by Maria Brophy
There are no set-in-stone pricing structures for licensing or for art deals. You have to be creative and come up with a deal that works for you and for your client.
NON-TRADITIONAL LICENSING
There are non-traditional ways to license your artwork; many of which do not include the sale of products with your art on them.
One example of a non-traditional deal would be licensing your art for an advertising campaign. The pricing would be determined by the size of the company, the extent of the campaign, and where it will be shown.
If you are licensing your art to a billion dollar tech company for a television campaign, you could get between a $20,000 - $100,000 license fee. If you are licensing to a small company that’s valued under a million dollars, for their Facebook advertising, you might be able to get $1,500.
If you are licensing for a beverage company to use your art on their in-store point of purchase displays, you could get in the tens of thousands for one campaign. The range is wide, and each deal has to be considered individually.
When considering what to charge for a non-traditional licensing deal, find answers to these questions: How large is the company (what are they worth $$$), how perfect is my artwork for their campaign, how long will they use it for, where will it be shown.
If you aren’t sure what to charge, invest in a consultant who is an expert on pricing. Doing the extra research could make you thousands of dollars more.
19
RUN YOUR ART BUSINESS LIKE A BUSINESS
“Making money is art and working is
art and good business is the best art.”
—Andy Warhol
One of my favorite quotes is by mega-successful singer Dolly Parton, who said during an interview with Dan Rather, that she tends to “...lay a little heavy on the business side of things.” Dolly credits her success to good business decisions.
She explained that early in her music career, she did the unthinkable and turned down a tempting offer from Elvis. Elvis wanted to buy the copyrights to her song “I will always love you.” Any other artist would have sold it to the King of Rock and Roll. But not Dolly. She knew that if she owned the rights, she could continue making money off of her song for the rest of her life.
It was a sound decision, because that song became one of the best selling singles of all time. Dolly’s heirs will be collecting royalties from it long after she’s gone.
In Dolly’s interview with Dan Rather she went on to explain that once she saw that she could make money with her music, she realized that she could make music profitable, as long as she made smart business decisions.
She said, “I thought, well, they do call this the music business. So, why don’t I kinda lay a little heavy on the business side of things?”
Successful artists generate success by making good decisions. Picasso, Salvador Dali, Andy Warhol; they all placed a focus on making good business decisions, and it did not take away from the validity of their art. The decisions you make on a daily basis are either going to make or break your career.
PROFIT AND CASH FLOW
A former accountant once told me “If you’re not making a profit, then what you’ve got is a hobby.”
I’ll never forget those words, as they inspired me to set up our art business to always earn a profit. I write about money often, and some people don’t like it; they say that artists shouldn’t allow their creative minds to become muddled with something as meaningless as money.
Money is a necessary evil; without it, I wouldn’t be able to live in my house or feed my kids or pay for art supplies. Our global money system is firmly in place in society and that isn’t going to change anytime soon, so we have to either accept it or go live in a cave.
For a full time professional artist, making sales and being paid properly will keep you in business. For the hobby artist, being paid for your work enables you to continue to produce work, as art supplies can be costly.
If you don’t care to earn money from your work, then you can skip reading this book entirely, because none of it will apply to you. But, if you are an artist who wants to earn a living with your art, you should know this:
To earn a full time living from your art, you must commit to the mindset of running your art business like a business. I have worked with hundreds of artists over the years and I get insight into what they are earning. Many of the artists I work with are earning over $100,000 a year. It is not uncommon for artists to earn six figures selling their art.
I also work with artists earning less than $10,000 a year with their art but are striving to increase that income. There are many differences between the artist earning six figures and those earning less than $10,000, none of which have anything to do with talent.
If you want to earn over six figures a year, read this entire chapter, three times. And then re-read it every month until you reach your income goal.
There are gems of wisdom here that you have to truly “get” before you’ll be ready to apply. You will “get it” over time by consistently programming your mind to these concepts.
An art business must have the following three components to be successful:
Cash Flow (money coming in)
Profit (your money from sales minus your expenses and overhead = profit) Without Profit, your business will die. Or, in other words, if you aren’t making a profit, then what you have is a hobby. This is not a bad thing, but be aware of the difference. It doesn’t matter how much money you bring in, it’s how much you keep.
Vision for the future (know what you want, set goals and write it down on paper)
When you make the decision to treat your art business like a business, your mental thoughts and subsequent actions will evolve to stay in line with that decision.
For every project, commission or job that you accept, you will create the intention of generating cash flow and a profit. And when you think that way consistently, every day, you will create cash flow and profit.
DETERMINE YOUR INCOME REQUIREMENT
Let me ask you a question: What is your weekly income requirement? What I mean is, what is the minimum amount you need to bring in every week to keep your art business thriving?
If you don’t know the answer to that question off of the top of your head, you should. But don’t worry, the exercise in this chapter will help you with the answer. There are many methods to determine your income requirements. Below are the two most common:
DETERMINE YOUR DESIRED $ AMOUNT AND GO FOR IT METHOD Decide the yearly and monthly amount you want to earn and then work backwards from that. This method works for some, but you have to have a healthy money relationship and a strong business mind to use it.
For example, an artist who has decided he will earn $200,000 a year with his fine photography will focus all of his efforts on getting at least ten $20,000 projects a year, and say no to everything else. This method can work for someone with the proper mindset, patience and an aggressive manner.
Most people, however, respond better to the second method shown below.
BAM + 20% METHOD
BAM stands for “Bare Ass Minimum”, a term I borrowed from my wise business coach, Ralph. Determine what you need to earn yearly and monthly to cover your expenses and lifestyle, and then add 20% padding to that number. This method works best for most artists, because it is simple and practical.
HOW TO DETERMINE YOUR SALES GOALS BASED ON BAM + 20% METHOD
(Please note in the example below I’m rounding up so the math is not exact to the penny.)
Determine your BAM number Your BAM number is the amount that you must earn to cover your living and business expenses. Add up your living expenses and your business expenses to determine your yearly BAM number.
For Example: Your yearly BAM is $60,000 to pay living expenses, studio rent, taxes, health insurance, debt repayment, IRA contribution and vacation.
Add 20% to your BAM number to generate a minimal amount of profit. The goal is to earn more than 20%, but 2
0% is good to begin with. For Example: Your BAM of $60,000 x 20% profit = $12,000. $60,000 BAM + $12,000 Profit = $72,000 total.
That means that $72,000 in sales is your Minimum Yearly Sales Goal.
Take your Minimum Yearly Sales goal and break it down into monthly, weekly and daily income requirements:
Example: $72,000 yearly is $6,000 monthly / $1,500 weekly / $300 daily (based on 5 days/week)
Once you know what your weekly and daily “rate” is, you can more easily come up with pricing that is in line with what you need to earn.
Knowing your weekly and daily rate is incredibly helpful when you are asked to do a project that you haven’t done before. This is especially useful for artists who do projects that cannot be easily defined in terms of time, but rather in days.
You should review your business each quarter and determine if you have hit your income goals or are far away. If you are not hitting your income goals, then you know that you have more work to do to either sell your work, get new clients or start selling products based on your work.
HOW TO USE THE BAM + 20% METHOD FOR PRICING
There are many different ways to price your work. If the industry or market you work in has a standard, you could choose to follow that standard. Or, you can use this method instead. Below are a few examples.
UNIQUE PROJECTS: For artists who take on unique projects, such as digital illustrations, painting random items or special projects that are difficult to categorize, this example illustrates how to use the BAM + 20% method:
Using the $72,000 per year example above, if someone commissions you for a special project and you estimate that it will take you five days from start to finish, you will charge at a minimum your weekly rate of $1,500 + the cost of supplies and travel and other expenses.
ORIGINAL PAINTINGS: For artists who sell original artworks, this example illustrates how to use the BAM + 20% method: Determine how many days one painting takes you to create, multiply that number by your daily rate, add your art materials expenses to that number, and now you have your retail price for your painting. Determine how that breaks down into square inches (or square centimeters) and use that per square inch, linear inch or per square centimeter price as a base for all of your paintings.
On the next page is a worksheet that will guide you to determining your income goals based on the BAM + 20% method.
INCOME GOALS WORKSHEET
Name: ___________________________ Date________________
Use this worksheet to ensure that every project earns at least your minimum goal for the month, week or day. Every six months, re-visit this worksheet. Raise your prices by 10-20% or more every 12 months.
The Bare Minimum I need to earn yearly to cover daily living expenses plus business expenses including insurance, studio rent, retirement savings and taxes:
Yearly Bare Minimum (BAM) $__________________________
Determine Yearly Income Goal:
$______________________ x 20% = ______________________
Yearly Bare Minimum (BAM) Profit Goal
Now Add ___________ + ___________ = __________________
Yearly BAM Profit Goal Yearly Income Goal
Determine Monthly Income Goal: (this is your monthly rate)
$_______________ divided by 12 Months = $_______________
Yearly Income Goal Monthly Income Goal
Determine Weekly Income Goal: (this is your weekly rate)
$________________ divided by 4 Weeks = $________________
Monthly Income Goal Weekly Income Goal
Determine Daily Income Goal: (this is your day rate)
$_________________ divided by 5 days = $_________________
Weekly Income Goal Daily Income Goal
20
GETTING PAID
“Money is better than poverty,
if only for financial reasons.”
—Woody Allen
If I had to choose the most harmful myth in the art business, I would say it is the prevalent misunderstanding that artists should give their art away in exchange for exposure.
Other people’s expectation for cheap art literally robs an artist from their ability to earn a living. Sometimes the thieves are those we love; friends, family and charities.
Many people don’t realize that when you give art away consistently, you degrade your art business and devalue your work.
You don’t have to give your art away in exchange for recognition. No other business in the world operates this way, and for good reason; it is not sustainable as a business practice.
If you’re not careful, you can fall into this trap and get into a consistent habit of giving your work away for less than it’s worth. Over time, you will drain your resources to nearly nothing and have to shut down your art business.
There are exceptions to every rule, so yes, there may be a rare time when it makes sense to lower your price or give art to someone special, but, as a daily business practice, “cheap and free = out of business”.
The world is full of people who erroneously believe that creating art is not “real” work and that the artist will benefit from giving it away. It’s not their fault. They have been conditioned by other artists to think this way. The artists who don’t value their own work are setting a precedent for the entire industry.
If you are one of the artists doing this, I don’t want to make you feel bad. I want to help you change your ways. You, too, have been a victim of past conditioning. My goal is to give you a new perspective on the exchange of money and forever change the way you work with clients, charities and friends.
Below are the top four art business thieves:
The Great Promotion Myth
People we love; friends and family
Charities
Clients with Small Budgets
In the following sections I share strategies that will enable you to prevent these thieves from robbing your dream of being a thriving artist.
The moment you implement the strategies in this section is the moment you will increase your income and you feel empowered and in control of your art business.
Just as the world is full of people who want free art, the world also has a plethora of people who are happy to pay you for your hard work and talent. Your job is to say “no” to the former and seek out the latter.
THE GREAT PROMOTION MYTH
“An artist can die from exposure.”
—Author unknown
When someone says “this will be great promotion for you,” I cringe. In the world of art, the word “promotion” is code word for “free.” It’s usually followed with “We don’t have a budget for your work, but if you do it for free, you will be exposed to many people.”
Moments before I sat down to write this chapter, I received a text from an artist friend in Florida who asked “Is it okay to give my art to a company in exchange for promotion?” My text back to him read, “No. Find out what they want and give them a price quote.”
He called me right away. He explained that someone at a local business said that if he painted a wall mural in their corporate headquarters at no charge, they would promote his art. When I pressed him to explain what exactly they will do to promote his art, he said that his name would be on the wall. This is not promotion! Your name always goes on the wall, even if you’re paid a million bucks. And so what? Your name is on the wall and about fifty employees get to see it. Not one of them will call you for work, because they aren’t your right buyers and because they know you did it for free. So if they do call, they expect you to do it for them for free, too.
There is no such thing as “free in exchange for promotion.”
True promotion is when your work is exposed to the masses, either through print, TV, website advertising or some other means to reach large numbers of people, and your name and contact information is clearly visible so the masses can easily find you and buy your work.
When one promises to promote your work, it usually does not mean they will direct pe
ople to your website. It rarely means they will make a page on their website dedicated to you and your art. And it never means that they will take out full page ads in a magazine for you.
No company will adequately promote your work for you, no matter what they promise. Not unless you are paying them, or it is written in a contract and they are obligated to do so.
I’ve seen artists create illustrations for concert posters for free, and then the company didn’t even print the artist’s name on the poster. There is zero promotion in that. Without a name on the poster, no one knows who did the art.
You should always be paid, even if the work you do provides exposure. When we license Drew’s artwork, we get paid, and at the same time, Drew’s art and signature is promoted on the products that the art is printed on.
This subject brings out the feisty in me because so many artists fall victim to it. You don’t see new doctors giving away free visits to get business. Nor do plumbers give away their services in exchange for promotion. The only world in which we see this is with art.
Why do we see this in art? Because artists keep giving art away, which sets the expectation for all artists. The reason I am so pained by this practice is because I work closely with artists who are struggling. When you give your art away it prevents you from earning a living. It takes away from your family. It literally robs you of your ability to maintain a healthy, thriving business. And if you allow it to continue for too long, it will kill your creative spirit.
When a professional artist gives too freely, they eventually go out of business. We need to change this paradigm. I’m changing it in my world and I encourage you to help me change it for all artists.
HOW TO TURN A REQUEST FOR FREE INTO PAID
I’m surrounded by artists in my line of work. I get to meet the fresh new ones that come out of art school, the mid-career artist and artists who have had lifelong success. But the one artist I worry most about, and the one that I usually can’t help, is the senior artist who is bitter and angry, after a lifetime of being taken advantage of.