Wednesday, October 01, 2008

Managing Business Risks as an Artist

Do you know what is the biggest business risk you're exposed to?

Have you ever thought about how likely it is to happen? Or indeed what sort of impact it would have if it did?

Do you have any plans in place to address that risk? Or  any other major risks that you face?

This is the first in a short series of posts about how to manage risk better and make and market art in a challenging economic environment.

The Catnapping Series: Sleeping on the job
pen and ink
copyright Katherine Tyrrell - all rights reserved
Risk management

Risk management sounds very 'city analyst' but in fact it's just a simple and systematic approach to identifying, assessing and addressing the normal risks that you may face in the context you operate in.
EXAMPLE: The risk is that the studio burns down, destroying equipment, art supplies and all stock kept in the studio. If this happens the artist has nowhere to make art and has lost all stock for upcoming exhibitions which will impact on income. It’s not very likely to happen but catastrophic if it does.

The time required to deal with finding a replacement studio and replenishing supplies and equipment and dealing with an insurance claim is all time which cannot be used for generating or marketing artwork.

Actions to reduce risk – keep a fire extinguisher in the studio and practice safe habits in relation to any inflammable materials.

Actions to mitigate risk – have an insurance policy for the studio building, its contents and the impact on your business if it is destroyed or severely damaged
A Making A Mark Guide to the Art Economy: Managing Business Risks
If you manage your risks well you can:
  • reduce the likelihood of very nasty surprises coming at you from out of left field
  • limit the scope for business catastrophes and going out of business
  • feel more confident about taking risks when developing your business - you know what they are and you know how to deal with them
  • make more cost-effective decisions about future directions for making and marketing your art and, who knows, you might make more money too!
I've written a guide about Managing Business Risks which outlines an approach which can be used by artists to identify, assess and address business risks. Any artist who can read, think, make lists and count to 10 can employ the approach I've outlined.

It also contains a number of practical examples to illustrate different aspects of the approach - two of which you can read in this blog post.
  • The guide is too long for a blog post and is avaialble for FREE (personal and educational use only) as a pdf file (224KB) and can be found on my Making A Mark website here.
  • For more Making A Mark Guides see the Directory
EXAMPLE You are a fine artist who produces etchings. Your printing press is absolutely vital to your production. Risk of its failure is of critical importance to you and you rate the risk importance factor as a 10. However your printing press is very old and very simple in terms of moving parts. It’s never failed before and has a good record of performance. So you rate the likelihood of it failing as 2. Therefore the combined risk rating of your printing press failing is 20 which is not very high.

However, because the press is so critical to your work you decide to source an alternative printing press so you know what you would do should it ever fail. You make a reciprocal agreement with another fine art printer that you’ll help each other out if either of you should have problems with your press.
A Making A Mark Guide to the Art Economy: Managing Business Risks
This isn't something I've invented. The principles have been around for quite some time. There are a number of variations on a theme around and about but my outline is very similar to the standard business practice I've employed previously in relation to very large organisations. All I've really done is taken the basic principles and translated them into the context of an artist's business.

This guide is also included in my new information site see Art and the Economy - Resources for Artists.

I'm also including blog posts from both artists and people who write about the art business. If you have a blog post which is relevant please identify a link using the comments function.

Note: The Catnapping series is a series of sketches of cats asleep - which are always drawn from life. The website page explains the rationale behind the series. Latterly they've nearly always been of my Somali cat Cosmo who's very fond of a kip! You can find the catnapping drawings here and prints here - although I've got more drawings I need to convert to prints!


Beth Robinson said...

Wonderful resource. It is fantastic that you put that together in a relevant and explainable way and offered it as a gift.

Dianne Mize said...

Helpful post. Thanks. And I love what you're doing with the Catnap Series. I like this drawing especially.

jandismall said...

Another excellent post...thank you, Katherine! And thanks for the wonderful PDF guide, too. You always provide so much good, solid, thoughtful information...I greatly appreciate it...and YOU.

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