Make 2021 a Success with an Art Business Budget

Own the New Year by Creating an Art Business Budget

The most successful resolutions build on what you are already working on to help you evolve and optimize your effort. In 2021 make the business of your art a priority.

Make the business of your art a priority in 2021 by starting off strong with an effective budget.

As we enter a new year, we pause to remember, reminisce, and refocus on how we operate within the world around us. January is made up of goals, resolutions, and recaps.

You can use budget-building as a reflective activity, allowing you to take stock of the past months and break down what worked and what didn’t work. Even the nittiest-grittiest need-to-do details of your career can offer up insight and be a tool for introspection. Looking at the past year in numbers helps you to understand how your art business functioned. You can then make more informed decisions about your art career finances moving forwards.

Budgeting allows you to take charge of your finances in the future.

As an artist, you are also an entrepreneur and a small business owner. In the new year, embrace both your creativity and your business savvy within your art career. If you prepare yourself now with structures that work for you, you’ll create financial success throughout the year.

If number crunching sounds intimidating, don’t be scared off. You are already doing the work of an art business—now it’s just about setting your intentions, thinking through what works and what doesn’t, and building your budget like a pro. The rest will fall into place.

Here’s how to create a smart budget that will help you realize your goals this year:

Total your income and reflect on your success

To create a budget you need to know how much money you bring in and the different sources of your income. It’s basic, but totaling and breaking down your income helps you make sure that your expenses aren’t greater than your revenue.

Go through and tally up your income generated from your art business for the past year. Even if you have income coming in from other non-art sources, start by tallying just the income from your art sales, workshops, fees and whatever else you brought in that was related to your art business. This will help you get a better idea of where to spend your time and resources in the upcoming year.

Or course, making money from your art is not the only reason to be an artist—there are many other markers of success. That said, if you are trying to make a career from your art or even a hobby, you will want to get an overview of your re

If you are using a system to keep track of your sales and manage your artwork like Artwork Archive, go through and create a record of your art sales from the year. In your Artwork Archive account, you can use the Revenue and Expense feature to generate a revenue report of art sales, non-sale revenue, and both types of revenue. This report will give you a total as well as break down your revenue by line item. You’ll be able to easily see a record of your sales and revenue with just a few clicks.

Make sure to add up your art sales, revenue from commissions, any workshop income, passive income like art licensing, and art sales from print-on-demand sites.

Fixed income is regular income that you can count on like a monthly payment from someone renting your art. Variable income is income that fluctuates, like sales from an art fair.

While variable income is, well, variable, you can still predict its patterns like a bump in revenue from holiday sales or summer art fair sales. While variable income is dependent on many different circumstances, you have some control over it since you arrange for its possibility.

An example of an expense report on Artwork Archive.

Identify costs and evaluate what did and didn’t work

Now that you have an idea of your art income for the year, go through and list out your art expenses.

Your costs can be everything from rent for a studio, membership dues, material costs, to utilities. Like your income, your costs are both fixed and variable.

What were the most expensive elements of your art career this year? Can you look back at big purchases from years past, like equipment, and see their continued pay off?

Look back on your expenses to trim unnecessary costs in the coming year so that your money spent can be as productive for you as possible. Yes, you must spend a certain amount of money to be able to thrive in an art career. However, not all money spent has equal future payoff for you.

Review your variable costs item by item and think about which costs are productive investments in your art career. For example, you might find that ordering supplies in bulk is cost-effective or that you can rent equipment or split or build your own art fair booth. You could also look into sharing expenses, equipment or with another artist looking to tighten their art belt.

There are always small ways to effectively reduce your business costs, even if it is insulating your studio so you spend less money on heat in the winter!

Be data-savvy by pairing numbers with intentions

Now that you know your money in and money out, think through how your costs related to your revenue. Before officially drawing up your yearly art business budget, be strategic.

With your data on hand, it’s time to work with your administrative details and your yearly goals and aspirations to create a budget that will help you evolve in your career.

To do this, consider a few questions:

Where did most of your income come from this year?

Was your year-end total consistent with past years?

What are the effort, time, and material costs that go with your top income-producing activities or works?

You can even get as specific in your breakdown by thinking about what type of artwork sold the most throughout the year. To analyze your data, look back on your sales from the past year. Artwork Archive’s Insights feature allows you to view the breakdown of your sales so that you can see where your works are selling most, the prices of works sold, sales over time, and a breakdown of what’s in your current inventory.

After understanding how your expenses help translate to your revenue, plot out how you want to operate in your art career this coming year and where you can grow. If there are certain types of artworks you want to make more of, workshops you want to create, or new ideas that may boost your career, what will be the cost and potential rewards of these plans?

Now, as you prepare to predict and map out your future spending you can based on what you know about how profitable your efforts and costs were and where you want to grow in the coming year.

Track expenses, sales and income by category on Artwork Archive.

Predict and prepare for spending

Based on your costs, create a rough prediction for your yearly spending. This is your budget. Make sure that your prediction leaves in you the black based on your previous year’s expenses.

If possible, add in some room for flexibility. Flexibility and agile responses to circumstances are necessary for success in any career—and in life in general.

There may be some upfront costs that are intimidating but will be rewarding over time. For example, during the COVID-19 pandemic artists transitioned to online sales, marketing, and exhibitions. During this transition, there may have been start-up costs that were intimidating but paid off. Start-up costs like new technology or systems like Artwork Archive that helped artists grow and manage their career became essential to growing income.

You now have an estimated cost of your art career for a year. You may want to break your budget down month by month, quarterly, and section out your various big-ticket costs and put those on your calendar. Make sure to lay out what your budget is each month so that your fixed costs, like studio rent, will be covered.

Revisit and revise your budget throughout the year

Your yearly and monthly budget will help guide you throughout the year. Make sure that your numbers add up and that there is room for flexibility.

A thoughtful budget can be a living document when need be. If something changes, you can update and revise your budget. Since you know what your strongest and most reliable revenue sources are and biggest expenses you can make informed decisions if you need to change your budget over time.

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The Best New Passive Income Ideas for Your Art Business in 2021

Looking for more passive income streams beyond online classes? We have you covered.

We can’t predict the exact play-by-play for the coming year. However, there are some things that will never change, despite a shifting calendar. In 2020, 2021, or the years to come, you want to seek out passive income opportunities for your art business.

Of course, passive income is a bit of a misnomer, as it actually takes quite a bit of work to set up these income streams. However, once the hard work is put in upfront, these avenues provide a steady income in addition to your art sales.

When times are lean, passive income provides security. When times are prosperous, passive income allows you more funds to expand and innovate within your career.

Many artists in 2020 took to their screens to host online art-making workshops and classes. But, online teaching is not the only way to drive new income. There are lessons to learn from when creatives in the visual arts and in other industries got, well, creative with earning money in 2020.

Here are our top alternative passive income ideas for your art business in 2021:

Membership Services or Perks

The idea of online membership and subscription services are not new. Whether it’s a Spotify subscription or movie and tv streaming site, people have embraced and normalized online subscription services. According to Forbes, the average American uses 3.4 services just for streaming.

The popularity of personalizing online subscription sites is a bit newer. Whether it’s curated subscription boxes or membership sites that connect fans with individual artists and celebrities, these services are booming.

In the past few years, social media has helped create a new type of celebrity—think Youtubers—and connect fans with their favorite actors, musicians, and athletes.

Membership sites like Patreon have been around for years but took off even more in the past year as artists and content creators of all types looked for new ways to continue to connect with their audiences. Patreon allows its hosts, mainly musicians, to create and share unreleased music, personal content, and to connect with fans in a “backstage” type of virtual environment. We buy ugly houses

Sites like Patreon are “accessibility subscriptions” that allow artists to create and share content to their subscribers who pay a set or leveled fee each month to participate.

While you may not feel the need to set up an account with a formal membership service or content sharing site, you can start your own or take a leaf out of the subscription and V.I.P. model.

If you do workshops, tutorials, have teaching material on hand, or other engaging art sharing materials on hand it can be worth giving this already created material some extra life.

If you are new to the idea of monetizing your content, you can always start off smaller or test interest by posting recorded lessons or downloadable materials online for one-off sales.

There are a plethora of sites that will host your content and charge users for downloads of your videos or text. Sites like Udemy or Skillshare allow you to experiment with selling content and will help you see what is most popular as you create a plan for a membership or subscription model.

Digital and Physical Art Renting

Think beyond the gallery.

Another growing pre-existing but growing business and changing business is the world of art rentals. Renting your art allows you to earn income before landing a buyer. Your art is sitting but still bringing in revenue—the definition of passive income!

Usually, when you rent art, you are giving your physical artworks to an individual or business for an agreed-upon amount of time.

Renting your art has another payoff. When your art is displayed in a business, restaurant, hotel, or other public places, like a city bus, you are gaining new audiences. Art rentals will help you to break into new and unexpected areas to sell and display artwork.

Some well-known art rental businesses for corporate use—like on television sets and for real estate development—are Turning Art, Art for Film, Artemus, and Art Force. Art galleries will also help coordinate corporate and private art leasing like London’s Red Eight Gallery and Rise Art.

While art rentals aren’t typically marketed to individuals, there are also services working to bring art into people’s homes. Curina is a company that is bringing emerging artists new collectors by allowing individuals to rent their work. If your renters like your work, there’s a good chance your renter may become your buyer—or at least will request your work again in the future!

What if you could make renting your artwork even more passive?

Art rental services that bring high-quality digital images of artworks to home viewers on digital screens are now another option. Canvia blends bringing famous artwork from museums and galleries as well as contemporary artists into viewers’ homes and venues on framed screens.

For now, physical art rental is the standard for art renting, but we are keeping our eye on digital art rental services—and so should you!

Hype up a Brand or Service You Love

Is there an art product or service that helps your practice and art business thrive?

You can share the love by exploring ways to partner with businesses that you love. Influencer marketing encompasses everything from repping a business you like to content marketing and more formal brand partnerships.

Start out by reaching out to a material provider or business you use and let them know how important they are to your art career. Ask if there are any marketing partnerships you could take part in. You might arrange content swaps, guest posts, or be paid to promote a material or service.

Partnering with a brand is another great way to earn passive income.

You can work with brands and still remain true to your vision and your art-making goals. We loved speaking with Artwork Archive artist Amaury Debois about how he creates relationships for licensing and branding and his work with businesses like Mercedes Benz and McDonald’s while still remaining true to his artistic self. Debois maintains that he doesn’t have a “brand” but an artistic “world” that allows for flexibility, ideation, and all sorts of creative possibilities including working with businesses and brands to create together.

If you’ve never approached a company and asked about partnering, know that you also have something to offer that company. There is nothing more valuable than an enthusiastic user. If you are going to tell all your friends about your favorite materials or tools anyway, why not earn cash while doing it?

Artwork Archive loves when users help their friends and communities find us! Artwork Archive has a referral program that rewards users when people they told about us sign up for an account.

Passive income is all about putting upfront work into a system that will pay off now and in the future.

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