Post by juicytomatoes on Jan 7, 2010 10:06:43 GMT -5
just a thought... would it be easier if you thought of it as you individually setting up a casting business instead? So we're like freelancers (so no difficulty with employees overseas, dealing with double taxation and whatnot) who request that you cast stuff for us (which is pretty much the case anyway?).
the only roadblock in my mind would be how to deal with the 'royalties' part. Is there any other way to define this other than royalties? if it could be seen as a business expense rather than salaries/wages/royalties, it would make things a whole lot easier. Could the 30% that you have to pay the sculptors be classified as the expense you have to pay out to other 'businesses' (i.e. suppliers) rather than a kind of renumeration for us?
basically, treat everyone as a separate business entity, and the payment you make to them is considered an expense in your P&L and then you don't have to worry about how you're paying 'employees' abroad.
btw, just got the procreate today. It's fantastic! and thanks for the lovely note. it's so different getting a handwritten note, so much more personal
“Anger may in time change to gladness; vexation may be succeeded by content. But a kingdom that has once been destroyed can never come again into being; nor can the dead ever be brought back to life.”
My dad and I work as house builders here in the state of New York. he has many of his employees ( especially these days)listed as subcontractors, hence placing the taxation demands on them. Same situation here. let us worry about breaking the law. Paying sculpters once a year could be written up as a material fee for the actual miniature. America is made for the small business man and lots of nice little holes exist for us to legally weave between. Don't take my word for it though. honestly, I would pay the sculptor a nominal fee for thier sculpt and then not start paying royalties until that sculpt had started making income for you. say $500 or whatever. This would allow you to amass more capital while you are getting established, and I doubt any one of us is relying on a 70-30 split to stay alive. and if they are, all the more incentive to sculpt better.
Post by Troll Forged on Jan 11, 2010 8:23:36 GMT -5
If I set up shop as a casting service most demand a $300-500 payment for a master mold, then charge again for a production mold. It would not be fair, or wise to try that route as I offered this service to help artists who want to try and learn miniature making, like I am. Most of this is being learned with all of you, as in we are growing and learning together.
The sub contractor part sounds like the most logical thing thus far and the $500 lump sums also seems to be the best possible course of action. It is by far the easiest way to get this going. Now it does not mean I could not pay in installments to the artists as far as I know. That's how most business pay over here in construction where I work.
Also does not mean I could send some cash and just bite the bullet and pay the tax for people who are friends and work hard. I'm still reading lots on this and might even try to find a Small Buissness Development Center in the area to see what I can come up with. They recommend seeking a lawyer from what I read but I'm not so keen on that idea. I've not had good experience with any in my area as they seem more interested in moving me along to get with the next client than understanding what I am doing.
I called the business law hotline for the area a 30min for $25 call and was rushed with no good information at all. To me in 30min if some one was listening to me they would understand what this is all about but alas they person had no clue and even got the product wrong in the final advice. I called a few others that claimed free consultation and same effect.
What it all boils down to is that I need to make the best of what I can this year and continue to research new ways to improve the service for the rest of the artists. A we grow and some of you have sales every week, whatever, we might even be better off to create some form of LLC and then pay a monthly salary which would require more information so this subject is not going to come to a close for some time. For now though I'm going to do more research and see what I can3figure out by the end of next years tax season.
Troll Forged Miniatures trollsforge.com/ "TBH the professionals out there still put their pants on one leg at a time. everyone is faking it, the very fact you're out there doing it makes you professional." Borak
Lot's to consider. I worked on a farm a couple of years ago and we took a small business class together. It was pointless. They tried to get us to hire lawyers, website designers, consoltants etc. Not a very self-reliant option. My dad is a corporation. It is very easy to set them up. My wife works at a small bakery that is a corporation. It has it's benifits and can be set up for like $80 online. Which is what my dad did, and he takes in several million dollars a year (which he doesn't get to keep much of). Corps have that nice distinction between you and your business. If you're going to be making this your thing it may be nice not to have it come back at you personally. You can make yourself a employee and if you're not going to have any 'staff' you can do well. Reinvesting capital (such as buying yourself a 'company' car) is better under corps as well i think. Good luck!
First up, the sculptors are not your employees, they are private contractors.
Second up - royalties are a bit weird, and after reading a bit of IRS waffle they seem even weirder.
How they are taxed depends on the contract and the nature of the royalty. For manufacture they seem to be classed as assets (i.e. you need it: to make it), but promotion and sales is not the same and counts as a cost.
You may want to look at sales and bonuses?
Cost of molds: You design it so that the sculptor's cut first pay off the mold cost?
Once the cost of the mold has been recovered, they get a far more generous cut?
I think maybe you should set up payments a little like Black Orc Games' mini sculpt program. You are buying the sculpt for a set price, let's just use the $500 amount. This would be made in payments equal to a percentage say the 70 30 route until the $500 is paid after that a different percentage is paid maybe 80 20 for the life of the figure in the catalog?
just have it as a contract, don't refer to it as a royalty, maybe as a "retainer" to keep the sculptor for "future" sculpts..... I think that would put the tax responsibility back on us.
The amount paid to the sculptor, for the sculpt, could be set at a level where it would be some time before it could be paid off thus ensuring payments for a long time and if something goes wrong (god forbid!) like closing, the sculptor has 4 months to request the piece back or it becomes your property?
Sandra Garrity told me "sculpting is just taking a blob of putty and putting lines in it."
Your best bet is to offer the casting and sale services via license with a minimum eighteen month contract to ensure that you make sales.
One thing that you should be cautious of that should a range prove to be successful that the person that submitted the original sculpt can't pull the model from your stores and go independent.
The alternative is for you to buy the sculpt from the sculptor with an initial payment but that goes against what this forum seems to be all about.
At this stage in the game I can see this collective thing working as is but sooner or later as the business expands licence and IP issues will come into play.
It would be prudent to establish from the off set some sort of legal agreement to protect yourself and at the same time allow the sculptor the right to maintain IP rights to the model.
If for example someone makes a thousand bucks in royalties they may figure it's in their interests to start producing the models themselves. If this product is one of your bigger selling items you could find yourself suddenly losing a large proportion of your income.