Info Info - Thursday, August 05, 2010
On an almost daily basis, we are asked by a musician or composer or a manager one of the toughest questions to answer. ‘How much do I charge for…a gig…a song in a film…a song in an ad…to have my lyrics on a T-Shirt’ and a thousand other money making ventures in the music industry.
It’s a tough question to know how to answer; it’s really a ‘how long is a piece of string’ type of questions. There are as many different answers as there are bands and artists out there. Plus, unknown and struggling bands are always excited by the idea that someone might want to pay them anything at all. They get used to working for free or even paying to play. The idea that you might find some way to promote your music AND get paid at the same time, is an exciting prospect for many bands.
So, I thought this week I would share a couple of tips that are helpful to apply when trying to set your price.
The key is really finding a price that you would feel happy to work for. If you were to walk away with $100 from the deal, would that make you happy or would that make you mad.
Find the middle ground between feeling like you are getting ripped off verses feeling like you are getting paid well beyond what you were expecting. That middle ground is where you should really be aiming.
Think about how much work will be involved for you in making the work happen. Can you break that down into an hourly amount? Work out how much per hour you would be happy to work for. (say $25 per hour) You know the work is going to take 10 hours (they want you to write a song for their short film) so, $25 x 10 hours = $250. Is that a fair price?
Practice common negotiation skills like putting yourself in the other person’s shoes. If your price is completely over the top, they won’t do a deal with you this time, or anytime in the future.
Value what you do. If you don’t, nobody else will either. If you give it away for nothing you need to have a way to convert that nothing into something. Bands might give away a demo CD in the hope that more people will come to their live shows. You can apply that principle in any deal that you do.
Weigh up the opportunity, is it really the opportunity that you think it is? What are the down sides verses the up sides
Does it always have to be a one off payment? You may be able to negotiate some kind of ‘verses deal’. The idea is you get a set amount for providing your service (say $500 for the gig) but if the use is more successful than 1st planned, you reserve the right to collect a larger share of the income, or renegotiate the deal. (say if 50 people show up to the gig you get your $500 plus $5 per person beyond the 50 person mark.) This works in film and other uses. It is sometimes referred to as a ‘backend payment’ (more about this in future blogs.)
For me, I don’t think that it is about winning or losing the negotiation. It is just about finding that middle ground. If you really want to opportunity to happen, you will be prepared to give up more. If you don’t mind if the opportunity goes ahead or not, you may be prepared to give up less.
Final tip – It is rare that you only get one opportunity in life. If the band is good, or the music is good things will happen. So saying no or valuing your music highly is not to say that you will never get opportunities. But the flip side of that is also true, be a diva and say no too often, eventually people will stop bothering to ask.
So, how much do you charge? It’s up to you. But use the tips above to try to find some kind of balance.
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Mark Beard - Monday, July 26, 2010
It's tax time again... time to complete those tax returns and collect a refund?
Maintaining financial records
The ATO (Australian Taxation Office) requires both individual employees and businesses to
keep source document evidence of economic activity. The reason being
that expense transactions are used both by individuals and businesses
to reduce taxable income, so naturally the ATO requires available
evidence of the transaction and thus the deduction.
In the case of work-related expenses for individuals the ATO states:
"You must have written evidence to prove your claims if your total claims exceed $300. The records you keep must prove the total amount, not just the amount over $300. The $300 limit does not apply to claims for car, meal allowance, award transport payments allowance and travel allowance expenses. There are special written evidence rules for these claims." Source: www.ato.gov.au
In the case of records for businesses (including companies, sole-traders and partnerships) the ATO states:
"By law, you must keep business records for five years after they are prepared, obtained or the transactions completed, whichever occurs latest. In addition the records must be in English or in a form that we can access and understand in order to work out the amount of tax you are liable to pay."
Are you a special professional?
Did you you know that as a Australian resident (for tax purposes) and a special professional you may be eligible for what the Australia Taxation Office (ATO) calls "Income averaging for special professionals"?
The ATO states:
"You are a special professional if you use intellectual, artistic, musical, physical or other personal skills in the presence of an audience or you perform or appear in a film, on a tape or disc, or in a television or radio broadcast." Source: www.ato.gov.au
Essentially, income averaging is what is called a "concessional tax treatment" and may provide "special professionals" the ability to "spread" their income over a number of years and possibly save on tax.
For more information consult your accountant, tax adviser or downloaded the ATO information sheet via:
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