Contrary to popular belief, those in the art sector are making good money. According to ZipRecruiter, “The average annual pay for the Art Business jobs category in the United States is $86,940 a year.”
This breaks down to just under $42 an hour, $1,671/week, or $7,245/month. Of course, making this kind of money consistently takes time and dedication. It also requires a willingness to learn the financial and business side of art.
We know. It’s not the fun part of being an artist. But understanding finances, costs, and inventory control is fundamental in your being able to create for a living long-term.
The following strategies will help you optimize your inventory, control costs, and build financial stability to grow a successful art business.
Conduct a Financial Audit
One of the first things you should do to get on the path to financial success is to figure out where you are right now. You’ll want to assess your business finances as well as your personal finances to get a full picture of what you need to do to make a living and drive a profitable business.
What are your business expenses? Are you taking a paycheck? How much are you making each month after you subtract costs? What are you putting away for taxes and savings? What is your profit goal?
Answer similar questions for your personal finances. What are your monthly personal expenses? Are you covering these expenses with a paycheck from your business or do you have another job or source of income? How much do you have left over after you cover expenses? What are you doing with your remaining income?
Know where you are right now financially so that you can put together a plan for where you want to be.
Understand Your Costs
This should be a part of your financial audit above, but we want to emphasize how important it is to understand your costs. When you know your costs, you can set profitable prices (we’ll talk more about this below). In addition, you can see where you can potentially cut costs and generate more profit.
Not every expense will be relevant to you, but some of the most common costs for artists include:
- Supplies
- Studio rent
- Labor costs
- Gallery fees
- Marketing expenses
- Copying, printing, framing
Study what you’re spending on the above and track these costs accurately to ensure they make sense for your business. Use these costs to set your prices appropriately too.
Set Your Prices
It’s hard to put a price on your art. But you have to if you want financial success. Make sure you approach pricing strategically. This means accounting for the costs above and your target audience when choosing prices.
Consider the financial ability of the people you’re shopping your art out to. Analyze the art they buy that’s similar to yours and how much they spend on it. Then, factor in your costs and how long it took you to complete the piece.
Add how much profit you want or need to make to the number you come up with above and set your price. Don’t be afraid to adjust prices as you learn more about what’s selling and what isn’t.
Implement eCommerce Automation Tools
eCommerce automation can be a game-changer for art businesses selling their products online. eCommerce automation is the use of software and technology to take over repetitive tasks and make processes more seamless.
Artists need to consider eCommerce automation for a few reasons:
- Eliminate human error
- Use data more effectively
- Personalize customer connections
- Get things done faster, increasing efficiency and productivity
- Take redundant, time-consuming tasks off your plate and free up your time to create and do duties that really need you
Which automation tools you implement depends on your processes. You’ll need to assess the processes in each part of your business to see which ones could be elevated with an automation tool. You should factor in your budget as well.
These four different areas in your art business could benefit from automation tools.
Marketing
Your art business won’t thrive without great marketing. Not only do you need to create high-quality content, but you also must distribute across a variety of channels that your target audience frequents.
Doing all of this manually is incredibly time-consuming, and costs you money. There are a variety of automation tools that can streamline essential marketing processes, including auto-schedulers for social media posts, automated email marketing campaigns, and template generators for content.
Customer service
Customer service is huge in any business. But it can be difficult to maintain quality customer service when you’re running your business all on your own wearing every hat. Thankfully, automation can streamline your customer service communication.
You can use a chatbot on your website that’s available 24/7 for visitors. You can use autoresponders on social media and for your email to ensure people get a response until you can connect with them. A customer relationship management (CRM) system is also a good idea to automate customer data collection.
Inventory and supply order
One of the most important aspects of your business when it comes to maintaining and growing your finances is inventory and supply management.
Knowing how much inventory you have, what’s selling and what isn’t, and ensuring you make timely supply orders is fundamental to your success. Inventory management is also critical to ensure customers get the art they want in a reasonable amount of time.
Manually audit your inventory often to ensure your numbers are correct. But relying on an automated inventory management system can streamline the process. It can keep track of inventory for you and pull products off your site that are sold out. You can also set it up to where supplies are automatically ordered once they reach a certain number.
Shipping
You should always be looking to exceed your customers’ expectations and earn their business. A great way to do this is through shipping. Get your customers’ products out to them quickly and efficiently and you’ll be well on your way to high customer satisfaction.
There are automation tools available to help you streamline shipping. When a customer makes an order, a shipping label is automatically created and customer information is stored in a central system.
Try These Cost-Control Strategies
Increasing efficiency and productivity through automation tools is critical for creating a solid financial foundation for your art business. But you also want to focus on strategies that help you control costs.
By controlling costs, you won’t have to raise your prices at times when other artists are. And that, in turn, keeps your customers happy and inspires repeat purchases. Your business finances will thank you too.
Keep reading for five cost-control strategies that will help you balance quality and affordability.
Diversify your income
If you’re depending on one source of income in your art business, you aren’t setting yourself up for success. If something happens to that income stream, you lose your living. Not only that, when you have more than one income stream, you have more profits available to cover costs and put back into your business.
Consider allowing external parties to use your artwork. You could draft a copyright license agreement with each party, allowing them to use your artwork for their business purposes. You’ll get an upfront fee when they purchase and receive royalties based on how much they make with your art.
This is just one way to diversify your income. Look at your competitors to see what other opportunities are available for you to make money with your artwork.
Check your space
If you have an art studio, good for you. But ask yourself, do you really need it? A studio is wonderful to have because it offers you the space you need to create, house your supplies, and even sell your art.
However, studio rent and expenses can be expensive. Cutting this cost can give you a financial cushion. You can use what you save on other expenses or put it away for taxes.
Consider bringing your art business to your house or another more cost-effective location.
Buy used and in bulk when possible
Art supplies can total thousands of dollars by the end of the year. If you can find a way to save on supplies, you’ll have a lot more room in your budget for other important things.
One way to save on supplies is to buy used and in bulk when possible. Gently used supplies can be just as functional as new supplies but for a much lower cost. Buying in bulk can also save you money. You can find suppliers that will give you a wholesale price versus a retail one if you buy a certain amount of product.
Market strategically
If you’re doing your art business right, you’re spending money on marketing. Marketing is how you connect with current and potential customers and get your art in front of them to convince them to buy.
That said, marketing costs can quickly get out of control if you aren’t paying attention. From paid advertising to branding and design to content creation to the tools you use, a results-oriented marketing strategy costs money.
Keep track of everything you spend on marketing. More importantly, market strategically. Study your customers to figure out which marketing channels, content, and tactics they’re most fond of, and spend your budget, resources, and time there. This is the most cost-effective approach.
Conclusion
Although many people doubt the financial viability of an art business, you can grow a profitable business with intention and planning. Start with one of the strategies above and work your way down the list to form a financial success strategy that elevates your artistry and company.