I love for artists to have multiple streams of income when it makes sense.
For most artists, relying only on sales of original art doesn’t always pay the bills. Sales can be seasonal. Galleries can close. The economy can tank.
But having more income sources doesn’t automatically make your business more profitable or more resilient. Each source requires time, energy, marketing, systems, and attention.
The real question is: Are your income sources helping you build the art business you want?
What Is the difference between an income source and an income stream?
Let’s start with some nomenclature. Don’t tune this out. It will help you think around this topic.
[ Important: These are how I define them with my artist-clients, which likely wouldn’t align with what you find in a business book. ]
An income source is the category name for the creative asset. It’s what someone is paying you for. Think in terms of nouns and bookkeeping categories.
An income stream is how the money comes in from that source. Think: How it moves from one place into your bank account.
Here are some examples.
INCOME SOURCES FOR ARTISTS
We’ll use nouns for these.
- Original artwork
- Reproductions
- Products from artwork
- Licensed artwork
- Granting agencies
- Speaking expertise
- Teaching expertise
INCOME STREAMS FOR ARTISTS
We’ll use verbs here, indicating the flow.
- Selling from your website
- Hosting an open studio
- Participating in an art festival
- Being represented by a gallery
- Landing grants
- Speaking
- Licensing
- Teaching in person or online
Can an artist have too many income sources?
You bet.
Too many artists add income sources because they saw another artist doing it. Or a one-time opportunity appeared in their inbox. Or they want their work to be affordable to more people.
Diversifying income sources is tempting. You might think:
More stuff = More money
More stuff = More potential buyers
Watch it. This logic is faulty.
Some sources make sense together because they are marketed to the same audience. You might promote products and reproductions to the same people in much the same way.
Other sources can become completely separate businesses.
Licensed art is one example. The audience for licensed art is different from the audience for original fine art. You’re working with licensing companies rather than exhibition and sales venues, so the research, relationships, and marketing are different.
You may essentially be running two businesses.
Why is a new income source riskier than a new income stream?
New income streams are usually fine. New income sources are riskier.
Before adding something new to sell, look for another way to sell what you already make.
You might not need a new product line. You might need stronger website sales, more studio visits, another gallery, or a well-chosen art festival.
A new income source can require a different audience, marketing plan, sales process, set of venues, and fulfillment system. That doesn’t mean you shouldn’t add one. Just know what you’re getting into.
Too many artists spend too much time on things that have too little return.
You won’t know whether a new source will take off, but you must do your research.
Before committing:
- Read all you can about the source.
- Talk with artists who are already doing it.
- Learn the industry standards and trends.
- Ask what has changed and what is working now.
Anything that takes you away from the work you do in the studio should be vetted with a vengeance.
And don’t fool yourself with promises of passive income. Very little income for artists (or anyone else) is truly passive. Every source requires setup, promotion, administration, maintenance, or fulfillment.
How do you know if an income source is profitable?
If you want clarity, do the math.
Wouldn’t you rather sell one original artwork for $1,000 than 100 sets of note cards that retail for $10 each?
Consider the work required to sell those note cards. You have to market them, process payments, record sales, pack, ship, update inventory, and track what’s left. That’s after paying for printing and packaging.
The math changes again if you wholesale them because you might make only 50 percent of the retail price. Then you need numerous wholesale accounts because it is unlikely that one venue will sell all 100 sets.
If you’re in the note card business, you really have to be in the note card business.
If you’re in the art licensing business, you really have to be in the art licensing business.
And if you’re in the original art sales business, you really have to be in the original art sales business.
Revenue is not the same as profit. And profit is not always your ultimate goal.
When you do the math, include production, packaging, fees, shipping supplies, unsold inventory, marketing, administrative time, and the value of your labor.
Also consider opportunity cost. What are you not making, marketing, or selling while you attend to this source?
Which income sources belong in your art business?
If you already have multiple income sources, figure out which ones are helping you accomplish your business goals.
Ask yourself:
- Which ones are making money?
- Which have bigger potential?
- Which are sources of frustration or consistent decline?
- Which require more attention than they deserve?
- Which support the work I really want to be doing?
- Which might need to go?
An open studio, for example, may not produce many sales that day. But it might grow your list, lead to future sales, and help you make valuable connections.
You have to take all of this into account before adding an income source, keeping it, or ditching it altogether.
I’m all for artists having multiple income sources. Just be aware that you may be juggling separate businesses, and those businesses may be taking you away from the work you really want to be doing.
The goal isn’t to have as many income sources as possible.
The goal is to understand what each one requires and decide whether it deserves a place in your art business.
Related
In the podcast, I mentioned these artists and their multiple income sources.
This was originally published October 24, 2019 and has been updated significantly with the addition of the podcast.
The post Do you have too many income sources in your art business? (269) appeared first on Art Biz Success.