28 Sep Money Talks, BullHockey Walks (Weeding out the Not-so-Serious)
The following is an excerpt from a chapter in my forthcoming book titled The Brophy Principles – A Brutally Honest Business Guide for Creative Types:
We get crazy proposals almost daily, from people who want to use Drew’s art and fame to help sell their products. And that’s our job – to make things look cool.
I know that many a good deal can be a diamond in the rough, so I make it a point to entertain every idea, even the ones that sound downright stupid.
The problem, however, is that some of these proposals come from people who don’t have capital ($$). They want to hang out, talk to Drew for hours about their new venture, and pick his brain for ideas. Then they disappear. Drew would rather be painting.
BUT – THERE ARE WAYS TO WEED OUT THE SERIOUS FROM THE BULL-HOCKERS.
Harsh Lesson Learned – the unpaid Bill: In our younger years, Drew took a commissioned job from Abercrombie and Fitch. He worked on this project with the art director for a week. Then they changed their campaign mid-stream and disappeared. And they didn’t pay Drew’s bill. Harsh lesson learned, and we never made that mistake again. We always get a deposit now.
MONEY TALKS, Bullsh*t Walks When you require a deposit up front, you weed out the serious client from the not-so-serious. The serious client will pay, and the not-so-serious client will walk away. And be glad that they did.
Don’t worry about losing a client over requiring a deposit. If they really want it, they’ll pay it. If they aren’t willing to pay it, then they don’t have a commitment to the project. And if there’s no commitment, then why should you waste your time?
Beware of the One who Blows Smoke up Your Keester: One Newport Beach business owner met with Drew and me to discuss licensing. He was movie-star good looking and pulled up in a convertible Mercedes. He blabbed for 90 minutes about how successful his company was, and how he wanted to use Drew’s art for his sunglass cleaners and how they would be retailed in over 2,000 stores. He was investing $50,000 into the marketing of this venture, and he’s already put about a half a million dollars into the development of it.
I followed up with a deal memo outlining the license. It’s standard to require an advance up front equal to 25% of the first two years projected royalties. I only asked for $5,000 up front. Oops, he didn’t have the money. Would we do it without an advance, he asked. Mr. Newport Beach guy, where did that $50,000 in marketing go overnight?
After one too many time-wasters, we’ve developed our own Principals to hedge against wasting our time and money on people who aren’t serious about business:
- Don’t extend credit – unless you’re a bank. I’m not running a bank, so it’s absolute policy that a deposit of 50% is due up front before we start. The remaining balance is due at the time the painting or project is delivered. For licensing, we typically get an advance of $5,000 – $20,000 up front (depending on the size of the deal).
- All Deposits are Non-Refundable: The advances and deposits are non-refundable. This is because once the work’s done, it’s done. We can’t un-do it. With commissioned paintings, they are typically painted to the customer’s specifications, and usually cannot be resold (especially if you had Drew paint your dog Spike in the painting.)
- Creative Meetings are Held After a Deposit is Received: I realize that many artists are working on their own, and so you’ll have to modify this rule a little. But for us, I let clients know that they can meet with Drew for a creative meeting after we nail down what they want and their deposit is received. What if they aren’t sure what they want? Read the next one:
- Consultation Fee is Charged for a Meeting: For clients who need Drew to help design a campaign or their storefront, or some other project that isn’t yet determined, the way to weed out the serious from not-so serious is through charging a consultation fee (starts at $300). It’s payable before the meeting, and it’s credit that goes towards the project once we nail it down. If the project doesn’t go forward, than we at least got paid for Drew’s 2 hour meeting giving them ideas for their project.
Now I’m sounding hard-nosed, and maybe not a lot of artists are getting inundated with time-wasters like we are. But believe me, after you realize that your children missed having dinner with their daddy (or mommy) because some guy was wasting your time, you start to get tough!
(Caveat: When I’m trying to sell someone on our ideas, of course, we will have creative meetings to get them off the fence and into signing a deal.)
There are many great people to work with out there: Know this and trust in this. You don’t have to do business with someone you can’t trust or count on.
Last year we were in discussions with Converse Shoes to do a Drew Brophy line. Early on, it was made clear by Converse that they don’t give advances. This was a problem for us. And you can imagine, doing a deal with Converse was huge for us – we didn’t want to blow it. But at the same time, I know what I know about commitment and money. So I explained to my guy at Converse how much work on our end it will be to design the shoes, and how our business model works. They gave it consideration, and agreed to do what they don’t normally do – give an advance of royalties up front. Converse is an example of a company that can commit, and put their money where their mouth is.
I can’t say it enough:
IF SOMEONE IS SERIOUS ABOUT “INVESTING” IN YOU, THEN THEY ARE SERIOUS ENOUGH TO PAY MONEY UP FRONT. And if not, then they are wasting your precious time.
Sure, there could be “POSSIBLE” royalties later, down the road, 2 years from now. And that’s IF they do a good job of marketing and sales and creating the line. And IF they don’t lose focus on something else, and IF they don’t go bankrupt, etc. etc.
If a potential client can’t give you a deposit, then they may never pay you anyway. The bottom line: Create yourself a business model that makes sense, that keeps you working on paying projects, and one that doesn’t require a collections department.
Spunk Brophy xxoo (Follow me on Twitter, please!)
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