In design, "margin" provides multiple functions. Arguably the most important is the space (or margin) between elements. It allows your design to breathe.
Margin is important in other areas of life as well. Especially business.
Good businesses have margin.
Profit margin? Yes.
But also margin for your time, your emotional and physical health, your relationships, your sanity, and your integrity. You're a human, and humans need breathing room.
In my early 20s, I opened a skateboard and snowboard shop with my friend. I'd dreamt about it since I was a teenager. I was passionate about snowboarding, and I'd spent two years working on the manufacturing side. I was looking forward to earning a profit from doing something I loved.
But, it was a "low margin" business in every way:
We never really acknowledged how little breathing room we had in the business; we were in too deep! We just kept “adding more” hoping it would increase our margins. We added a mini-ramp, did events, published a magazine, ran contests, joined a retail collective, and started doing bike repairs.
Looking back on it now, I can see we were in a dangerous cycle.
It's something the podcast 99% Invisible explored here:
Adding more and more layers to a system intended to avert disaster often makes catastrophe all the more likely.
We were essentially "throwing good effort after bad fundamentals.” Our primary business model was lousy; adding more complexity didn't fix that.
And here's the thing about low-margin work: it eventually leads to ruin. The margins rarely get better, but the sunk costs get worse. Every month you dedicate to the bad business reinforces your desire to "make it work."
We eventually pulled the plug on the Real Deal and closed it two years later.
What's the answer for aspiring indie entrepreneurs?
Look for business models that have good margins, with minimal complexity. And, choose work that gives you lots of breathing room.
I realize this is easier said than done, so I'll provide a few observations:
I'll give Patio11 the closing word:
If you want something small and beautiful, please, please pick something with fat margins (like software) and customer willingness to pay. Margins create margins. You need massive scale to afford “that thing you want” in a low margin environment. There are great businesses in the world that have low margins, but they rely on iron discipline and scale.
I hope this was helpful!
Justin Jackson
@mijustin