If you’re a business owner, just for fun, try making a deal with one of the check out clerks over at Office Max, “How about you let me have this equipment, and if my business does well, I’ll come back and pay you?” Or you could try approaching your CPA with this, “How about you do my company’s taxes, and if I have money left over I will pay you with it?”
They sound pretty ridiculous, don’t they?
You’re probably saying, “That would never happen”, and you’re probably right, but you’d be amazed at how many business owners pitch graphic designers such a deal. In fact, there seems to be a never-ending parade of Monte Hall “wanna-be’s” wanting to play, “Let’s Make a Deal”. From the humorous to the absurd, from the mildly insulting to just plain fraudulent - if you’ve been a freelance designer for a few years, you going to see it all.
Over the years business owners have pitched me on some outrageous deals over the most wacky products imaginable: a hangover pill, wearable buttons with Bible verses on it, a baby coupon book, dune buggy races and inspirational decals you can stick on windows. An interesting side note is that ALL, and I mean all of these business owners were thoroughly convinced they had the next great idea – and that I would be foolish not to get in on their rocket ride to fame and fortune.
There’s the Windup, and Here’s the Pitch
The business owner’s pitch is that the graphic designer provides some upfront work on a project(s), and if the owner’s idea takes off and makes money, she/he will pay the designer. If the project doesn’t take off the designer doesn’t get paid and has wasted her/his time - the owner isn’t out any time or money for the design. Sounds like a good deal, doesn’t it? Not if you’re the designer.
The deal usually works something a little like this; the business owner has no money to fund the project and has no VC (venture capital) backing, yet she/he is convinced they have the next best idea since sliced bread. Her/his pitch is that the graphic artist does the entire up front design and creativity, then, if the idea takes off she/he will get a percentage of the profits or a flat rate. What designers typically hear is, “I am looking to partner with someone - I am looking for a partner”. This statement should be one of many HUGE red flags: remember that a partner is someone what not only has risk in the company, they have a stake and a say in its creation and direction. As a designer you have nothing. What the owner really means is, “I need someone to bear all of the upfront risk for me and if it takes off I may pay her/him.” Ouch.
At this point, a couple of questions have probably leap into your mind:
* Why doesn’t this business owner have any money? Isn’t having working capital in a business essential for success?
* How will I know that if the business takes off, the owner will pay? When will they pay, and how much will they pay?
* If this idea is so good, why would any sensible owner want to share in the future profits?
* Why can’t she/he find business people looking to invest in such a “great idea”? Shouldn’t venture capitalists (VC) be jumping over each other to invest in this?
Are All of These Deals Bad Ideas?
Not necessarily. I don’t want to paint a portrait of unscrupulous business owners preying on unsuspecting graphic designers like a Hollywood movie about Dracula. These aren’t bad people; at least most of them, and there are some legitimate projects and business owners out there that might be worth a look. But over my seven plus years as a designer, I’ve never been approached with one. If you’re an owner legitimately looking for someone to help you with your business, or if you’re a designer has been approached with a deal, I leave you with the following advice.
My Advice to Business Owners Looking for Help:
* You might want to look into working with a designer who is young, inexperienced or doesn’t have a lot of work coming in. They might be willing to take a chance on your project. Be willing to take a lesser degree of talent and experience when not paying.
* Make sure you’re committed to your project: a business plan, marketing strategy and competitive analysis are a must. Make sure you’ve seriously researched your market before you contact any designer.
* Be honest with yourself and the designer. If you have no intention to pay the designer upfront and you need a partner, let this be known at the beginning of your conversation. I’ve experienced owners who hold off of disclosing this until after a proposal and a face-to-face meeting. It turns out they wasted their time and mine.
* Talented designers really aren’t interested in these types of projects. She/he has clients more than willing to pay them in cash. You want to avoid wasting your time and theirs and concentrate on other options. Now you might get lucky and convince one to help you, but 99 times out of 100 you’re going to be throwing away time.
My Advice to Younger Graphic Designers:
* Use your common sense: If the idea was that good, why would the owner be foolish to share the profits with you?
* Use your common sense part 2: If the idea was that good the business owner would have no trouble finding venture capitalists jumping over each other to invest in the project. Perhaps the owner doesn’t even know how to do this – red flag here. Remember, there is ALWAYS funding for good ideas.
* Ask to see a business plan or model. See the projected financial statements and marketing strategy. Make certain that the business owner’s put a lot of work into this idea and that it makes sense to you. No business plan, no designer.
* If this will allow you to practice a new skill, broaden your portfolio or keep you busy when you don’t have a lot of work coming in you may want to VERY CAREFULLY consider the project.
* Be wary about being promised “loads and loads” of referrals after you complete the project, “I am going to tell all of my friends about you”. I hear this all the time, and if you’re a freelancer, your going to hear it to, if you believe it let me know – I’ve got beachfront property in Kansas I’d like you to look at.
* The best advice I can give you is to try to quickly identify the bad ideas and the scams. Very politely tell the owners that you’re not interested in the project and leave it at that. Watch your time with these people; you can invest valuable hours without making a dime. Ouch, that can hurt.
* Get EVERYTHING and I mean EVERYTHING in writing up front in the form of a contract.
* Accept the risk: if you do decide to take on a project and it doesn’t take off. You’ll have no recourse against the business owner.
Designers, use your common sense, if you really need the work and or experience you may on a rare occasion consider one of these, but protect yourself at all times. Ask yourself, “If this idea is so good, why can’t the owner raise any money to pay for a designer?” Remember, your time is just as valuable as the next person’s; you deserve to be paid for your time and your expertise. Make sure you protect yourself at all times.
A business savvy graphic designer is often a contradiction in terms; however, Jeremy is a unique combination of sharp business marketer and creative designer. This one-two punch provides clients with targeted marketing, advertising and design projects that yield outstanding results and a terrific return on their investment; they actually work. Companies looking to feel more confident and credible with their business brand, tired of getting lost in a crowd of competitors and always feeling like they have to compete on price, need to call Jeremy at 480.391.0704.
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By: Jeremy Tuber