Wednesday, September 09, 2020

Hardship lies ahead #1: Checklist for Artists

This post provides some CHECKLISTS FOR ARTISTS 
  • thinking about the future and 
  • wanting to get to grips with the basics of surviving as an artist AND an art business within the context of both Covid AND the Recession.
i.e. Neither the Coronavirus Pandemic nor the Recession are going away completely in a hurry - so it's time to tease out and get to grips with some of the practical implications for the medium and longer term.

For what it's worth I reckon it will be at least two years before we get back to normal.  Possibly three.

In the meantime people have some difficult decisions to make.



"Hardship lies ahead" is the new slogan of the Chancellor of the Exchequer - and he's absolutely spot on.
  • Not all businesses will reopen
  • Not everybody will have a job in the businesses that do
  • Not everybody is going to enjoy the income level going forward that they have had in the past
  • LOTS OF PEOPLE ARE GOING TO FEEL VERY UNCERTAIN - and lack of confidence depresses spending on art.
PLUS at some point, we'll all have to pay for the enormous bailouts which have been going on around the world - which may well mean tax increases in the longer term.

This post is about translating that context into the PRACTICAL IMPLICATIONS for artists and selling art generally and providing CHECKLISTS for
  • artists - this post
  • future posts re.
    • art societies 
    • art exhibitions 
    • art galleries
    • art teachers

A preamble


I last wrote on this topic in The Pandemic Recession: Likely Impact on Art Sales and Artists

HOWEVER I gathered afterwards that quite a few people felt I was probably being too negative and miserable - and that "everything will be back to normal soon".

I wonder if others might also now feel it wise to revise that view?
The COVID-19 pandemic has triggered one of the worst jobs crises since the Great Depression. There is a real danger that the crisis will increase poverty and widen inequalities, with the impact felt for years to come. OECD
Now that
  • business closures and job losses are now being announced on a very regular basis as we begin to come out of the furlough period (i.e. closure of 8 branches of John Lewis is NOT normal! Nor is M&S reducing staff by 950 jobs.)
  • businesses are talking about it taking years to get back to normal AND
  • we're seeing some very fierce covid-19 spikes (i.e. second wave) around the world (notably in the USA) as people "got back to normal" much too fast and without taking appropriate precautions 
  • PLUS as of today we're got local lockdowns in the UK and we're back to no more than 6 people meeting together I think it's time to get serious.
I'm really NOT being negative.

I'm essentially a really pragmatic person who likes to know the parameters of a problem - including the nasty bits!

I'm also a great believer in planning for what's coming.  Probably because I'm "cursed" by a very marked talent for being able to predict what's coming over the horizon - and a very good track record of being right. It has proved to be useful in a career (sometimes) - but there's always been a tendency to want to "shoot the messenger!" when people really don't like the message - so I wasn't surprised at all by the reaction to the last post.

I'm going to be like Chris Whitty and Dr Fauci and just keep saying what needs saying until people get it!! :)


CHECKLIST FOR ARTISTS


Just for a moment consider the following scenario - and how realistic it might be.
  • Your art galleries close down - and your art gets stuck inside
  • Your sales incomes dries up or reduces significantly - because fewer people are buying - because of lack of confidence in knowing how long the pandemic / recession will last
  • Your regular Bread and Butter job which pays basic bills disappears - it's happening to a lot of people even if they are working for FTSE 100 employers!
  • Your online platform suddenly shuts down - don't forget it's not just bricks and mortar businesses which shut down. Small entities are the ones which shut down in the last recession. Consequently all my blogs and websites are with very big hosts for a reason.
  • Your partner loses their job - it happens.
  • You will be living on a much reduced income - do you know how much you need to keep a roof over your head - and or how long you can last on just savings?
  • BUT you haven't got a clue about....
    • what you do that makes money or maximises your income and 
    • which activity/activities is/are basically a self indulgent money pit
Bear in mind a lot of people have had to face this already.

So now is the time when spending some time on working this out is a really good investment. 

Otherwise life may very well come and bite you on the backside when you're not looking!


TIPS: FINANCIALS


Now is a really good time to work out the ABSOLUTE BASICS

  • which income streams maximise profit for time and effort expended and 
  • which represent a really poor return after you take every aspect into account.
At times like this it becomes absolutely essential to know these BASIC FACTS
- learn how or get somebody to help you organise your financial data so you understand:
  • what you know, 
  • what you don't know - and 
  • what you don't know you don't know!
  • what makes you money and 
  • what costs you a lot of time for very little reward
It's worth noting that experience tells us that
  • people who are successful (or their sidekick partner) know which are 
    • their profitable income streams 
    • those activities which are "nice if you can afford it"
    • those which are actually costing your money i.e. you should think long and hard about continuing!!
  • people who go bust know very little about:
    • what their profit margin is
    • how much they are earning
    • how much they are spending 
      • how much varies with activity
      • what they must cover as fixed overheads - whatever happens
    • what can be changed quickly e.g. 
      • increased (income) e.g. many artists are doing very well with consistent sales re. the Artist Support Pledge - because they are producing affordable art which is looks attractive / represents value for money to buyers
      • decreased (spend) quickly

You should always know how your art business works in financial terms 

e.g.
  • how you price your time on different activities i.e. making art / doing the paperwork / packing artwork / delivering artwork (i.e. the price is what it would cost you to buy help on activities which could be done by other people)
  • what makes the best profit (eg in respect of size / subject / theme / time spent / art materials used)
  • what makes the least profit (e.g. is this something which can be sorted - change frames for pics; supply without frames and sell as a benefit to the customer) 
  • whether your pricing covers your costs - and your time - and if not, why not?
  • what you can claim against tax - and what you cannot
  • why raiding the pension pot to bail you out is a terrible idea.

Cork Street, London

TIPS: BUSINESS DEVELOPMENT


  • Think about how you can upskill in terms of art business skills which make a difference in terms of:
    • marketing
    • selling
    • business planning and development - in the long term
  • YOU need to review:
    • the optimistic outlook - assuming everything goes OK.  Ask yourself lots of tough questions about assumptions re everything being fine and dandy
    • the worst case 'horror story' - what happens to cause a collapse? What must be protected to mean you are viable as an artist and art business in the longer term
  • and then identify the robust option 
    • knowing what you feel confident about as a baseline 
    • knowing what you need to test out re. potential outcomes in the context of what you don't know 
    • until you arrive at a 'feels safe and achievable' way forward.


TIPS: ART GALLERY


You need to be very pragmatic.

  • Assume that 
    • the bankruptcy of your art gallery is a distinct possibility 
    • you need to prepare to safeguard your assets (i.e. artwork on consignment and on their premises) 
  • Keep a really close eye on all art galleries currently stocking your work. 
    • Check their websites every week at a minimum. 
    • Print the "artists page" to pdf so you know 
  • If you want to be able to get your art back should an art gallery shutdown with absolutely no warning, be very, very careful to make sure you have got on file ALL relevant paperwork to prove artwork belongs to you i.e.
    • very explicit documentation about the work being on consignment (i.e. owned by you);  
    • plus a contract from the Gallery stipulating its terms of sale - which 
      • reinforces the fact they have not bought it in and 
      • hence the Administrator of the Bankruptcy cannot count it as a Gallery Asset 
      • you will be allowed to recover it.
    • details of the how the owner can be contacted when away from the gallery. 
  • Consider alternative options very carefully i.e. 
    • EITHER the wisdom of keeping your stock there so they have something to sell and can stay in business (eg your art is selling and you keep getting regular payments)
    • OR Removing your artwork because it's not selling and/or you;re not getting payments and/or and it's beginning to look like rather rocky / as if they're going under. 
      •  If it were me - and it's not been selling I'd extract the artwork PDQ. 
      • I've read far too many stories by artists who lost stock altogether when a gallery goes into administration
  • Keep the net benefit of selling via an art gallery under constant review - it's an expensive way of selling art after framing, transport and commissions costs are taken into account
If the Gallery does go bankrupt you may or may not be told. Depending on the integrity of the owner. You will need to deal direct with the Administrator of the Bankruptcy - which can be long and tortuous because he's also got a lot of other people to deal with.

TIPS: INCOME FROM ART SALES


  • Be very nice to your Collectors - you need them!
  • Cultivate new ones - in new ventures e.g. 
    • online - selling small works to generate ready cash
    • promoting your past artwork online - via social media platforms which are popular with art collectors (eg Instagram and Facebook)

TIPS: ART MATERIALS 


  • don't buy what you don't need. 
  • Review art materials stock and use your stock before you replenish
  • Remember to buy art materials locally at art shops if you want that shop to remain open


    TIPS: ARTIST WEBSITE


    • Examine all the costs of maintaining your art online
    • Examine how well your website looks on all types and sizes of screens - bearing in mind most buying traffic by potential purchasers is now on mobile devices
      • Do you know how many artists regularly sell work via Instagram - which is free?
    • Now is NOT the time for tired and out of date websites which are not mobile friendly
      • Lick your website into shape and give a good impression of both you and your art
      • You might be surprised to know how many artists have impressed me a lot by making very good use of lockdown to get their websites sorted for an online future!

    NOTE FOR THOSE WHO DON'T KNOW ME


    You can read about my competence to make suggestions on About the author: Katherine Tyrrell on my Art Business Info for Artists website

    My professional background is very influential in wanting to help artists do better at the art business. I'm a qualified accountant, with an MBA from the London Business School and a very long track record of
    • reviewing activities of large and small organisations and identifying the critical and common characteristics of those which succeeded - and those which went out of control
    • financial management of huge budgets (latterly I was the top finance person responsible for budgets significantly in excess of £100 million)
    This means that I'm used to looking at a complete range of scenarios and critical factors in order to assess
    • risk management relating to budget construction and subsequent management 
    • various factors underpinning robust business plans within an uncertain context. 
    It's a bit like playing Jenga - working out which brick if pulled out will bring the whole tower crashing down.

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