During a negotiation, it would be wise not to take anything personally.  If you leave personalities out of it, you will be able to see opportunities more objectively.  Brian Koslow

From deal making to buying Gucci purses in the streets of New York, negotiating is a part of life.  And yet, many of us are so uncomfortable with it that we cave in and agree to anything!

Some cultures are trained to be ruthless negotiators, and certain areas of America contain more skilled negotiators than others.

I have never been very comfortable with negotiating.  Shopping trips to Mexico would have me paying more than I should just because I don’t enjoy the game of talking someone down on a price.  After all, I don’t mind paying a little more for a box of Chiclets if it means a poor street kid will eat better that night.

But, when it comes to survival in business, I’ve had to learn to negotiate.  I’ve read books such as Getting to Yes and I’ve taken negotiating workshops through Karrass, Inc.  And though I’m not the most aggressive negotiator, I have learned to keep up with the best of them.

Just as there are guidelines to cooking a turkey, there are guidelines to negotiating.  These basic guidelines will help prevent you from making a big mistake during your next business deal:

NEGOTIATING MUSTS:

• Research Before the Negotiation:  Do your homework.  In a business deal, you want to find out as much as you can about the company and the people you are dealing with.  This will aid in your negotiation.

• Know your Numbers Before the Negotiation:  Go into a negotiation knowing what you want.  If you don’t know what you want, you’ll never get it!   Write down on a piece of paper three things:

1. Your desire outcome;
2. Your drop dead lowest outcome that you will agree to if you have to; and
3. Your Deal Breaker, which is the outcome that will cause you to walk away from the deal.

• Ask for What you Want:  Often, a client will pay or give more than you thought.  Don’t be afraid to ask for what you want.

• Talk less, Listen More:  Understand where the other party is coming from.  Ask a lot of questions so that you know what their concerns are and their needs are.  Sometimes it’s not what you think.

• Concessions should be Tit for Tat:  Make sure that if the other party asks you to make a concession (give something extra or take less money), that you are given something extra in return.  In business deals, you can get very creative with this.  Ask for free advertising or extra products or plane tickets, etc.  Avoid granting concessions without anything given to you in return.

•  Change your Offer if Need Be:  Often we are wary of changing our offer in the middle of the game. But sometimes it’s necessary, especially when the deal has changed and new information is gained during discussions.  Don’t be afraid to withdraw something you offered earlier, if it makes sense to do so now.

• Brainstorm to make the deal fair to all:  The best deals are ones that have never been done before, so says Seth Godin.  Get creative;  if you reach a point in negotiations where you can’t agree, think up a new way to get you what you want and to get them what they want.

• Follow up in Writing:  Always follow up a discussion with the points agreed to in writing.  Email this to the client and make sure that you both have clarity on what was discussed.

NEGOTIATING NO-NO’s:

• Never Negotiate Against Yourself:  If you gave an offer or a price and the other person didn’t accept it, DO NOT offer them a lower number.  This is called negotiating against yourself.  Instead, ask them to make you a counter-offer.

• Don’t Fall for the “Hurry up and Sign!”  If your new business partner is giving you the rush-rush to sign a contract before you are ready or have time to think about what you are agreeing to, Don’t Do it!  Ask them to slow down and to allow you the time you need.

• Don’t Negotiate with Someone Who Doesn’t Make the Decisions:  If the person you’re dealing with says “I have to go ask my boss now if he agrees” insist that you deal directly with the person making the negotiating decisions.  Don’t fall for this game.  It’s a negotiating tactic.

• Don’t Agree to Something That Feels Wrong:  Look out for Red Flags.  If the deal feels bad, worries you or turns your stomach, don’t agree to it.  Period.

• Don’t Regret your Decision Later:  Learn to trust your decision making.  Once you make a decision on a negotiation, look forward, move ahead, and never look back with regret.  Learn from mistakes, but don’t feel regret.

• Don’t fall for the “But it’s great Promotion for you” Line:  When negotiating a business deal, the price you are paid should have absolutely nothing to do with how well the product will sell or how many famous people are involved or anything else like that.  When a client uses the “But it will be good promotion for you” line , ignore it.  Don’t give it any merit or consideration.   It’s irrelevant 99% of time.

• Don’t be afraid to walk away if it goes badly:  A bad deal is a bad deal.  Don’t agree to one.

I hope these tips are helpful.  If you have any to add in the comments, please do.   You may want to check out an article on this topic that I really liked titled Negotiation Tips for the Beginner by Man Vs. Debt.

Maria xxoo

PS:  You can find more negotiating tips for art licensing deals in my new book, co-written with artist Tara Reed, called How to Understand Art Licensing Contracts.  Click the link to find out more about it!

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“A verbal contract isn’t worth the paper it’s written on” Samuel Goldwyn

A friend of mine is quite famous in Europe.  He signed an Exclusive contract for with a large company that licensed his art for clothing.  It was a hit in Europe, and fat royalty checks were rolling in.

He made so much money that he got himself a new wife and a nice little mansion on the beach.   For a few good years he lived the high life.

That is until early 2008. One day, the checks just stopped coming.

His European licensee went bankrupt.  The money never returned.  He lost his home.  He was devastated financially.  He had to start over again.

Why didn’t he just sign up with another licensee, you might wonder?  He was very popular – it would have been so easy for him to sign up with a new company and do the same thing.

He legally could NOT do any more work in Europe because of two reasons:  1.)  He inadvertently SOLD his name, trademarks and copyrights to the company that went bankrupt; and 2.) He can’t cancel the contract because it doesn’t have a “get out” clause.

Basically, he signed a bad contract, and it’s cost him everything.  (He admitted to me later that he never bothered to have an attorney look over the lengthy contract the company had him sign.)

Something like this is extremely rare, however, I never want to see this happen to you! So I’ve put together a partial list of Red Flags to look out for in a contract.

DISCLAIMER:  I am not an attorney.  But I do know a lot about art licensing deals.  When I consult artists on deal-making, I share my many years of experience but always advise them to talk to an Art Licensing Attorney for answers on contract law.  This information I share comes from years of negotiating deals with Licensees and clients and working with attorneys.

I’ve put together more deals and contracts in the last ten years than most people ever do in a lifetime.  My experience, mistakes and triumphs with deal-making has enabled me to help others with their contract-anxiety.

Sometimes the hardest part about being a creative entrepreneur is putting together the deals.  There really is no one road-map to follow.  Each contract is different from the other.

But there are a few contract terms and concepts that are the same from deal to deal.

There are certain red flags to look out for in any contract.  There are also necessary terms/clauses that should be in every agreement you sign.

Many companies are using outdated, antiquated language that no longer is used in the real world.  Most of the time they don’t even know WHY something is worded the way it is.

So don’t be shy to tell them that you will sign the contract once they make the changes you require. Literally EVERYTHING is negotiable, especially contract language.

In the end, most of your clients are going to want you to be happy, too.

The contract phase is the most important start to a relationship – it’s where you both draw the line at what you’ll give and what you ask for.

Once you get all of that down on paper, you hopefully never have to look at the contract again!  (And if you do, it usually means trouble.)

Here’s my personal list of RED FLAGS that give me goose bumps:

TRANSFER OF RIGHTS: Unless your business plan includes selling the rights to your art outright (some illustrators do this), NEVER transfer your copyright ownership.  Retain ownership to all your copyrights.  Once you transfer your rights to any image, you can’t get it back.  Not even for that coffee-table book you plan to publish about your work when you’re old.  (Read my post on the Bikini Model who sold all rights to her image and lived to regret it)

REMEDY:  Ask the client to replace the “TRANSFER OF RIGHTS” language to a statement that says the Artist retains all rights to copyright in the artwork.

LONG TERMS:  I’ve seen contracts that have as much as a ten year term!  That’s just too long.  A typical licensing contract is one or two years.  (If you like each other, you can always renew)

REMEDY:  Ask the client to lower the contract to two years.  That is a very reasonable amount of time.

AUTOMATIC RENEW: Some contracts are for a certain period of time, say 2 years, and the term listed in the contract states that it automatically renews for another 2 years unless either party gives 60 day written notice.  (Or something along those lines.)

Who in the world is going to remember to cancel a contract, almost two years into the future? Sure, you can put it on your Google calendar, but what if something goes wrong with that?  Then you’re stuck for another two years without a chance to cancel.

REMEDY:  Ask the client to limit it to a specific time period (ex:  June 1, 2011 to May 31, 2012).  And tell your client “If, at that time, we both want to renew, we can do so with an amendment to the contract.”

WORLDWIDE:  Some companies will want their license to be granted to sell worldwide.  It’s extremely rare that a company sells their product in EVERY COUNTRY IN THE WORLD!  No contract should have the territory of WORLDWIDE unless they’re Coca Cola.

REMEDY:  Ask the client to give you a list of countries where they are already selling the product, and then replace the word “WORLDWIDE” with their list (Example:  “Territory:  North America, Canada and the Virgin Islands.”) This leaves you free to doing a similar deal with a company in other territories.

EXCLUSIVE:   BE AWARE OF THE EXCLUSIVE!

One of my consulting clients showed me a license agreement he was about to sign with a publishing company.  It had a sentence that said that the agreement was Exclusive, World Wide, for all products!

Now, it’s literally impossible for a company to make EVERY SINGLE PRODUCT available, and in EVERY COUNTRY IN THE WORLD! Turns out, this particular company only sells in the U.S., and not in large quantities.

REMEDY:  Ask the client to change the wording to Non-exclusive, and have them specify the actual products that they are making (i.e. canvas art prints or bobble heads or mohair sweaters, etc.).

If my artist had signed this agreement the way they had it worded, it would mean that if a large Australian print company approached him to sell his prints in the South Pacific, he would have to turn them down, and that severely limits his ability to earn more money from his art.

ALWAYS THINK TWICE BEFORE SIGNING AN EXCLUSIVE. It can be extremely limiting.  Often, companies asking for an exclusive don’t even know why they want it.  But it can seriously hurt you and future sales of your art.

*Caveat:  I have this discussion with seasoned artists and some do sign exclusive agreements, for very narrow definitions of product lines. There are exceptions to every rule, and you should just be aware of what you are getting yourself into before signing.

Reasons NOT to sign an Exclusive Agreement:

LOSS OF INCOME TO THE ARTIST:  There’s no guarantee that they’ll do a good job of selling your products and you may not make much from the deal.  In the meantime, you’re not able to go into a deal with anyone else that could be paying you.

Most large companies, experienced in licensing art, understand this concept. When we went into a deal with the huge company Converse, they didn’t even ask for an exclusive.  I find it’s usually the smaller companies that try for the exclusive, not understanding why it’s a bad deal for you.

BANKRUPCY:  Bankrupcy law in the U.S. requires an exclusive agreement to be considered an “asset” of the company who goes bankrupt.  This means that if your Licensee goes bankrupt and stops paying you, you are still held hostage to the exclusive agreement – you aren’t able to cancel the contract and work with any other company. (We once signed on with the 3^rd largest toy company in the U.S. – they went bankrupt 1 month later.  Luckily, we didn’t give in when they insisted on an exclusive.)

In some cases, I’ve had a Licensee STRONGLY insist on an exclusive.  Usually it’s because they don’t want you going to their competitor with the same designs or art.

When a client vehemently opposes a non-exclusive, I ask them a lot of questions to fully understand what their issues are, and then try to find a way to give them what they want while protecting my needs.

In other words, I get creative and find a way to give them what they need to feel secure, while not giving up my ability to earn money elsewhere.

Once we did a deal with a rather large boot company.  They were putting a lot of money into Drew’s program, and wanted assurance that we wouldn’t take the designs to a competitor.  That was a reasonable concern, so to ease their minds, we signed an agreement that specifically stated:  “Non-exclusive.  Artist agrees not to license the designs named in this contract to competing sheep-skin shoe companies for a period of one year.”  We were very specific, which made us happy, and we gave them what they wanted, which made them feel good.  Everyone wins!

TWO GOOD REASONS TO SIGN AN EXCLUSIVE:

1.)  IF THEY ARE PAYING A HANDSOME GUARANTEE:  In the licensing world, a guarantee means that you will be paid a specific minimum dollar amount in royalties, regardless of how many units actually sold.  A guarantee is usually included in a contract that’s exclusive.

Example of a Guarantee: Minimum of $15,000 per quarter is payable to Licensor (the artist).  This Guarantee means that we get paid a minimum of $15,000 (or insert any number you wish) no matter how many products are sold (even if none are sold).

Asking for a guarantee usually inspires the client to change “exclusive” to “non-exclusive” in a hurry.  After all, they don’t want to be on the hook for that much money should the product not sell in the marketplace.

And on our end, we don’t want to be tied to an exclusive contract should the Licensee not sell large quantities.

2.)  IF THERE ARE SPECIFIC LIMITS IN THE CONTRACT:

If you agree to an exclusive, you should very narrowly limit the following:

• The term should be as short as possible (i.e. one year)
• The Product should be as specific as possible (i.e. Long sleeve sweaters made of mohair)
• The Territory should be very specific (i.e. East Coast of North America – or wherever they are actually selling)

WHY?  Because the more specific you are, the freer you are to go into other deals.  After all, you’re in this to make money, right?  You don’t want to tie up your possible income streams by giving an exclusive for items or a territory that a company isn’t even engaged in.

NECESSITIES IN A CONTRACT:

If there’s one important thing in a contract for you to know about, it’s this:

Always have a “GET OUT” Clause. Now, I’m not sure if “get out” clause is the proper name, but it’s what I call a way out of a contract.

The “get out” clause should allow you to cancel the contract with a thirty day notice for the following reasons:

• The product is not sold in commercially sufficient amounts (thus you aren’t making enough money)
• The Licensee sells their company (you don’t know the new owners – you can always sign on with them later)
• The Licensee has not paid you on time or at all
• The Licensee has been seen in poor light in the publics eye (i.e. Toyota with their failed brakes)
• The Licensee breaches the contract in any way (i.e. they don’t pay you on time)

The most important one, though, is the first one.  If they aren’t paying you enough, it’s a good reason to cancel the contract.

APPROVAL OF PRODUCT: The artist should always require that they give approval of the samples of the product before it’s made available to public.

SAMPLES:  Artist gets samples (you choose how many) of each product produced.  They should be shipped directly to the artist – shipping paid for by licensee.

SIGNATURE:  Artists’ signature and/or logo should legibly appear on each product and packaging, in a manner required by the artist.  (Spell out how you want it to look)

There is so much more, but these are the first things I think about when looking over a contract or license agreement.

I hope this is helpful, and please print this out and save it for the future, should you find yourself in the position of having to navigate a licensing contract.

My number one advice, though, is this: Hire an attorney that specializes in Art Licensing (do NOT hire Uncle Bob who does business contracts) – and have an art licensing template made up for yourself.  It will cost you about $500 – $1,000 initially, but once you have it, you can use that template again and again for all of your licensing deals.  In the long run, it will save you time and money.  You MUST invest in yourself if you are going to find success!

If you have ANY deal-making or contract questions AT ALL, ask me in the comments please.  I’ll do my best to answer.

Here’s to our success!

Maria xxoo

PS:  I provide consulting for artists and I specialize in deal-making and navigating art licensing.  For more information, click on my consulting page.

My goal is to help each of my artist clients to learn to feel confident with deal-making and going into contracts.

.

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“In business a reputation for keeping absolutely to the letter and spirit of an agreement, even when it is unfavorable, is the most precious of assets…”  Lord Chandos

Often I get this question from my entrepreneurial friends:  ”How do you avoid getting into a bad business deal?”

My smarty-pants response is “Don’t sign deals with the wrong people!”

But here’s my long, respectable answer:

Before entering into a deal with someone, do your homework.

Because if things go wrong down the road, well, don’t come crying because I’ll tell you what I tell myself:  it’s probably your own fault.

Like the situation I have with Start Mobile.  We signed a contract to use Drew’s images for mobile downloads.  But they weren’t sending us payments.   There were always excuses which sounded good at the time.  But after months of this, I made a final attempt to straighten it out, and got an explanation that didn’t feel right to me.

Frustrated, I called two other artists who also had a deal with this company and they both told me the same story; they hadn’t been paid.  My call was over a year too late; had I contacted the artists BEFORE signing the contact, I wouldn’t have entered into it.

I promptly canceled the contract and Start Mobile was legally obligated to remove all downloads from the web.

So imagine my surprise this morning when I did a search online and found that they are STILL selling Drew’s art, without authorization!

I have no one to blame but ME.  Why, you ask?

Every one of us is responsible for all that happens to us, good and bad. (I love this belief because it gives me greater control over everything in my life.)

In this instance, I should have done my “vetting” BEFORE signing the contract and handing over the art in the first place.  (Lesson learned)

Sometimes we get so excited about an opportunity that we forget to do our homework.

Luckily, I’ve only had a few deals go bad over the years, each for a different reason, and looking back I see that sometimes the problem was lack of doing detective work BEFORE going into it.

EXAMPLES OF DEALS GONE BAD

1.)     NON-PAYMENT: The client just doesn’t pay you.   I’ve avoided this most of the time by using a 50% down or Advance required policy.  Read my post called How to Never Get Ripped off Again to learn more about this wonderful policy.

2.)    CONSISTENT LATE PAYMENT:  The client pays 60, 90, 120 days late, consistently.

3.)    CLIENT GOES OUT OF BUSINESS after you did a lot of work for them (before they paid you):  An advance or deposit prevents this as well.

We once did a deal with one of the oldest and largest (and secure) toy companies in America and they went bankrupt 2 months later.  Luckily, we had required a $5,000 advance so we got paid for our time.

4.)    CLIENT DOESN’T RESPECT THE TERMS OF THE AGREEMENT or they butcher your work:  A good written agreement will prevent this.

PREVENTION IS THE CURE

The best way to deal with bad situations in business is to prevent it from happening in the first place. It’s up to YOU to make sure you aren’t “taken advantage of.”

Practice “SAFE DEAL MAKING” with the following precautions:

1.)    MOST IMPORTANT FIRST:  DO YOUR HOMEWORK:  This is your greatest and easiest tool.  Contact others who have done business with this person/company, and call them for a referral.

Before going into a deal with Nirve Sports for Drew’s beach cruiser bikes, I called Paul Frank Industries, who had been doing business with them for years.  They gave a positive referral, and we are now in our 6^th or 7^th successful year with Nirve Sports.

2.)    LISTEN TO YOUR GUT AND FIRST IMPRESSION:  My gut often warns me if someone’s not legit.  However, your gut is not always fool proof.  That’s why doing your homework is number one.

3.)    IF THERE’S FRICTION FROM THE BEGINNING WALK AWAY:  If a deal or relationship is difficult from the beginning, it’s a great indicator that it is only going to get harder with time.  Walk away.

4.)    USE WRITTEN AGREEMENTS:  You don’t have to be an attorney (or hire one) to put something in writing.  I’ve written about the Three Reasons to Use a Contract to help people understand that you should put every agreement in writing, even those with friends and family members.

The magic of writing down what you agree to is that  when both parties see it in writing, they know exactly what they are agreeing to.

This prevents misunderstandings later.  The agreement, in writing, will come in handy later should someone “forget” what they agreed to.

“A verbal contract isn’t worth the paper it is written on.”  Sam Goldwyn

Some people make the mistake of TRUSTING EVERYONE, and others make the mistake of TRUSTING NO-ONE.

The problem with blindly Trusting Everyone is that you don’t make decisions based on logic, but rather on impulse.

The problem with Trusting No-One is that you miss out on great opportunities by being paranoid.

Find the middle ground instead.  Use your head.

I’d say that 90% of the people I’ve worked with over the years have been enjoyable to deal with.  There have only been a few bad apples.

I never start a conversation with a new client with a negative thought in my mind.  I always begin with enthusiasm and excitement, but still do my homework and take precautions.

Choosing who to work with is like finding the perfect DSLR camera.  You do your background checks, you go online and see what others are saying about it, and you make a decision based on the evidence you gather.

And if you do fall into a “bad” deal, don’t let it bother you too much.  Instead, learn from it, analyze how you ended up in that situation, and then never make that mistake again.

Here’s to your success!  Maria xxoo

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I’m going to tell all.  Oh My God, I’m sharing with the entire world our pricing structure for wall murals.  (Subject to increase by 10% every year…)

Why would I do something so daring and crazy, you ask?  Because that’s what this blog is all about – uniting artists and sharing information so that we all can be successful and live the dream life.

In a second follow-up article, I’m going to give you our “secrets” for making mural clients so happy that they scream from their rooftops “Use this artist for your next project.  She’s/He’s the BEST!”

But first, I’ll go over the money part – because for me, money is important.  I love to eat good food and travel.  And for some strange reason, it costs money to do that.

WHY IT’S IMPORTANT TO DEVELOP A STRUCTURED PRICE SHEET

You should have a detailed mural pricing structure in writing.  And if you don’t have one already, you can use mine as a guide.

Determining what to charge for a wall mural can be tricky.  But once you get a structure in place, pricing murals will be a smooth process.

This month we have two large murals that Drew has been commissioned to paint.  One of the murals is for a new store called Yogurt Wave.  We flew mural expert, Katie Staib, down from Spokane Washington to help make it look great.

The owners, Kerry and Tommy, contacted Drew because his fun style attracts young people that are into action sports, which is their target market.

Their first question was “what will it cost to have Drew paint a 46’ foot mural?”  In just a few short minutes, I was able to give them a quote thanks to my nicely organized price sheet.

One of the most common challenges for artists is determining what to charge for a project.  Developing a structure & system will make it so much easier for you.

Our current system is working well for us and our clients understand it.  But there may be alternative ways to do it, so if you know of a better system, please share in the comments!  I’m constantly improving upon how I do things.

HOW TO DEVELOP YOUR PRICE SHEET

Photo: Wall Mural by Drew Brophy

Your price sheet should be structured in a way that makes sense and that enables you to easily determine what you will charge based on size of the mural.

We charge approx. $35.00 per square foot with a minimum of 160 square feet.  Knowing this makes it easy to establish pricing based on various sizes.

Below is a copy of the price sheet that we give to people prior to a written proposal, to let them know how we price it and what they can expect as well as what we expect from them.

Giving a potential client a price sheet helps to do two things:

1. It weeds out the people who can’t afford you (so you don’t waste your time or theirs); and
2. It demonstrates your professionalism.  People tend to feel better about handing you a big check when they think you know what you’re doing.

Keep in mind, our pricing may be considered high by some standards and very low by others.  We know of many artists that charge a lot more than we do.  And then there are some that are charging half of what we do.

What you charge is relative to your experience, where you are located (some places are cheaper to live than others) and supply and demand of your art.

I hope that by sharing our methods I will save you time and confusion.  You are welcome to copy and paste the form below and adjust it accordingly for your own use.

DREW BROPHY MURAL PRICING SHEET (Revised March 2010)

Minimum Price:  Murals sized 0 to 160 Square Feet:  Price is $5,600

Pricing starts at $35 per square foot and decreases with increased size of mural; at 290 sf price drops to $32/sf – at 500 sf drops to $30/sf – at 900 sf price drops to $28/sf.

(Square Foot is determined by multiplying the height x width of the painting surface)

*Price per square foot may increase if design requested is complex.  This will be indicated in price quote and determined at the time that the final sketch is approved.

SAMPLE PRICING, per square foot:

Non-Refundable Design/Sketch Fee:  $500.00 – Includes up to 2 sets of changes by client (Additional sketches charged at $100/sketch)

Pricing includes:  Travel within South Orange County, all materials, rental equipment, assistant fees and work to completion.

Pricing does not include:  Travel outside of South Orange County, liability insurance or Wall Preparation.

*Additional work due to adverse conditions on surface that requires extraneous labor will be charged extra, by the hour, at a rate of $95.00 / hour, and sometimes cannot be determined until after the job has begun.

PAYMENT TERMS:  Design fee of $500 due prior to sketch process.  A 50% non-refundable deposit is due two weeks prior to start date of painting (this allows ordering of supplies and scheduling.)  Full balance is due on the final day of completion.

PRICE SHEET EXPLANATION

Every detail and *caveat on the price sheet is necessary and came from us learning the hard way.  I want to explain each point:

Pricing Structure:  I’ve talked to mural artists who charge $40 – $50 a square foot.  For us, a starting price of $35 per square foot works, because Drew is extremely efficient and gets a project completed rather quickly.

• You might charge less if you’re new at it or if you live in a low cost-of-living area, or
• You might charge more if you are very experienced or in high demand, or live in a high cost-of-living area (like New York or LA).

Minimum Price:  We charge a minimum for small murals under 160 square feet because it’s a lot of work and time to set up at a location.  It’s not worth it for us to have Drew go out to paint a small mural and only be paid a couple thousand dollars.  You may want to adjust this number up or down, depending upon where you are in your career.

Realistically, for murals smaller than 160 sf, an artist is better off painting an original painting in their studio.  It’s easier and doesn’t require travel or set up someplace else.

Often we will suggest an original painting on canvas, instead, to clients who ask for a small mural.  The upside for the client is a piece of art that they can remove from the wall if they move, or that they can resell if they want to later.

Non-Refundable Design (Sketch) Fee:  Every mural we do is designed on paper first.  We offer the client the ability to pay just for the sketches first, because sometimes a client isn’t sure if you can do what it is that they want.

If they don’t like your design or decide not to use your services after all, they only lose $500.00 and you are at least paid for your time to sketch it for them.  We don’t sketch out anything without the design fee because it’s a lot of work. Just meeting with the person to discuss what they want can take a couple hours.  You want to make sure that you are paid for that time.

Why You Should Limit the Number of Sketches: We have a limit of up to 3 sketches (2 sets of changes) and then charge for each additional sketch beyond that. When you do this, your client will be motivated to be very specific about what they want. If you don’t limit the number of sketches, they will just go on and on with changes.  Trust me on this!

Wall Preparation: So far, we’ve never had to charge additional fees for wall prep.  We’ve only had brand new walls to paint.  But if Drew arrived at a location and the walls were in bad shape, we have this caveat in the price quote so that we can charge extra for getting the wall paint-ready.

Payment Terms:  This is very Important!  We require 50% of the total amount 2 weeks prior to the scheduled start date.  This allows us to block out 5 or more days on the calendar (thus not accepting other projects for those days) and to purchase the necessary materials prior to the painting.

Paying a deposit is also a psychological thing with your client – you want to train them to view you as a professional who expects prompt payment, and they are fully committed when they pay half up front.

If you are just building your portfolio, you may want to only require 30% up front until you’ve become established and you have a good reputation for following through and doing top quality work.

THE BALANCE is due on the last day of the painting.  This is because I personally hate chasing money.  I want to be paid and done with a job when it’s finished.  Also, I have to pay our assistant on that last day as well.  And if you know anything about me by reading my posts, you know that I got out of the Art Banking business years ago!

PROPOSAL PROCESS

When we get a call from someone interested in a mural painting, our process is:

1.)     E-mail them the pricing sheet above.  This is so that from the very beginning, your client knows your general pricing and they can determine if it’s in their price range.

2.)    Gather details about the mural, such as:  Height and Width of the proposed mural, physical location, the shape that the wall is in, and what design they want.  (I ask the client for this – we rarely go out to see the mural space until after we know it’s a “go”.)

3.)    Based on the information provided above, then I’ll write up and e-mail a written proposal.  (See sample proposal at bottom of post)

Throughout the process I will verbally clarify, up front, how we work (meaning our payment policies).   I’ll usually say: “We will begin the sketch process once you pay your $500 fee.  The fee includes up to 3 sketches, so please be as specific as you can about what you want.  A 50% deposit is due 2 weeks before the painting begins.  The mural will take approximately 5 days (or however many).  We plan to work from 9-5 daily.  Your final payment is due on the day it’s finished.”

Being clear and direct helps to prevent misunderstandings later. I don’t like surprises, especially when it comes to money.  That’s why I’m so specific in both my written agreements and my verbal discussions with clients.  Everything goes better that way, and clients appreciate knowing what to expect.

GIVING A DEAL/PRICE BREAK

Your client may ask for a deal on price.  Sometimes it’s reasonable to give a small discount or freebie to a returning client.

For new clients:  If it seems like it’ll be a less complicated design, sometimes I’ll offer to deduct their $500 sketch fee from the total of the mural price.  Basically I’m waiving the sketch fee, but I still require a payment of $500 prior to the sketch process.  (Read How to Never Get Ripped off Again to see why I require this).

You could also offer to lower the per-square-foot fee if the mural is going to be very simple and easy, say, like a basic design.  On the other hand, if the design they want is extremely detailed, you should consider increasing the per square foot fee.

ONCE THE SKETCH PROCESS IS COMPLETE

After we get the sketch drawn out, and the client is ready to move forward, we ask for 50% down and we schedule the dates that the painting will take place.

Typically Drew can get a mural completed in 5-7 days.  Using a system of gridlines and efficiency, along with the help of an assistant, most murals, even very large ones, can be completed in that time frame.

In the end, the most important thing is to make sure that your client is extremely happy with your work. Stay tuned for my next article on how to make your client so pleased, that they are screaming your name from their rooftops!

SAMPLE WALL MURAL PROPOSAL:

Artist Wall Mural Painting Proposal – SHANTI’S COSTA MESA

Date:  May 29, 2010 – Proposal valid for 30 days

FOR:  Shanti’s (Client) Contact Name: _________________ Phone: _________________
Billing Address:______________________________________________

By signing below, we state that we agree to the terms set forth in this document:

FOR ARTIST:                                                        FOR COMPANY:

AUTHORIZED BY:  Artists Name Here                     AUTHORIZED BY:

SIGNATURE:______________      SIGNATURE:_________________

I hope this has been helpful to you. If it has been helpful, please let me know in the comments below.  (Or share your suggestions on how to make the mural pricing process better). Because of my freakish nature of ruminating over every little detail, it takes me hours to write these articles, and if I know that I’m helping people, I will keep on doing it!

Luv, Maria xxoo

.Similar Posts:

• Painting a Wall Mural: Ten Ways to Please Your Client
• How to Never get Ripped Off AGAIN – For Freelancers
• Fear Giving a Price Quote? The art of the Deal Memo

“Money is better than poverty, if only for financial reasons.”  Woody Allen

Being “ripped off”.  I really don’t like the negative sound of those words. But I’m compelled to write about it because it’s a topic that comes up again and again.

Yesterday an artist was in my office and she said that she’s been stiffed on payment too many times to mention.  It’s worn her down and she feels unappreciated.

Getting stiffed on payment is sadly one of the most common and frustrating things that can happen to freelancers.  It happens to artists, photographers, filmmakers,  web designers and just about every small business owner at  one time or another.

But it doesn’t have to ever happen to you (again).  It’s very simple to avoid.  You just have to do two things:

1.)     Require a deposit up front

2.)    Require the full balance at completion

The INSTANT you institute these two policies for your small business, you will NEVER have to make a collection call EVER again.

If it’s this simple, why do so many people continue to get “stiffed” on payment?

Because they don’t ask for the deposit up front and they hand over the goods before being paid.  It’s too bad that art school doesn’t teach you the importance of running your art venture like a business.

Here are some of the most common excuses I hear from people who keep getting ripped off:

• “I don’t have a business mind”
• “I’m new at this”
• “I need an agent to do this for me.”
• “I needed the work really bad – I was desperate.”

Handling your business wisely is a decision you make, not a gene that you’re born with!

Please trust me when I say that YOU DO NOT HAVE TO HAVE BEEN BORN WITH A BUSINESS MIND TO AVOID BEING RIPPED OFF!

You just have to institute your own payment policies.

I learned this the hard way when, many moons ago, Drew was “hired” by the large clothing company American Eagle.  They asked him to create a detailed artistic map of one of the Hawaiian Islands.  The art was going to be used for t-shirts and other accessories.

They were on a tight deadline and needed it yesterday.  There was no time to get a deposit.  Drew put in many hours drawing this up, and the art director at American Eagle kept making changes.

Their final change is what led to the non-payment:  They decided not to use a map after all.  We sent them a bill for the work done, and they never paid us.  Dealing with a company that large is nearly impossible to get payment from AFTER THE FACT.  That’s why we should have gotten money up front.

We were, by some standards, ripped off, taken advantage of and screwed over.

But I’m a firm believer that no-one can take advantage of you without your consent.

It was our own fault for not getting money up front before Drew put in many hours of work.

That was the LAST TIME we ever got stiffed on a commissioned job.  We learned from our mistake, and since then have required 50% up front and the balance when finished (before we hand the art over).

THE PSYCHOLOGY OF REQUIRING A DEPOSIT

Two important things happen when you say to your client:  “I’ll need 50% up front to start the work and the balance is due when the work is completed.”

1         You are viewed as professional:  Your client now sees you as a person who has payment policies in place.  They respect you, and they are clear on what you expect and how it’s going to go.

2         A commitment is formed: Your client is fully committed when they pay a deposit.

When someone pays a deposit towards something, they are making a commitment to the project.

It’s a psychological thing.  Without a deposit, there is no real commitment from your client.  It’s like buying plane tickets.  My trip to New Zealand last year was just talk until I plunked down the $1,800 for plane tickets.  Once that money was paid, it was a reality.  We were fully committed.

HOW MUCH OF A DEPOSIT SHOULD YOU ASK FOR?

Many artists require 50% up front.  The average, according to the Graphic Artists Guide to Ethical Pricing, is 30%.  I prefer the 50% and so does my bank account.

HOW DO YOU ASK FOR A DEPOSIT?

In every conversation I have with a new client, I mention, up front (even with friends and acquaintances and my mother’s uncle’s niece) that we need a deposit to get started.  (Hate to say it, but sometimes it’s the people closest to you that will stiff you).

You may feel strange asking for this.  Get over it, do it, and you’ll get used to it and eventually it won’t feel strange anymore.  Learning how to walk was strange also.  But you got used to it.

When giving a price quote, include your deposit requirement in writing by e-mail or proposal.  Here’s how ours looks in a price quote (I grabbed this from an actual proposal for a wakeboard design we did earlier this year):

PRICING:  Fee is $3,800.00.  A 50% deposit is required to start the work, and full balance upon completion.  OPTIONAL:  Original artwork may be purchased within 30 days of completion at a greatly discounted price of $3,500.  (Payments shall be made to Son of the Sea, Inc. PO Box 836, San Clemente, CA 92674.)

And here’s what we put in e-mails sent to clients with big projects, like murals:

We must have your signed proposal and deposit for the mural painting NO LATER THAN 2 weeks prior to the start date.  This allows us to get the materials we need at the pricing we configured for your quote.

Over time, your returning customers will know what you expect and they will be prepared to write you a check for the deposit.  All of our longtime customers are used to the way we work.  They also know that the work will get done to their satisfaction, because they’ve worked with us before.

RESISTANCE TO PAYING A DEPOSIT COMES FROM CLIENTS AND ARTISTS:

It’s not always the client feeling weird about a deposit.  Sometimes it’s the artist.  Here are some of the scenarios:

THE ARTIST DOESN’T REQUIRE IT BECAUSE THEY ARE DESPERATE FOR THE WORK:  If you are desperate for work, than you surely cannot afford to spend time on something that you’ll never get paid for.  A deposit weeds out the payers from the non-payers.  The people who most likely will never pay you are the ones who won’t give a deposit.  The people willing to give a deposit are the ones that are serious.  See how this works?!

THE CLIENT REFUSES TO PAY A DEPOSIT:  If a client won’t pay a deposit, they just aren’t ready to commit.  If that’s the case, than you shouldn’t commit your time to their project.

Don’t get mad.  Just let them know that you are happy to start the work after they pay.  Tell them to call you when they are ready.  Be friendly and professional.

THEY DON’T HAVE THE MONEY:  I’ve run into this many times:  When I tell someone that they have to pay a deposit, and then they say “Oh, I don’t have the money right now.”  This tells me that they may never have it.  So I say “When you do, let me know.  We are looking forward to working with you.”

YOU FEEL YOU HAVE TO PROVE YOURSELF BEFORE YOU CAN DEMAND A DEPOSIT:  If you’ve been at it for less than 2 years you may still have to prove yourself before you can require a 30% – 50% deposit.  Maybe the client isn’t sure of your abilities and they are nervous to trust you.  In this case, lower the amount you ask for to 20% instead.

YOUR CLIENT IS A HUGE 5 BILLION DOLLAR COMPANY AND THEY TAKE 3 WEEKS TO CUT CHECKS BUT NEED YOU TO FINISH IN 2 WEEKS:  I’ve been faced with this scenario a few times.  Here’s what I do:   I ask the client to write me a personal check and they can bill their company for it later.  Some people laugh at that, but the serious ones send me their personal check.

THEY FLAT OUT REFUSE:  If they just refuse to pay a deposit, than most likely you’ll never get paid, no matter what you do, because of a lack of commitment on their part.  So walk away.  You’ll save yourself a lot of wasted time and frustration.

IF YOU’VE BEEN A PROFESSIONAL AT YOUR TRADE FOR OVER FIVE YEARS:  You can STOP proving yourself.  No one should question you at this point.  You have good references that the client can call if they doubt your abilities.

EXCEPTIONS TO THE RULES:  Of course, there are exceptions to every rule.  We made an exception when we did a deal with Converse - Drew started the work before we got our deposit.  They took 6 weeks to cut us a check.  But we have a good relationship with our people there, and I knew they would take care of us.  I very rarely make the exception, because of being burned in the past.

LEARN FROM YOUR MISTAKES

If you’ve been “ripped off” more than a couple times, than you need to look in the mirror and ask yourself what you’re doing to cause this.  Analyze what’s happening – are you keeping your end of the bargain?  Do you meet your deadlines?  Are you a joy to work with?  Do you behave like a professional?  It’s important to learn from our mistakes and then change the way we do things if something isn’t working.

I read somewhere once that the definition of crazy person is:  Someone who keeps doing the same thing over and over again but expecting a different result!

SIMPLE RULES FOR PRICING:

If you follow these simple guidelines, you’ll never have a problem getting paid:

Put your price quote in writing (e-mail is fine) – this way there are no surprises on either end.  Give your quote leeway to add to it in the event that the scope of the work changes.  (We do this by adding this sentence:  In the event of unforeseen additional work due to conditions on surface or changes to the design by the client that may require extra labor or detail, this price could change.)

Have a payment policy and include that in your price quote (i.e. 50% down and balance due at completion)

Put a 30 day limit on your price quote – your situation could change or your materials costs can go up.  On my proposals I’ll put:  Proposal Date May 27, 2010.  Proposal valid for 30 days

Don’t begin the work without a commitment from your client in the form of a deposit

Send your client frequent updates of the progress of the work, along with photos of the progression.  This will give your client satisfaction knowing that you are working on it and that it’s getting done.

When it’s finished, send them a photo of the completed work and arrange to get final payment at the same time you hand over the goods.

I sincerely hope this article convinces all of you out there to institute your own policies.  Even if you are a part-time freelance artist or photographer, you are in business.  Your time is valuable.  You should be paid for your work.

Please, in the comments below, let me know what problems you’ve had on this subject and how you’ve dealt with it!

Maria xxoo

.Similar Posts:

• How to Price a Wall Mural – Developing a Price Sheet and Proposal
• Fear Giving a Price Quote? The art of the Deal Memo
• Painting a Wall Mural: Ten Ways to Please Your Client

“It is one thing to license one design or collection with a company to see how it goes.  It’s like going on a blind date – you see what happens. But it is quite another to tie your wagon to a company for 2-3 years.”  Artist Tara Reed

Before signing any document that has the word “Exclusive” in it, be aware of what you are giving away.

This advice applies to all business arrangements, no matter what niche you work in.

In the world of art sales, licensing and exhibit shows, often we get asked to sign an exclusive agreement, and most of the time, I won’t.   I’ll explain why – read on:

WHAT DOES EXCLUSIVE MEAN? When you agree to give someone an exclusive, it means that you cannot sell your goods or services to anyone else for the term of the agreement.

Occasionally, signing an exclusive can make sense.  But usually it does not.

REASONS NOT TO SIGN AN EXCLUSIVE AGREEMENT:

• You are shut off from other opportunities when you sign an exclusive.
• The company asking for an exclusive isn’t offering any extra money or incentive for giving it to them.
• If the project, exhibit or product fails, you may still be tied to the exclusive, and now you aren’t making any money off of it at all, nor can you go elsewhere to earn from it.
• The most important reason of all:  In the event of bankruptcy, the law will hold you to an exclusive, even if the company goes bust and isn’t able to pay you anymore.  This is why in the licensing world, exclusives are rare.  (My attorney says that including wording that says “should the company go bankrupt, this contract is void” does not solve this problem.  The bankruptcy laws do not recognize or honor that language in a contract.)
• If there is no value to be gained from giving an exclusive, not for you or the person you’re granting it to.

I WAS GLAD WE ARGUED FOR A NON-EXCLUSIVE WITH SPORT-FUN TOY COMPANY:

We signed a licensing deal with one of the largest U.S. toy companies for skateboards a few years ago.  They demanded an exclusive.  I held my ground, for all the reasons above.  But I assured them that we wouldn’t do a skateboard license with a competing company (that would be stupid on our part).  Eventually, they agreed to a non-exclusive.  I kid you not, 6 weeks later they went bankrupt!  And we were free to do a skateboard license with any other company.  Had we agreed to the exclusive, we would have not been able to business with another skateboard company for 2 years, even though we weren’t earning from this license.

HOW DO YOU GET THE CLIENT/GALLERIST TO DROP THE EXCLUSIVE REQUIREMENT?

Don’t be afraid to question why they want an exclusive. Get to the bottom of what their real concern is by asking them what it is.  And then find another way to give them what they need.  You do this by having a grown-up conversation.

Just last week, a very important client that pays Drew to travel and paint at events asked that he sign an exclusive on his designs.  I explained that we can’t because his designs are being used for other things.  I asked why they wanted an exclusive.  They said they were worried that their competitors would contact Drew and have him do the same work for them.  After all, they hired Drew to do a special promotion that they are putting a lot of money into and they are paying us top dollar for it.  I said okay, instead of giving an exclusive on the designs, why don’t we agree to not work with your direct competitors for one year?  That way, we keep control over the designs, and they get the assurance they need.  Everyone wins.

There’s always a way to give your client what they want without giving it all away. Just find out what they REALLY are after.  I find with some companies they don’t even know why they want an exclusive. In one instance, a licensee insisted on one because his highly paid attorney said he should.  But there wasn’t any reason behind it!

WHY EXCLUSIVE AGREEMENTS HURT GALLERY SALES:

In the case of galleries, they can act just like jealous teenagers.  They don’t want anyone else to get what they think is theirs.  But it’s dangerous to give a gallery complete control over your entire career.

There is a gallery in Newport Beach, California that asked my husband Drew to exhibit his artwork.  The gallerist handed us an “exclusive” consignment agreement.  This meant that Drew couldn’t exhibit his art in any other gallery, ANYWHERE IN THE WORLD.

“Why do you need to have an exclusive?  You don’t have locations else-where, do you?” I asked.  The answer was no.  They had only one location, but wanted to make sure that nothing was sold from their artists anywhere else!  This thinking is completely backwards, and here’s why, as I explained to the gallerist:

If Drew isn’t exhibiting anywhere else in the world, it’s not going to help the sales of his art anywhere, including in YOUR gallery.  It will hurt ALL sales.  He didn’t see my point, but granted, he was pretty stubborn.

After some going back and forth on it, the gallerist removed the word “exclusive” and we agreed to not exhibit at any gallery in the actual town that the gallery was in.  That seemed fair and made sense.  The world-wide exclusive was just silly.  I found out later that other artists with that same gallery made the mistake of signing his exclusive agreement, which had a 5 year term!

I discovered this when an opportunity to do a group show in a town 70 miles south of this gallery came up.  I called one of the other artists that was in the gallery in Newport Beach and asked if they were going to do the group exhibit.  “Oh, I can’t.  I’ve signed an exclusive with the Newport Beach gallery and can’t do any other shows for 5 years.” Yikes.

By signing a world-wide exclusive, this artist can’t be a part of ANY art show ANYWHERE for any reason.  He’s going to miss out on a lot of exposure. And guess who else misses out?  The Newport Beach gallery.

They will have an artist with a shrinking, rather than growing, resume of shows and exhibits.  Not good for high-end art sales.

The worst part is that this artist tells me that he sells less than a dozen paintings a year through the gallery in Newport Beach.  The exclusive prevents him from making a living off of his art.

WHEN SIGNING AN EXCLUSIVE MAKES SENSE:

In some instances it makes sense to sign an exclusive – like when it means high-dollar stakes and massive sales.

We agreed to an exclusive Drew Brophy/Converse Chuck Taylor design to Journey’s shoes.  That was in exchange for a large order, as they have 900 stores.  But that exclusive had limits to it; it was for one specific design, not the entire category of shoes and the exclusive was only for summer 2010.

Here are some sensible reasons to sign an exclusive:

You are paid extremely well for that Exclusive through a Guarantee: A guarantee in the contract states that you are paid a minimum dollar amount regardless of what sells.

Example of a Minimum Guarantee:  You are paid a minimum of $20,000 per quarter regardless of what actually sells.  (The dollar amount should be what makes it worthwhile for you to not do work with anyone else).  This way, if the company doesn’t properly sell your art, you are still getting paid for that exclusive.

The contract has a very short time period: Narrow it to one or two years, that way if the client or gallery doesn’t succeed selling your artwork, than you only lost a year or two of your career.  Think long and hard before you sign a long term exclusive agreement (unless you are paid extremely well for it).

The contract has a very narrow geographical location: In the case of a licensee, narrow it to where they are actually selling your products (i.e. in North America).

In the case of gallery representation, narrow it down to the actual town that the gallery is in.  If the gallery has multiple locations, than have the contract state all of those multiple towns (i.e. this contract is exclusive in Newport Beach, CA, Miami FL and Manhattan).  That way you won’t miss out on other exhibits that could earn you a greater fan base and more sales.

The contract has a narrow list of items that are exclusive:  An example would be a specific design for a specific product, such as:  The design named “Pure Joy” for printing on 11” x 14” Lithographs.

Being specific allows you to free up all designs except those listed in the agreement.  Trust me, after doing licensing for a few years, this will make sense to you.

There’s money up front: A large chunk of projected earnings up front before signing an Exclusive agreement ensures a commitment on the part of the person you are partnering with.

HONOR YOUR CLIENTS EVEN WITHOUT AN EXCLUSIVE

An exclusive isn’t needed to keep your integrity.  You can assure your client or gallery that you will keep their best interest in mind without that legal limitation.  All while keeping yourself free to pursue other opportunities should they go bankrupt, fail to market you as they promised, or drop the ball altogether.

Even though almost all of our agreements are non-exclusive, I am very careful not to do business with the competitors of our current clients.  It would be unwise to ruin our existing relationships, and it goes against our personal code of values.

We are four years into a non-exclusive arrangement with manufacturer Coastal Classics.  They print Drew’s art on t-shirts and sell them to surf shops and coastal gift stores.  They sell very well.  Last year their biggest competitor called asking if Drew would design t-shirts for them.  Even though we don’t have an exclusive with Coastal Classics, we said no.  It wouldn’t do anyone any good to have Drew’s art with 2 competing companies.  It would be unethical, for one, and the other reason is that it would confuse the customers.

But, if Coastal Classics didn’t properly market Drew’s t-shirts and we didn’t see any income from that agreement, we might have considered doing business with their competitor.  We would have been free to take on that opportunity.

The bottom line is that when you sign an agreement, pay attention to the important words that can bind you.   Know what you are getting into, and what you are giving up.

Remember that everything is negotiable, and that most of the companies you work with will understand when you explain why you don’t want to agree to something that’s not in your best interest.

Be honest, up front and reasonable.  As with everything else, just use your head!

Maria xxoo

PS:  I found a great article by the very wise artist Tara Reed on the same topic.  Read her point of view here: Five Things to Consider Before Signing an Exclusive Agreement.

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To gain a strong understanding of Art Licensing Contracts, what to charge, how to protect yourself in a deal, and so much more:  Check out my e-Book, co-written with artist Tara Reed, called How to Understand Art Licensing Contracts.

This eBook will save you years of experience, time & money.  It will prevent you from getting into bad deals and show you what’s reasonable to ask for.  You’ll feel more confident going into each deal with this reference by your side.  It’s truly a must-have reference for all artists who are licensing their art!Similar Posts:

• Artists Beware of these Red Flags in Contracts
• LICENSING YOUR ART TO A SKATEBOARD COMPANY (Or any Company)
• Do I need an Artist’s Agent?

Image by Rebekka Guðleifsdóttir

Sometimes it’s a challenge doing business with people close to you.  There are two issue to deal with:

1. You may feel obligated to give them a cheap deal, which means you lose money and time, so you put them off and procrastinate getting their project going.  But this is a mistake to feel this way, because your friends may just want to support your business and may feel great being able to pay you for your services.

2. They expect free or cheap – If they are not entrepreneurs, some people might not understand how freelancers make their money, and they may feel slighted if you don’t give the goods away.

My husband and I earn our living from art sales and the art products (books, dvd’s, art prints) that we create.  All of these goods cost us to produce, stock and ship.  We are not paid a salary and every day we have to figure out how to keep the cash flowing.

We just came out with a new book and the publisher gave us 12 free copies, which we’ve given to people that contributed to the book and a few to media.  Every extra copy costs us $4.50.  I’ve had about 30 people ask me for a free copy, not understanding the cost to me.

The hard part is that all of the 30 people are loved by me and they are special.  I wish I was a millionaire so I could give these cool books away to those people that I care about.  But I’m a few years away from that.

THE ENTREPRENEURIAL DILEMMA

It’s hard to impart to people that your time is money earned or not earned.  I can spend hours helping people (which I love to do) but then my 8 year old son gets less mommy time.  So I have to be very careful with how I use my time.  The same goes for most entrepreneurs.

I have a great friend is a computer wizard, a social media expert, and just damn intelligent.

He told me about the time that a friend dropped off a laptop and asked him to fix it (for free).  He had other deadlines with paying customers and after 2 days the friend called and yelled that he needed it NOW!  He finally fixed it, but it took hours.  Now, he won’t allow anyone to drop off anything again if it’s run by electricity, and he had a t-shirt made that reads across the front:  DON’T ASK ME TO FIX YOUR COMPUTER!

CAN YOU DRAW THIS FOR ME, IT’LL BE REAL QUICK!

In the case of art, at least once a week someone will ask my husband, Drew, to draw a ‘quick’ design.  “Oh, it should only take you a few minutes to whip this out.  I’ll buy you lunch for it.”

There’s no such thing as a “quick” anything.  And though we love our friends and will do most anything for them, we can’t just whip out a quick piece of art (priced at $1,500) and trade it for a $20.00 lunch.  We’d be in the homeless soup line quicker than you can say “free logo” if we operated that way.

This is why creative professionals tend to feel anxious when a friend asks them to do work for them.  Often, we assume that the request is asked expecting it for free or very cheap.

THE PROBLEM WITH ASSUMING THAT THEY WANT IT FOR CHEAP – YOU COULD BE WRONG

Why would anyone assume that someone wants something for free or cheap?  Because we’ve been through it so many times that it’s much like getting hit in the head every time you walk under that tree in your front yard with the low hanging branch.  Eventually, you avoid going there because you know it’s going to hurt.

But assuming that your friends want to short change you isn’t nice.  So here’s where direct communication and the written word removes all of those anxieties for you.

The next time that a friend asks you to quickly draw up a masterpiece logo for their car washing business, work up a price quote for them in writing.  This will avoid the problem of a possible misunderstanding and eliminate wrong assumptions that can embarrass you.

Many years ago we were on a tropical island and were friends with the owner of a Restaurant there.  He asked if Drew would design a t-shirt for him.  We blew it off because we were busy surfing and seeing the sights.  But after we returned home, the restaurant owner e-mailed asking, once again, for Drew to create artwork for him.

It became uncomfortable, because we assumed he wanted the art for cheap.  We told him that Drew was too busy and couldn’t do it.

Now that I’m older and wiser, I understand that the restaurant owner probably would have had no problem paying for the art.  He just wanted something cool and I’ll bet he wanted to help contribute to what we were doing.  We made a mistake in assuming anything.

But that’s the great part about getting older.  You learn to just be real.

It’s easier to be Real honest, real up-front and really real.  Just speak your mind.

There’s an old saying that I’m reminded of:

“What is ASSUME?  It’s when you make an ASS out of U and ME.”

The best way to handle these situations is to give a price quote, like you would with any other prospect.  Put it in writing so that there are no unanswered questions or assumptions.  Handle it like a professional, even with friends.  They can then choose whether or not they want to pay the fee.

Being real is easier than making assumptions and making other people guess what’s on your mind.

SUPPORT YOUR FRIENDS & FAMILY

We are fortunate that most of our family and friends want to support our endeavors.

The best way friends can support you is to buy stuff from you (that they love) to help keep you in business.  There are many cultures that are centered around this very idea, which is why those cultures tend to do well in business.

(I just heard the other day that the Jewish religion teaches that it’s a sin to take up the time of a professional in their place of business without buying something.  Now that’s a good policy!)

And in turn, you need to support those around you.

If I need a photographer, I’ll hire one of my professional photographer friends.  If Drew needs an assistant painter, we’ll hire an artist friend.  And I’ll pay them a fair price.

SOLUTION:  THE FRIENDS AND FAMILY DISCOUNT

I have a solution for the anxiety of providing services for those close to you:  Institute a policy called the FRIENDS AND FAMILY DISCOUNT.

Take your normal price quote and you tell your friends and family that you are offering them a discount from your normal prices.

How much of a discount you give is up to you.  On goods that are for sale on our website, I give a 20% discount to friends and family.  For commissioned works, I’ll give 20% off or more, depending on time, our passion for the project, or the scope of the work.

To be eligible for the friends & family discount, you must be a real friend (someone that we spend time with regularly) or a real family member.

If we call you “mom” or “dad”, you get most everything for free, because without you we wouldn’t be alive.

(If you’re a friend of a friend, that doesn’t count.  Sorry!)

THANK YOUR FRIENDS FOR KEEPING YOU IN BUSINESS

Next time a friend asks for a design, or a computer fix or photography, let them know that you appreciate that they are helping you to stay in business.  The salary-paid employees in our lives don’t always understand how much work it is to run your own business.  Let them know that they are a great contributor to your career!

Then write them out a quote and show where you’re giving them a nice discount.  They’ll be happy to get a discount, and they can feel good about contributing to your business.  That’s what good friends do.

Maria Brophy xxoo

IMAGE CREDIT:  Image by the most amazing photographer I’ve ever seen, truly.  Check out  Rebekka Guðleifsdóttir incredible images.

.Similar Posts:

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“The greatest barrier to success is the fear of failure.” Sven Goren Eriksson

Have you ever turned down a great opportunity because you were scared that you’d be taken advantage of?  Or you were afraid that you would agree to something that you later would regret?

There’s a fun term that I read in WATERSHIP DOWN many years ago called “state of tharn” and it is used to reference that irrational “deer in the headlights” mentality that rabbits tend to go into when they are scared.  When faced with a terrifying, life threatening (or perceived  threat), the furry rabbits just stand there, frozen in time.  They don’t move, even if it means they’ll be killed.   The actual meaning of “tharn” is:  stupefied, distraught, hypnotized with fear.

Humans go into a state of tharn also.  But usually it’s more of a philosophical state of mind than a physical one. Such as when you fall into the trap of watching a really great deal pass you by like a slow moving train, all because you never returned the phone call to the person making you the offer.  And the reason you didn’t call him back; because you were in a state of tharn.  You didn’t know what to charge and you weren’t sure how to put the deal together.

You weren’t sure what you should do, so you did nothing.  And so nothing happened.  To you.  Or for you.

Every great deal that’s ever gone down in history didn’t have a template to follow.  It’s really just a matter of two parties of people getting together and working out an agreement that benefits everyone concerned.  In all of the hundreds of deals I’ve made over the years, each one was different.  Sure, many had similar features, but just like snowflakes, no two deals are ever alike.

When you are offered a great opportunity, but you aren’t sure what to charge, what to ask for, and what’s right and fair to agree to, consider these factors:

• Relax:  Don’t wig out over the details like a teenage girl in love.  Take your time and figure it out.  Feel excitement and gratitude for what this new opportunity is bringing to you, and create a way to make it work.
• Determine exactly what your client is asking for: Sometimes people can be vague.  You need specifics. How many, what color, deadline date, what do they expect from you, what are they offering to you in return, etc.  Get information from them via e-mail so you can refer back to their written requirements when putting together your proposal.  (Or take very good notes.)
• Ask a lot of questions: Often we are afraid to ask questions for fear of sounding stupid.  It’s actually the opposite.  It’s stupid not to ask.  Throw out many questions, and then repeat what you thought you heard to confirm that you heard it.  “Oh, you’d like for me to send you ten of my original paintings and you’ll show and sell them in three different galleries in France, is that right?” and “Who will be responsible to pay for the shipping both ways?”  It’s crucial to know exactly what is expected of you and what they plan to be responsible for.
• Do your Research: Look online for information by others who may have been involved in a similar situation.  Also, call and ask people you know if they’ve ever had experience with this sort of thing.  Find out what the pros and cons are.
• When determining payment: If you aren’t sure what the going rate is, call others and ask them what they have charged for the same type of work.  If you are active on Twitter, you’d be amazed at how helpful Twitterers are when asked a question.
• When Quoting a price: Don’t quote a price or even give a guess until you’ve done all your research, you have all details on the material, travel, attorney and other costs that may be involved.  When you do give a price quote, place a time limit on it.  I use 30 days from the date of the quote.  That way they can’t come back a year later with the same quote when material prices have gone up, or my prices have increased.
• Don’t Let Fear Hold you Back: Often we let opportunities pass us by because we are afraid of the risk involved.   Don’t be scared – make your decisions based on your logical research and move forward.
• Put it in Writing: This is important so that all parties involved know what they are agreeing to.  It’s helpful to have something in writing to refer to later should there be confusion on what was promised.
• Use an Attorney: If it’s a rather large deal which involves large sums of money or contracts with companies that have their own legal department, you must hire an attorney to look over your agreement.  Sorry, but it’s foolish not to.
• Remain Professional: Throughout the process, behave like a professional.  Be upfront with your client, let them know where you’re at on this, and have open and frank discussions.

If, after all of your research and negotiations, you find that the deal isn’t worth it because it’s going to cost you more than you’ll get in return or it will ultimately be a time-waster for you, than politely back out of it.

But, if it’s something that you’ll enjoy, gain and grow from, than just go for it.  Don’t let fear hold you back. The worst that can happen is not really that bad.  Use your head, but don’t be scared to take on an exciting new opportunity.

Break out of that irrational “state of tharn” and jump in with both feet!

The greater the risk you take, the greater the rewards you’ll get.

Maria xxoo

PS:  The Business of Art can be a roller coaster ride, but a most thrilling one!  If there’s anything I can help you with, please email me or write your question in the comments.  I’d love to help.  Thanks for reading!Similar Posts:

• Fear Giving a Price Quote? The art of the Deal Memo
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Image (c) Dennis Panzik

“Anyone who doesn’t take truth seriously in small matters cannot be trusted in large ones, either.” Albert Einstein.

Licensing your artwork or photographs is a great way to earn money. In this article I’ll address two common issues with regards to licensing, based on an e-mail from Dennis Panzik, a successful artist that is finding more and more opportunities for licensing his art:

1.) What’s the best way to get a contract signed by a client who is out of state? Will a faxed signature on a contract hold up in court?

I’ll answer this question two ways:  First: The legal answer. (Disclaimer: I am not an attorney.  But I have paid a lot of money to attorneys!)

Second: My philosophical thoughts on why you shouldn’t worry about having to sue a client.

When I asked my attorney this question a few years ago, she said that if the contract states that faxed signatures are accepted, than the faxed copy will hold up in court. Also, make sure that every page of the contract is either signed or initialed if it has multiple pages.

HERE’S WHY I NEVER WORRY ABOUT HAVING TO SUE A CLIENT:

Before Drew Brophy starts the work for any project, we require receipt of the signed agreement and payment (an advance for royalty arrangements or 50% down for flat fees – balance due at completion).

I never go into a new relationship with a client worrying about having to sue later. Instead, I do my “vetting” up front to make sure that the clients are good people to do business with and that they are committed to the project.

There are several things you can do to screen clients:

A.  Use a deal memo or proposal prior to starting the work to make sure that both parties agree to the important points in the deal (price, copyrights, usage, etc.)

B.  Collect a non-refundable deposit (or advance of royalties) up front before beginning any work and before sending hi-res files;

C.  Keep in constant communication with the client;

D. Contact other artists who may have worked with this client and ask for a reference;

E. Don’t move forward with someone you don’t trust. You can’t have a healthy business relationship if you have a bad feeling about someone.

If you have policies in place that protect you from the start, you won’t get “stiffed”.

FOOD FOR THOUGHT: Someone told me once that if you are having trouble with a deal in the beginning, than it will only get worse later and will end badly. This was good advice, and I now keep that in mind when starting a new business relationship.

AVOID THE BULL-HITTERS:  (I don’t like to use foul language in public, so I’ve dropped the S!)  We are often approached by fast-talkers who dream big but deliver little. One smooth-talker spent days creating impressive spreadsheets projecting how much money we’ll make off of a clothing line that they wanted to develop.

“Oh, it’ll be great! We can use Drew’s art to sell a clothing line to department stores. We’ll put a quarter of a million dollars into the marketing and development….”   They claimed that we would make hundreds of thousands of dollars in royalty payments. But when I submitted a deal memo asking for a royalty advance, they couldn’t put their money where their mouth was. They wouldn’t pay an advance. We turned it down and saved ourselves a lot of work for nothing. If they were truly committed, paying a $5,000 advance would have been just another cost for doing business. After all, the advance is deducted from future royalties. Requiring an advance is one way we weed out the serious from the bull-hitters.

FIRE BAD CLIENTS TO MAKE ROOM FOR THE GOOD ONES:   Sometimes Drew and I will “fire” a client. We prefer not to work with people who lack integrity and who don’t keep their promises, or people who are just too difficult. Life just shouldn’t be that hard. If you can’t get a client to pay, or if they consistently break promises, then it’s time to fire them. You’ll make ample room in your universe for new clients that you genuinely enjoy working with. I am proud to say that 95% of the people we work with now are wonderful and we have mutual respect and love for each other! (I have just one last problem-client to fire, and then I’ll be at 100%!) 2.)

2.) When you’re licensing art should you register with the copyright office immediately? It takes awhile for the copyright office to get it processed – does this mean you’re not protected until it the processing is done?

You should always file a copyright for artwork that you’ll be licensing or putting out into the world. The copyright office is slow, but your protection begins the date that they receive your application and payment.

The best reason to file copyrights is to not only protect you, but to protect your clients from other entities that may steal your images for their own products (and in doing so, they hurt your clients’ sales).

I wouldn’t worry so much about being ripped off from your client, if you are doing your vetting and due diligence.

WEED OUT THE SHYSTERS: Just recently, we had a company contact us to license Drew’s art for wallpapers. I did my usual poking around and contacted a few artists that had been licensing to the company.  I was told by two very disappointed artists that the company has not paid them a dime! That was all I needed to hear – I stopped communication with the company and saved us the trouble of being stiffed.

MOST PEOPLE / COMPANIES ARE GREAT TO WORK WITH: My experience is that while there are some shysters out there that will steal your art from you, they are far and few between. Most of the companies that you work with will be straight up.

Just be sure to have solid procedures in place to protect yourself so you can focus more on the artwork without the worry of being taken for a ride.

These are great questions. Thanks, Dennis. I hope to see you at the next trade show!

Maria xxoo

Was this post helpful to you?  Please, SUBSCRIBE to my e-mail feeds by putting your e-mail address in the white box below.  You’ll get my posts in your in-box and you won’t miss anything!Similar Posts:

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Sector 9 Skateboard Designed by Drew Brophy

“Making money is art and working is art and good business is the best art.”  Andy Warhol

Licensing your art to a reputable company is a wonderful way to make your art available to the world.  What I love about licensing:

• You’ll earn money off of one piece of art over and over again
• You can get your art on quality products without having to produce them yourself (leave the production and sales to the experts)
• It’s one more way to get your art and name out into the world

The difficult thing about licensing is that there is no solid road-map to follow.  Sure, there are general rules, but it’s not easy getting the information on it.

Which leads me to this question that I received by e-mail today from a friend named Patrick Parker, who has rapidly become a popular surf artist in Southern California:

“I’m going to sign with a company to use my art on their skateboards but am only working on a royalty basis.  What is a common way to go about doing this – percentage, etc.?”

I’ve handled about 200 licensing deals over the past ten years for my husband, Drew Brophy, and a few other artists, and not one of those deals were the same!

There are many different aspects to a license agreement, and I won’t be able to cover all of them here, but I’ll hit on the basic points.

First, I would ask this artist how many designs the company wants to use.

FLAT FEE BASIS:

If it’s not a complete line of skateboards, but only 3 or 4, then I would recommend not doing a royalty deal but rather a fee per design. I’d do this for 2 reasons:

1 – Unless it’s a toy company that’s going to sell 10,000 skateboards, the royalty won’t be worth it because the volume will be low.  You’re better off getting paid the full amount up front, and:

2 – The accounting of royalty reports is a pain the butt for your client, and for small deals, it’s a waste of their time.

The flat fee per design can range from $300 to $3,000.  What you can charge depends on your reputation, the popularity of your art, and what they are willing to pay. Our typical flat fee for Drew’s designs are $1,500 per design, when providing existing art to a small company that will produce less than 5,000 units.  For some of you reading this, $1,500 will sound like not enough.  True, I agree!  But, Drew likes to work with companies that make products that he likes, and many of them are small and can’t afford much more.   Some of you will see $1,500 as being a high number.  And maybe for many it is.  That’s the interesting thing about this business – the numbers are all over the place and are subject to the perception of the people on both ends.

You have to figure out for yourself what to charge, and eventually you’ll come to a formula that makes sense for you and your clients.

If you are new to  licensing and your art isn’t very well known, you might have to charge on the low end to build up your portfolio.  But please, don’t do this for long, because then you’ll lower the bar for all artists.  Be sure that once you’ve got a few successful deals under your belt, you start inching your prices up to where they should be.

ROYALTY ONLY BASIS: If the company wants to do a complete skateboard line with your designs, then a royalty deal could make sense.  Be sure you get an advance of royalty up front.

We rarely go into a deal without a non-refundable advance of royalties paid up front.

A royalty advance is a dollar amount paid to the artist at signing, before creating and/or providing the artwork.  This advance is deducted from future royalties that are to be paid to the artist.

WHY GET AN ADVANCE OF ROYALTY? Without an advance of royalty, the client has no incentive to make this work.  They may drop it from the line, or they may go out of business, or a new person comes in and changes things, etc.  It’s one tool we use to be sure that the client is serious about making it work.

The other reason is that we are not a bank.  Meaning, we aren’t able to do the work up front without getting paid anything for 6-18 months.

Your advance is insurance that you’ll be paid something in the event anything goes wrong.

And believe me, things go wrong.  Here are a few real “wrong things” that we’ve experienced with licensees over the last decade:

• Sport-Fun, a 50 year old toy company (one of the largest in the U.S.), went bankrupt one month after we gave them the artwork for a kid’s skateboard line (good thing they paid us $5,000 advance for all the work Drew did)
• A kid’s clothing co. had their Drew Brophy line ready to go, then a new partner came in and nixed it.  The line never made it to retail, which means there were no royalties to be paid.  (Good thing we were paid $5,000 also.)
• A license plate company owner, after we did a deal for Drew Brophy Plates, shut down his business and joined the airforce!  (We were only paid $1,200, but it was something.)
• A cell phone screensaver company never sold anything after we provided over 20 images and put hours into the contract, marketing information, etc. (we were paid nothing up front here so we ate this one)

There are so many things that can prevent your line from making it to retail.  If it doesn’t make it to retail, there’s no royalties.   And that means that you’ll be paid nothing for your efforts unless you’ve recieved an advance up front.

HOW MUCH SHOULD A ROYALTY ADVANCE BE? This depends on so many factors.  Sorry, I know that’s frustrating!  If you are Disney, you can require anywhere from $50,000 to $200,000 up front.  But in the real world, for your average artist, it will have to be more realistic.

There are two ways that we’ll ask for advances, and it depends on the size of the deal, the company, etc.:

1. FLAT FEE ADVANCE:   We use $5,000 as our benchmark.  However, if we are dealing with larger companies for big deals, we’ll go as high as $15,000.  (We usually put a cap on the number of images provided for a flat fee, to ensure that the client won’t keep asking for an endless supply of new art season after season.  Another insurance policy…..)
2. PER DESIGN ADVANCE FEE:  We’ve gone this route with JGR Copa, a licensee that produces Drew’s beach products, because they use so many designs.  They’ve used up to ten designs just for skimboards.  Charging per design ensures that Drew isn’t providing a limitless number of designs.

EXCEPTIONS:  There are exceptions to everything in licensing.  In the case of our t-shirt licensee, Coastal Classics, we provide many new designs each season but don’t charge any advance because our royalty payments from them are high enough to satisfy.  We’ve worked with them for four years, and they have a  track record that we can count on.

ANOTHER EXCEPTION: Sometimes a company just won’t pay advances.  It’s rare for us to move forward with these companies, for the reasons I’ve stated above, but I can name one instance that I made an exception and it’s worked out great.  Skin-It.com doesn’t do advances with any of their licensors because they’ve been burned on a few, and we decided to do the deal with them anyway, because they are large enough to where they actually feature Drew’s art on national t.v. commercials.  (One of the commercials was running during Christmas.)

(NOTE to the Licensing Experts out there on why I’ve omitted information on a Guarantee:  I don’t typically work with guarantees – I prefer advances up front.  It’s the business model that’s worked well for us.)

ROYALTY PERCENTAGE:  Percentages are all over the board in licensing, too.  They are based on the product being produced, the number of items projected to sell, the value of the artwork (popularity), etc.

There are books that you can refer to and find ranges to this.  I refer to Licensing Art and Design: A Professional’s Guide to Licensing and Royalty Agreements – as a handbook I received when I took my licensing course thorugh LIMA.

For skateboards, you can ask for anywhere from 6% to 10%.  If it’s a large company that sells in major retail chains, you’d go with a lower percentage, because your volume will be higher.  If it’s a smaller core company that sells in skate shops, you’d go with a higher % because the volume will be lower.

Just to give you an example of how percentages are all over the board:  For paper goods like posters or greeting cards, the range can be anywhere from 10% to 18%.  For high volume shoe sales or boogie board sales, you would go as low as 3%.

OTHER POINTS TO WORK INTO YOUR CONTRACT OR AGREEMENT:

• State that Artist retains the copyrights to the artwork. (This is a no-brainer, but you’d be surprised at how many great brains don’t get this concept.)
• Contract start and end date.  (We typically go for 2 years.)
• Samples:  Ask for a number of samples (for skateboards, I’d ask for 2 or 3.  For less expensive products, we’ll get a dozen or more.)
• Approval:  Artist must approve, in writing, the final sample before going to production (this gives you control over your art)
• Signature:  Artist’s signature must appear legibly on the product and copyright notice (i.e. (c) Artists Name) must appear legibly on all marketing and advertising materials.  This is important for protecting your copyrights.
• Payments:  Must be made MONTHLY or QUARTERLY – however you determine with the client.
• Royalty Reports:  Must be issued Monthly or Quarterly (see above) regardless of whether there’s been sales or not.  Reports must state retailers names and quantity sold per design.  (This information will be greatly helpful to you when determining what your best selling images are, as well as which stores are carrying your products.)

I recommend getting more information on licensing agreements as you go along – this barely skims the surface.

Here are some of my related articles on this topic:

• THE MAKING OF A GOOD ART LICENSING AGREEMENT
• WORK SMARTER, NOT HARDER:  LICENSING YOUR ART 101
• BRANDING ART – FROM SURFBOARDS TO GREETING CARDS
• THE ART OF THE DEAL MEMO
• OUR BIGGEST MISTAKE EVER – IN THE ART BUSINESS

Here are some great websites to get better educated on this topic:

The Do’s and Don’ts of Art Licensing by Porterfield’s Fine Art

Art Licensing Blog – Artist Tara Reed’s Helpful Information for artists

All Art Licensing – A helpful site by J’Net Smith, an expert on art licensing

My final parting words:  Move forward, do your deal, get into licensing. The best way to learn about licensing is to just do the deals without hesitation.

Don’t be afraid of making a mistake, because you will.  And  that’s okay – you’ll learn from it.

Don’t be afriad of being ripped off:  that can happen, and you’ll learn from it.

Good luck on this, and please, anyone, if you have any questions on anything that wasn’t clear in this post, let me know in the comments below!

Maria xxooSimilar Posts:

• Help, a big company wants to license my art. What do I Do?
• Ten Questions to ask Before Hooking Up Your Art With a License
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