Computers, printers, software and scanners aren’t free. And the ink you go through printing things to submit or show– that adds up quickly.
Websites, reference books, trade magazines, … there are expenses.
Invest in your business but don’t go into major debt if possible. Watch your cash flow and spend wisely. Investments can be in the form of training (like books, classes, seminars or personal consulting), attending or exhibiting at trade shows, upgrading a printer or computer. Grow as your business grows.
The Cash Flow Cycle of Licensing
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:
- Create the art. You or your agent show it to manufacturers.
- Celebrate! Someone is interested! Contract negotiation starts.
- 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.
- Prepare the art. Make any requested changes or additions to your art and get everything to the manufacturer.
- Now the manufacturer needs 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.
- The manufacturer ships the product with your art. Assume this happens in January– it’s now been
12 months since signing the deal.
- 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!
Here’s to your creative – and dare I say realistic – success!
– Tara Reed