By Mita Carriman Esq. (@nymusiclawyer), NYC entertainment lawyer at Carriman Law Group and band manager, named a 10 "must follow" Twitter music law resource by The DIY Musician. She really (really) loves curating playlists. (Originally posted on Culturefphiles.com)
(UPDATED) Buzz-kill anyone? If you’re an independent artist or an arts related small business owner, I completely understand why taking care of the business and legal aspects of your work is about as fun as watching paint dry. It might be something you’ve been subconsciously avoiding. Conversely, you might be ready to get into it, but you’re unsure of where to begin.
As an entertainment attorney and owner of my own firm, I know that I have a special place in my heart for law and business that few can relate to. However, fear not! Below are 10 key steps I made and explained with a Spotify playlist to help independent artists and arts-related small business owners get their business and legal house in order…Best enjoyed while simultaneously *listening* to it.
Step 1 / Track 1
“Maps” by the Yeah Yeah Yeahs
Map Out Your Business Goals with a Plan
One of the best purposes of writing a business plan, is to force you to think through and articulate different ideas and challenges behind your work and ability to make money. Your initial plan for personal use doesn’t have to be a formal document – in fact, it’s probably best to start with a stream-of-consciousness approach before editing. As an added benefit, your initial plan may come in handy as a rough draft to formally edit per the specifications of any particular investment opportunities that might come your way. If your goal is to get from a particular “point A” to a particular “point B,” then don’t get lost in your travels without a business plan as your map! Also, see step 10 for ideas on how to find a working business plan to model your own off of.
Step 2/ Track 2
“Big Mouth” by Santigold
Speak up and Have Transparent Talks with Possible Collaborators About Your Expectations
My BIGGEST (and least expensive) piece of general advice to get your business and legal house in order, is to simply engage in a habit of speaking up more before you execute a deal or start a collaboration. I’ve noticed that a lot of creative types tend to avoid discussing their wants, needs, or concerns in a particular deal or collaboration because these conversations are understandably uncomfortable to initiate. They don’t want to “rock the boat,” and would rather pretend that their concerns magically go away. I find this especially true for creative types that collaborate with their friends.
Approximately 90% of the collaboration related disputes that my entertainment law firm deals with from artists or creative business owners stems from their failure to have these conversations. This avoidance frequently leads to arguments, animosity, legal disputes, and abandonment of the creative project at issue. Be tactful, but speak up from the jump and be transparent about what your wants, needs, concerns, and expectations are. Give your co-collaborators a fair and clear opportunity to accept, reject, or find middle ground in meeting your needs. Making unanticipated demands months later can come across as shady. Speak up and have those needed conversations!
Step 3 /Track 3
“Other People” by Beach House
Decide if You Want to Work with Other People as Partners, Independent Contractors, Employees, or Interns
Understandably, you might want to be the sole owner of your business so that you have a bigger piece of the pie. The problem is that it can be overwhelming to do everything by yourself. Collaborating with another person could be a solution to this problem, but decide if you want someone to collaborate with you as a partner, independent contractor, employee, or intern.
Each of these different relationships imply very different things with respect to concerns such as joint ownership of your business/business property; liability concerns; and state/federal obligations. A college will likely give you the paper work to bring on an intern in exchange for school credit, and an attorney can explain to you the nuances/advantages/disadvantages of working with other people as partners, independent contractors, or employees. See also Step 10 for additional help on this matter.
Step 4 / Track 4
“Hold On” by SBTRKT
Hold on to Your Creative Intellectual Property by Registering Your Trademark, Copyrights, and Patents.
The three types of intellectual property (property rights that stem from creations of the mind) that might prominently be involved with your work as an artist or creative entrepreneur are copyrights, trademarks, and patents. Each of these forms of intellectual property protect different things, and essentially gives you a monopoly for a specific amount of time over a specific territory to exclusively, among other things, own, control, and sell them.
Copyrights protect original works of authorship in fixed format such as books, paintings, music compositions, sound recordings, screenplays, tv show treatments, photographs, illustrations, news articles, videos, film, and sculpture.
Trademarks protect certain elements that uniquely identify your business product or services such as your actual business name, your musical band name, a record label name, the name of your fashion line, or an artist pseudonym/stage name.
Lastly, patents in the creative world usually come into play for the fashion industry to protect design and utility inventions. Protect and secure your monopoly to the very thing you’re selling/making a living off of by having your intellectual property registrations in place! Not sure how to do it? Find an attorney to assist you or see step 10.
Step 5 / Track 5
“Protect Your Neck” by Wutang Clan
Protect your Personal Finances by Possibly Forming a Corporation, LLC, or non-profit corporation
If you’re the only person who owns your business or if you have partners on board, you don’t need to form a corporation to have a “business,” but there are different benefits involved in forming one. Namely, the ability to protect your personal assets. S-Corps, C-Corps, and LLC’s protect the personal assets of the owners of businesses that operate for profit. Having the corporate form also enables investors of S-Corps, C-Corps, and LLC’s to receive membership shares or dividends in exchange for their investment. A non-profit corporate formation can protect the personal assets of the owners of business that don’t operate for profit and generally have a charitable or public interest purpose.
Each of these different corporate forms have vast differences and are further nuanced by varying state laws. For that reason, I’m of the belief that a glossed explanation of each corporate form won’t be able to best help you here. Its best to have an attorney directly advise on what the implications are for using a particular corporate form in your particular state, coupled with the advantages and disadvantages to using a particular one with your specific business goals and needs. Step 10 can also help.
Step 6 / Track 6
“Handshake” by Two Door Cinema Club
Never do a Deal on a Handshake
You hopefully did the right thing by having transparent talks about your expectations with co-collaborators and people you might otherwise want to do a business deal with. Everyone feels like they’re on the same page and you’re excited to move forward. But it turns out that someone on the other side of your deal forgot about an obligation they had promised you, or worse – they reneged on their promise to pay you. What’s your recourse?
Revisit a written contract you hopefully had in place before you acted on the deal. Have your contracts in place before you execute your deal, and always ALWAYS get them in writing. The writing serves as proof of what was promised and can be used in court as evidence of such. Trying to save money by purchasing pre-made boilerplate contracts for cheap off the internet is often a recipe for disaster. I’ve seen many of them from some clients who later realize that these pre-purchased/ or free contracts didn’t address the specific needs of their situation. Or worse, sadly – entirely missed the mark. Your best bet is to get an attorney to write it for you.
As attorneys, we know the specific language that’s needed for your unique situation. Worse case scenario – if you can’t afford a lawyer, get something down on paper to memorialize the deal, and do the best you can. At the very least, make sure you have an email record. I. Can’t. Say. This. Enough. Get your deal in writing and never do a deal on a handshake. As we lawyers say all of the time – a deal made with a handshake is worth the paper it’s written on.
Step 7 / Track 7
“Take That To the Bank” by Shalimar
Open a business bank account for all of your business transactions
A truly old school track for an old school step: open a business checking account. Having a business bank account that is separate from your personal banking account will help you do clean and accurate bookkeeping. It also helps to enhance your professionalism, and if you have a corporation or LLC, you need to keep your business finances separate from your personal finances anyway. Speak with an agent at your preferred banking institution to learn more about the nuances in operating a business account for your work as an independent artist or arts related small business.
Step 8 /Track 8
“Get MuNNY” by Erykah Badu
Look into the Options to Fund your Creative Work or Business as it Builds
If you’re just starting out, it may be a while until you’re able to turn a profit that will sustain your basic living needs. Aside from pursuing personal loans or bank loans to help keep you afloat, the digital world has given independent artists and creative small businesses the ability to “crowdfund” their projects with web platforms like PledgeMusic, Kickstarter, Rockethub, and Indie-go-go. Thinking that its easy to just post and fund a $10,000.00 crowdfunding goal would be largely misguided, however there are more than enough success stories out there that can inspire you to still look into this option.
I had a chance to speak with Benji Rogers, CEO of PledgeMusic.com on the topic of crowdfunding in the music industry, and he shared with me that “Engaging fans, by allowing them to participate in not just the end result of but also the process of how you make music is now a big business. Direct-to-fanfunding is now a viable option and is no longer seen as simply a last resort. With an average spend per fan of $55 on our platform, its quite clearly a better business to be in than one of just trying to sell $0.99 downloads or $9.99 albums.”
Be sure to do your research on the benefits and disadvantages of using the different platforms, and see which one works better for you. Also be sure to have enough of an online following and a time commitment to successfully pursue it.
Outside of crowdfunding and bank loans, other options to fund your work includes working with a private investor to fund your for-profit business, or receiving grants if you have a non-profit business. Even if you can’t get someone to fund your business through crowdfunding, private investment, a bank loan, or a grant, I think it’s wise to have a part-time job to make sure you can survive. Your ability to survive will enable you to thrive creatively. It may mean that you wait tables or take on a temp job at night or on the weekends so that you can focus on your creative work by day. With enough persistence, you’ll be able to successfully transition from part-time work to working full-time on your creative work or business.
Step 9/ Track 9
“Ritual Union” by Little Dragon
Discipline Yourself with Good Business Rituals
As a former creative myself (I performed piano for 10 years was also an actress in NYC before finishing my law degree), I know how restricting it can feel to have rituals and discipline when you’re accustomed to unfettered free form creativity. However, the reality is that as an independent artist or small business owner, you don’t have the luxury of looking to a boss or superior for accountability for your business and legal housekeeping.
The only person accountable for your success is you. This largely requires a good dose of self-induced discipline and business rituals such as giving yourself your own deadlines for work, saving your receipts from purchases to use for tax time, not over-spending your budget, being diligent about routinely engaging your fans or customers with social media, and routine networking (making new business friends while handing out your business card) even when you’re not really in the mood as well as keeping a good rolodex of your contacts. The good news though about practicing these rituals, (and practicing anything, really), is that it gets easier over time.
Step 10/ Track 10
“Ima Read” by Zebra Katz
Get a Book and Self-educate Yourself on What You Need to Know
Last but not least, even the “brokest” of so-called “broke artists” have no excuse where this is concerned: grab a book and self-educate yourself on the business and legal aspects of your career. Heck – educate yourself on the creative aspects of your career too. Turn yourself into a master of your business by going to the library, or going to the bookstore, or simply purchasing online the different books you might need to have a successful career or business. I tend to work with a lot of musicians and it ALWAYS amazes me that many independent musicians will easily spend thousands of dollars on new equipment, but won’t go to the bookstore and spend $15.99 on a basic book for running a small business (and complain that they aren’t making any money and that they don’t know how).
Don’t have the $15.99 to spare? Go to your local public library and check out the books there – it’s FREE. Spend even one day to just read and learn what you can. Also read the various trade books, magazines, and websites within your industry so that you’re aware of developing trends and resources in your field. Even if you can’t ultimately afford a lawyer to help you with the business and legal aspects of what you do (which is always best and what I advise), you can still read on your own and try your best to learn. It will also help you make better informed decisions when you are finally able to work with a lawyer.
Not sure which books are best for you? Literally, hit google. As an independent artist or business owner, you’re going to have to learn to take initiative and be resourceful and a self-starter. You need a book on learning the nuances of an LLC in the state of California? Hit a google search on that topic and see what books and resources you can find. Spend a day at the bookstore and browse the small business section on different books for different business plans. Search the online bookstores for books that can help explain more details on your intellectual property. Its not hard to do. Perform a search, and read what seems to work best for your needs. Read, read, and read.
But Wait! – there’s a bonus track!
In close I want to leave you with one of my favorite tracks of last year: “This Chain Wont Break” by Wild Nothing (shout out to Joe Lambert, one of my favorite people in the music business who did an awesome job in mastering this track!)
Becoming a successful independent artist or small business owner is no easy thing. It’s likely going to take time. You may not succeed on your first try…or your second…or your third try for the matter. It’s ok and natural to get down when things don’t go as planned, but don’t stay down for too long. Become resilient to these challenges. Find the strength to dust yourself off. Move upward and onward. Be grateful for learning from any past mistakes, and enjoy the inspiration to make your next go at it even better. Keep an unbreakable spirit, and never, EVER give up.
Mita Carriman, Esq. is an entertainment, intellectual property, and small business lawyer at CarrimanLawGroup.com. As a former artist and owner of her own firm, she takes great pride in working with independent musicians, fine artists, fashion designers, film/tv producers, screenwriters, several online publications, nonprofits, and creative start-up businesses. In June 2012 she was named a top ten “must follow” music law resource on twitter by Cdbaby.com, the worlds largest online distributor of independent music. She can be reached at firstname.lastname@example.org or on twitter @nymusiclawyer. Her firm offers several options for new clients who need her help to get their business and legal house in order.
Legal disclaimer stuff: this article is intended and presented for general information purposes only. It does not replace or constitute legal advice of any kind, nor does it create an attorney-client relationship. You are advised to directly seek the help of a licensed attorney to help you with your unique and specific situation.