Chapter 13 The business side of ice sculpting.
After reading this chapter, you will be able to:
* Identify the responsibilities a professional sculptor must manage
* Discuss the nature and purpose of a business plan
* Describe various financial documents used in business, including budgets, break-even analysis, profit and loss statements, and balance sheets
* Discuss methods for attracting media attention and creating press kits
* Discuss the nature and purpose of service contacts and work orders
* Discuss how theme is used in creating sculpture designs
* Define functionality as it relates to ice sculptures
* Identify and discuss various practical considerations that must be made before finalizing the contact
Key Terms and Concepts
profit and loss statement (income statement)
OUTLINE The Professional Sculptor * As Artist * As Entrepreneur * As Promoter * As Office, Production Manager * As Delivery Driver * As Sales Person Interviewing the Customer * Identifying Themes * Identifying Important * Design Elements Practical Considerations in Evaluating Potential Business * Cost/Benefit Mix * Lost Opportunity * Budget and Pricing * Transportation * Set-Up * Equipment Required Professionalism: A Requirement At All Levels Artist Profile
This chapter addresses some of the business-related issues affecting sculpting for profit. That said, this chapter will not tell you how to succeed in business. It merely touches on some topics relative to sales and service, customer satisfaction, and financial management that are part of good business practices. The chapter discusses some of the attitudes and tools needed to be successful in the business side of ice sculpting.
We begin by evaluating the different responsibilities a sculptor must assume when doing works for hire on a regular basis. Effort must be expended in many areas in order for the business to thrive. However, some of these areas may be new territory for the artist.
We continue by focusing on the customer's needs, and the evaluations that the sculptor must make before committing to produce the work. If a sculptor carefully considers the variables involved when planning an icework, a more efficient solution and a better sculpture can be expected. Both the sculptor and the customer will benefit from a thorough examination of the work being requested. There should be no surprises by either parry.
THE PROFESSIONAL SCULPTOR
As much as in any enterprise, the personality and philosophy of the sculptor affects the character of her business. Professionafism is an attitude and a way of business. It is reflected in the condition of the tools, orderliness of the work area, and demeanor of the artist. It is valued by the relationships that are established with customers and employees and evidenced in the execution of the work orders. Professionalism is everything to the sculptor, and to the customer.
In the beginning, it is typical that an individual creates works for hire as a sideline business to his or her primary employment. Not many people jump in without having at least some previous experience in making and selling ice sculptures. But at some point, a few decide to start a full-fledged business.
As with most start--up businesses, the principal owners of an ice sculpting company are involved with the three primary functions of the business: administration, sales, and production. Some of these duties include:
* Administration-Paying staff, paying bills, paying taxes, ordering raw products, organizing office work, computer work, ordering equipment
* Sales--Returning telephone calls, placing ads, meeting with customers, writing sales contracts
* Production--Creating designs, making sculptures, fixing tools, cleaning the studio, delivering finished sculptures
It is rare that one individual has exceptional talent in all areas. Humans generally have their likes and dislikes, their strengths and weaknesses. And an individual who has been successful in the past through above-average talent in one area may not be as successful and talented in another area of business. This has been witnessed time and again in the sports, entertainment, hospitality, and business arenas.
The professional sculptor must recognize her weaknesses and capitalize on her strengths. Each aspect of the company's business must be sufficiently addressed in order for the business to succeed. That will probably mean partnerships between people with complementary skills or hiring people to fill in the gaps.
The professional sculptor is, first and foremost, an artist. The sculptor is drawn to the work by her creative desires. She feels a connection to the medium. So, it is important that the artistry is not forsaken by the demands of business. Compromises are part of our everyday existence, and the practical artisan should understand this point and adjust when appropriate. However, the quest for artistic expression must remain central to the company's goals for there to be joy in the work. Good art can co-exist with good business.
To begin an enterprise of her own, the sculptor must also be an entrepreneur, a person with a business-like attitude. An entrepreneur is an individual who organizes a business and assumes risks in order to create a market for profit. Risks are the "unknowns." It is incumbent upon the savvy entrepreneur to anticipate unknowns insofar as possible and thereby reduce unnecessary risk. As Winston Churchill once said, "the price of leadership is responsibility"
The Business Plan
When starting a company, it is a good idea to formulate a business plan. A business plan can serve as a guideline for pertinent research, as a strategic plan for long-term goals, and as a focus for establishing short-term goals in addition to being a communication tool for investors and stakeholders.
Generally speaking, the typical business plan:
* Presents the overall vision for the business
* Sets the direction for the organization
* Communicates to stakeholders the intended sales, production, and financial growth of the company
* Discloses the organization's financial goals
Someone once said "research is cheap if you want to stay in business, expensive if you don't." A good business plan requires effort and research on the part of the owner, but the effort and research is vital to the success of the enterprise. Although there are some differences among approaches taken to prepare a business plan, the following sections are typically included in the final document:
* Company Description
* Industry Analysis
* Products and Related Services
* Target Market
* Marketing Plan and Sales Strategy
* Management and Organization
* Long-Term Development Plan
* Financial Data and Projections
* Supporting Documentation
Money is the primary language of business. Although sculptors would like to be able to focus on artistry exclusively, the art must exist within a proper business framework. This includes financial planning and controls, known as the Siamese twins of management. They are the essence of financial management.
The business-minded sculptor develops a business plan that becomes the guiding document for the company. Within the business plan, sources of expenses and revenues are identified. The sculptor must also establish a system that carefully monitors the financial activity of the company. The budget is one form of financial control and allows you to compare planned expenses and revenues to actual activity. It is used to set parameters for an identified period of time, such as for a single event, a month, or a year. The more detail that is included, and is therefore monitored in the budget, the closer the sculptor is to understanding the true financial health of the organization. A well-constructed budget is an important part of a sculptor's control plan.
In addition to the budget, there are other financial documents that are commonly used by businesses to monitor and communicate their financial activity Banks and investors generally require these documents to monitor their investments. However, even if there were no other investors demanding financial statements, the owner should still understand these concepts and create these documents to better understand the bigger financial picture of her business.
* Break-Even Analysis-A break-even analysis is an exercise demonstrating the relationship between costs and sales. It is a mathematical method for finding the dollar amount needed for a business to break even. Breakeven analysis calculates the amount of sales and other financial activity with which the operation neither makes a profit nor incurs a loss. The exercise reveals the dollar amount of sales that must be reached above which profit can be realized, and below which losses are incurred. Mathematically, it is expressed as:
Sales Revenue - Variable Costs = Gross Profit Gross Profit - Fixed Costs = $0.00
This exercise is beneficial to help the businesswoman determine the sales levels required to stay in business, and to plan for desired profits.
* Income Statement (Profit and Loss Statement)--An income statement, also known as a P & L statement, is a financial report that shows the amount of money a business has earned (net income or profit) or lost (net loss) over a given period (usually a month, a quarter, or a year). It is calculated by adding all of the revenue a business earns during a particular time period and subtracting all of the expenses incurred to earn it. One busy month may show a net profit, while a slower month may reveal a net loss. Hopefully, the company will show a net profit over the course of a fiscal year. Mathematically, it is expressed as:
Sales - Cost of Goods Sold = Gross Margin Gross Margin - Total Operating Expenses = Net Profit or Loss
* Statement of Financial Position (Balance Sheet)--A balance sheet is a company's statement of financial position on a given day. It is the basic accounting equation (Assets = Liabilities + Owner's Equity) expressed as a formal report. The company's assets include the value of large equipment, furniture, cash on hand, accounts receivable, and inventory. Liabilities include all debts, accounts payable, and other expenses owed to creditors.
The owner's equity is the amount of financial interest an owner has in the assets of the business. In other words, what money is left after all debts would be satisfied.
One of the many hats a sculptor-for-hire must wear is that of promoter. An artist needs to understand the proactive nature of business. It is inherent in business to create interest in the product a company sells. The media-smart sculptor must learn to think in terms of publicity, free promotion being, of course, the best. This requires continuous effort in self-promotion and public relations. The sculptor must always be prepared for opportunities and the success that follows.
There is always a limit to the budget anyone or any company can spend on advertising and promotion. The sculptor must seek ways of receiving free print. (This expression, of course, includes all media.) Understanding the general media and their needs, and developing a rapport with them, is a decided advantage over the competition and a boost to business. The following points are consistent with most media, anywhere:
* Media always need stories to cover. They must have something on which to report.
* Media cover a wide variety of stories, including human interest, business, education, hobbies, local people and companies, seasonal activities, and unusual jobs.
* Media like to work with flexible, quick-responding, dependable, punctual, attractive, clean, well-spoken, and affable people.
* Media like to get ideas for shows from viewers or persons seeking coverage.
* Media like press kits prepared by their guests.
* Media like to know recognized authorities (on any subject).
* Media must appear unbiased, but will report factual information.
We have used the following ideas, or hooks, successfully to attract and secure media attention:
* "Give the coolest gift you'll ever give" (A 9" X 11" heart-shaped ice sculpture with a special message etched on the surface and a rose encased in the ice, packed in a Styrofoam box for ease in distribution.)
* "What's the coolest job in the summer?" (Practically an annual feature by our local television station during extended heat waves.)
* Including brochures on all products and services that a company offers, with sculptures that are sold and packaged for delivery. (The easiest customer to attract is the repeat customer.)
* Creating Santa Claus displays, complete with reindeer and sleigh, outside the office in December.
* Sending carved pumpkins to radio disc jockeys during the Halloween season to illustrate your sculpting abilities.
* Creating large, highly photogenic displays of ice at outdoor ice and snow festivals in order to attract media on-site doing their broadcasts. These displays must have the ability to translate well on television or in print.
* Creating caricatures of local media personalities in ice, or the logo of their news station.
* Donating sculptures to help fundraising campaigns (place a transparency inside the large ice sculptures with the words: "these are the cold, hard facts").
The Press Kit
In order to make it easier for the media to feature a story about your craft and business, and to ensure accuracy in their reporting, it is best to create a press kit that you can give to the reporters. It can be gathered and assembled using a glossy pocket folder that has your logo and company name printed on the cover. If money is tight, attach a business card to a high quality pocket folder available in business supply stores. A press kit can include many things about you and your company, but the following items are standard:
* 5" x 7" color photograph of you. (It is best to have props in the picture to help tell the story.)
* 5" x 7" black and white photograph of you. (With your name, to ensure proper spelling.)
* 5" x 7" color close-up photograph of you sculpting.
* 5" x 7" black and white close-up photograph of you sculpting.
* 1-2 page biography, including information on any special achievements or awards.
* A few quotes from you that can be used in their stories.
* Fact sheet about your business, including address, Web site, range of products, and notable clients.
* Fact sheet about the industry.
* Several business cards.
CDs can also be used as press kits. When a sculptor has access to the proper computer hardware, software, and digital camera, a CD is an inexpensive way to include many color photographs, information on the sculptor and the company, and quotes that writers can use.
However, as the saying goes, "the best ad is a good product." Quality has a language of its own, and the consumer understands it.
As Office/Production Manager
Although sculptors generally feel most at home in the studio, the broader demands of business can impact the sculptor's ability to do all of the production alone. It is vital to the success of the company that the quality of the products does not suffer. Time management and the ability to allocate energy and time appropriately to the various tasks is crucial.
As the requests for sculptures and services increase, the company needs to expand its production. This growth will often necessitate hiring additional employees. The key is to hire individuals who are capable of doing work needed by the sculpting business but not necessarily requiring the skills of the primary sculptor. Proper delegation can allow the sculptor to perform those tasks that only she can do. Communication and training are key to this transition.
Work orders are most commonly used in larger operations, where the person selling the sculpture is not actually producing the sculpture. Work orders are an effective tool for recording and communicating specific design and production requirements and providing direction to production staff. Current software can generate printed work orders from service contracts. Or, with a little more effort and direct access to a computer, managers can generate electronic work orders that reflect up-to-the-moment specifications and other information for production staff.
As Delivery Driver
Quite often, part of the service that sculptors offer their clients is delivery and set-up of the sculpture. It is important that the driver/delivery person be dressed appropriately and courteous and respectful to the customer and surroundings. They are a representative of the sculpting business and its image.
Items should be packed in the delivery vehicle that might be needed on the job site but were not necessarily requested. These include duct tape, extra drainage hoses, assorted color gels, and extra light bulbs for display lighting.
As Sales Person
Every sale is driven by its own objectives. However, there are two objectives business-minded sculptors must establish for all sales: financial objectives and customer-satisfaction objectives. The salesperson must fairly represent the abilities of the production staff. Sculptures that cannot be made properly should not be sold. And sales that don't generate a profit should be carefully scrutinized.
That said, selling ice sculptures (like all sales positions) is an art. The salesperson has the opportunity to try suggestive selling and possibly expand on the items the customer was originally considering. It is up to the salesperson to teach the customer about the available products. Typically, clients such as event planners, chefs, and caterers have set budgets for their events. But most want to create something magical for their customers.
To accommodate, a smart salesperson can suggest using items like ice sorbet dishes, which could be bought with money budgeted for either china rental or food costs. They may suggest using individual table centerpieces as an alternative to more common floral displays. The point is to broaden the impact by using ice in clever ways and to get the customer thinking beyond a single display piece for a buffet.
The Service Contract
The prudent ice-artist who intends to sculpt for profit should always complete some form of a service contract between herself and the client. This form clearly defines and details client expectations and sculptor obligations based on evaluation of the cost/benefit mix, lost opportunity, client budget, transportation requirements, set-up needs, and any equipment to be used, among other considerations.
[FIGURE 13-1 OMITTED]
Figure 13-1 is an example of a partial Service Agreement that was developed by SoCal Ice Productions for sculptors to purchase as a template for their own sculpting business. Note the detail relative to payment, set-up, and other miscellaneous provisions. Also important is the Hazard _Warning statement contained in the contract, emphasizing the client's obligation to maintain a safe environment for their guests. SoCal has other related products that address the client sculptor contractual relationship.
INTERVIEWING THE CUSTOMER
"Will Henry once said, "What is research but a blind date with knowledge?" Ideally, it means that one should not approach the unknown with preconceived ideas but be open to what information is presented. Research is the practice of, good listening skills, among other things.
[FIGURE 13-2 OMITTED]
The ice artisan who wishes to stay in business can only do so by providing customers with products that meet their needs. The following topics are a few of the key elements a sculptor may wish to evaluate when working with a client.
One of the first tasks is to identify and evaluate the theme involved. Artists and event planners always like to know if there exists a certain theme or motif to the event in which be ice will appear. Ice sculptures are usually wanted for their ability to make a strong statement or impression, so the design should complement either the theme of the event or the style of cuisine with which it is displayed, so as not to detract from the other elements.
Figure 13-2 illustrates how be catering company of NQ Chef Inc, of Naperville, Illinois, uses ice sculptures to support and enhance their buffer presentations. In this case, the tropical theme of the event is complementary by the use of a snow-filled sculpture depicting a flamingo arid palm tree.
[FIGURE 13-3 OMITTED]
Identifying Important Design Elements
Capturing both prominent and subtle design elements of an event is the intelligent way to match the sculpture to the event. Design elements can include patterns, colors, logos, and objects, among other thing-s. Uniting the event's prominent elements through the sculpture is a way to satisfy the customer and create a buzz, among the guests.
During the writing of this teat, we created an ice display of butterflies that was featured at the wedding reception for Chef Garlough's son and daughter-in-law. The dinner event was held at the Meijer Gardens, a local botanical and sculpture garden. The bride, who has a passion for flowers and butterflies, was determined to incorporate the two design elements into their wedding and reception. The dinner tables had flowerpots as centerpieces. The wedding cake featured pulled-sugar butterflies in colors matching the bridesmaids' dresses.
As a surprise addition to the reception, we designed an array of nine variously-sized ice butterflies, some with bright hues to again support the theme and colors of the event (see the color insert for the hill effect). The dynamic display of stacked, winged ice sculptures flanked the hors d'oeuvre table and greeted the guests as they entered the banquet room, making a strong impression on the guests as they arrived and creating a lasting memory for the newlyweds.
The sculptor also needs to know the sculpture's intended functionality. Whether the ice is meant to hold and display food, or merely to serve as an enhancement to the event, the sculpture should be practical. The artist must have a complete understanding of the client needs, 'which the sculpture must fulfill.
PRACTICAL CONSIDERATIONS IN EVALUATING POTENTIAL BUSINESS
Once the intended form and function of a sculpture have been established, the ice artist must also consider the practicality of the piece. From a business point of view, the sculptor must evaluate several practical considerations before signing a contract to complete the work. The following are some of the more significant considerations.
It is most important, before any other activity, to consider the cost/benefit mix when contemplating work for hire. In business, the owner must evaluate the assignment of assets. These assets will include equipment and facilities, cash, staff (labor), and supplies on hand. Each has value, each is expendable, and each is finite. The ultimate goal of management is to invest these assets where there is likely to be the greatest return on the investment.
However, most businesses are cyclical, and there are different variables to consider throughout the year. What is worthwhile one day might not be on another day. This is cost/benefit at play. The business-minded sculptor must evaluate the losses and gains of each job offer. Will the time and talent invested by the sculptor, plus equipment and supplies expended, be compensated appropriately, given the other variables affecting this decision?
Experience, and a practical understanding of Profit and Loss Statements, clarifies the answer. Often work is done because it is profitable beyond all costs, and its value is an overall profit to the company. And sometimes work is accepted, not because it is profitable beyond costs, but because it helps with cash flow, making payroll and promoting the business.
Another consideration related to cost/benefit is the concept of lost opportunity. The business-minded sculptor, as mentioned before, has a finite amount of time and labor to expend. Agreeing to take on sculptures of little financial, public relations, or promotional value may make some sense when nothing else is scheduled. However, should a more profitable opportunity arise that cannot be realized because of prior commitments, then the sculptor experiences lost opportunity. Unfortunately, there is no crystal ball for such decisions, but experience is a good teacher.
Budget and Pricing
Knowing a client's budget constraints will help the sculptor to focus appropriately on the design aspect of the job. Creating designs beyond the client's budget will ultimately cost the sculptor in wasted time. Creating a design below the client's budget will likely cost the sculptor additional profits. A set budget, or range of budget for the work, must be established at the beginning of the discussion.
A business-oriented sculptor must also establish his desired pay rate per hour, the length of time required for sculpting a piece, the cost of consumable supplies, and the profit percentage applied to costs. The sculptor then considers all costs, including labor and supplies, plus the desired profit to establish the asking price for the sculpture.
Should the client wish to discuss or debate the asking price with the sculptor, the cost/benefit consideration comes into affect.
Sculptures must be designed for portability. That is to say, the sculpture has to survive the trip in acceptable display condition to be of value to the customer and, ultimately, the sculptor. Depending on the distance between where the finished sculpture is stored and where it will be displayed, the sculptor must make some design decisions. One important consideration may be to assemble and finish the sculpture on site.
Sometimes, it may be necessary to make certain artistic concessions in order for the ice works to be structurally sound enough to transport. The safe arrival of the piece is vital to a successful business relationship with the customer.
From a business point of view, the transportation, set-up, and tearing-down of the sculpture must also be considered in the selling price. We consider these as "add-on services" and price them in addition to the base price of a sculpture. Depending on the size and complexity of the sculpture, the customer doesn't always need this service. Yet, sometimes, extraordinary services are needed. We have flown with sculptures to remote locations and have driven truckloads of them across the country. The nature of the service provided, and final price, will vary with the function's requirements.
We have an expression for service requests that go beyond the basic service and products generally offered. We call this type of added request, the hassle factor. (Our rates for catering at My Chef, Inc., and for creating ice pieces at Ice Sculptures, Ltd., are often affected by the hassle factor.) We take pride in our customer service and strive to build positive relationships with all of our clients through competitive pricing, high quality products, and attentive service, yet we must ask for appropriate compensation for those services that exceed the norm. The hassle factor rate is applied to those events.
The attentive sculptor evaluates the equipment that is required to complete, transport, and exhibit a sculpture. It is important to design within one's means. Sometimes the sculptor needs to rent or purchase additional equipment to support a job order. Generally, rentals or purchases are considered "pass through expenses" and they are merely added onto the bill with little or no mark-up. Research into these costs in advance of quoting a price is paramount to preventing unforeseen losses.
[FIGURE 13-4 OMITTED]
PROFESSIONALISM: A REQUIREMENT AT ALL LEVELS
In addition to all of the practice an aspiring sculptor needs to learn the skills required to be considered a talented artisan, there remains an equally important virtue. It has been said that artistic temperament is a disease that afflicts the amateur. One can be a great artist but lack the substance to be a true professional.
It would be negligent of us to omit the context in 'which the knowledge required to become an ice artisan ought to be obtained. Knowledge is a gift to be appreciated and shared. It is acquired through study and experience, by watching and listening, in small doses and in large bundles. However, it only comes when the student is ready, and the professional appears.
The student sculptor must strive to behave professionally at all times, with all people, under all circumstances. Criticism is often difficult to accept when a sculptor has labored long and hard on a project, investing emotion and love for the art. But it is during these times of anxiety when passion must yield to professionalism. It is incumbent upon a would-be professional ice artist, and those who call themselves professionals, to solicit input and express appreciation for any interest taken in their work. This includes contact with members of the public, the media, judges, and other ice artisans. After all, art is not only for the artists.
Ice sculpting is a quest for the professional, at all levels.
Meet the Artists--Randy Finch and Derek Maxfield
Ice Sculptures, Ltd. began in 1994 when co-founders Randy Finch and Dock Maxtield pooled their resources to start a business. The company's modest holdings began with one Clinebell ice-block maker and a 10' x 10' walk-in freezer, located in a converted warehouse. prior to formalizing their business, they each sold sculptures on the side while working frill-time as chefs. The company is known for taking a different approach to ice sculpting and the ice sculpting business. Central to the goal of the company is to improve the standards of sculptures, and the sculpting industry, by being actively involved in education and the advancement of sculpting technology. Their company and professional philosophy requires that they keep an open mind to new ideas and share ideas with others interested in the art of ice sculpture.
Ask the Artist
Q How should the approach differ from selling sculptures as a sideline business, versus working as a frill-time ice artisan
A It shouldn't! Unfortunately for the sculpture industry, part-time sculptors are underpricing their works. They often are employed full-time somewhere else where they receive medical benefits, sufficient pay, and often the use of the company's tools and facilities. These costs are not initially considered when pricing their sculptures. Later, when the individual leaves their full-time job in pursuit of a career as a sculptor, they have difficulty adjusting their established rates to the necessary level of compensation for their work.
Q How have you been able to stay in business this long? What is your secret to profitability?
A Our company's desire to establish Ice Sculptures, Ltd. products as a "brand name" for sculpted ice has driven us to create a niche market within the greater niche market of selling ice sculptures. We have increased our sales by crossing over into other budget categories, by educating the public as to what qualities to look for in a sculpture, and by designing sculptures around our clients' individual needs, as opposed to our own existing repertoire. The use of technology has allowed us to create products that are unique and to offer hybrids of traditional sculptures.
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|Title Annotation:||Part IV Advanced Skills With Ice|
|Publication:||Ice Sculpting the Modern Way|
|Date:||Jan 1, 2004|
|Previous Article:||Chapter 12 Ice sculpting organizations, competitions, and festivals.|
|Next Article:||Prelude to appendices A, B, and C.|