make running your firm much, much easier.

We look forward to watching you escape the Push Season as you take back control of your firm and your work/life balance. A happier and healthier you awaits in the Punch Season.

Please share this article with anyone you feel it might benefit.

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