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  • We talked about what happens when you're owed money. Keep asking for it. What should you be thinking about in your contracts right now? A few things. One, let's put a kill fee in there. If you don't know what a kill fee is, it is just that. It's a fee if the brand backs out of the contract. I think industry standard is generally 25% of the contract value if content isn't created, 50% of the contract value if content is created and then if it's a multiple post-campaign and they pull out in the middle obviously they have to pay you for the posts that have already been posted and then 50% or 25% if you created the content for the other posts. Putting a kill fee in there, definitely gives you a little bit of protection.

    Something else that could be hard but if you're a big influencer and you're talking about a big contract and it's with a brand that isn't established and maybe isn't really huge, you might consider taking 50% upfront. It's pretty rare in the influencer space but I think if you are a bigger influencer and again it's a bigger contract, an ambassador contract, something like that, then I think you could ask for it. If it's a big brand, if you're working with a large retailer or a huge multibillion dollar brand, those brands don't generally default on their payments so I don't think you have to really worry about that.

    If it's a startup, if it's a brand you don't think has as deep of pockets and they're offering you a big contract maybe try and negotiate for 50% upfront. Even if that means you have to bring the contract value down at least you'll know you have some of that money to hedge if something does go wrong, because we're definitely going to see more businesses going out of business than we have in 10, 15 years happening here in the next 6 to 12 months. It's definitely something to consider.
    Episode #196
    - The Art of the Negroni
  • I don't know what travel is going to look like. I think for influencers at this point, if you are thinking that you're going to travel abroad in 2020, I would probably let go of that fantasy. I don't really see a lot of international travel happening until there's a vaccine. Maybe if there's great treatments, if there's antibody tests and tracking and tracing things that happen, maybe that will get easier, but in general I would not think that international travel is going to be happening the rest of this year. That's the expectation that I would throw out there.

    Now most of the audience watching this is in America. There's a lot of America out there that people haven't explored. I think that that will open for travel before the international markets do. I think that if you're a travel influencer, if you're someone that travel has been a big part of what you do, think about the places you haven't been in America. Have you been to our national parks? Have you been to the Tetons? Have you been to Yellowstone? Have you been to Seattle or Portland? There's a lot of America out there that people don't see because they want to go to the Amalfi Coast every summer. I just don't see that happening and I think that as a travel influencer you're going to have to get pretty creative because I think the days of doing 150,000 miles a year of travel are not going to return until we have a viable vaccine for this virus.

    I think you're going to have to try and pivot and figure out what travel looks like. Again, I don't have any huge insight into what that's actually going to be but I do know it will be vastly different. You think about your hotel partners and the relationships you have there, think about the ones that have a big presence in America. These hotels are hurting and they're not going to have a lot of money, these hotels are hurting, they're not going to have a lot of money. They are going to want to show people that it's okay to travel. I think I can continue to see influencers being a big part of that story and showing Americans and people around the world that it's okay to travel again, whatever that travel eventually looks like.

    I would be conscious of what you're asking for. I know there's never been a huge amount of money in travel regardless. I would think that the idea of big budgets and things like that and travel right now are going to take a year or two or three to rebound. Expedia's CEO recently came out and said they usually spend $5 billion a year in advertising. They're going to spend 1 billion this year that's 80% reduction in their ad budgets. Take that as an indicator of where the rest of the industry is going to be. It's definitely going to be scaled back a little bit.
    Episode #196
    - The Art of the Negroni
  • Essentially, how do you go about getting paid? Right now there's a lot of companies out there that have just straight up said, "We are not paying anyone." Equinox's CFO sent a letter out recently that just said, "Until further notice, Equinox isn't paying anyone." They're not paying rent. They're not paying. If they owe you money in any capacity, you're not getting it right now. They are not alone in that message and I think that as an influencer you have to expect that some companies won't pay potentially ever or those payments would be really delayed.

    Just because a company is suffering and just because they can't pay you right now or because they're not paying you right now, does not in any way mean you shouldn't be following up with them. It is my experience that the more you ask, the sooner you get paid. The whole squeaky wheel gets the grease cliche is true. That most brands will be paying some people and if you are persistent enough then you can be the person that they pay. If you aren't giving them a hard time, if you're not following up a lot they're not going to jump to pay you.
    Now where this gets complex is let's say you have a great relationship with the person who works in digital or PR at a brand and they haven't paid you. Now you don't want to badger that person that you have a good relationship with, the person you go out to drinks with a few times a year and you've come to like. You don't want to badger them for a payment necessarily. You need to try and get an introduction to the accounting department, to the people who are going to pay them.

    You can just reach out to your contacts and say, "Hey, I'm having some trouble getting payment. I know that you don't really have any control over this. Could you just introduce me to the accounting department or to the person you work with there? I just want to talk to them directly and make sure I have everything I need to get paid." They should definitely introduce you. If they don't, you can always try accounting at whatever their URL or email signature is. If that doesn't work, call the corporate number. I had a brand that owed me over $10,000 once and I couldn't get paid and eventually I just called corporate and they said could you connect me to accounting? I finally found a person and I got paid in the next week or so.

    There are ways to get around it and if you can get that communication away from the person you work with and move it to accounting so that you don't have to muddy the relationship with that person you work with but end of the day you need to get paid. It is also their responsibility to make sure that happens. If there's no way to get connected to accounting, I would continue to pressure that person. If you don't bother brands that aren't paying you often, you're you'll probably never get it. There is no too much. You stop emailing them when they pay you. It's a pretty simple transaction there.
    Episode #196
    - The Art of the Negroni
  • For influencers, for most of you if you're getting paid with the 1099, what you want to do is you want to look at your Schedule C from your 2019 taxes, and you want to look at your net earnings. A schedule C form from the IRS, it's going to be line 31 there. That's going to be your net earnings. You're going to divide that by 12, and then multiply it by two and a half. If it's just you, that's what you're going to do.

    Now, if you have employees, like for Fohr, we took 2019 average payroll across the whole year and said this is the average amount of money we were spending per month on payroll, and we multiplied that by two and a half. That's how we got the number that the loan that we applied for. If you have employees, if you have employees who get a salary, then you can use that number. You can use those employees in your number of how big your loan is going to be. If it's just you, you're going to take your 1099 Schedule C, divide it by 12.

    Now, there's a very important caveat there. The government is not subsidizing salaries over $100,000. If you made $150,000 last year on your Schedule C and that's what it says, you're only going to be able to get a $100,000. In that case, it's going to be $8,300 a month. $8,300 times 2.5 is about $20,500 and some change, something like that. That is the size of loan that you can apply for. If you're a single person, you don't have employees, you made over $100,000, your loan amount is going to be about $20,500. If you use that money to pay yourself for the next eight weeks after you get the money, and your rent and some other things, but 75% of it needs to go to paying you, then that loan should be forgiven and you don't have to pay it back, which is very exciting. We'll get into more of forgiveness later.
    Episode #194
    - Using the COVID-19 loans to your advantage
  • I believe the answer to that is no. You have to pick one or the other, and I think for those of you out there, you just have to figure out which one makes more sense for you. You should be able to pretty easily figure out how much money you could potentially get from unemployment, and you should very easily be able to figure out how much money you can get from PPP, and you should choose the one that makes the most sense for you.

    I honestly don't understand a lot about-- I don't understand as much about unemployment, so I can't give you a huge amount of guidance there. I know there was a question essentially that was like, okay, if I work as a hairdresser and I have influencer work that I do, and I'm getting unemployment as a hairdresser, can I also apply for PPP for the influencer side of things? My gut would tell me, no, but I don't know the answer to that. Again, right now there's a lot of unanswered questions, and what is concerning about some of them is-- if the answer is in two years that the government deemed that you did something wrong, you could owe them a huge amount of money, you could potentially go to jail. These things are serious. I don't think you want to try and game the system, this is just to try and prop up the economy. If you're already getting unemployment, I'm not sure that you'll be able to apply for PPP.

    Okay, guys, look, I think that's most of the questions that people generally have. Again, you can go to sba.gov, also go to our investor has made a whole page with information on this site. We'll also link to that. I think you can also actually apply through that link if you'd like. This program, for a lot of people, can be transformative, it can definitely help you get through what is sure to be a difficult couple of months for everybody, and I definitely encourage you guys to look into it. If you feel that you're a good candidate for you, I encourage you to apply for this, but understand that it's a first-come-first-served basis. There's right now $350 billion. I think they're trying to get another $200 billion into it, but there's a chance this money could be gone in the next 10 days, I would say.
    Episode #194
    - Using the COVID-19 loans to your advantage
  • If you use this loan for what it's intended, which is 75% is for payroll, it can also go to rent, other benefits, there's a few things, we can put up a full list of what you can use this for, if you use it for those things, it should be forgiven. Again, we don't know the full implications of what is forgiven. There's a lot of complexity with you guys as influencers because you're taking this money and you then have to prove that you're paying yourself somehow, so I don't know if you have to then pay taxes on the money that you pay yourself out of the loan, I assume that you will have to pay taxes on that. That is something to consider. I would definitely try and talk to an accountant or a banker about that.

    If you use this money in eight weeks to pay 75% goes to payroll and the rest rent and some other things, yes, that should be forgiven and you should not have to pay that back, and you're also not taxed on the loan, so you don't get double taxed. While you might have to pay taxes on the portion that you pay yourself a salary, you're not getting taxed on the actual loan.
    Episode #194
    - Using the COVID-19 loans to your advantage
  • Nobody really knows. The Fed and SBA said they'd given out about $180 billion so far. It's hard to say if that's what's committed or if that's what's actually landed. I've heard independent studies that say that only 2% of the businesses that have applied have actually received the money. I actually haven't heard of any of my friends that run businesses who have actually gotten their loans yet, so we don't know the answer to that question. They were saying three days that's not happening, but it should be I think within a couple of weeks of your application being accepted, which there's no guarantee that that will happen.
    Episode #194
    - Using the COVID-19 loans to your advantage
  • First, you should work with the bank that you currently bank with. What's a little confusing about this program is that, while Congress has signed it into law, and the Fed and SBA are working on this together, it is implemented and executed by banks. Each bank has their own set of rules of who they're giving us to, which don't always line up exactly with the actual laws. One of those rules that we're seeing is that some banks are saying if you don't have a business account, you can't apply for PPP. Even if you are in operating a business but you have a personal account that you're running it out of, there's a chance your bank might say that they won't let you apply. In that case, I would try and ask them if they could transfer it over and transfer you to a business account, some banks will do that. That is to say, the frustration is that banks are setting some rules that aren't actually in the law.

    The Fed and everyone has suggested that you start with your existing bank. If you bank with Chase, reach out to Chase and try and apply there, Bank of America, Wells Fargo, same thing. Everyone has these portals online generally that you can do this. If you have a relationship with your banker, even better, start there. If that doesn't work, you can also try places like Lendio. You can apply in as many places as you want, you can only take the loan out once.
    For instance, with Fohr, there was a time where we felt like where our bank said they weren't going to do PPP loans, and I think we talked to 20 bankers and we probably put 10 applications in, and our bank finally came back and said hey we're going to support PPP blah blah blah. Anyway, that's to say you can apply as many times as you want, and it doesn't hurt to. Start with your bank, and then maybe also try a provider like Lendio.
    Episode #194
    - Using the COVID-19 loans to your advantage
  • No. This is different than unemployment in that you don't have to prove that you're not making money. You don't have to prove that your business has taken a hit to get this. Ideally, if your business is booming and you don't need this money, you shouldn't apply. There is not a lot of guidance about how the government is going to audit these loans, but right now they're giving them out as quickly as they can. I think they're going to come back in the next few years and do audits and make sure that the right people got the money. If business is booming, if it didn't feel like you really needed this loan, I would be careful about taking it because we just don't know what the implications of that are.
    That said, if you usually were making-- I'm going to use easy math. Say, you're usually making $10,000 a month from collaborations you were doing with brands, that's down to $5,000 a month, you don't have to prove that to be able to apply for the loan. Again, it's different than unemployment. We're going to talk about how unemployment works with this in a little bit, but you do not have to prove that loss of income to apply for the loan.
    Episode #194
    - Using the COVID-19 loans to your advantage
  • Again, you don't have to pay yourself that salary. You just have to average it out. If the way you paid yourself was you pulled $50,000 out of your business twice during a year, again you would average that out and say I made $100,000 in the year. You would get that $20,500 again, it would come back to the same amount. You don't have to pay yourself a salary. To do this again, look at your 1099, look at your Schedule C, that should help drive what that number is for you.
    Episode #194
    - Using the COVID-19 loans to your advantage
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