Setting up a Business: Before we can get to making sales, it is important that you set yourself up as a business. You can get away with not doing this for a little while, but once you start taking sales on a regular basis, you must register yourself as a business. Here’s a good place to start: How to Start a Small Business in a Few Hours. Here are a couple pieces of advice:
Get your Employer Identification number (EIN).
An EIN is the federal tax number used to identify your business. You don’t need an EIN unless you will have employees or plan to form a partnership, LLC, or corporation.
But even if you don’t need an EIN, get one anyway: It’s free, takes minutes, and you can keep your Social Security number private and reduce the chance of identity theft, because if you don’t have an EIN, your SSN identifies your business for tax purposes.
Note: If you’re using an online legal service to set up an LLC or corporation, don’t use it to get your EIN. Instead, apply online at the IRS website. You’ll have your EIN in minutes.
Get your business license.
Your county or city will require a business license. The form takes minutes to fill out. Use your EIN instead of your Social Security number to identify your business (for privacy reasons if nothing else).
Get a business bank account.
One of the easiest ways to screw up your business accounting and possibly run afoul of the IRS is to commingle personal and business funds (and transactions). Using a business account for all business transactions eliminates that possibility.
Get a business account using your business name and EIN, and only use that account for all business-related deposits, withdrawals, and transactions.
Pick a bank or credit union that is convenient. Check out your local credit unions; often they provide better deals than banks.
Selling your work: There are a number of venues and methods in which to sell your work. Each medium has its own ways around the problem of thinking about art as commodity. It is easier for some than others to view work in this way. If you have any aspiration to “make it” as a full time artist, it is a good idea to abandon any kind of pure or poetic thinking on this subject. Unless you are independently wealthy, you have to do something for money. Some of us can find ways in which to make our art habit work for us , making the practice of art the sole source of income. This is incredibly difficult to do- but it is not impossible. Whether you make a living through grant funding or through art sales, your art is still the commodity. It is very helpful to come to this realization.
So where and how can you sell your work? What we are taught in school is about galleries. Typically a gallery works as agent. They do a lot of the work for you, by keeping the lights on, the doors open, advertising your show, collecting sales tax (we will go into detail about this on another post) etc… The best galleries have a group of collectors, and do a lot of leg work to get your work sold. In return, you pay them between 40% and 60% commission. If you have a good gallery, this is well worth it. If you don’t well….
There are also art, craft and design fairs from small town to large city. There are often booth fees, and unexpected expenses in this, but you gain a huge amount of exposure to a very broad market. You also get to keep all of what you sell. If you choose this route, be sure to register with each new state you plan to sell in. Each place has its own sales tax laws and you will need to pay sales tax to each new place.
Take a look at this article on wholesale versus retail. This is a very important distinction. Also in this article, you will find an indication of some of the venues you might explore: craft fairs, galleries, trade shows, corporate representation etc.
This is really just the tip of the iceberg. I recommend trying some of each of these things. Think about who your audience is and go from there. Where are you most likely to encounter your target audience. Aim high!
Creating an Invoice: An Invoice is a bill presented by a seller to a buyer. *Read through the information on the link!
It’s a statement of what goods or services have been supplied and how much is now due in settlement of the transaction between seller and buyer. It tells your client or customer how much they now need to pay for what they have received (or are about to receive) and how to pay it. It’s not a receipt.
Invoices should contain information about:
- you the artist
- your billing address
- your client or customer
- their taxable address
- your UTR (tax. ref. code)
- the tax date for the product or service rendered
- description of the artwork provided or artistic service rendered
- the sum due
- statement of terms for payment
Taking Payments: There are several ways in which you can take payment for art. First and foremost, open a bank account dedicated to your art business! Keep it separate from personal finances! You can take cash or checks easily. These can be deposited into your bank account with ease. However, fewer and fewer people carry cash or checkbooks around with them. It’s a good idea to get yourself a system which accepts credit cards. I strongly recommend that if you plan to make online sales as well as in person sales, that your system integrates easily. There are a couple places you can start. Often, if you bank with a larger national bank, you will be able to purchase a device for taking credits cards through your bank. Chase for example has a device which connects with a mobile device and makes payments directly to your account. This method cuts down on fees that others like Square charge, but I’ve found those devices to be a little glitchy. Square is easy, and the fees are relatively low. You can set up sales tax for each state you are selling in, and you can integrate it with your website. Do your research.
Finding Your Target Audience
A target audience is the demographic of people most likely to be interested in your product or service. If you own a plumbing company, your target audience is property owners, both commercial and residential. If you own a toy store, your target audience is parents, grandparents, and anyone else with children in their lives.
Other examples of target audiences include single men in their 20s, tweens, working mothers, retired seniors and dog owners. In some cases, the target audience becomes very narrow-focused. For instance, if the product is a pricey Italian men’s business suit appropriate for up-and-coming Wall Streeters, then the market audience is single men in their 20s who live in New York City and earn over $200,000 per year.
It’s a little icky to think about groups of people in this way but gaining an understanding of who is actually buying your work will help you to tailor your marketing to maximize your efforts. It’s lovely to sell to you family and friends, but this is a little market, and a really easy on to tap out.
In order for people to “buy into” a product or service, they need to relate to the tone and content of the message. By striking a chord with someone, a personal connection is made, and trust is established. Let’s say the goal is to sell a product to working mothers. The advertising methods might employ digital and social media platforms and may have an energetic and empathetic tone.
Now, are you stuck? If you want to get a little more scientific about it there are some methods you can use to go about starting on the Pricing your Work post.