Today, I would like to end my previous two blog articles with a simulation of how working with a partner could look like in the beginning and give some thoughts on how it might evolve over time, because it’s nice to talk about things in theory, but having real data — or in this case, at least a simulation — just makes things easier and more concrete.
So, we return to Jane’s adventures, where she has been sipping coffee, driving her Honda up and down the country and working her magic on a few potential buyers for my art, but before we study what happened, let’s see how we structured our agreement at the beginning:Â
A good way to find an agreement is to simulate it and just sit down with our partner and go through the whole process of sales as a mental exercise, so that’s what we did.Â
After we discussed all my average expenses and what Jane thought would be hers, we found that at a price of 1000€ per work, the average profit margin is about 80% (100€ I have to spend on making the work and about 100€ to compensate the usage and a full tank of gas for Janes car with miscellaneous expenses like the few drinks she might buy potential prospects).Â
As our expenses are more or less similar, we decide to split the whole sale sum 50/50, thus making us equal partners.Â
This makes sense to both; I calculated I only spend about 4 hours on average making one of my paintings and a 100€ per hour working on what I love seems like a nice number — albeit I am aware that if nothing sells, that number will drop to 0, but at an average of at least 2 sales per 4 paintings made, it still brings me a return of 50€ per hour (because only half of what I made actually sold).
Jane might spend twice the amount of time selling the work (or even more), but the nature of her work and her success isn’t bound by the time it takes for a thick paint blotch to dry or the fact that stretching a canvas cannot be done in 5 minutes, she can potentially triple her production without any added effort on her side — meaning she could potentially sell 3 instead of 1 painting to someone and thus make 3x the return.Â
Due to this fact, but especially because Jane and I decided to partner up because of her ability to sell the kind of products I make and my inability to do sales and work at the same time, Jane’s whole job relies on her making sales. As such, even though the majority of the risk is on her side, Jane decides that it’s worth the potential reward (especially because she can sell several pieces at a time and I have a large inventory of finished work) and we come to the 50/50 split.
Were she more conservative with her projections, she might have demanded 60% of the whole amount, and the decision for me to either go into such an agreement or not is absolutely one that each of us has to make for ourselves.Â
It all depends on what expenses we anticipate, how well they think they will be able to sell our work and in what quantity, and of course if they’ve done similar sales before, because those will give them a lot of information to help define the deal and us some assurance that they can deliver on their promises (the emphasis is on some, as it’s really unpredictable).
Now we go into the future; Jane has been successfully selling about 3 pieces per month, effectively making each of us about 1200€ a month (before taxes). If this example was happening in Slovenia, we both could live a modest life in the capital and have enough to set aside for a rainy day or reinvest in our partnership. But of course, these numbers won’t work in Santa Monica, and they might work even better someplace, where the living standard is even lower than where I am.Â
The last thing I would like to talk about is what happens after we come to a financially comfortable place?
If we end up selling 3 paintings because Jane can’t sell more, I could think about finding another partner and as most of the details have been polished out by me and Jane, if I were to find a Paul or a Brian next, both would have a much easier time working with me (and vice versa), as most of the hypotheticals have already been addressed.Â
But if we only sell 3 paintings because I am unable to produce more (and it’s not an issue with me being lazy — though 4 hours per work but only 3 per month does bring up some questions to be honest) Jane and I need to start raising the price.
Maybe only 5% or 10%, and see where that takes us. If after a while we’re still struggling to sell enough work, we need to bump up the price a bit more. And we continue this as long as demand is high (I might even use the excess money I make now to hire an assistant and make additional work, because Billy could stretch and prime my canvases and I could teach him my craft — a win win for both.
While all of this is just hypothetical, it works in reality if applied. I do not believe all of us artists were made to sell our work, organise it and manage everything that comes with being a small business. The point is, we don’t have to. We just have to learn that delegating ones work is a necessity if we either cannot do it ourselves or even if we just don’t have the time.Â
In the end, what mattes most to me is the story my work tells, and by delegation I have the ability to tell more of them to more people.