Create a Budget in 5 Easy Steps (and why it’s critical for your art career)
2019 means you’re starting fresh and this year is going to be YOUR YEAR! How do I know that? Because you asked, and we listened. We’ve put together an incredible lineup of content to help build the creative entrepreneur in you and really launch your art career this year. Think of it as a boot camp of sorts. There’s no way you can really get your art career off the ground unless you’re willing to roll up your sleeves, get down and dirty with hard work, creative play, and good business sense.
While galleries should still play an important part in your strategic plan to sell art, long gone are the days when artists can solely rely on this type of support. If you want to be a successful artist, you must first understand how much you’re bringing in (aka selling) comparatively to what your output is (aka your expenses). In the past, I've talked about why having a budget is critical, but here I’ve established five easy steps on how you can successfully set up a budget to maximize your art career goals.
Calculate and Track Expenses
Your first order of business is finding out exactly how much you’re spending each month. To begin a proper budget, think about your regular bills and your irregular bills that are due for the upcoming month. Do this by reviewing your bank statements, receipts and financials. After that, total your other costs, like food, gas, and entertainment. Every dollar you spend on your art should be accounted for. It’s easier to determine and plan for expenses when you break them into two categories: fixed and variable.
How to determine fixed expenses
Fixed expenses are items that will not change from month to month. They are your regular bills like studio rent, monthly marketing costs (website subscription, advertising, etc.) and utilities (electricity, gas, internet, etc.) This last cost has a variable element but is largely fixed – essentially, you can anticipate what the cost will be from month to month.
How to determine variable expenses
Now that you’ve established what your fixed expenses are for the month, determine the amount that you spend on variable expenses or irregular bills like material costs (any element that you need to create your artwork), shipping costs (packing materials), business cards. Even grabbing a coffee before you head into the studio, how much gas it took to get there, or the wine and cheese you buy for art openings should all be expenses you’re counting.
Small Business Tip: If you’re regularly producing and selling your artwork you should consider registering yourself as an LLC (Limited Liability Company). In doing so there are additional benefits, tax write-offs, and ways to protect yourself and your art career. If you’re interested and want to learn more about the advantages of setting up an LLC for your business this article is a must-read.
Son of Rhupert by D. Arthur Wilson Rhupert
Determine Your Income
Now that you got a sense of how much you’re spending each month, you can figure out how much you need to make things work financially. It’s time to determine your actual income. Ideally, you should create a budget where your income matches or exceeds your outgoing expenses.
You can digest this in two ways. The first, if you’re a full-time artist read this as a comprehensive list and factor in all costs you’re spending and separate them into two buckets personal (mortgage, car loan, student loans, etc.) and business (studio rent, gas mileage, etc.). The second, if you’re still doing that double grind and have a full-time job outside of your creative pursuits then keep track of your art expenses and income.
If you sell artwork irregularly, still set a limit for how much you need to make each month and if you exceed that amount it should go into savings or a reserve account if you need it for a month where your income doesn’t exceed expenses.
Architectural Sunset by Barbara Westfall
Set Savings Aside to Reinvest Back into Yourself
Whether you’re a full-time artist or working up to being one, this key point is a MUST! You can set savings aside to reinvest back into yourself by subtracting your monthly expenses from your income. Anything that is left over can go towards marketing or savings. Another way that I recommend is allocating a percentage (10-20%) from each art sale towards marketing funds. Think about it like the savings that get taken out of each paycheck for a 401k, money is put away for when you need it.
Why set aside money for marketing?
It gives you a competitive advantage over other artists. While advertising is one avenue of marketing, it’s the best way to get your target audience to see you. If no one knows about you, they won’t be able to buy from you. Many of our Blink Art artists know this and prepare for annual marketing expenses like advertising costs. Learn how they successfully promote and sell their art.
Record Spending and Track Progress
The best way to stay on track of your budget is to record all your monthly expenses and income. It may seem tedious but is worth it. This will help to prevent you from overspending. If you sit down for a few minutes each day, you will find that you spend less time than you would if you put it all off until the end of the month.
End of Apron by Anyes Galleani
Be Realistic and Adjust as Needed
Whew, you’ve read through to the last point! Awesome. You know what that means? You’ve already invested so much in your art career just by reading this blog. And you’re on to bigger and better things in 2019.
This last step is important. So, take note. After you’ve put together your monthly budget, it’s okay to tweak it until it makes sense for you. It’s not set in stone. This is the key to making your budget work. You may find that you need to cut back in a few areas, while you need more money for others. That’s okay. You should evaluate your budget every month going forward. This will help you adjust your spending as your life changes and your spending increases in different areas.
While there are many online and application options for budget tracking, you can just as easily set up a simple monthly budget in Excel (download a template from Microsoft Office) or the old-fashioned paper and pencil work just as well. Whatever your means, just do something to set up a budget for your art career.
- Setting up a monthly budget for your art lets you better understand your expenses versus income.
- A budget gives you a competitive edge over other artists because you are now able to set aside money for marketing and savings.
- A budget provides peace of mind knowing your expenses can be covered, and less stress allows you to produce better work.
ART COMES ALIVE – NOW OPEN FOR ENTRIES
Known as the “Academy Awards for Art,” Art Comes Alive (ACA), ADC's annual art competition and exhibit, is embarking on its 10th year of helping artists get their work in front of art-industry professionals such as interior designers, art galleries, private art collectors, and corporate collections. Each year the art competition gets bigger and better, and this year over $300,000 in awards will be given to artists through gallery contracts, purchase awards, publishing contracts, and more!
DEADLINE TO APPLY EXTENDED TO: 8/12/19