Creative Finance

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As artists, makers, and creative entrepreneurs, numbers are huge part of success. If you are not keeping track of your finances, then you cannot measure your success (or failure) effectively. And what is the point of pursuing a creative business for it to essentially become a non-profit company that disappears into the ether?

Embracing the  titles of Artist, Maker, and Creative Entrepreneur require you to also embrace the power of understanding finance. You are no longer allowed to say, “I’m not good with numbers.” Many artists joke that they became creatives because they are so bad at math. I’ve said so myself. However, if the age-old concept of the starving artist is getting left behind, then why not dispose of this cliché about artists being bad at math as well! If you have any success at all as an adult paying bills, car payments, mortgage, or at the very least feeding your dog, then you are not as inept at numbers as you believe.

Understanding the rules of finance is really more about learning the language of finance than about being good at numbers. So, for your education, I would like to discuss some finance terms and how they relate to an arts-based business. Let’s start with the most basic financial statement, the minimum requirement for any arts-based business.

The Income Statement

The Income Statement is one of the most useful tools in your financial toolbox. As an artist, you will use the income statement to review and manage your financial activity, manage your financial resources, and create effective budgets. The income statement uses your sales  and expenses to understand your profits or losses in your business. In it’s most basic form, the income statement is:

Sales – Expenses = Gross Profit/Loss

Artists should always keep detailed track of their sales. The income statement can help you keep track of the kind of sale, such as a print or an original piece, whether the purchase was made with a cash, credit, or some other form of payment, if the sale was through a gallery, online, or private, and any other valuable sales information.

Expenses should also be carefully monitored. There are many ways an artist can create expenses. Expenses can be incurred along the way from creating the work, to selling it and shipping it. Understanding where your money is being spent in the process is important to creating strong profits. Many times sales are adequate, but spending is too high.

Finally, subtracting your expenses from your sales will give you the gross profit or loss of your business activities. However, you must understand the terms gross and net.

Gross income is the amount that a business earns from the sale of goods or services, before selling, administrative, tax, and other expenses have been deducted. For a company, net income is the residual amount of earnings after all expenses have been deducted from sales. In short, gross income is an intermediate earnings figure before all expenses are included, and net income is the final amount of profit or loss after all expenses are included.”

There are a lot of different expenses that must be considered after finding your gross income, and many of those expenses vary from state to state and what kind of business you have created (i.e. LLC, Corporation, Sole Proprieter). Just know that your gross profit is not the same as your net profit, which means you cannot go spending all of your gross profits.

The value of the income statement is in the details. You can analyze the sales and expenses to better understand where your business is succeeding and where it can use some help. The income statement will help you file taxes, apply for loans, grants, and other funding, and even track your performance and sales trends from year to year. The income statement is one of the most basic statements that can help you monitor the health of your business, so start tracking those sales and expenses today!

Goals, Networking, and Taking Action

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Hello Artists, Makers, Crafters, and Dreamers! Here is an audio file of my talk Me, Inc., Visualizing Your Creative Practice in Business Terms. This is the first presentation in my Arts and Entrepreneurship Talks. Please note, this is just me, alone in my dining room, practicing being comfortable in front of an audience. Well, that’s not exactly true. I had an audience of four of my daughter’s stuffed animals. They were exceptionally attentive, but a bit lackluster in follow-up questions and conversation! However, the real talk at Starfangled Press went well, with eleven participants and a great round of questions and answers at the end. Thanks to the great group of creative entrepreneurs who came out to learn and support me in my education!

An Art and Entrepreneurship Talk

Me, Inc Press photo

Starfangled Press invites visual artists to attend a talk with Joy Poe about building your business skills as an artist. Joy is an artist, and she is currently persuing her masters in Entrepreneurship at Western Carolina University. Her talk, Me, Incorporated will be held on Saturday, July 28th at 11am and is free and open to the public. Starfangled Press is located at 36 W. Jordan Street in downtown Brevard.

The intent of the talk is to help artists begin to see themselves as creative entrepreneurs. Joy will talk about setting goals, creating networks, and building an actionable plan to reach your goals. In addition, this is a great opportunity to meet local artists, arts-based business owners, and see a snapshot of the arts community in Brevard.

Starfangled Press is a Printmaking studio, gallery, and storefront. Driven by the belief that art makes life better, Starfangled Press aims to connect more art to the everyday. In addition to creating handprinted art and goods that are both fine and affordable, we offer workshops, demonstrations, and services for all levels of experience. Located in beautiful Brevard, NC Starfangled Press is owned and operated by Kristen Necessary. 

For questions or curiosities about the event, please contact Kristen Necessary at http://www.starfangledpress.com or Joy Poe at http://www.worthwhilestudio.com