In studios with several artists, the studio and the artists usually agree on a percentage rent for the space, depending on turnover. This has advantages for both parties: the artist only pays if they make sales and you as a studio earn more the more appointments you can make for the artist.
This makes sense especially when both artists don’t know each other very well yet, i.e. at the beginning of a guest spot. However, if an artist decides to stay in your studio after a while, the percentage space rental has a few disadvantages:
- To be able to really keep track of the turnover an artist makes, you can’t avoid collecting money for them. This increases your workload at the bar and in accounting. What’s more, someone always has to be there to collect the money.
- Alternatively, you can let the artist collect the money himself, but then you have to come up with a way of at least randomly checking his sales figures.
- To ensure that either the artist or you receive your money on time, weekly or daily invoices are required. This also means more work at the cash desk and in accounting.
- increases the risk of bogus self-employment. This is because cashing in through the studio can be interpreted to mean that the guest artist is only a subcontractor. Special precautions/formulations in your space rental contracts are required here.
- If the guest artist’s motivation to work decreases after a while because he is satisfied with less, you will also feel this in the space rental. Again, because of the risk of bogus self-employment, you cannot give him any instructions regarding his appointments (he is bound by your instructions). And you don’t immediately part ways if one of your artists runs out of steam.
- The majority of costs in a studio are fixed costs. However, with a percentage space rent, the costs are offset by highly fluctuating income, which makes it difficult to plan for any investments in expansion/conversion.
Fixed space rental
Alternatively, you can also agree a fixed space rental with your resident artists, as with a normal rental contract. It is always due at the beginning of the month, regardless of whether the artist is on vacation or sick. Just like a real rental contract for a workplace. This has a number of advantages:
- You can have the artist collect the money himself, thus considerably reducing the workload at the cash desk and in accounting.
- It is also no longer necessary to settle accounts with the artist. You only check once a month whether the rent has been credited to your account.
- The risk of bogus self-employment is significantly reduced, as the business is now demonstrably conducted directly between the client and the artist.
- It doesn’t matter to you if an artist is ill or on vacation. The fixed space rental will discipline them all by itself at some point. The hard-working will be rewarded, the lazy will be punished.
- You now have much better planning security for possible investments.
If you include these advantages in the space rental (in particular, that you receive the rent even if the artist is not there), you can calculate the fixed space rental accordingly more favorably without losing anything. However, you must then bear in mind that you will no longer be able to freely dispose of the artist’s space if they are absent, as you have rented it out permanently. But you can usually quickly come to an agreement with the “tenant” if you ever need their space.
If you decide on such a fixed space rental model, we recommend that you continue to collect the down payments (or appointment deposits) via the studio cash register and only pay them out to the artist when they are settled. This way you avoid the risk of an artist disappearing at some point with the entire deposit/appointment deposit.
And if you still need suitable space rental contracts, take a look here: Carefree package contracts.
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