by Maria Brophy
INSTALLMENT PAYMENTS
ARE NON-REFUNDABLE
Installment payments should be considered non-refundable. The main reason for the installment payment is to cover your initial material expenses and time. If the client pulls out, disappears or changes their mind after you invested time and money, they lose their installment payment.
HOW DO YOU ASK FOR AN
INSTALLMENT PAYMENT?
In every conversation with a new client, we mention (even with friends, acquaintances and relatives) that we need an installment payment to get started.
You may feel strange asking for this. Don’t worry, it will come naturally to you over time. When giving a price quote, include your installment requirement in writing by e-mail or proposal.
Over time, your returning customers will know what you expect and they will be prepared to give you payment for the up front for future projects. All of our longtime customers are familiar with the way we work. They also know that the work will be done to their satisfaction, because they’ve worked with us before.
WHAT IF THERE IS RESISTANCE
TO PAYING AN INSTALLMENT?
Sometimes it’s the artists themselves who hesitate to require an installment payment from their client. They feel desperate for the work and are afraid to sound demanding.
Here’s a perspective I want you to consider; if you are desperate for work, then you surely cannot afford to spend time on something that you might never get paid for.
In the art business, it’s very common for artists to be stiffed of payment. The scenario always goes like this: an artist is approached by someone who loves their work and asks the artist to create for them. The artist gets excited and forgets to price it properly or get an installment payment. They do the work and then ask for payment; the client never intended to pay that much, or decided they didn’t want it. The artist is now financially harmed and upset.
Requiring an installment payment avoids that scenario by weeding out the payers from the non-payers. The people who most likely will never pay you are the ones who won’t pay money up front. The people willing to pay up front are the ones that are serious.
It’s very rare for me to have a client that doesn’t want to pay an installment up front. But every now and again I get some resistance. Below are some tips on how to handle it.
WHEN THE CLIENT REFUSES
TO PAY AN INSTALLMENT
If a client refuses to pay an installment, sometimes it means that they just aren’t ready to commit. If that’s the case, then you shouldn’t commit your time to their project until they are ready.
Don’t feel upset when this happens. Be graceful and 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.
There are other reasons a client might not pay an installment, listed below.
WHEN THEY DON’T HAVE THE MONEY
I’ve run into this many times. When I tell someone that they have to pay 50% up front, and then they say “Oh, I don’t have the money right now,” this tells me that it’s possible they may never have it. So I say “When you do, let me know. We are looking forward to working with you.”
WHEN YOU ARE NEW AT YOUR CRAFT
If you’ve been at your craft for less than 2 years, you may still have to prove yourself before you can require 50% up front. Maybe the client isn’t sure of your abilities and they are nervous to invest in you. In this case, lower the amount you ask for to 20% instead. This way, you still get the benefit of the client making a commitment, and the client gets the benefit of a lower financial risk.
WHEN THE CLIENT IS IN A HURRY FOR YOU TO GET STARTED AND THERE IS NO TIME TO PAY YOU RIGHT NOW
If the client is in a hurry, they will hurry up and send the money so that you can get started. Stick to your guns, don’t give in. You hold all the power when they are rushed with a deadline. Use it to your advantage and suggest they either pay by Paypal, credit card or Overnight Express you a check. Don’t start the work without the installment payment.
WHEN YOUR CLIENT IS A HUGE 5 BILLION DOLLAR COMPANY AND THEY TAKE 3 WEEKS TO CUT CHECKS BUT THEY NEED YOU TO GET THE WORK DONE BY FRIDAY
I’ve been faced with this scenario many, many times. Here’s what I do: I ask the client to write me a personal check or credit card and they can bill their company for it later. The serious ones send me their personal check or credit card. Others suddenly are able to get their company to cut a check quickly. There is always a way to be paid up front, even with large companies.
If you absolutely cannot get an installment payment from a large company, then a signed contract or legally binding purchase order, issued by the company’s purchasing department, would be your next best option.
THEY AREN’T CONVINCED YOU CAN DO THE WORK
This is a valid concern if the artist is newly out of school and just getting started. However, if you have been at your craft for more than three years, and you have a lot of happy clients, this is an easy problem to solve. Show your new client past projects that you have done. Provide references that the client can call if they doubt your abilities. Put them at ease. Once they are confident you can do what they need, they will happily pay your installment.
THEY FLAT OUT REFUSE
If they just refuse to make a payment up front, take the time to find out why, and put their concerns at ease. If it’s because they can’t afford it, then they aren’t a viable client and you’ll have to move on.
If there is no good reason for them to refuse, it’s possible you’ll never get paid by them, no matter what you do, because of a lack of commitment on their part. In this case, walk away. You’ll save yourself a lot of wasted time and frustration.
Some clients are high maintenance and difficult to do business with. The people that demand cheaper rates and avoid paying installments are typically the same people who will give you the hardest time during a project. You don’t have to take on every client. It’s okay to say “no” to clients that will be disrespectful and difficult.
EXCEPTIONS AND BEING FLEXIBLE TO
THE 50% INSTALLMENT PAYMENT RULE
There are exceptions to every rule. In the many years I’ve been using this process, I’ve only made a few. One was when we did a deal with Converse Shoes and it took them six weeks to get us a check. However, we had a contract in writing and they had advised me in advance that it would take that long to be paid. It was a huge deal for us, so we were flexible.
When a project requires a lot of money and time on our end, I can’t afford to be flexible on the installment, because in doing so, it would harm our business. We once did a big project with Western Digital, our largest client to date. The project was huge, and just our cost of materials was over $4,000 out of pocket. My contact there told me that it took thirty to ninety days to get paid through their accounting system. I explained that we don’t have the cash flow to front the cost of expenses, plus the month of time it would take Drew to do the artwork. I had a lengthy conversation with my client, explaining that we are a small business, and by waiting 90 days to get paid, it would put a great strain on us. He took our concerns into consideration, and was able to get his accounting department to issue a payment quickly.
When there is a lot of time involved on our end, I’m not willing to take on the project without an adequate installment payment. A few years ago, a large shoe company approached us to do a complete line of Drew Brophy flip flops. We had many meetings with them and they were excited to get started. Drew was going to create all new artwork for the line, which would have been about four full weeks of work.
We asked them for an advance payment up front, to cover the time Drew would be committing. They were up against a tight deadline and pushed him to get started immediately. But no check came. A week went by. I finally called, saying “Drew is eager to get started. But we haven’t received the check.” They said it was coming. It never came. They disappeared. I was shocked, because our meetin
gs went so well and we had the entire line planned out. When it came to putting money down, they were not committed to the project. I’m grateful that we didn’t block off a month of Drew’s time for nothing.
One way artists get themselves into deep financial distress is by working on non-paying projects for people who aren’t committed to it. When people express amazement at the fact that Drew and I have been able to make a good living off of Drew’s artwork, I tell them that these are some of the strategies that I attribute our success to.
Being consistent with payment policies and not allowing others to drain our business financially are the sound practices that enable us to succeed.
HOW TO RAISE YOUR PRICES
An artist wrote me: “I have been in this business a long time and I have a degree. But I struggle with getting paid what I want for designs. I hear excuses like ‘I give you consistent work’ or ‘we are just a new company’. I’ve been told that I am easy to work with and my designs sell well. So it confuses me when I ask to be paid more and they don’t think I deserve an increase. It’s hard to stick up for myself even though I am confident the work is good quality.”
This artist is making the mistake of allowing his clients to dictate his pricing. This is an easy problem to fix. He is educated, experienced and his designs have a history of selling well. It would be risky for a client to stop working with him and give another artist a chance, because there are so many artists out there that are not good at what they do.
The problem is not his client, but how he has trained them to think of him. Charging reasonable prices is not “sticking up for yourself.” It’s operating your business properly.
The way to set this right is to change the way you communicate with your clients. From this point forward, your prices are not negotiable, they are what they are. Just like your attorney’s prices are set and your gas prices are set and the prices at the grocery store are set.
If you have been under-charging your clients, raise your prices immediately. Do this by properly communicating with them. Send a letter to all of your clients that states:
“Effective immediately my prices have increased by 20%. I value my relationship with you and want to give you my best work possible. This minor adjustment will allow me to continue to give you the excellent service I have been, while being able to run my business properly. Please let me know if you have any questions.”
When you make a decision and an announcement, no one will argue with you. If they do argue, tell them, “I’m sorry, the decision has been made. I do hope you value my work and continue to work with me, as you are an important client and friend.”
CHARGE FOR EXTRAS
Always charge your client for additional expenses and services. Many artists make the mistake of eating extra costs. They will say things like “oh, it’s only $20, I’ll just pay for it” or “a digital file costs me nothing, I won’t charge them extra.” But your time and expenses add up and reduce your overall income. If your client requests something extra, or there are additional expenses out of your pocket, charge them for it.
Below are examples of line items that freelancers should charge extra for. Some artists include the prices in either the proposal as an additional line item, or they include it in the overall price. Regardless, make sure your client pays for the extras.
Embellishment
Added materials, increase in complexity of project, additional fees due to client’s unexpected changes
Rush Fee
Extra revisions to sketches beyond a set number
Reproduction rights
Credit card or Paypal processing fees
Bank wire fees
Digital files to replace files that the client lost
Project files (in graphic design)
Any changes that the client makes to the original scope of work
Shipping costs
Boxing and packaging costs
Sales tax
Delivery Fees
Travel expenses, hotel, lodging
KILL FEES
A “Kill Fee” can be added to your agreements for extra protection. It is an amount the artist would be paid if the project is “killed” or canceled by the client before it’s complete. This protects against you doing all the work, only to have your client say “sorry, we changed our minds.” A kill fee is typically used by illustrators, but can be worked into any type of deal.
Kill fees range from 50% to 100% of the cost of the entire project. Many artists charge a 75% kill fee. If you had received 50% up front as an installment payment, your kill fee would be an additional 25%. An example:
PRICING AND PAYMENT: $3,000 total. A 50% installment payment of $1,500 is required to begin the sketch process. Final balance is due and payable to the artist at completion. An additional kill fee of $750 is payable to the artist should the project be canceled or discontinued by the Client. The kill fee is due immediately upon cancellation.
For very large projects, your kill fee may be structured to have different amounts for cancellation at different stages in the project. At the halfway stage of the project, the kill fee may be 75% of the total price. At the two thirds stage of the project, your kill fee may be 100%. You can decide what works best for you and your client.
28
COPYRIGHTS
“When you sign your copyrights away,
you are giving up future earning potential.”
—Maria Brophy
Often I am asked if an artist should sell all of their copyrights to a client. Most of the time, my answer is “no.” If you are an artist who visualizes long term success with your art, you must be in control of all of your artwork. Your art is your brand and you must protect it.
Of course, as with everything in the art business, there are a few exceptions to this, such as graphic logo design or if it is your business model as an illustrator to transfer copyrights to your client.
When Drew was 25 years old, he received the best piece of advice that set the course for his future success as an artist. At the time, he was painting surfboards and designing t-shirts for surf companies. He knew very little about the business of art. He never thought about things like copyrights or ownership of his images.
Then Drew met art agent Gordon McClelland. Gordon had previously represented the late, great Rick Griffin, a California artist famously known for his psychedelic poster art for bands such as the Grateful Dead and Bob Dylan, and Zap Comix art from back in the 60’s and 70’s. Rick Griffin’s work was a huge inspiration to Drew.
If Drew was destined to become a well-known artist, then meeting Gordon McClelland was an act of fate. Gordon uttered a warning that set the course for Drew’s future success. He said, “Drew, don’t ever sign your copyrights away to anyone.”
Drew didn’t understand how copyrights worked at the time. But he listened as Gordon explained that the art he was creating now could earn him money for years to come, and that later it could be passed onto his children, if he kept ownership of it. Gordon also explained how licensing worked, and how Drew could earn money again and again off of one image.
Drew took Gordon’s advice, and from that day forward, on his hand-written invoices to his clients, Drew added a line that read “Artist retains all copyrights.”
Thanks to Gordon’s advice, Drew owns all of the art images he ever created. Since then, we have earned money again and again off of Drew’s most popular images.
There are two very sound business reasons to own your copyrights:
It allows you to control where your art ends up. You decide how it is sold and how it is portrayed to the world. When you sign your rights away, the new owner of your copyrights can do anything they want with your art, even things that would harm your brand or go against your personal values. For an artist with a distinctive style, this could negatively impact your brand as an artist and make your fans angry. An example would be that of a fine artist who signs their rights away and later finds their work being printed on poo
r quality items sold in bargain basement stores.
It allows you to earn money from your art again and again. You can leverage your time by earning money from licensing, merchandising and reproductions. Your library of images will be passed down to your family and your children will earn from it long after you’re gone.
When you sign your copyrights away, you give up future earning potential. In other words, it takes money out of your pocket and gives it to someone else. This is why musicians don’t usually sell the rights to their songs. When they stumble on a hit song, they can earn from it over and over again.
One of Drew’s images, titled Pure Joy, was painted in 2001. The original painting was sold at an art gallery in Laguna Beach, California. It was a small painting on canvas and it sold for $450 to a collector from Los Angeles. The image itself became iconic in surf culture and has been printed on everything from magazine covers to art prints to apparel and hard goods. To date, Pure Joy has earned us well over $250,000 in licensing and reproduction sales. Just think, if we had only sold the original of Pure Joy for $450 and didn’t keep the copyrights, we would have earned only $450 from it instead of $250,000.
Did we have a crystal ball that told us Pure Joy would have that kind of earning power? Well, we knew it was one of Drew’s better paintings, but there was no way of knowing that it would become as popular as it did. This is why we scan and capture the image of everything Drew creates, even commissioned work that he does for his clients; any one of them could end up being an iconic image with immense earning power.
