While visiting my family in Connecticut over the holidays, my mom came to me on behalf of a friend who had a legal question. This friend "Sally" is a middle school teacher and had developed a unique idea for an educational curriculum for science teachers. She wanted to market and sell the curriculum, but had some concerns over whether she could use the title she came up with.
Since I was in the Christmas spirit and Sally was operating on a budget of less than zero, I told my mom that Sally could very easily (and for free!) run a trademark check at the U.S. Patent and Trademark Office website (titles are protected under trademark law, but only if registered through the USPTO). If the title was available, the website explained how she could register it and what it would cost. I also suggested to my mom that Sally find a way to hire a lawyer despite budget constraints because A) I'm not licensed to practice law in Connecticut and therefore couldn't provide anymore worthwhile advice, and B) there might be some trademark dilution issues if the title was too similar to something else already out there.
A few days passed and my mom told me that Sally had gone to the USPTO website but ended up without any answers. To Sally, the website was difficult to navigate and understand; she wound up more confused than ever. When my mom asked me what Sally should do, this was my answer:
"Sally should hire a lawyer. If she can't afford one, she'll have to become her own. That will mean spending a lot of time being confused at first. But eventually she'll understand and be a better business owner because of it."
In the past, I've spoken about sweating the business stuff, but I haven't really detailed what that means for all you budding artrepreneurs out there. So by way of closing out the year at The [Legal] Artist, here are the top three things you and Sally need to do to turn your art into your business:
(1) Have patience. Seriously, this may be the most important thing I ever tell you. Artists, by nature, are doers who thrive on activity and creation. That's a wonderful thing in my opinion, but successful businesses require someone behind the wheel to be thinking and planning, playing the long game (for your Boardwalk Empire fans out there, think of it this way: every Lucky Luciano needs a Meyer Lanksy). And playing the long game requires patience. In Sally's case, if she can't hire a lawyer to walk her through this process, she's going to have to do it herself. Which means looking at a lot of documents she won't understand. Sally will end up frustrated and agitated and the business will take off a lot slower than she wants. But that's okay! If she has patience and keeps at it (with a little help from Google) these complicated things will eventually seem less complicated. When I started law school, I had to read each case 3-4 times before I understood what I was reading. With some practice, I learned how to do it in a fraction of the time. If Sally spends an hour or so clicking around the USPTO website, eventually it will start to make sense and she won't need to pay a lawyer $400 an hour to do something she can do by herself for free... if only she has some patience with the process.
(2) Decide what kind of form your business will take. There's no doubt about it - people take you more seriously if you're a business. Years ago when I was a young television producer, I went out to pitch a number of TV show and script ideas. One network executive looked me right in the eye and said "we like you, but we will not do business with you until you incorporate." A week later, Hammerspace Productions LLC was born.
If you want to turn your art into a business, then you're going to have to actually turn it into a business; that means deciding what type of business you want to create. For artrpreneurs, the most obvious choices for business type are sole proprietorships (if you're the only employee) and LLCs, mainly due to the low start-up costs and paperwork. There's a good article here explaining the difference, but the gist is that with an LLC, you pay income tax for both yourself and the business, but the business shields you from personal liability (if you're sued, they can only come after business assets, not your personal assets). With a sole proprietorship, you only pay taxes on the profit you make, but you are open to personal liability (meaning someone can sue you for the acts of your business, putting your personal assets at risk, such as your checking and savings accounts, and even your house). In a sole proprietorship, you generally do not file any documentation with the state, whereas an LLC requires certain documentation to get going (such as a federal EIN, state and federal tax documents, etc). Check with your state's Secretary of State to find out wha documents they require.
(3) Draft a business plan. This is a tough thing to ask of artists because it requires them to think about things like taxes and finances and long-term planning. Hell, even after seven years producing and three years of law school (and dozens of jobs and internships in between) I'm still struggling with it. But a business plan is extremely necessary for two reasons: First, it shows outsiders that you're serious and have given your business some thought. Second, it lays out a path for you and helps you understand steps you need to take to get your business off the ground. A business plan need not be written in stone. It should be a living document that grows with the business. Put in as much or as little detail as you want. Regardless of whatever form the plan takes, it should impart one clear message: you have thought about this business and know what is required to make it a successful one.
As you build your business, there will be a lot of little things to consider. How will you accept payment? How will you market your wares? Will you pay taxes yearly or quarterly? All of these things are important on some level, but getting these big decisions made will take some time, so don't rush it. Have a little patience. I promise that you (and Sally) will be glad you did.
Have a Happy New Year everyone!