Starting an art business can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful art business.
Importantly, a critical step in starting an art business is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
14 Steps To Start an Art Business:
- Choose the Name for Your Art Business
- Develop Your Art Business Plan
- Choose the Legal Structure for Your Art Business
- Secure Startup Funding for Your Art Business (If Needed)
- Secure a Location for Your Business
- Register Your Art Business with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Art Business
- Buy or Lease the Right Art Business Equipment
- Develop Your Art Business Marketing Materials
- Purchase and Setup the Software Needed to Run Your Art Business
- Open for Business
1. Choose the Name for Your Art Business
The first step to starting an art business is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your own art business:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your art business.
2. Develop Your Art Business Plan
One of the most important steps in starting an art business is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your new business.
- Company Overview – this section tells the reader about the history of your art business and what type of art business you operate. For example, are you an artist management firm, art dealer, auction house, or an art gallery?
- Industry Analysis – here you will document key information about the art industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products or services like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract customers to your art business? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your art business make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
3. Choose the Legal Structure for Your Art Business
Next you need to choose a legal structure for your own business and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the owner of the art business and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start an art business together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for an art business include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for an art business is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your art business, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
4. Secure Startup Funding for Your Art Business (If Needed)
In developing your art business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for an art business to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in professional artists that they believe has high potential for growth.
5. Secure a Location for Your Business
When starting an art business, you’ll need to find a good location for your studio. Here are a few tips on how to find the perfect spot:
- Start by considering your budget and what you can afford.
- Consider the traffic flow and how much exposure your business will get.
- Find a location that is accessible and has enough parking.
- Take into account the zoning regulations in your area.
- Finally, tour potential locations and make sure you feel comfortable there.
6. Register Your Art Business with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
7. Open a Business Bank Account
It is important to establish a bank account in your art business’ name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
8. Get a Business Credit Card
You should get a business credit card for your art business to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
9. Get the Required Business Licenses and Permits
The licenses and permits you need to start an art business may vary depending on the state in which you reside. You may need a business license, a seller’s permit, and a tax identification number. You should also consult with your local state to learn about any specific permits or licenses that are required in your area.
10. Get Business Insurance for Your Art Business
The type of insurance you need to operate an art business will depend on the scope of your operations.
Some business insurance policies you should consider for your art business include:
- General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
- Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
- Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
- Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
- Professional liability insurance: This protects your business against claims of professional negligence.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
11. Buy or Lease the Right Art Business Equipment
To start an art business, you will need some essential equipment. If you plan to sell your own art, you’ll need supplies such as a computer with design software, a printer, paper, canvases, paints, and brushes. You may also want to invest in a camera to take photographs of your work, and a website to showcase your portfolio.
12. Develop Your Art Business Marketing Materials
Marketing materials will be required to attract and retain customers to your art business.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your art business. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional art business website provides potential customers with information about the products and/or services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your own website will affect how customers perceive you.
- Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your art business.
13. Purchase and Setup the Software Needed to Run Your Art Business
To run an art business, you need accounting software to track your expenses and income, as well as an invoicing program to send invoices to your clients. You may also want to invest in a customer relationship management (CRM) system to track your customers and contact information and a project management program to help keep you organized.
14. Open for Business
You are now ready to open your art business. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.
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How to Start an Art Business FAQs
Is it hard to start an art business?
No, it is not hard to start an art business and have a successful career. There are a few things you’ll need to do in order to get started. You will need to have artistic skills, create a portfolio of your own work, set up a website or online shop, and start marketing yourself. You can also join art communities, local art fairs, and networking groups to get started.
How can I start an art business with no experience?
There are a few ways to start an art business with no experience. One way is to find a professional artist who is looking for a business partner. You could also offer your services as an art consultant or art teacher. Another option is to start a blog or website about art, and sell your artwork online.
What type of art business is most profitable?
The type of art business that is most profitable is one that sells original pieces of art. This is because there is a higher demand for original art. If you are starting an art business, it is important to research the market and find your niche.
How much does it cost to start an art business?
It can be difficult to estimate the amount of money it would cost to start an art business, as the costs vary depending on the type of business. However, there are some common expenses that are associated with starting any type of business, such as registration fees, marketing materials, and website development. In general, it is recommended that business owners set aside between $5,000 and $10,000 for these initial costs.
What are the ongoing expenses for an art business?
There are a few ongoing expenses that are associated with running an art business. These costs can include things like marketing and advertising, website design and maintenance, and even the purchase of art supplies.
How does an art business make money?
An art business can make money in a variety of ways, including selling art, prints, and other products featuring the artwork; offering commissioned work to clients; teaching classes and workshops; and licensing artworks for use on products or advertising. Other artists and graphic designers create and sell digital art online.
Is owning an art business profitable?
Yes, owning an art business can be profitable, but there are a few things you need to keep in mind. The most important thing is to find your target market that will be interested in your work. You'll also need to invest in quality supplies and make sure you're keeping up with the latest trends. It's also important to market your business effectively to find the right customers.
Why do art businesses fail?
Art businesses can fail for a number of reasons, but the most common are a lack of planning, funding, and marketing. Other reasons include bad timing, poor business decisions, and not understanding the art market. Without a clear understanding of the basics – what you want to sell, who your target market is, and how you plan to reach them – it's difficult to have a successful art career.