Recently my stepdaughter decided to leave her job at one of the major labels and become an independent designer. Her primary expertise is album artwork. Katie is a “creative” and has no business experience. I shared with her a few tips about being an independent business person. After doing this it occurred to me that many of my readers also might find this information useful. While my “tips” are based on years of experience as a solo entertainment lawyer, they are common to most service businesses with which I am familiar. Here we go:
1. Do Get a Deposit. Many artists and other creatives are very trusting – I know I am. I have learned the hard way with new clients to either get the entire amount in advance or, at a minimum, a deposit before I begin working. Believe it or not, there are people who will hire you, accept the fruits of your labor, and then never pay you. If you get a 50% deposit up front at least you will have been paid something if you never get paid the balance. Make it clear that this is non-refundable if you complete the work. Doing this also helps the cash-flow. However, be forewarned that if you end up with an unhappy client you might find yourself refunding the deposit.
2. Don’t Say “No” to New Work Just Because You are Busy. I frequently turn down new clients for various legitimate reasons such as I am not the right attorney for the job or perhaps simply because I determine that they are not the kind of client that I want to represent. However, I do not turn down work because I am busy. I do however let the client know a realistic time frame on when the work will be completed. Then I let the client decide if they want to hire me.
3. Do Have a Written Engagement Agreement. Always have a written agreement with your client. This isn’t surprising coming from a lawyer. A written agreement serves a lot of purposes. It puts in writing precisely what is expected of the person being hired and what is expected of the person doing the hiring. If you are relying solely on an oral agreement you might unfortunately find out that as time passes people’s recollections of what was agreed to tend to get blurred. If it is in writing and signed it is difficult for your client to claim that you said you would perform certain services when you don't recall having said that – or at least that is not what you meant. People can have genuine misunderstandings about what is being said on the front end. A written agreement helps clarify the important details.
4. Don’t Forget About the IRS. You no longer have an employer taking withholding tax and social security payments out of your paycheck. It is all up to you now to set aside enough to pay your taxes come April 15th. I am not a tax attorney or an accountant so I will not suggest how much you should pay and how often. I will leave that for a discussion I recommend you have with an accountant.
Of course the above list is not all inclusive. But it is a good start. If you are a self-employed artist, songwriter, publisher other business person, then see how the above might apply to your business. If you have other tips you would like to share then please do so in the comment section.