"My husband is a famous artist but isn't really good at the business side of things. I've just retired from a corporate job and want to help him out.
What's the best way to set up a business like this one, and what are some of the things I need to know about to help him?"
Many of my clients are engaged in creative businesses — artists, photographers, authors and musicians who try to make a living from their work.
When we think of artists, the word "starving" is somewhere nearby. But it doesn't have to be that way. Some artists — think Vincent van Gogh — die penniless and unknown, their genius not appreciated until after their death. But others — think Pablo Picasso — die rich, famous and beloved. Which way would you rather go?
There are three steps to building a successful arts business.
First, remember it's a business. Whenever you do anything fun or creative and nobody pays you for it, it's called a hobby. Something is a business only if someone pays you for what you do. Before you can call something a business and deduct expenses and losses from your taxes, the IRS requires you to have made money at least three of the previous five years (www.irs.gov/newsroom/hobby-or-business-irs-offers-tips-to-decide).
When making art of any kind, it's always a good idea to ask yourself, "Who is going to buy this?" before committing pen to paper (OK, fingers to keyboard) or brush to canvas.
Second, give the customers what they want. Wolfgang Amadeus Mozart was one of the world's greatest composers. One day, he was approached by a local nobleman who wanted some French horn concertos for his son who had taken a fancy to the instrument. After getting some gold coins in advance, Mozart sat down and wrote four of the best concertos for French horn ever written.
In contrast, Mozart never wrote a concerto for the cello, even though we know (from his surviving correspondence) that he loved the instrument and knew how to play it. Why did Mozart never write a cello concerto? Answer: No rich nobleman with gold ducats in his hand asked him to write one.
Please, don't get me wrong: I'm not suggesting Mozart was a hack. There is no bad Mozart, and most of his works are eternally transcendent. But his catalogue looks the way it does because of the commissions he received, not what he wanted to create.
The secret to success in an arts business is not to create great works and hope that people will buy them (or that posterity will appreciate them). The secret is to seek commissions and then put your genius into them and make them great works of art. Genius will prevail in the long run, but first, the mortgage must be paid.
When artists lose touch with their customers or fan base (or can't keep up with changing market demands), decline and eventual financial failure are inevitable. But even artists who maintain their popularity and sales throughout their lifetime face obscurity if the talent or genius isn't really there. To be a successful artist in any creative field, you need both genius and revenue.
Third, remember it's the rights that count, not the artworks themselves. You create a painting. You sell it at a galley or exhibition. Repeat. That's one way artists make money.
You create a painting. You make thousands of lithographs and serigraphs of that painting (some signed, some not), and license the rights to the painting's image to people who want to reproduce it. That's a much better, more sustainable way for artists to make money.
Successful artistic businesses are not about the works of art themselves. They are all about the intellectual property rights to those works: the copyright (for works of literature or graphic art), the performance and publishing rights (for works of music), and the licensing rights (for cartoon characters). You can sell the works themselves, but you never part with the "rights" without a fight.
The Beatles found this out the hard way in the late 1960s when they lost control of the rights to their early (Beatlemania era) hits, which were sold for a little over $2 million in today's money. Those rights were eventually acquired by Michael Jackson (yes, that Michael Jackson) in 1985 for $47.5 million. Seven years after Jackson's death, in 2016, Sony bought the rights for $750 million, and Sir Paul McCartney — who wrote or co-wrote almost all of the songs — finally got them back in 2017 for an undisclosed sum after a lengthy court battle.
In this reader's case, I would add a fourth step: Form a limited liability company (LLC) owned jointly by you and your husband, and make sure all rights are owned by the LLC, not your husband individually. That way, you — as the artist's spouse — are guaranteed to control the rights after your husband's death and make sure your family benefits from them going forward.
Cliff Ennico ([email protected]) is a syndicated columnist, author and former host of the PBS television series "Money Hunt." This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our webpage at www.creators.com.