Tag Archive for: art business

What Is a Business Model and Why Your Artistic Business Needs One

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As a creative person who wants to earn a living, you might think that’s as easy as selling the fruits of your creativity. That’s true on some level, but it’s likely not enough to get you to a point where you can sustain yourself. Having a business model that you understand and can craft into a business plan will help you get more time in the studio doing what you love!

 

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When you look at the careers of successful artists, it might seem like they got there through sheer luck. Maybe they were at the right place at the right time. They found a patron or stumbled into a relationship with a dealer when out on the town. But that’s probably not the case. 

The truth is that more often than not, getting to the point where you’re earning a living off your art takes more than just divine intervention. It takes thoughtful planning. That’s where having a business model for your art comes in. Hours spent building your business model will give you many years in your studio.

 

What Is a Business Model?

A business model is a plan that describes how you intend to make money. Every business—no matter what size or type of business it is—needs to have a business model. A business plan, built around a business model, gives definition for what needs to be done, and prepares for when things don’t go as expected. A plan can also be used to attract resources, money and talent, to a firm. 

Business models can be simple or complex, but they do need to have some key ingredients if they’re going to be useful. While larger businesses often use very complicated business models, I find the Business Model Canvas to be the easiest and least cluttered way for an artist to conceptualize their business. 

In my experience, a business plan, which we will connect to the model, minimally needs:

Executive Summary:  A short description of what the business is, what it does, and who it does it for. 

Market Analysis:  An understanding of how an artist’s work, the products, fits into the market; i.e. is it fine art, public art, 

Marketing Plan:  A method for identifying and attracting audience and customers.

Sales Plan:  A process that identifies your sales goals (transactions), tactics, and challenges for closing sales.

Finances: A description of your sources and pricing, and the costs required to produce the goods or services. 

Team Players:  The critical people that make the business run. That certainly includes yourself, but it might include staff, partners, vendors, venues, etc.

For internal purposes it is valuable to have a plan of operations. These are the manuals for production and process for delivering services, as well as the means of maintain great company culture.

Of course, none of these items exist in a vacuum. You need to understand how they connect and influence each other.The business model canvas is a tool that outlines and connects the different aspects of a plan.

Value Proposition: What is the unique value that your work brings to your audience?

At the heart of any business is the value it is producing for the world. This will influence internal operations of production and external communication of marketing and sales. The executive summary of a full business plan will focus on the value proposition and concisely address other facets of the plan.

Customer Segments and Channels: Who are your customers and audience? Who will value what you are doing? How will you present the value of what you are doing with them? The marketing portion of a business plan will identify customers and define methods of connecting with them. 

Customer Relationships: How will you build a relationship with someone from meeting  for the first time to being a repeat audience member or customer? Sales is about building relationships, a sequence of exchanging value. The plan for sales will define the process the business uses to develop and grow meaningful relationships with its audience. 

Revenue Sources + Cost Structure: How will the business make money, what will it cost to generate the revenue. The financial piece of a business plan has many details and most relate to revenue and expenses. The plan may also define sources of outside cash like investors, patrons and traditional banks.

Key Partners + Key Activities + Key Resources: How does the business make its product or deliver its services? What special relationships, resources or skills are required? This is the operational plan for making a product or delivering a service. A note on partners, they are critical vendors and others necessary for your operations who also share in risk and reward. 

Do You Need a Business Model?

I hope that by the time you’ve gotten to this point, you realize the answer is a resounding YES! Putting them together can be challenging, particularly if you’ve never done one before. That’s where I come in! I’m happy to help you strategize your business model. Contact me to schedule a chat or join one of our Creative Coworking sessions. 

 

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Cash Flow for an Artists: What Is It and Why You Need to Pay Attention to It

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Have you ever opened your banking app to look at your balance, only to find it’s much lower than you thought it would be? Not my favorite feeling either, but if you have encountered this sensation, then you’ve experienced the effects of cash flow!

If there never seems to be enough cash on hand for your creative endeavor, consider signing up for our business of art newsletter.

 

Just like you need to keep an eye on your personal account balance to make sure you have sufficient funds to live, so too do you need to pay attention to what’s coming in and going out of your business to sustain your practice. That, in a nutshell, is cash flow. 

When mastered, strong cash flow for an artist can make the difference between a business that’s healthy and one that’s no longer in business, or the difference between making more art or waiting for the next check. Let’s take a closer look at what cash flow for an artist  is, how to ensure you have a positive cash flow, and the impact that it can have on your arts business. 

 

What Is Cash Flow?

Cash flow is the movement of money through your business. Typically speaking, money coming into your business is revenue, while money going out of your business is expenses. Cash flow for an artist takes into account both revenues and expenses to date, as well as future revenues and expenses. In this sense, it’s also a forecast of what you can expect financially.  

Cash flow is calculated over a duration of time. Frequently it is analyzed over the course of a month, but you might also calculate the flow for a day, week, quarter, or year. A month tends to be most helpful as “bills” or invoices from vendors are usually calculated on a monthly basis. 

What Is Positive Cash Flow?

Cash ebbs and flows; sometimes we have more cash on hand, sometimes we have less. Having a positive cash flow for an artist means that more money is coming into your business than going out. It’s a sign that your business is healthy. It’s important to note that this doesn’t necessarily mean you’re profitable, as things can change over time. 

The dynamic nature of your cash position makes it important to look at your cash flow monthly. Consistent check ups allow you to a) ensure you’re not spending more than you’re taking in and b) adjust your forecast of revenue and expenditures of future cash flow to keep sufficient funds on hand to stay operational. And yes, when you are in business for yourself you can control the expenses and revenue. You can put more energy into marketing and sales to increase revenue, and you can reduce costs by changing vendors for products and services.

Additionally, a cash flow report for a certain period is often required by banks and lenders in cases where you need to take a business loan. 

 

How to Calculate Cash Flow

There are a number of ways to calculate cash flow for an artist, some more complex than others. If you’ve invested in an accounting tool, they frequently offer a cash flow report, but it’s good to still understand how it’s measured. 

A basic cash flow formula looks like this:

Income – Expenses

So, for example, let’s say last month you sold $5,000 worth of art. But you also spent $3,000 in expenses such as supplies and materials, studio rent, utilities, etc. during the same time period. You therefore have a $2,000 positive cash flow for the month; i.e. $5,000 revenue – $3,000 expenses = $2,000 cash flow) .

You can certainly project the same numbers out over a time period, but it’s important to take into consideration that both revenue and expenses are likely to fluctuate over time. That is, you’re not going to necessarily bring in $5,000 every single month, and your expenses may shift based on your business activities. 

But, let’s say you want to project your cash flow for the next four months. That’s a little trickier, particularly for an artist with revenues and expenses that fluctuate. A cash flow report might look like this:

January February March April
Cash at beginning of period $5,000 $7,000 $5,000 $9,000
Estimated Revenue  $5,000 $2,000 $6,000 $3,000
Estimated expenses $3,000 $4,000 $2,000 $3,000
Final Cash on Hand (change in cash + cash at beginning) $7,000 $5,000 $9,000 $9,000

 

Of course, your cash flow report should be more detailed, with itemized expenses and potentially income (particularly if you have multiple income sources). 

Ultimately, putting together a cash flow report and reviewing it on a monthly basis will help ensure you’re staying on top of expenses, operating within the bounds of your income, and whether or not your business is on a positive track. 

Your cash flow report can also help you prioritize your activities. If you need more revenue, you may want to work on your sales or marketing. If you have ample cash on hand, it may be time to invest in new equipment or more materials. Understanding cash flow for an artist, can give you more time in the studio with better gear to make the things you want to make!

 

Want help putting together a cash flow statement? I’m happy to help! Set up a time to chat with me or check out one of our Coworking with Creatives sessions. 

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How to Make Money Online as an Artist

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A common question artists ask me is how to sell their work online. For some artists, such as those who work in digital mediums, the answer is usually straightforward how to make money online. But for others whose work is more visceral, the answer isn’t always as clear. There are a number of ways artists can use the web to make money online, but there are tradeoffs for the convenience of selling work while you sleep. 

Let’s take a closer look at three common online sales channels open to artists and see how they might help you make money online as an artist.

 

Your Website

Every artist should have a website to share their portfolio and artist statement. But some artists may want to take their site a step further by turning it into a place to actually sell artwork online. Setting this up can be done fairly easily, even if you don’t know how to code. Sites like Shopify and Wix make setting up a personal website marketplace fairly easy, or if you use WordPress, there’s the Woocommerce plugin, which is free but can be a bit more challenging to figure out.

Benefits:

  • You 100% own the site and can control the content and presentation
  • You can set the price of your artwork
  • General low financial overhead

Costs:

  • You have to pay for the domain name and website hosting 
  • Potential additional costs for shop/market platform or plugin (e.g. Shopify costs a minimum of $29/month)
  • Setting up and maintaining an ecommerce site takes time and energy
  • You have to manage your own purchase fulfillment: packaging, cost of shipping, and logistics of shipping

 

Online Fine Art Gallery

There are many art galleries who have digitized over the years, as well as several galleries that are only present online. Ugallery is one of my favorites. Similar to a real-world art gallery, an online gallery curates and sells artist works, often across a variety of media. Some galleries will specialize in a specific medium, a specific geography, etc. Some might be local to you, while others might be more global. 

Benefits

  • You do not have to run your own digital market place or shop
  • Gallery will market your work for you
  • Professional representation and presentation of your artwork
  • Can potentially be passive income 

Cost

  • Limited control of the online experience for your audience
  • Galleries take commissions or charge fees for services
  • You may still have to handle shipping to customer or gallery
  • You may not be excited about the marketing or lack of marketing by the galley
  • Can’t control your own prices

 

Online Marketplaces

Online marketplaces might be the best of both worlds in terms of selling work online. Marketplaces offer the opportunity to control how your work is presented without the financial or time commitment needed to manage your own website. In some ways, they’re similar to online galleries, but they tend to have larger audiences. Etsy is likely the most well-known online marketplace for creative businesses, but there are others. 

Benefits:

  • Control over pricing and presentation
  • Established marketplace brand name
  • Community of other sellers

Costs:

  • Fees for each sale
  • Algorithm often drives visibility and you do not control the algorithm
  • You have to do your own marketing
  • You have to do your purchase fulfillment

Of course, these aren’t your only options for selling artwork online. There are also social media ecommerce channels like Facebook, as well as online merchandising sites. We’ll cover those in a separate post.

 

Feeling a little lost? I’m happy to help you figure out which of these channels is right for you. Contact me to set up a chat or check out one of our upcoming Coworking with Creatives sessions. 

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Best Legal Structures for an Art Business

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Art Business Legal structure was likely not taught in art school. This short post is a quick overview of the topic. 

We are NOT lawyers! This is not legal advice, but may help you converse with your future lawyer, possibly a volunteer lawyer for the arts.

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If you’re an artist, photographer, writer, or any other type of self-employed creative worker, you are required to register as a business.This will actually help you in the long run. Registering a business entitles you to a number of protections and benefits, including (but not limited to):

  • Reducing your personal liability in case of a lawsuit
  • Potentially reducing your tax burden
  • Access to public grants and funding (PPP during pandemic required registration)

 

Although there are a variety of legal structures possible, some of them are a better fit for a creative business than others. Let’s take a brief look at the three most popular ones and discuss the advantages and disadvantages of each.

 

Sole-proprietorship

This is the simplest business structure and is a good place to start for artists just beginning to sell their work. A sole-proprietorship treats the artist and the business as a single entity.  The government (both state and federal) utilizes your social security number as your “identity.” With this basic type of business, you can deduct business-related expenses such as your materials, travel costs to work-related events, studio rent, subcontractors etc. 

That said, because you and your business are considered a single entity, you are personally liable for all business debts or damages should someone bring a lawsuit against you and win. Additionally, all business income is considered personal income and will be taxed at your personal income tax rate, including Federal Insurance Contributions Act (FICA) taxes, i.e. social security and medicare contributions. This may end up increasing what you owe in taxes, though it will depend on how much you make. 

 

Limited Liability Corporation (LLC)

An LLC is the next step up from sole-proprietorship, though depending on the type of LLC you choose, it can be very similar. LLCs are generally very flexible when it comes to how they are taxed and grant you additional liability protection in case of business debt or lawsuits. To date, there have been very few cases where liability has penetrated the LLC, but usually this is the result of abuse of the structure. 

Another advantage is that an LLC enables you to hire employees, which a sole-proprietorship doesn’t allow. Both a sole-proprietor and an LLC can hire subcontractors. There are very particular laws on the difference between the two and it is worth getting familiar with the nuance between a contractor and an employee to ensure you are operating within the law. You can also deduct business expenses from your taxable income under an LLC.

LLCs can be considered single member, meaning you’re the only owner, or multi-member, meaning you have partners. Like a sole-proprietorship, income is only taxed at the individual member level as personal income for each member, regardless of the number of partners involved. Income under an LLC is treated as personal income, and as such, you are required to also pay a self-employment tax that goes towards things like social security, Medicare, etc. 

LLC’s cost money to register and maintain depending on the state in which they reside. Filing taxes is also slightly more complicated than sole-proprietorship.

 

S Corporation 

S corporations (S corps for short) are significantly different than the previous two structures in that they are a tax classification rather than a business structure. To receive this classification, you need to register as an LLC first. 

Once you obtain S-Corp status, business income is treated separately from your personal income. That is, anything the business earns is taxed as a business, while you will pay taxes on your personal income separately. Owners of S corps who operate or run their business pay themselves a salary as an employee even if they are the only person in the business.

Like LLCs, S corps shield personal assets from liability in case of business debt or lawsuit. Additionally, S corps can hire employees, deduct business expenses, and they enjoy all the benefits of an LLC and greater liability protection for the owners of the company.

Generally speaking, and very much a back of the envelope calculation, it’s a good idea to switch over to an S corp if your take home income from your business is greater than $100,000. This will help lower your personal tax rate, any additional income beyond your salary is taxed at the corporate rate which is lower than higher level personal income tax rates. Yes, that last sentence was complicated, but if your business is at this point it is probably a good idea to hire an accountant and possibly a lawyer to ensure you are making the most prudent business decisions.

S-Corps have registration fees as well as annual maintenance fees (depending on the state of residence, and expectations for corporate governance like meetings of shareholders and board members. Filing taxes is more complicated as more forms must be filled out to appease government agencies. 

 

Choosing the right business structure is crucial to your success. It’s a good idea to consult with an accountant or tax lawyer before you file any paperwork with federal or state governments. 

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Join a future coworking session where we often engage in topics like business structure, finances, and taxes.

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Art Business Marketing: Goals and Measurement

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Art Business Marketing is not a mystery. Growing your audience in ways that are true to you can be easy and enjoyable. Let us show you how.

This post is Part 2 of a multi-part series. Subscribe to our Business of Art newsletter to receive notification when additional posts are published. 

 

In the first part of this series, we discussed the basic parts your marketing plan needs to have. In this, and a few future posts, we will go into more detail about what goes into each part of art business marketing and how to put them all together. Think about it like drawing a roadmap with a clear destination, a pathway to get there, and measurable milestones that you can track to determine if the plan is succeeding. 

In this part, we’re going to talk about goals, the clear destination, and measurement, the milestones along the way. If you haven’t already, I highly recommend you go back and read Part 1 before reading this.

Let’s dive in! 

Goals

As we mentioned in Part 1, goals need to be specific and measurable. This is where you want to think about the big picture of what you want to accomplish. 

Some examples of goals could be:

  • Increase sales by 10 percent.
  • Hold 2 gallery openings in a year. 
  • Secure 3 commissions. 
  • Earn $50,000 total revenue. 

Spend some time thinking critically about what you specifically want to accomplish. For example, let’s say you want to sell commissions. Who do you want to sell them to? Do they need to be a certain type? A certain dollar amount? A certain size?

A key part of developing goals is making them realistic. If you’re just starting out and you’ve never sold a single piece in your life, then going from $0 to $100,000 is very unrealistic. Instead, focus on what you honestly believe you can achieve. 

Although these goals may not look like marketing goals, they will significantly influence how you approach your art business marketing. These specific destinations will help you define the audience and customers that you will need to engage during the year. To reach these goals you will need to think about: what galleries you want to show your work in, who will commission you, and who are the customers that will buy your work to generate your revenue. These details are important to your roadmap (marketing plan) for success.

 

Measurement 

 

Your goals will determine what you need to measure. In our map example it is helpful to measure the miles you have traveled towards your destination, it is probably much less helpful to keep track of the number of cows you pass.

For example, if your goal is increasing sales by 10 percent over the previous year, it’s easy to measure whether you’re on track to meet that goal or not. If last year you generate $20,000 of revenue in your art business, this year you want to increase thatto $22,000. Another way to see that is about $200 extra of revenue generation each month. This might mean one more customer or 4 more print sales.

The trick here is to make sure you’re measuring things that are actually important to meeting your goals. We call these “metrics.” So if your goal is to increase sales, you may not find it useful to measure and track things like social media engagement—unless they correlate to closing sales.

An easy way to do this is to document your process. You can choose any tool/place to do this. For instance you could set up a spreadsheet where you can add monthly stats such as sales figures, website traffic, social media followers, etc. At first, it might seem like busy work. And you may start by tracking things that only seem tangentially relevant to your goals. But over time, patterns will start to emerge. Over time, the more data you track, the more you’ll be able to judge whether they contribute to your success. Using social media followers as an example, you might find that whenever your Instagram follower count grows by 5 percent, you get more sales. 

Keep in mind that metrics are finicky. What works today might not work tomorrow. That’s one reason why it’s a good idea to review your marketing plan—and any results you achieved—on a regular basis, which initially may be quarterly but as your business grows you may find it helpful to check where you are at more frequently. 

 

Need help putting this all together? I’m here to help! Check out my Coworking with Creatives workshops or contact me to discuss how I can help you market your art. 

 

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Making Myths and Luxuries: Branding Lessons for Artists

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In the corporate world, we talk about “brand” to discuss a company’s identity. Much like human identities, there are many brand possibilities for companies. Brands can be fun and playful, irreverent, serious, etc.

While the word brand might be too stiff or formal for an artist’s business, artists still have an identity. And developing your identity is key to being successful. For artist entrepreneurs, it can be fun and valuable to explore what identity they want their business to have. Artist branding doesn’t have to be a bad thing.

 

What Is a Brand?

We often think of a brand as a logo, but it’s a lot more than a stylish symbol. A common phrase in corporate marketing is, “A brand is what your customers say it is.” In other words, a brand is the emotional connection between the company, its products, and the customer. A brand is complex; it is the essence of a company and the relationship of that essence to its audience. 

When customers buy something from a brand they like, they’re not just buying a product or a service. They’re buying meaning, something that goes beyond function and reflects on how the customer views themselves. 

 

Something similar can be said for art. 

 

Certainly, most people don’t buy art for its functional value the way they buy, say, a pair of shoes or a car. They buy art for how it makes them feel. A big part of that is the storytelling that happens around the art, what I like to call the Myth.

 

Myth Making for Artists

What makes one artist more well-known than another? Is it that their work is better than others? 

Sometimes a revered artists work IS better, but likely what makes an artist more well known than another is differentiation! More often than not, it’s the myths created around the artist and their artwork that heighten the audience’s value of the creative output. In branding, we call this “myth” a brand story.

 

What is a myth, exactly? 

 

It’s more than a story. Myths often have some common characteristics, including:

  • A story with a nearly unbelievable—but still possible—arc. 
  • An origin, a transformation, and an expansive possibility

Myths are created to teach us, to inspire us, and to help us understand our own experiences in the world. The ability to craft and articulate a myth can be very valuable to an artist seeking to sustain themselves through the sale of their artwork.

 

For artists, this usually translates to:

  • An origin story somewhere between truth and fiction, but that showcases the artist’s humanity. It is where you are from in all aspects. Your hometown, your family, your friends and colleagues, and all the unique things and experiences that make you, YOU.
  • A transition where they experience concepts and learn skills to turn ideas into things. It is how you emerged as an artist. Your early experiences. The teacher that recognizes your talent. The training that refined you. The critique that made you. The transition is the awareness of you as a creative force.  A vision of things yet to exist. The artist has dreams of concepts, ideas and inventions that will enrich them as a creator.

 

So how does myth making translate to selling art? To understand this, it’s important to understand what type of business you want to be and to develop a myth that embraces the type. 

 

Three Types of Businesses

There are essentially three types of business: Commodity, Premium, and Luxury. Let’s take a quick look at what each of these are. 

 

Commodity Business 

Commodities are interchangeable goods or services. Their price is controlled by the customer, who can buy any number of products or services that are nearly the same  from a selection of vendors. For example, it doesn’t matter whether they buy the store brand of sugar or a name brand. The product is essentially the same and the creator has no control over the price.

 

Fine art is rarely sold as a commodity, though there are certainly websites where artists can sell various quality prints of their work as a commodity. This might be most akin to an unlimited print run.

 

Premium Business

A premium business sells differentiated products or services based on quality of material, skill, or customer support. The prices are often tied to what the market will bear, but is also greatly influenced by the quantity and expansiveness of offerings that supply has created in the marketplace. The creator has some control over the price, although the peers that they are competing with will influence price as well.

 

For an artist business, a premium business model can make a lot of sense. The artist often selects ideal materials for their creations and their skill is often high caliber. Together, the quality of materials and expertise of craftsmanship to make a work of art can command premium pricing, although your price may be influenced by your fellow premium peers.

 

Luxury Business

Luxury businesses are distinguished from the other types based on often irrational, subjective reasons. Products and services in this category are driven by scarcity, usually manufactured, and priced much higher than the value of the materials or skill needed to create them. In some ways, luxury products transcend reality by enabling the customer to be, think, say or do something beyond themselves. 

 

Think of almost any high-end luxury clothing brand where it’s all about the designer’s name and the brand rather than the material of the product or the skill of the person actually making the goods (either by hand or using machines). 

 

Art easily lends itself to this category, and much of society also sees art as a luxury. Not only is art a perspective, expression or manifestation of an idea that reflects the buyer, but its supply is greatly limited, it is usually unique, and only the artist has the skill and experience to create it. As a luxury brand, the artist and their business team can have significant control of the price.

 

Where Does Your Artist Business Fit In?

So what do these three types of businesses have to do with making myths? Oftentimes, the myth defines the business type. In other words, your art might be totally differentiated from every single piece of art out there. But it is your myth—your story, your skill, your experiences, etc.—that defines whether your art is a commodity, a premium product, or a luxury experience. How accessible your myth is to your audience also plays an important role. If no one knows the myth–or understands it–it kind of doesn’t exist!

 

Keep in mind that you may work through all three of these types of businesses over your art career. You might start at the commodity level, maybe churning out similar, less differentiated work at first. Then, as both your artistic vision and business skills mature, you might morph into a premium business, making fewer pieces (i.e. reducing supply) and growing the perceived value of your work. Finally, you might further refine your model to develop luxury pieces and services, such as painting commissioned murals in a customer’s home or designing Diadora’s next show line.

 

Ultimately, the direction you choose to take your business is yours. But if you need guidance in refining your vision and understanding how to build a business that supports your art, I’m here to help. Contact me to discuss how to build your income as an artist in a way that aligns with your artistic vision.

 

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Accounting Tools for Artists

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Let’s face it: Doing accounting for your business probably isn’t at the top of the list of things you enjoy doing. After all, you probably became an artist to express yourself, and spreadsheets and tracking income and expenses is probably not your preferred medium. Yet, as someone who wants to earn a living doing what you love most, you need to do at least a little bit of accounting.  

“Why?” you may ask yourself. 

For one, it is important to know your financial health. Just as taking care of your physical health allows you to create more art, a healthy perspective on your money will serve both your business and your creativity. Of course, you want to make sure you report the right amount of income and pay your taxes correctly in order to avoid major penalties and life-wrecking finances later down the road. And you might be surprised by how exciting it can be when you can see how your business is doing financially—especially when you’re profitable. Good accounting will also improve your pricing! Ultimately good accounting can give you more time in the studio and less time worrying.

Luckily, technology is here to help! There are a number of great financial tools for artists out there to help with accounting. Here are three that I like to use and that I’ve seen work well for some of my clients. 

Before we get to the financial tools for artists, it is important to note that the best tools for your business are the ones you will use. A powerful and great looking app may not be as helpful as a paper and pen sometimes. Choose the tool you want to learn and are willing to embrace!

Spreadsheets

I know, you’re probably thinking there’s nothing less interesting than a spreadsheet. I feel your pain. But hear me out:  The spreadsheet is a powerful tool that, when set up correctly, can make accounting a breeze while also giving you all the information you need to properly run your business. 

The best thing about spreadsheets:  You can set spreadsheets up anyway you like. They’re incredibly flexible to serve multiple purposes, and they are low cost or even free!

The worst thing about spreadsheets:  You have to have a basic understanding of how they work and how to manipulate them to get the most use out of them. They are also pretty boring to look at.

The good news is that there are plenty of templates out there that might be perfect for you, so you don’t have to start from scratch. There are also plenty of resources on how to utilize spreadsheets and even set them up for financial purposes. Finally, there are a number of free platforms out there that offer spreadsheets, such as Google Sheets or Apache Open Office. So, it’s often just a matter of finding the platform you prefer and choosing an appropriate template. 

Spreadsheets are a great financial tool for artists that are just getting started in business. The price is right, they are pretty easy to learn how to use and understand, and there are many individuals who utilize spreadsheets and can possibly help.

 

Quickbooks

Sometimes, it’s good to just pick a well known entity. And in the world of accounting tools, that winner is Quickbooks.

Quickbooks is the industry go-to for accounting software for small business owners. Unlike spreadsheets, you  have to pay for Quickbooks, but they offer a few different packages to fit different budgets. The cool thing about Quickbooks is its many functions.  You can track income and expenses, use it to send invoices to customers, send reminder invoices to customers, manage and pay bills, track inventory, and prepare for your taxes.Quickbooks offers a lot of automation and can connect to your bank account too. Quickbooks might be worth the investment as it will save you a ton of time and headaches.  It also generates reports that can help you make better business decisions that give you more resources (money) and enables more time to create.

Quickbooks is a great  financial tool for artists who have figured out their business to some degree. They likely have gone through a tax season or two and know what their sources of revenue are and what expenses to track. There are excellent resources and lots of professionals to help set it up as well as possibly do the financial work. It is a great financial tool for an artist who wants to automate some of their finance work and is interested in how finances can influence operational decisions.

The challenging thing about Quickbooks is that it requires at least a basic understanding of accounting terminology and principles. It also requires a bit of time and effort to set it up properly. You can certainly do this yourself, but there are plenty of accountants out there who are more than happy to help you with this.

HoneyBook

Want something that’s easy to learn, easy to use, and kinda pretty? If so, you might want to consider HoneyBook.

HoneyBook calls itself a platform to get everything done that you need to. In addition to accounting features, it can help you manage projects, clients, proposals, and more. It helps you manage essential documents (contracts, invoices, etc.), and  allows you to streamline client communications into a single platform. You can  manage bookings (such as if you’re scheduling photoshoots) and payments. Honeybook can be a great place to manage your customer contacts, particularly for relationships points like quotes/estimates, invoices, and tax reporting.  For the full price ($390/year at the time of this writing) you get all the platform’s features, but they do have more affordable plans if you don’t want to make that level of financial commitment. 

Honeybook is a great financial tool for artists who want to integrate their finances, customer information, and production calendar, while creating a high-touch experience for customers. It doesn’t quite have the support system of spreadsheets and Quickbooks, but there are resources and individuals who can help get things set up properly.

 

Want to learn more about financial tools for artists? You’ve come to the right place. Check out my upcoming Finance Friday coworking session where we’ll discuss all things financial for your artist business. Or if you have a burning question now, don’t hesitate to contact me. 

 

If you just want good business tidbits in your inbox once or maybe twice a month, sign up for our business of art newsletter.

 

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How to Build a Marketing Plan for Your Art Business (Part 1/x)

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This post is Part 1 of a multi-part series about marketing. Subscribe to our Business of Art newsletter to receive notification when additional posts are published. 

One of the most common questions I hear is “How can I sell my art?” And while that’s an important question that every artist needs to find a way to answer, I find the more appropriate place to start is, “How should I market my art?” 

“Marketing” is a nebulous topic that frequently isn’t taught in school. And while some may be naturally gifted at drawing attention to their work on social media channels, those activities don’t always equate to actually marketing their work. In fact, being good at social media is just one aspect of marketing and sometimes may not even lead to sales.

In order to successfully sell your art, you need to approach marketing strategically. 

What does that mean?  Marketing requires critical thinking about who your audience is, the best ways to reach them, and all the steps they will go through to become customers. Good marketing is a series of activities that are part of the pathway to transaction.

Let’s take a closer look at the framework that  supports an effective marketing plan. In future posts, we will look at actionable steps to implement a marketing plan. 

 

A MARKETING PLAN FRAMEWORK:

GOALS

Audience

Message

Channel

Market conditions

Strategy

Tactics

Measurement 

 

Before we get into “how to build a marketing plan,” it’s important to understand the parts that make up a marketing strategy. While there are many different approaches to building a marketing strategy, here are the critical pieces that I’ve found are invaluable for artists to include. 

Goals: What are you trying to accomplish? 

Yes, you want to sell more art. And that’s a fine goal to have. But it’s not enough for a marketing strategy. Goals should be both specific about what you want and measurable. 

To define goals, think both about the steps needed to achieve those sales (drive more traffic to your website, have X number of gallery showings, etc.).

As you see above, there is a link that flows from your goals all the way to your action and outcome (more sales). 

 

Audience:  Who is your artwork for? 

Often when I ask an artist this question, many  will gleefully respond, “Everybody!”

Yes, artwork can be enjoyed by all people, but not everyone will value it. Nor do you want everyone to value it, as that likely means it is too average and does not transcend as great art. 

Furthermore, it is impossible to market to everyone. There is no message that will speak to every person the globe over, and there is no place–physical or digital–that could put your work in front of the entire world population. Your audience is a group of people who recognize the value of your work. 

More particularly your customers are those who value it AND are willing to pay for it. Keep in mind that some audiences may not be direct buyers, but rather people who can help you get in front of buyers, such as galleries. 

When defining your audiences, include things like age, gender, geographical location (if applicable), other artists they like, and other activities they enjoy. Income level is also good to include when building audience profiles, particularly if you have a desired price point for your work in mind.  With clarity on who your audience is, the rest of marketing becomes easier.

Messaging:  What do you want to say and how do  you want to say it to your audience? There are key things your audience wants to know about your artwork. There is context you can you provide to your audience that invites their engagement with your work. What details about materials, process and your philosophies add value to the experience of your work? Messaging is where you can, and frankly where you will need to differentiate yourself from other artists. 

Channels:  Where do your audiences hang out, both literally and figuratively? 

Hint: Social media is not the right answer. That is akin to saying my audience hangs out in the ocean, and if I start swimming I will probably find them. 

Channels need to be tangible places to connect with your audience. What social media platforms do they prefer? What hashtags do they follow?  Do they visit any particular art venues on a regular basis? What publications do they read? Where am I likely to personally, in physical or digital form, encounter my audience?

Market Conditions: What are people who are purchasing artistic experiences looking for? 

This can include information about what type(s) of art your ideal customers like, but it should also include general market conditions that may affect your ability to sell art. For example, when there is an economic downtown, art purchases tend to drop. You don’t have to be an economist, but a general awareness of market conditions will help you to properly communicate with your audience. 

Strategies: How will you reach your audience?

Marketing strategies define your approaches to growing your audience and increasing your sales. This includes things like developing a stronger online presence, building relationships with more galleries, participating in online art forums, developing an email list, creating stronger visual assets to communicate your values (brand) etc. Strategies, although large in scope, should be very specific and should directly support your goals. 

Tactics: What work do you need to do today to move towards your goal?

Often confused with Strategies, tactics are the specific steps you need to take to put your strategies into place. That might be “Create a daily Instagram post” or “Send a monthly newsletter.” 

Measurement: How do you know if you are getting closer to your goals? 

Good goals are measurable, but you also need to know what to measure. For example, if I’m driving from Baltimore to San Francisco, I know the route is going to be about 3,000 miles. Throughout my journey, I can easily glance at a number of mile markers, but that will only tell me how far I’ve gone on a specific highway. 

A better method would be to note down my odometer’s starting point and estimate the number it will be when I arrive in San Francisco. That way I know how far I’ve traveled at any time and can estimate how much further I have to go.

Measuring your marketing is similar. You need to know what you want to measure and how you will measure it. For example, if one of your goals is to grow online sales by X percent, you will need a way to track all your online sales, AND to measure its growth over time. Good analysis doesn’t cause paralysis, good analysis enables good growth.

This is the framework for any good marketing plan. Check out future posts for an overview of how to put these together to form a single, cohesive plan that gets results! 

 

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GUEST POST: How You Can Find Success When Starting a New Business

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This post was generously contributed by Chelsea Lamb

Diving into Business

Are you thinking of starting your own business, you’re not alone. More and more people are leaving the predictable 9-to-5 employee lifestyle to launch their own companies. In fact, according to official statistics, the number of U.S. business applications has been steadily rising for more than ten years. If you are part of this growing number, you may wonder where and how you should begin. This guide from Burkholder Agency provides critical first steps and practical online tools to get you started on the right path.

 

Choose a Name

Choosing a name for your new company is an early step that can impact your future success. Selecting an optimal name can simplify your marketing strategy and help you connect with potential clients. Luckily, online name generators can help you choose an easy-to-remember one that conveys the vision and purpose of your business.

 

Consider Working From Home

Launching a business from the comfort of your own home saves you money, and therefore, reduces your risk. By using your house rather than renting a separate space for your company, you need less money to get started and incur fewer overhead costs down the road. The at-home business arrangement also saves you time and increases your flexibility, making the work-life balance easier to achieve.

 

Pick the Right Business Structure

If you are running your own company, filing as a limited liability company can be a smart move. LLC status protects your personal assets from potential liability and reduces your tax burden by allowing you to categorize company profits as personal income. Although the filing process is straightforward and doesn’t require much paperwork, an online formation service is recommended to ensure you meet all the state-specific requirements.

 

Develop a Comprehensive Business Plan

Once you’ve selected your company’s name, location, and structure, it’s time to develop a business plan.  A comprehensive plan, which includes details about your product, target market, and business structure, can serve as a roadmap for your company’s direction, decisions, and strategies. It should also include financial information, including start-up costs, projected operational expenses, and metrics for measuring success. To create your company’s business plan, you can do it yourself or use special software or tools to help you.

 

Apply for Funding

If you need money to launch your business, there are several potential sources of funding. For example, loans that are guaranteed by the Small Business Administration, such as 504 loans, 7(a) loans, and microloans, are easy to qualify for while still offering competitive rates. There are also small business grants available from both government and private sources.

Another option is to seek out an angel investor or a venture capitalist who is willing to provide funding in exchange for equity in your business. Finally, crowdfunding platforms allow individuals to contribute money in exchange for a product or perks.

 

Select the Best Payroll Service
When you hire staff, you need a system to handle all aspects of the payroll. If you don’t want to handle this administrative task in-house, an online payroll service can help. Look for a company that allows you to customize the payroll system to your company’s particular needs with options, such as:

  • Tax form completion
  • Benefit deductions
  • Automated tax withholdings
  • Time tracking
  • Scheduled direct deposits
  • Year-end summary reports
  • Tax penalty protection

 

When starting a new company, many of your early decisions can impact the direction and future success of your business. Thankfully, by planning well, exercising the necessary steps, and taking advantage of online tools, you can ensure a smooth and successful launch.

 

Chelsea Lamb has spent the last eight years honing her tech skills and is the resident tech specialist at Business Pop. Her goal is to demystify some of the technical aspects of business ownership.

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Do I need an agent… or any expert

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Last week my accountant emailed me with the out come of our tax return. He suggested that if I move some cash into retirement savings I could reduce my burden by 2x what I am paying him for this year’s service. He has paid for himself with a simple suggestion. It is the second time in as many meetings he has added depth to my knowledge and numbers to my bank account.

He is a valuable resource to have. It is interesting though, that the value of the accountant seems to go up as our net-worth goes up. When there is little to account for there is little opportunity to recoup the cost of counting. Yet, I have utmost confidence that had a professional financial guide been at my side in the beginning we would be in an even better position today.

When resources are scarce one of the hardest things for us to pay for is knowledge. Yet it is precisely knowledge that we need when we have little else to work with. We need to work smarter in tandem with working hard, because often times we are working harder due to lack of efficiency, or rather, lack of knowledge..

The benefit of efficiency is a curious thing, it has drastic impact at the start and overtime it compounds.

One of the most evident signs of our need for knowledge is with our most precious resource: time. When we first start a business, we are constantly busy. We are terrible at time management because we can not assess what is important. Assessment is about awareness. We lack knowledge of the right questions to ask to gather the right information to guide our actions. Is the product more important or finding my audience? Should I work on a partnership or focus on a sale? Is that gig worth it? Furthermore, when we lack time because we are busy, the last thing we prioritize is sitting to think. Thinking seems like doing nothing and how can we afford to DO nothing.

Unfortunately doing nothing is likely one of the most valuable things you could do to not only win back time, but also win the life you want to lead.

If you are unable to think, who will for you?

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