Maintenance Entrance (from the series: Insomnia; Hotel Noir)
I was about to move on to the topic of Marketing for the ArtBiz101 series. But while talking about retail sales recently, I realized that for perhaps a lot of artist, seasonal budgeting is a must. That is to say that during the year, you will have a really big sales periods followed by a long sales drought. That was a regular occurance with our frame/art-supply store, with the big sales periods of “back to school” and Christmas followed by Mothers Day and Fathers Day. Summer was usually very slooooow.
Some artist may see 75% of their annual sales occur over a three month time and the remining 25% over the remainder of the year. This may occur because the area you have your gallery in has a peak tourist traffic peroid, say Scottsdale, Arizona during the winter or the New Hampshire area during the intense Fall color changes.
But your costs are usually not in sync with the sales and you have operating costs that occur regualarly during the year; rent, utilities, etc. And you may have to spend a lot of money to get your pictures ready for the sales period, such that your popular images need mattes and frames and be ready to sell before the big buying season. Thus you are spending a large of amount of money before the sales, so again, the cash flow is backwards; spend money and then later get the cash back. This requires some serious cash reserves and budgeting.
For our frame/art-supply store, during that really slow period of Summer, we also had to make some really big purchases of art supplies. That was for the “back to school” sales in the Fall, when all of the new budding artist brought in their list of supplies for their new class. The same was true for purchasing all the “ready to use” picture frames in October, to stock in November and then to sell in December for Christmas.
If you spend all of your sales cash in the good times, you may be really hurting financially during the slow times. So it helps to know what is going to be your seasonal sales cycle for your art and budget accordingly!
Best regards, Doug