Wednesday, October 27, 2010

Secrets you need to know about the client who asks you to do work for free

It’s pretty obvious why giving your product (your art) away for nothing in return is a bad move for your business. But, what about those clients that DO offer you something, it’s just not money? What if it’s a royalty, or a piece of ownership in the project? That’s not the same as offering nothing, right?

Well it’s not exactly the same~ but it’s often a dead giveaway of something about the person who is offering it to you- that something is a secret that maybe the client doesn’t even know about themselves. What is this secret? The secret is: this very offer shows that they have no idea what they are doing! And if they don’t know what they’re doing, they’re probably not going to be successful in their goal.

Giant Red Flag #1 “I am just looking for help to get this going and then it will take off”

Why this flag is red: There are institutions and individuals out there who make a living by lending people money- a couple of these institutions are called banks and venture capitalists. Both of these strange organizations are full time lenders of money- it’s what they do, it’s what they excel at, it’s why they’re rich and they have money to lend in the first place. They make money off of lending people money, and they ask for a set amount back in return, called interest, for their trouble.

If a client doesn’t know about this, then they either:

a) don’t know what they are doing which means the likelihood of success of the project is very slim, or

b) they weren’t able to secure funding because their idea wasn’t thought through and the lenders saw them as a big risk and said heck no!

And if the billionaires say they don’t want to risk $10,000 on someone, you, non-billionaire artist, should definitely not risk anything on them either

Giant Red Flag #2 “In exchange I will give you a royalty so when this blows up you will be rich”

Why this flag is red: Why would a client offer someone a royalty on something that they have pretty much proven through diligent research to be a successful product when it’s cheaper to just pay for the thing up front? That money will be taken away from reinvesting and growing their business.

It’s usually because:

a) They don’t know how to get funding because they don’t know what they’re doing, and if they don’t know what they are doing, the product probably won’t succeed, or

b) A client would do that because they aren’t sure if the product will succeed because they didn’t research it and they are guessing, and so they will offer a royalty as a way of avoiding any risk of their own- because they don’t want to lose their OWN money on it, they’d rather lose your money.


A color illustration for a tshirt= $300. 3% royalty on a 100,000 shirts that are sold at wholesale prices to stores "when the shirt blows up"= $21,000.

Why would they pay $21,000 when they could pay $500? Because they don’t know what they’re doing, and since they don’t know what they’re doing the project probably won’t work.

Giant Red Flag #3 “You can have a piece of the ownership of the project!”

Why this flag is red: This is even worse than giant red flag #2- it is giving away even more of that money that they should be wanting to keep to help their business succeed. They’re offering you money on stuff you didn’t even work on. They’re offering you money on projects that will be made ten years down the road by some other artist you’ve never met. Instead of offering you $21,000 in exchange for $500 of work, they’re offering you $175,000. That’s an even more ridiculous move on their part and will even more seriously dwarf the growth of their company.

Also, when banks and investors review business plans to decide if they should invest in a company or not, they look and see how many owners of the company there are. If someone has given away ownership to people who aren’t helping to run the business , that’s a giant red flag to them too that the person doesn’t know what they’re doing and that they will never get their money back. And that person will be denied.

They are offering a deal that could make the chances of failure of their company greater, and they are also offering a deal that could make it harder for them to get approved for additional funding later. So they could be double-screwed, by their own decisions. This person definitely doesn’t know what they’re doing, and if they don’t know then it probably won’t work.

Giant Red Flag #4 Artists are pitched projects with these terms about a zillion times a year.

Why this flag is red: The fact that this is so prevalent means the likelihood of the one in a zillion projects that will actually work being pitched to you out of every other artist on this planet is low. It’s like winning the lottery. And we all know how easy that is.

But what if you are actually interested in the project?

I think we as artists should start learning something from the banks. They research the project, research the person, and use all of this information to come up with an educated determination. We should also ask questions and scrutinize these people who are basically asking us to invest. Here are some things that banks want to know, that artists should also want to know:

-What is your marketing plan for this project and how much do you have to spend on advertising it?

-Who are you selling it to, and where will you be selling it?

-Have you sought out a loan to fund this project? If not, why? If so, why were you denied?

-Do you have any deals that are already in writing regarding this project? If so, with who?

-What are your qualifications that make you and your team able to bring this project off successfully?

-How much of your OWN money are you investing in this project?

-May I see the financial analysis of your projected sales for the next 3-5 years?

Giant Red Flag #5 If a client has no answers, won’t share these answers even after an offer of a confidentiality agreement, or has crappy answers. Then they definitely don’t know what they’re doing and therefore the project probably won’t succeed.

So these are the secrets I have learned that I am sharing. To learn more about his stuff take a class on writing business plans and talk to your bank about what is involved in seeking and being granted a business loan. This can be useful information for your own business as well as for understanding what goes into a product or company that makes it succeed.

If we’re expected to be investors, then we need to protect ourselves with basic knowledge and with information to guard against bad investments, because that’s exactly what you don’t need to get your bills paid.

Friday, June 11, 2010

An Open Letter to Art Schools Everywhere

Look at this:

"Open Letter to Art Schools Everywhere
JUNE 9, 2010

by Thomas James

To the faculty and boards of art schools everywhere,

As an Illustrator, Writer, and Podcaster I explore the issues that face creative professionals every day and do my best to share resources and inspiration with my fellow artists.

At least once a week, I receive an email from both experienced and novice Illustrators alike who express immense gratitude for the information that I provide via my blog and podcast, Escape from Illustration Island. In these emails, artists from all over the world complain about the lack of business education they received when they attended art school. Many of them tell me that when they graduated with their Bachelor’s degree they felt a sense of panic and anxiety as they realized that while they had learned the technical skills to pursue their craft, they were completely unprepared for the many aspects of running a creative business. I have often been thanked and praised as a breath of fresh air in the industry, and even called a 'hero'..."

read the rest; discussion here and on the original post is welcome:

I am forwarding this to my alma mater as well.

Monday, May 10, 2010

Where is Your Business Brain?

The artistic brain works in mysterious ways. We as artists come up with weird ideas that no one else even bothers to think about, and we make connections between things that don’t make logical sense sometimes. We are motivated and affected by color and mood and imagery in a way that non-artists don’t understand. Not only are artists naturally this way, but on top of it we need to focus on these abstract subjects throughout our lives in order to develop. What ends up happening, I think, is that artists end up sheltered from reality in a way because we are busy creating our own.

Then one day you realize that you need to translate this unique outlook into an art-related business in order to stay alive and keep food on your table (or else risk giving up spending a majority of your time on the arts). But, business is all about forms and rules and decisions that are based completely on input from the outside instead of input that is developed from the inside. For the artist, it’s a different way of thinking. And, you probably (like most) have no idea how to do that. It’s a rude awakening.

So, if you need to be successful in art-related business, you need exposure to this through-the- looking-glass way of thinking (for artists that is looking out of Wonderland and into boring normal life) so you can see how your business fits into the (boring/actual) world and therefore get an idea of what you should be doing so that you can thrive in that world. To do that you need to figure out where your business brain is located so you can tap into it and use its powers to compliment your art brain.

There are two places to find this necessary business brain:

1) Find it at home: Do you have a spouse, significant other, family member, or friend who is in a field like accounting, marketing, or who runs a small business of any kind? If so, then they probably already know tons of stuff that you need to know, and hopefully they would like to help you out and share their knowledge with you. They will also probably know other people that you could connect with who specialise in even more details that you need to know.
This seems to be the most popular area that artists find their business brains- the next time you’re at a comic convention, count the number of artists that are sitting to the side as their spouse does all the selling work, and you’ll see what I mean. I think it’s because this is the easiest way that doesn’t require as much risk as the alternative; but it is also harder to get a good return because your potential is limited to the people that you know or meet randomly.

But what if you are a recluse, have sworn yourself to a lifetime of singlehood or if you keep befriending only other likeminded artists? Well- there is hope still:

2) Find it in a stranger’s brain: There are businesses out there that have been created specifically to help others run their businesses, and this is the way that successful business people tend to go. No business owner knows everything. In fact we have all heard about how a wise person knows their strengths and limitations, and knows when to seek help. This literally describes how you need to think if you run your own business. You are an artist, yes? But you’re probably not also a business person. So you need to find a business person to help. And actually even if you can find it at home, at some point you will need to graduate to the brain of a stranger once you get into more complicated stuff or once your family members burn out on helping.

But where Specifically do you find these strangers who hold the knowledge that you need?
-There is the option of seeking out a business consultant who may be able to charge you a small monthly flat rate for consulting and assistance with particular issues. You will need to call various places and tell them what you need and see what their suggestions and price ranges are. If you contact smaller consulting businesses to start, the likelihood that they will be cheaper increases. Once you start earning more money you can hire larger and larger firms if you feel you need to.

-Or if you have limited funds, start out with a class or two at a local college on entrepeneurship or running your own business

-And, organizations such as your local Small Business Association often have seminars and classes to help those who are looking to start a business. Through participating you will also find more similarly minded people who are seeking the same goals as you, some who are farther ahead, and some who are behind you in terms of knowledge.

-Of course there are also books and blogs on these subjects, which are helpful, but the essential difference is that you will most likely need a flesh and blood mentor that you can talk to. They can show you exactly what to do with a form, explain terms that you haven't encountered before, and help with those other little details that are just impossible to understand without real life experience..

Looking on the bright side, even business majors graduate and don't know what they're doing in business- they learn through real life experience. And that's what we have to do too, Just remember that it's a slow process but you can make major progress quickly, and that you don't need to know everything, as long as you know who to ask for help!

So, where is your business brain?

Tuesday, April 27, 2010

Introductions are in order

When I went to art school, I was convinced that I would learn what I needed to know in order to be a great artist. I studied animation and film specifically, and from books about the art of animation I learned the disciplines that were most needed in order to be a great animation artist. I fought to be included in figure drawing classes where I learned to construct the human figure in my mind and feign three dimensions on two dimensional paper; I learned to detach what I was seeing from what I knew so I could record it more accurately; I absorbed art history in hopes that the inspiration of these great artists would rub off on me, and that from observing patterns of history I hoped to figure out how these men (and a few women) became as great as they are. I learned how to recreate reality with art then to go beyond that into creativity and individual interpretation of the world. For practicality's sake I learned time saving tricks and techniques that allowed me to correct my mistakes without damaging the precious works of art that I was creating. I was sure I was on my way.

The problem is that half (or maybe even more than half) of being a successful artist has nothing to do with any of that.

The years I spent after school were a constant struggle of catching up with how the real world worked. As time went on I became bitter at how little I knew, at how I had tuition debt but no practical skills, meaning I couldn't even qualify for a job as a secretary (sorry, administrative professional). I was angry that I went to school to become a professional artist, and that I graduated with honors, but that I was still miles from being a professional artist, and I wasn't even sure where the path was to get there. Around me classmates were dropping like flies, disappearing into menial jobs that they could have gotten straight out of high school or with a two year certificate.

But I got lucky. I persisted. I clawed and pestered, and I started getting work and more work, and I started figuring out the mysteries one by one. I am still learning. Now I occasionally go to a class to speak about my experiences, and I look at the fresh faced students with sympathy because they don't know what is in store for them, and their parents don't know either.

To this day the nature of an artists' education boggles my mind. We have so much to learn in order to be successful. The ideal art education, to me, would be like this: A young artist with potential is spotted by a teacher at a ripe young age- maybe they draw insane things or are always wanting to create. They are taught technique and art history in between their math and reading classes up until their graduation from high school. Then, after high school, they go to college for business and management, with a minor in mastering art. If we were all so lucky, this world would be run by artists right now.

But, we're not so lucky. So I figured the next best thing would be a blog attempting to deal with the issues that every artist needs to deal with, to be a kind of resource for struggling artists in the attempt at addressing some of the things that they don't teach and will never teach you in art school.

So, let's see how this goes, shall we?