Owning and operating your own art gallery can be frustrating, exhilarating, bring you in contact with a wide range of creative people, and enable you to generate some revenue from your love of art – or it may be a quick trip into bankruptcy.
In general there are two types of privately owned art galleries, those owned and operated by an individual or partners, or those operated by an artist collective. Each has their own unique challenges.
Regardless of the ownership structure all art galleries have one thing in common. They require a lot of work to identify potential exhibitors, establish a space, install an exhibition, market the event, dismantle the exhibition, return art to owners or artists – and then repeat the process. Artist run galleries may have an advantage here in that the work can be shared amongst a larger group of people.
Few art galleries make any money from irregular exhibitions, therefore this cycle must be repeated several times each year, sometimes monthly.
The desire, or otherwise to generate revenue influences an important decision from early in the process. Do you exhibit art that sells a lot or do you show work that is less well known or accepted and risk minimal revenue? This may lead to you having to answer a deeper question. Are you doing this for the the owners, the artists, the audience or all three? These are important questions as they influence how you go about marketing exhibitions and events.
Your gallery must do more than provide you with an income. It must also generate sufficient revenue to cover costs such as leasing premises, paying utilities, marketing, freight, insurance, consumables associated with mounting exhibitions, food, wine – and taxes.
Assuming a personal income of $50000 after expenses and taxes, operational costs of 60%, taxes at 30%, and 10% of revenue to generate your income. You would need to sell a million dollars of art and collect 50% as gallery fees to generate a minimum income. Clearly these figures will slide left or right depending upon size, location, artist resale value etc. They do however highlight the financial challenge with running your own art gallery.
For many individual owners their art gallery provides supplementary income. This can mean one or both owners have other work elsewhere. Another strategy can be to create diversified revenue streams through your gallery; exhibition sales, a retail shop, maybe selling coffees, offer some non-exhibition events such as a workshop, entry fees to some events, maybe value added services such as framing or even engage in consulting work. Remember to operate both bricks and mortar and online to maximise opportunities for revenue.
Before you even consider opening a gallery you should consider your personal network of potential customers. These are the people you market your event at, they come along to your exhibitions and they purchase art. The level of your network may determine the price range of the art your exhibit, which will impact upon the artists you can host; all which may impact revenue. If you want to sell art with multiple zero’s on the price tag then you need to have an extensive network of wealthy people, be located where those people will visit you and be able to create an atmosphere that makes a statement; as well as have the capacity to exhibit artists able to command those prices.
There is a trend amongst art galleries to charge artists an exhibition fee, in return for lower sales commissions. This benefits the gallery in creating both fixed and variable income. It can reduce risk to the gallery while ensuring the artist has skin in the game. There are two things to consider when doing this. How similar are the risk profiles between the gallery and the artist?
Once an artist has a stake in the outcome, other than creating the art, they may also see themselves having a stake in the decision making process. Instead of accepting an invitation to exhibit and being glad for the opportunity, the artist can start to question whether this is the right gallery for them, maybe ask questions about the gallery owners’ capacity to connect with appropriate buyers and generate sales and look to have input into the marketing process. Some gallery owners may be uncomfortable with this level of engagement by an artist.
Except in the most unique of circumstances, and then often only after many years devoted to building a group of friends and followers, only a handful of art galleries generate a sustainable income for their owners. Its not a place for those short of capital or looking to make a fortune in the short term.
The Cycle model provides a great guide for galleries – exhibit great art, market the living daylights out of it, to a growing group of artists, customers, supporters and friends, who in turn help you generate revenue, which is then reinvested in exhibiting even more great art.
I’m John Coxon, founder of art4u.australia, a consulting agency devoted to helping arts organisations remain viable through application of the The Cycle a proven model for arts organisations. If you would like to catch up via Zoom please email me or sms 0424103971 and I will set it up.