4:19 PM 04/20/2004 - Chicago
As soon as I decided to turn my painting skills into a business venture... everything turned the corner into an entirely new dimension... one of dollars and cents. I had read a few books relating to 'Art as a Business' but none of them addressed the most rudimentary level... which is, in my opinion, the level that will (before other, higher levels even have a chance to become operative) determine whether the venture will either succeed or fail.
So here is what I have figured out for myself, so far. There may still be bugs in my plan, and things left out... but it's a good start:
Painting, at its most prosaic (ignoring all the 'artsy stuff' for the moment), is about making paintings.
Business is about making money, by providing goods and services.
So a journeyman painter, starting up a business, will be making money, by selling paintings. There may be other alternate income streams, as well, but for the time being, this one most central income stream, is enough to consider.
A painter can either 'make what they sell', or 'sell what they make'.
Making what you sell, is usually referred to as a 'jobbing', 'contracting', or 'commissioning'... you have a service to sell... the skill of painting, in this case, so you seek out customers who will pay you to employ your skill/ talent, doing a job for them, which most often is a job 'on their terms'... they will have the final say, in what is a 'job well done', and what is not. A professional portrait painter or muralist is an example of this working strategy. Partial payment is usually made up-front, and final payment made, after the job is completed to the satisfaction of the customer. If the customer isn't happy... the painter could be screwed... especially if the painting just happens to be painted onto the walls of the customer's house or business.
Selling what you make... is the manufacturer's strategy. First, you make something, and after it is finished, you put it up for sale. No one pays you anything up-front, and if you can't find a buyer, you are stuck owning what you made... but at least no one is mad at you, or trying to sue you. This is the strategy most often employed by people calling themselves 'artists'. If they find a lot of buyers for their work, they are usually referred to as 'successful artists', and if no one wants to pay them anything, they are referred to as 'starving artists'.
Both strategies have their advantages and risks. Some folks do a little of both, simultaneously. I have chosen, for the time being and foreseeable future, to 'sell what I make'. It is the strategy that fits best with my overall plan for myself, and with which I am the most comfortable. They both work... how much of which... is a matter of personal preference.
In order for my business as a painter to succeed, I have to be able to paint pictures in a very competent manner, which will not fall apart or deteriorate prematurely, and for which there is a large enough interested customer base available, so that I can earn a living wage selling to them. Before I worry about anything else, I have to make sure that I know my job at the easel. Once this is satisfied, I have to make sure that I am not painting something absolutely wonderful... but for which there exists no market. You can be a real, genuine visionary, and 100 years ahead of your time, and that is all good and wonderful... but if you plan on eating, and sleeping in out of the cold, and earning the money to do this with your brush... then you are going to have to paint something that people will buy, now. That's business.
I decided not to follow the 'gallery representation' route, and go straight to the customer, using my website and eBay. This isn't necessarily the best strategy, or the easiest strategy, but it can be done. I know this, because people are doing it, myself among them. I will not argue the merits of one strategy over another in this essay, because this essay is about business basics. If a dealer contacted me tomorrow, and offered to represent my work, I would seriously consider the offer. In the mean time, I will run with eBay, because it is a 'bird in the hand'. Eventually, I am sure I will pursue other options, as opportunities present themselves.
Businesses use money, more than anything else, as a means of exchange. Sometimes super deals can be made with barter, and other forms of exchange, but in my current experience, 99.99% of everything I earn comes across the table in the form of Paypal deposits (an on-line banking-type company, specialising in on-line transactions) and checks arriving in the mail... both of which, wind up in my local bank.
The money coming in, must exceed the money I am paying out for all of my business expenses, by a margin great enough to pay my taxes and living expenses, or else I will go broke, and the business will fail, and I will become a 'starving artist'... literally. The money may come in 'evenly', or it may come in, in occasional huge chunks, but when there are bills and taxes and personal expenses to be paid out, there had better be enough money in the bank, to meet my obligations, or I am screwed. I consider a one year reserve to be prudent... to have enough money in the bank, to live and run the business on for a full year. I don't have a year's reserve right now... but I am working on it. I would rather be a 'little bit poor' every day, and get used to it... than to spend a little bit more every day, and then one day become 'totally poor' all at once.
Once I was a good enough painter, so that I could sell my work on eBay... at any price... I realised that the very first order of starting a business, would have to be dealing successfully with the I.R.S. If you're not a U.S. citizen, just substitute the name of your own country's taxing body, in place of I.R.S.
Having had previous business experience, in which I *did not* place the realities of having to pay taxes first, I realise the consequences... in stress and cash... that such a decision levies. A very clever fellow once told me, that in business, where money is concerned, it is not what you make, that is important, but what you get to keep. With the I.R.S., taxes not paid in a timely manner, or in the right amount, can cost the business owner a huge percentage of their net earnings, in penalty and interest payments. Also, the stress of not knowing what one's tax liability is at any given moment is nothing to sneeze at. I spent a lot of my working life living with uncertainty, and outright fear in the past, just because I did not know where I stood, tax-wise. This time... I decided that from the very start of my business as a painter in the fine arts, I was going to know the score, tax-wise, to the point where I would be ready at any given moment, to stand an I.R.S. audit, with no more than 5 minutes preparation... period.
I began by visiting the I.R.S. website, where I was able to download and read up on everything I would have to do, to stay on top of my taxes. Then, I worked backwards, figuring out what things I would need to do in my everyday business activities, to get the tax job done... which just by happenstance... wound up being just about everything a start-up business, like a painter, would need to do, to track their financial and customer information.
I bought some older accounting packages... MYOB, Peachtree, and QuickBooks... and tried all three... finally settling on QuickBooks as the one best suited for me. I do not have employees, and I fill out and file all my own tax forms with the help of the I.R.S. website, so the fact that I am using an older accounting package doesn't really matter... the ledger is the same, whether you use a new or old software package, or write things down in a traditional paper book. The point is... to *understand* what you are doing. To accomplish this, I bought a few inexpensive books on eBay, explaining basic accounting, and starting a business.
Having an accounting package that you are comfortable using doesn't mean much, if you don't use it. My strategy, is to use it *instantly*... entering *all* receipts as soon as they are generated, so that I know at every given moment... exactly where I stand, down to the last cent.
I'm a painter, who is also a businessman. I have a very simple prioritization, for my everyday tasks... I paint, I manage selling and customer service, and I pay my taxes. Painting is what I do most of the time. Putting work up for sale, after it is finished, is what I do after I have finished painting for the day. When a customer makes a purchase, I stop what I am doing, and process the purchase, do the accounting entries, and ship the painting... then, I go back to work painting. When taxes have to be paid, I prepare the forms myself, at the earliest possible moment, write the check, and mail it... then, I go back to painting.
Only after my taxes for a quarter, or end of year, are paid in full, do I take my personal draw.
This is basically the description of being between a rock and a hard place... everybody gets their money first, and then, if there is anything left... I get to eat and pay my bills... heh.
As far as I know, there is no better strategy, for a low-budget business like a painter in the fine arts, just starting out. Total business expenses for a month ((working out of my house, which is not a business expense), is under $1,000.00, and half of that is the eBay bill. This is a pretty low overhead, as businesses go. By keeping living expenses as low as humanly possible, it is actually almost possible to live off what can be made on eBay, at the entry level... if you can finish two or three paintings per day, five of six days a week.
The important thing, in my opinion, is to do everything 'right' from the very beginning, and fill in the shortfall with odd jobs, like selling junk on eBay, etc.... but under no circumstances, to use the bill or tax money, to pay yourself, and hope to make it up later... the penalties and interest that the I.R.S. charges, are literally a business killer. Once you fall behind with the I.R.S., you will find catching up nearly impossible.
Most of my days are 12 to 16 hours long. Painting and managing a small on-line business like mine is not physically hard, but it does entail very long hours... painting, posting auctions, answering emails, trips to post office, painting, paying bills, painting, writing articles like this one, managing a website, and painting.
I pay a huge amount of attention to my eBay auctions, and website. These are the documents that act as my public persona, because as a business operating primarily on the Web, there is no face-to-face contact with my clients. I also pay a huge amount of attention to email... what I say, how I say it, and answering promptly, when people email me. Email is the life-blood of an on-line business.
I haven't tried to address every possible situation in this article... only to cover the things I have personal experience with. The jury's still out on how successful I will be, as a businessman selling my own work, but I suspect that I will at least be successful enough to earn a modest living, which is good enough for me. As long as I get to paint, eat, and stay worm and dry, I will have no complaints.
------------Addendum----------
I just realised, after finishing this article, where I have borrowed/stolen a lot of my strategy, for building my business...
For the last couple months, I have been reading... on and off... my way through a book titled 'Software that Works', by Michael Ward. This is a book that describes the iterative process that a lot of successful software designers use, to build computer programs... they do not simply write down a design plan, and then do the project from start to finish... they design, and then build a little, and then re-design, and then build a little more, and then re-re-design, and re-build... and continue this process until the software actually works... as opposed to working until the initial plan is completed.
This is what I am doing with my business, and my plan for it... I realise going in, that I do not... cannot... know all the requirements that will be necessary for the final plan to work. So I start building, then stop every so often... every month/ quarter/ year, etc., to re-design my plan... to take into account what I have figured out, since last month, last quarter, or last year.
At some point... I will cross the line, and have a 'Business that Works'... but even then, it will only be version 1... a perfect time, to start debugging what works, and begin a new plan, for version 1.5.