Category Archives: Accounting & Finance

Things every art business owner needs to know about accounting and finance

Financing Your Art Business

Money is the life blood of any business

Money is the life blood of any business. When there isn’t enough you may need to look at additional sources to grow your art business

Every business needs money to operate and grow and your art business is no exception. It is important that you have a basic understanding of the various ways to finance a business that are available. Most artists start(finance) their businesses with their own or borrowed funds and use the money generated from sales to fund future activities. For some artists these funds are not sufficient to fund their growth plans or other obligations and they need to raise money.

In this article I will explore the common ways to finance a business. You don’t need to go to business school to understand the basics of business financing. Learn the basics and you are well on your way to keeping your art business viable and growing! In a future article I will take a look at other financing methods such as grants, fiscal sponsorship and crowdfunding.

Why you may need financing

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Artist Goals 2015 – Create A Budget For My Art Business + Cash Flow Template

Creatives and Business Cash Flow Budget

As your art business grows your need for budgets will grow also

Ok, every business needs a budget – your art or creative business is no different. A budget for your business is sometimes called a cash flow budget or cash flow projection. Typically a cash flow budget covers a 12 month period and is updated over time. The concept is simple – you itemize your anticipated expenses by month and subtract them from the funds which come into your art business from sources such sales or cash injections like loans.

If you have money left over at the end of the month you can apply these funds to future monthly expenses. If you have a deficit at the end of the month you will need to come up with additional funds or possibly defer some expenses to a later date. Budgeting for your art business is really no different than having a budget for your home.

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Sole Proprietorship, Partnership or Corporation – Choosing The Best Form Of Legal Organization For Your Art Business

When starting a new art or creative business (or any other business for that matter) you will be faced with choosing a legal form of organization for your company. In fact you may have already made that choice whether you are aware of it or not.

There are several kinds of legal forms of organization – sole proprietorship, limited liability company (LLC), partnership and a corporation. Each one has its advantages and disadvantages depending on your needs for financing, the level of control you wish to retain, tax consequences and the level of risk or liability that you are willing to take.

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Making a Profit From Editions, Prints and Multiple Copies

Break Even Analysis Worksheet

Use this worksheet to help you determine your break even level of sales

One business model for your art business could be producing and selling a series of prints, photographs, sculptures or multiple copies of any artwork.  The advantage of this model is that it allows you to leverage the work or designs you have created and achieve some level of efficiency and predictability in producing the copies.  An edition can be either limited or unlimited in the number of pieces produced.  Before you embark on producing and selling multiple copies or prints, it is a good idea to know what your costs will be and how you should price the works so that you will make a profit.

 

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