Tuesday, November 12, 2019

The business side of art making

I am back to my blog after a prolonged absence. 
I held an Open Studio Event in my Back Yard Studio (photo above) for 6 hours October 5, 2019. Lots of people showed up (I invited them!) and some purchased art. Yay! This event taught me to get more serious about 'selling' my art. 

So...I've been spending a lot more time lately learning how to focus on the 'business' side of art making. I want to share what I've learned with you. 

Here's what my step-by-step process looked like:

First, I learned I needed to create an Inventory of all of the artwork I have made and everything I make in the future. I selected my most recent work completed in the last 2 years. Recommendations are to create a sequential numbering system for each painting. I choose 2000 as my starting value and wrote the ID# on the back of all finished pieces and Works in Progress (WIPs). I created a spreadsheet to help me track my art. It includes: a thumbnail photo of the finished work for each ID # with categories such as the year the work was completed, the dimensions and characteristics of the work, the sales price, the date of purchase with the name of the person/entity who bought it, and some notes. It was easy to set up and updates are easy when everything is tied to the unique ID#. I will use the ID# on my sales receipt to speed the inventory recording process.

Second, I learned from my tax accountant and a consultant at my local arts organization that, given my artist's goals, I should apply for a business license for an LLC. It was surprisingly easy after gathering information from my State's agency handling business regulations. I received my e-LLC license 2 days after I applied. If you don't know the benefits of an artist's LLC, check out this helpful web page to learn more. 

Third, I opened a bank account using proof of my LLC license and handing over cash to start the account with income from my Oct 5 Open Studio sales. It took a little time for all the paperwork; but, the process was easy with those two important pieces to get it started.

Fourth, I created a spreadsheet to monitor my income and expenses. My tax accountant gave me a sheet of allowable categories for the IRS and State tax forms. I am very talented using Excel spreadsheets; but, I started to see problems ahead when I looked a "potential annual income" against "real expenses." I am working on this issue now, will probably figure it out sooner or later, but, I doubt I'll ever post on this topic again on this blog. 

I hope this has been helpful to you.  Please comment on this posting if you have questions, suggestions or want to describe your own experience with setting up a licensed Artist's business.

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