. . . A Few Good Practices Can Make All the Difference to Your Art Enterprise
Managing cash, better known as cash flow management, can be problematic for many entrepreneurs and for you as an artist – this may also be a challenge.
You as an artist have special circumstances with selling your art. This is due to the often sporadic cash flows that are unique to your art sales. Often you will have sales that are variable – high some months and then lower in others and so you experience that “roller coaster” feeling. This takes its emotional and practical toll, so it is helpful to have a plan to deal with it.
Please be mindful there is really no amount of good money management that will help you out of simply not having enough money to cover your expenses.
What to Do?
Be sure that you have a marketing plan for selling your work as an artist. You always need to have a plan of how, where and to whom you are going to sell you art. Although this will not be covered in this article, you will discover upcoming articles that will help you with this.
For now, let’s start with looking at the practical methods to better manage your cash flow:
1. Have a Plan for Your Money
This may sound redundant – but nothing could be more worth your effort than for you to calculate the amount of money that you actually need each month to cover your expenses. Make yourself a list of them and that total is the amount that you need to generate per month. This hard number will help you to have a goal to work towards and you will gain confidence in knowing what it is.
2. Keep a set of bookkeeping records
While it is preferable for you to have a formal set of bookkeeping records, if you simply keep an updated listing of the revenue and expenses that you have each month, you will easily be mindful of what your cash flows need to be and you will have the proof from the revenue and expense listings that you have made.
3. Watch Those Expenses
Further to listing your expenses that you have per month, make sure that you are not purchasing items that you either don’t use or don’t need now. It is easy to think that you need many goods and services – but be aware of the difference between the “nice to have” as opposed to “absolutely need to have.” A key thought to keep in mind is anything that you need to produce your art and make it saleable is always a priority over more peripheral expenses.
4. Learn to Negotiate
If you are a regular customer with some of your suppliers and vendors, you should be able to negotiate better payment terms, namely a little longer time frame when they require payment or payments in installments. Keep in mind that you don’t want payment terms that include hefty interest charges nor you do not want to take advantage of this arrangement and be in default or provide late payments. Its best if you can pay in full as often as possible as you want to be a valued customer of your suppliers and vendors and if they to feel that you are being fair with them; then it will be reciprocated for you. It is just helpful if you can on occasion, have the option to pay a bill or part of it, as a deferral option in case you run into a bit of a money crunch for a particular month.
5. Avoid Debt & Plan
No different than your personal money, be sure that you avoid taking on any debt, particularly those involved with credit cards or lines of credit. You pay for items many times over if you finance using credit cards and lines of credit seem never ending to get that balance to zero. If you need an item that is rather costly, try to save a little money each month to work towards the goal of having enough money to purchase it. The added benefit is that you will feel rewarded when you can buy the item outright without needing to take on debt. Don’t underestimate how debt can have a negative drain on you, both practically and emotionally. As a creative individual, you need your emotions for musing and creating your most important work – your art!
6. Saving . . . Even a Little Helps
Although it may seem to be difficult, try to save a little money each month. This will help you to cover unexpected expenses and it will give you a more positive mental attitude with having a “cushion” for your finances and if necessary accrue towards larger purchases. An extra tip is to have a separate savings account as it will help you to think of it as “savings” as opposed to just the money in your regular chequing account and it may even pay you a bit of interest. If you use online banking (or even if you don’t) you can easily make arrangements with your bank to take a small amount out of your chequing account on a monthly basis. Further, you can make transfers to your savings account whenever you can manage it (that is, you’ve paid all expenses and you have leftover cash). This bank account will act as a reserve fund and you will be surprised how it grows over time!
7. Keep a Real, Workable Sales Plan
It may be tempting to think and act when sales are steady and cash flowing into your enterprise is bountiful that you need to forget selling – this is a rather dangerous assumption to make. Often times, in the business of selling art, there can be disruptions and lower points for selling your art. You need to have a workable plan for the ongoing promotion of your art in order to always have others interested in purchasing from you directly or with others who are working to sell your art such as galleries and art consultants. This is commonly referred to as your “sales funnel” whereby you are working at the sales side of your art on a regular and consistent basis.
8. Top Up Your Inventory Levels
In tandem with the sales plan, you need to keep an inventory of saleable art. You can’t promote your art if you have nothing to sell! Given the labour and mind intensiveness of creating your art, it isn’t something you can just create on a whim . . . you need to be consistently adding to your inventory so that you have enough art to actually supply to buyers.
To Have and Have Not – Is There Enough Money for You?
To end with – it is important again to mention that you actually must earn enough cash in order for you to have something to manage – so be sure that you have a sales strategy in place for this purpose!
Do you have a comment, opinion or experience? Please let us all know . . .