Surviving Tough Times in the Art World
The tough times are the true test of a business. Weaknesses and unhealthy practices will be spotted and exaggerated quickly during periods of recession. Art businesses are subject to the same market conditions as other business sectors. The key to survival is to keep your nerve, reassess business performance and put in place a raft of strategies to see you through the bad times.
Effects of RecessionThe effects of a recession help to identify areas you need to act on and plans that may have to be developed. Some of the effects are obvious but others are more surprising.
- Art galleries and art businesses will close, creating changes in the market and forcing you to reassess your contacts.
- Less disposable income creates uncertainty amongst buyers and decreased sales.
- Sometimes cash is released from investments where there is great uncertainty. People with higher incomes, tend to reinvest this cash into safer, speculative investments such as art.
- Contemporary artists find that their art often changes to reflect the social concerns of the day. This will obviously include economic conditions.
- The market may be flooded with corporate art as some companies liquidate their assets.
- There is less access to credit for most businesses and they will be more reliant on self-financing.
- There are rarely any impulse purchases. All transactions are planned and considered.
Survival StrategiesTimes of recession will force you to strive for every sale possible. There are several ways you can achieve this. Reduce the amount of high value art you produce and focus on increased volume of sale for lower priced works.
Make sure you research the direction prices are following in the market. Examine strategies employed by your competitors. It’s a safe bet that you’ll need to reduce your prices. It’s important that you do this with subtlety and confidence. If you are worried that a drop in prices implies a fall in quality, communicate this concern by making the price fall ‘temporary’ or one-off. You could even reduce prices following a specific enquiry.
Produce art which reflects the changed economic and social conditions. Art collectors with an interest in social history will want to focus on relevant art during a recession.
Re-examine all areas of your business with a view to cutting costs. This means measures like:
- Consider advertising your gallery as a classy venue for relevant social events such as launches or cocktail parties.
- Diversify with new art-based ventures. This might mean finding new markets, offering craft classes, craft parties or extending your gallery to include a craft cafe.
- Transfer some of your business to e-commerce. This will instantly reduce your outlay and costs.
- Look at every single cost. This applies to petty cash, all incidental expenses and necessitates a review of your materials suppliers.
Turn to RentalFinally, if you are finding it hard to sell your art, consider renting it out instead. This will provide you with a guaranteed monthly income if you can find a market for your work. You could even include provisions for the renters to purchase the work at a reduced rate following the end of the term.
Make sure that you only consider items that are difficult to sell in your rental scheme; otherwise you will deny your business valuable sales income.
Another advantage is that rental frees up space in your premises. This cuts down on storage costs and justifies the continued production of your works of art.
The best piece of advice is that during the tough times, you must hold your nerve. There are lots of survival strategies you can put in place and confidence is the key to your future success.