The 7 Step Cash Flow Cycle of Art Licensing
One of the keys to building an art business that lasts is cash flow. It takes money to make and market art. And then there is always a waiting period between when money leaves your bank account to pay the bills and when you get income from your efforts to pay yourself.
"If you haven't licensed your art before, you may wonder how long it will take to make money. Of course, it can vary and each artist's experience will differ. But below I have outlined the 7 basic stages that will give an idea of what to expect:
2. Celebrate! Someone is interested! Contract negotiation starts.
3. Sign the contract. (Let's assume it is January) You will get some money now IF you get an advance. In my experience, that happens about 50% of the time.
4. Prepare the art. Make any requested changes or additions to your art and get everything to the manufacturer.
5. Now the manufacturer does their part. They need to make sure everything is formatted and ready. Product needs to be made. It is often 6-12 months between when you give them the art and when the art is on the products, in a store.
6. Product ships. The manufacturer ships the product with your art, say in January - it's now been 12 months since signing the deal.
7. Most companies pay quarterly - so you will be paid 4 times a year. At the end of the quarter, which would be March, they start to do royalty reports and generally have to have them in the mail within 30 days - so by April 30th. You should have your first royalty check by the first week in May.
"As you can see by this example, it can take some time to get the money flowing. Sometimes things move faster but I want you to prepare for this type of time line. If you understand it going into it, you are less likely to get frustrated and give up.
"Once you have things in the licensing pipeline, you start to get very excited at the end of each quarter and watch for the mail carrier!
"Some artists will buck this system and seem to become huge overnight. It is easy to become a little envious. One of my clients once told me that in her experience, it is the artists with slow and steady growththat do really well in the long run, many who are overnight successes lose their appeal to consumers just as fast."
So slow and steady wins the race - but you have to start to win.
If you have been following this series, you have already:
Talk back about your licensing experiences and questions by posting a comment here.
P.S. If you want to know "Five Things Artists Should Consider Before Deciding to License Your Art", join me and Tara Reed* on Wednesday, March 10th at 4:00 p.m. Pacific. Click here to register. If you can't make it, register anyway to get the recording and content outline.
Tara is active in licensing so you will get the latest information and advice that works. After all, we want you to build an art business that lasts and helps you make a better living.
If you prefer learning on your own, check out these resources.
*FTC Disclosure: When we find artists like Tara Reed who have deep, proven experience in a topic that will help you make a better living making art, we put them front and center. When these fine folks offer services and products that are first class, sometimes we agree to help each other get the word out to you with an "affiliate" arrangement, which means that we will earn a small commission for referring you to their resources. Those are marked with an asterisk.
Aletta de Wal
in ArtMatters Weekly Tips, art licensing, tara reed
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