February 25, 2015 | by Caroline Moore

(Ed. note: Caroline Moore is a photographer and designer based in western Pennsylvania. Her new book, Punk Rock Entrepreneur, is due out in September and outlines not only her own experiences starting a business through a DIY punk lens, but the experiences of some of her peers as well. It’s a great, helpful, illuminating read filled with real-world advice on how to truly be your own boss and turn your creative aspirations into your livelihood. Pre-order it here. The Runout is excited to publish an excerpt from the book below.)

Sell Out

I’m not actually going to talk about sellouts here, because I think that’s as boring as arguing over who’s punk and who’s not. Money is kind of a taboo subject in the punk scene, and some small-business owners get a little squirmy when you get into the subject, too. While the punk community has taught me so many positive things, it’s also taught me a few things not to do. The subject of money actually puts a few points into each column. I learned a little bit about good money management from touring bands but a lot about an extremely negative attitude toward money, which will be destructive to your business.

We’ll start with the good stuff. I learned a lot about money flow from touring bands. Granted, I did learn a bit of this through bands that were doing it badly. It’s amazing to me how many bands will jump to touring (and how many entrepreneurs will throw themselves into a new business) without doing any math first. This seems to be a pretty basic concept, but you want to have a solid understanding of how much this undertaking will cost you versus how much you’ll be bringing in. You want to have some kind of budget, which you’ll likely need to revisit at various points to make sure you’re still on track. And you want to have these things before you take that leap.

One method to keep your cash flow in the black is one that Adam Joad touched on in a previous chapter—keeping your overhead low. If you go on tour with three buses, a pyrotechnics show, a 10-person crew, and a plan to stay in hotels every night, you’ll have to take in a lot of income to offset those costs. If, on the other hand, you decide to head out with just your band and a merchandise person in a van, which you’ll also be sleeping in, you won’t need nearly as much cash to keep your bank account positive. A rather ridiculously named band wrote an article detailing how they’d made some $136,000 on tour but still lost money. This is because the expenses for that tour were close to $148,000. Now, this is fairly basic math, but I’m gonna help you out—they spent $12,000 more than they made. Clearly, they didn’t bother to do that basic math before they lined up equipment rentals, lighting boards, and huge tour buses. These things might be really nice to have, but they apparently aren’t things you can afford right now, Ridiculously Named Band. You’ll have to cut luxuries like those to afford necessities like gas and food.

Likewise, when I started out in photography, I didn’t immediately rent a studio and hire employees. With just me, working out of my home, I didn’t have much overhead, and it didn’t take as much income to make the business financially successful. Bootstrapping is your friend, particularly when you’re just starting out. It’s easy to get weighed down thinking I need an office, I need to be in the city, I need a dozen employees and state of the art equipment to even think about starting this thing. You don’t. You don’t necessarily need fancy equipment to make something cool. When I say I run a small business, I mean a REALLY small business—it’s just me. It’s incredibly important to identify those things that you honestly do require to succeed, and those things that you don’t. Would owning a huge studio with an office space make me feel super important? Maybe. But am I in a position that it would help my business? No, I’m not. It would require me to raise my rates to offset the cost, but since most of my work is on location, it wouldn’t really help me to bring in more business. Now, do I need a solid camera for my photography business? Yes, I definitely need that, and that’s where I’m going to spend my cash. I learned to keep my overhead low, because it makes it easier for me to keep my business running. I learned to buy new equipment only if I could justify that my current gear was holding me back. Is this purchase going to save me enough time to justify the expense? It’s important to look as critically at your expenses as at your income sources.

Don’t go into debt to buy equipment if you can help it. You may be in a position where taking out a loan to start your business is a necessary course of action—if you’re opening a gym, you’ll have to rent space and buy machines, and there are some large startup costs. But try to figure out your MVP—what’s the least that I can start this business with, without giving up crucial elements—and start with that. Whatever you have, scope it down to something you can ship. Show it to your friends, talk about it, give it a platform. Use that to earn the cash to put back into your business. I found some advice on the first year of business as a photographer, and it read, “a laptop won’t do it. Don’t even try, you need a more powerful processor.” That’s swell, but a laptop is what I could afford (in fact, a laptop was what I already owned). So a laptop was what I used exclusively for about three years. You can, in fact, get by with a laptop. It’s a time bandit, but I was pretty insistent about not putting things on credit. I also made sure that I made business purchases with only business funds, not my own personal checking account. I kept saving money from my photography work until I could afford to upgrade to the gigantic cinema-screened beast that I use today. It’s very easy to blame your gear for your not getting started—I can’t do this because I don’t have a new Mac Pro or this software or that camera or this much studio space. I’ve made flyers with a Xerox machine, and I worked for a whole year using a lens that wouldn’t autofocus on my camera, so I shot hockey with a prime lens, manual focus. This is the photographer equivalent of walking to school in the snow, uphill both ways. Is it harder to do? Of course. But it’s not impossible.

You’re ready now. Figure out how to take what you have today, and start.

Figuring out your minimum overhead helps stem the tide of money going out, but what about increasing the money coming in? Consider how to get passive income to work for you. Everyone hits that roadblock of having only so many workable hours in a day, but bands on tour have only the length of their set—anywhere from 15 minutes to an hour—to get paid for the thing they actually do. There’s a set door price and a set time limit, and the venue has agreed to pay them so much for that time. That’s all the money they can make there. Eventually, the amount may be higher—they’re headlining instead of opening, tickets may cost more—but it’s still capped there. Unless, of course, they had something else to offer people.

Welcome to merch. Bands have t-shirts, stickers, back patches, records, pins. They will create a great experience in their live shows and then embed that experience in real products that all remind you of said show. All those things take time to make, but once they’ve made them, it takes significantly less time to reproduce them. That’s how passive income works. You’re effectively selling something that you don’t have to put much additional time into. I do custom design work for all manner of projects, and my time on that is capped. I can work only so many hours in a day. However, I have personal projects that I’ve made and can continue to sell. I made some posters, I have a few t-shirt designs, I have some linoleum block prints, and they’re all available in an online shop. The first one took time—I had to make an illustration or carve a block. But now, I have a stack of posters and shirts and prints in stock. While I’m minding my business and doing other work, people purchase them. I can keep selling that same design, but with custom work, I get paid only once. While this may seem like an easier thing to do for maker types, people in service industries can do the same thing. Many venues will rent out space on off nights, which requires very little work or time commitment on their part. Photographers, bakers, or consultants might offer e-books to share knowledge that’s of interest to clients and colleagues. It takes time to create that guide, but once you complete it, you can continue selling it indefinitely.

Of course, you’ll need money to create all these pieces, and where does that come from? Your business fund. In the interest of not losing everything you own, it’s important to separate your own money from business money. Most of my friends in bands had a band fund, which wasn’t any individual’s money, but, collectively, it was the band’s money. As such, it was spent on band things.

I worked awhile without having a business account, because I thought it’d be easy enough to keep my money separate. Maybe you’re better at that than I am, but I found it really helpful to have a separate account just for business. I developed a system: when I got paid for a job, I’d split the money three ways. A certain percentage went into my main checking account—so I’m paying myself. A percentage went into the business account, for taxes, because I’m at a point in my life where all my income is untaxed, which can make for some unpleasant surprises come April if you’re not prepared. The rest went into the business account, for use on the business—if I needed to buy a new lens or some postcards for marketing mailers, that’s where the money would come from.

So, using the band model, say you get your guarantee from a venue. You do your three-way split and then look at what’s in the band fund. Since some of your income goes to reinvesting in your band, some of that money can be used to buy t-shirts. (Maybe some goes to replacing an amp that blew out. Some methods of reinvesting don’t result in new income. And certainly there are expenses like gas and food.) The next time out, you can add that t-shirt money to the income you’re guaranteed, and at the end of the tour, you do your split again. This time you’re making shirts again, but some of that money gets invested in making a record, and you keep on that way. Some of your income should always be going to making your business better. Passive income streams are one of the ways you can do that.

All this talk about money might sound terribly crass to you. You’re following your passion and creating something that speaks to you, and you’re not going to sully that with talk about money. The thing is, money matters in a business. If you want to do this as a hobby, then there’s a whole different set of rules. You can do whatever you want. You can go on tour at your own expense and not make a dime. You can give away paintings. You can set up workshops and teach for free. But if you want to make a living at any of it, then money matters. Ira Glass said that the more idealistic you are about your work, the more savvy you have to be about the business side. Because you’re doing something you love and you’re making something that you want people to see, it’s a lot more tempting to take any opportunity to work, even if the pay is terrible or nonexistent. If I’d been told that the pay would be really low at the jersey factory where I used to work but that it’d be really good exposure, there is zero chance I would have even considered taking that job. I would have laughed my way out of the interview because it wasn’t something I was personally invested in, and the paycheck was my only motivator. They weren’t offering me anything BUT money.

When you’re working on something you feel strongly about, though, something that you feel is important to get out into the world, there are benefits other than money. This certainly makes it a lot harder to decide whether an opportunity is worthwhile. The decision is harder but also incredibly important in order to determine what sort of exceptions you’re willing to make. Is bartering with another business something you’re willing to consider? Are there conditions under which you’re willing to work for free? Some writers will publish unpaid work only on their own blogs because, at the very least, traffic earned is to their own platform, instead of someone else’s. When people offer me exposure in lieu of payment, I remind them that people die of exposure. But I am willing to do pro bono (that’s Latin for “free”) work for certain charities. You’re able to work outside standard business practices if you want to, but it’s also important to remember that most of the world doesn’t. You can’t pay your rent with Instagram likes or a really cool scarf. Make sure you’re bringing in enough actual money for your business to operate.

It’s easier to be taken advantage of when you care so much about your work, and it’s a problem that’s compounded by the guilt some people have over making money at all. Some feel like they shouldn’t be making money for doing something that they love and enjoy, that the work should be its own reward.

“The Punk and DIY scene taught me that money is evil. This isn’t a good lesson, but rather a belief system that doesn’t exactly make it easy to make money. When you think money is evil and you don’t want to be greedy, you make it hard for yourself to charge what you are worth. You discount too much. You undersell yourself. You have a skewed perception of money from listening to too many anarcho, anti-capitalist, hippie punk bands. This belief led me into situations where I was always trying to justify my prices to the ‘punx’ of the world and constantly being afraid of being called a sellout. And this caused a lot of conflict in me as I tried to make sense of it amidst questioning and criticism from outsiders. I learned what ‘working for exposure’ was all about. That exposure was considered an acceptable form of payment for doing any kind of work for the music business. I fell for it many times and had my fair share of exposure. I was even published in national magazines. I’ve learned that exposure does not equal happiness and doesn’t put food on my plate. Exposure alone isn’t worth it.”

—Jeff Finley, Go Media and Campfire Conspiracy

In the punk scene, there’s an attitude that if you DO make money doing something you love, it will make your work inauthentic, and you will be a terrible sellout. It’s a really strange attitude. Say I’m a fan of your band. I love your band. You make amazing music, and it’s the best thing I’ve ever heard, but I can’t give you any money for making it because it’s art, and you should be doing that just for the love of doing it. You can’t get day jobs either, though. When would you have time to write and practice and record all this amazing music that I love? Plus, you won’t be able to get time off from work to go on tour to Podunk. And even if you were to keep making the exact same music, which I adore, if you sign to a major label, or make any money, or if, God forbid, other people find out who you are and you get popular, I’m going to tell everyone what sellouts you are. Did I say I loved your band? What I meant is, you’re the worst.

There’s a serious backlash in response to any kind of success. The punk police come out of the woodwork. This is punk, but that isn’t. This makes you a sellout, and that doesn’t. They’re some of the most boring people to be around. Eventually, when some bands did start actually making some cash and touring in buses instead of vans, they’d hear, You can’t come back to us if this doesn’t work out. How many years do you have to live in a van and eat at soup kitchens? Are you ever allowed to make a living at this? People can somehow be a huge fan of what you’re doing but still expect you to live in abject poverty while you do it, or else whatever you’re making isn’t authentic. It’s not art if you get paid for it.

“Dog Days was terrible about money management. When we regrouped, we were just happy to be playing again. We recorded our full-length and knew things were different. Things were slower, and we weren’t serious about being a full-time band. We made our music free. We gave it away on Bandcamp, and, out of my own personal obsession, I printed fifty packaged cds. We figured, why not get it to as many people as possible? Not a bad idea, unless you want to see a return for the work you put in. I know there will be some of you out there that say ‘man, making music should be for the love, not the money.’ You’re half right.

“You should make music for the love, but making money at something you’re good at shouldn’t be looked down upon. If you have something people want, sell it. As an audience, we should want to support the people that give us something special in life. Giving money to bands that give me music that betters my life is no sweat. They deserve it. Where would I be without the bands that I grew up on? What if Bad Religion couldn’t fund their albums? Who would I be if the bands I saw when I was younger couldn’t tour because they couldn’t afford to?

“How you run your band is—and totally should be—up to you. I’m curious to see where the music industry goes when there are a million bands getting paid nothing for creating music and how long that system will last. Will it continue? Will the quality of music drop because people can’t spend the time making it great?” —David Wilson, Skies Bleed Black / Dog Days

People who grow up around this mindset can have a hard time shaking it, and they carry it into their business ventures, even when they’re entirely unrelated to that scene. It’s an attitude that is counterproductive to running a successful business, for obvious reasons. You don’t have to sell your soul or ditch all your values to make a living. But you do need to develop a healthier attitude about getting paid.

I may have a different perspective on this than some, having studied graphic design, which is considered a commercial art. Naturally, I feel that being a commercial art doesn’t necessarily preclude graphic design from also being a fine art or an authentic expression. The punk scene often touts the opposite, that making money negates any art or authenticity, despite the fact that many musicians in the genre are making a decent living. The easy argument, of course, is that they aren’t making art. They’re completely commercial, or they’re making watered-down drivel to appeal to the masses, or they’re in it only for the money.

So let’s talk for a minute, instead, about the Sistine Chapel. I did my undergraduate thesis on papal portraiture and am morally obligated to talk about Renaissance artwork as often as possible. I bring it up because Michelangelo got paid to create the famous mural on the chapel’s ceiling. In fact, he got paid Pope money, which means he got paid extremely well to create it. That sweet paycheck was his driving motivation to even take on the work—Michelangelo considered himself a sculptor and thought that painting was kind of beneath him, and he was actually really busy with another sculpting project at the time. But Julius II was insistent and willing to compensate him for his time, so Michelangelo went ahead and painted the ceiling.

Are we really going to argue that this isn’t art because he was paid for it? Or it isn’t art because he got paid really well for it? Or that it isn’t art because it was client work? It sounds entirely ridiculous. And yet, by that very black-and-white definition in which making a living from your work negates the work itself, the Sistine Chapel panels are not art, are not authentic, and Michelangelo is a sellout (so you should probably start telling your friends that you really like only his older stuff).

You may, understandably, not be comfortable with equating whatever work you’re doing with one of Michelangelo’s most famous masterpieces. But you can do authentic work that speaks to people in a real way, with integrity, and also make a living from your efforts. The two are not mutually exclusive. It’s a mindset you need to fully embrace if you have plans to run a successful business.

Now, I may have leaned a little hard on Michelangelo’s taking the gig only for the money. We’ve all been there, Mike. But once he accepted the job, he went on to argue with Pope Julius II about the content of the painting and negotiated a much bigger project, as well as a way more complex piece. If he was going to do this damn ceiling project, he was going to do it right.