The reason it’s not so simple is that there is intellectual property (IP) involved in all creative businesses and the things they sell to their clients.

There’s a lot of confusion about intellectual property. Customers often misunderstand what they are buying and creative entrepreneurs themselves are sometimes unclear.

The question is this: When you sell something to a customer, are you also selling the intellectual property that lies within it?

For example:

– As a customer, when I buy a photograph from a photographer, am I buying just that one framed print – or the right to scan and reprint it?

– When I pay a graphic designer to devise a new logo for my business, do I own that logo?

– Does the purchaser of an original oil painting now own the reproduction rights to that painting?

– Who owns the design of my website – the designer or me?

In my experience, creative people in business are often unclear about what they are actually selling. Even if they are clear, their customers might not be.

The implications of what happens with the IP we create are serious – and at the very heart of creative enterprises.

Pricing is one major issue. Selling IP outright should command a much higher price than selling a product or service based on IP that you continue to own. There is a fundamental difference between selling IP and licensing it, so we need to know which of these is happening in any transaction with a customer.

Contracts should be clear about IP, for example whether a design created for a client will remain the property of the creator, or be assigned to the client (if so, it needs to be assigned in writing because the default position is that it remains the property of the creator).

Another IP issue is about moral rights and the future use of your creative work, as in the case of that photo of Che Guevara.

You can design your creative business around renting (licensing) intellectual property as opposed to selling it, raising the question of whether you are a creative entrepreneur or simply a ‘creative labourer’.

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Marketing is one of the business issues covered in the book ‘T-Shirts and Suits: A Guide to the Business of Creativity’, which is also available online as a free eBook.

There is more about selling creative goods and services in the marketing book  ’Chase One Rabbit: Strategic Marketing for Business Success. 63 Tips, Techniques and Tales for Creative Entrepreneurs’.

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Copyright © David Parrish. This article was first published on the MyCake Blog.