One of the most rewarding parts of being a solo artist is selling your first piece to people who love it just as much as you do. However, before you make that first sale you should take the time to consider that your art will be your business. You will have a spectrum of issues to address—profits to account for, taxes to consider, etc.— and may become more involved with entrepreneurship than originally anticipated. Congratulations! You have grown from a solo artist into an art-repreneur.
An art-repreneur is an artist who creates and sells art from within their own business entity.As an art-repreneur, it is important to recognize the benefits of having a separate business entity. The term “business entity” encompasses the many forms a business can take. This post will discuss the two most appropriate entities for budding solo artists: the sole proprietorship and the Limited Liability Company (LLC). It will also explore the benefits and drawbacks that online galleries and rent-to-own websites present to the art-repreneur.
Top 3 Benefits of Having a Sole Proprietorship
- Sole Proprietorships require no paperwork and are the easiest type of business entity to create. In fact, if you are creating art by yourself and you have already sold some pieces, you are already a sole proprietor!
- Taxes are complicated, but in most cases a sole proprietorship does not require extra paperwork come April. You will have to claim your profits, but that is to be expected.
- DaVinci. Warhol. Banksy. There is something to be said for name recognition in art. Since you can maintain a sole proprietorship directly under your name (or under a pseudonym if you prefer), you can associate your name directly with your art. Keeping that personal touch can also make people feel more inclined to do business with you, as some customers buy art because they enjoy that personal connection.
Top 3 Benefits of Having a LLC
- A LLC requires separate banking accounts. This can be beneficial in many ways; separate accounts can keep you aware of profit margins and expenditures that may get lost in a personal account.
- When conducting business with people that you don’t meet face-to-face, working as a separate business can have multiple marketing effects. It can inspire trust in transactions and give you negotiating clout, as it detracts from the “desperate, starving artist” stereotype that some may associate with budding artists.
- It may sound strange, but even artists have risks and liabilities to consider. For instance, is there insurance on your studio? What if you get sued for breach of contract/selling agreement, or someone gets hurt from your piece? With LLCs, your personal responsibility, or personal liability, is held separately from what may happen in the course of your art business. This can protect your personal assets if something goes wrong.
Modern Means
Though the traditional art collector may appreciate the nostalgia of walking around a gallery in person, many modern consumers do not want to spend time in traditional galleries. Nowadays, people look for everything online- clothes, groceries, love- and art is no exception. Art-repreneurs need to be tech-savvy to keep their sales up. Online galleries and rent-to-own websites offer a transformative and accessible way to reach customers. However, the art-repreneur should be aware of the legal issues that may accompany these new means of reaching customers and understand how a sole proprietorship or LLC can be used to address some of these concerns.
Online Galleries/Marketplaces
There are many types of online galleries and marketplaces for today’s artist. These websites provide artists the opportunity to sell their work by uploading high-quality pictures of their artwork for interested buyers to view. It is an effective way for sole proprietors to reach an audience that is particularly interested in your artwork.
That being said, there have been accounts of artists who struggle to maintain the value of their original pieces after putting pictures online. The same people who are willing to online shop for art may also fall prey to a copycat- someone who prints off the high-quality picture you uploaded and is profiting off the resulting copy. This can raise significant problems for the art-repreneur. Having an LLC or business name may intimidate some from committing fraud, but it will not prevent those who are particularly set on cheating the system. If you find this has happened, you should always seek the advice of an attorney. There are serious legal consequences at state and federal levels for intellectual property violations and art fraud.
Rent-to-Own Websites
Rent-to-own websites propose a relatively new concept that is quickly gaining popularity. The website is based on an agreement between the website and the artist in which the artist allows the website to advertise and rent their piece, and the website will take a portion of the following profits. The customer then has an opportunity to view the artwork to determine if the piece is a good fit or not. If the customer likes it, he or she can purchase the piece; if the customer does not like it, the piece can be returned at the end of a month. This can be a huge advantage for the artist because customers often have trouble visualizing where the piece may go when they view it in a gallery, and the option to view it in their space can push the hesitant buyer to make the purchase. Even if the sale is not completed, the artist still receives “rent”.
Yet this may bring the artist to a new level of anxiety. What if the sculpture is damaged in transit? What if the piece falls and injures someone? Can you be personally sued (if you’ve prioritized liability as a business entity consideration and operating as an LLC, the answer should be no!) or will the website be liable for the injuries? The vigilant art-repreneur should closely review the terms of the agreement with the website for details that address such issues, as these questions are best asked while negotiating your contract, not after something has happened. It’s always good to check in with your attorney whenever you have questions.
Being mindful of business considerations may be cumbersome, but it pays off in the long run because your focus can remain where it should be: on your art.
Sources
GetArtUp, http://www.getartup.com/ (last visited Feb. 1, 2019).
Interview of Lawrence M. Shindell, AiA Newsl. (Authentication in Art, The Hague, Neth.), July 2017, at 2. http://authenticationinart.org/pdf/newsletter/AiA-Newsletter-July.pdf.
Klaus Esterluss, The art of selling art: Young artists navigate the digital world, DW (Apr. 15, 2015), https://www.dw.com/en/the-art-of-selling-art-young-artists-navigate-the-digital-world/a-18382841.
Start Your Art, http://www.startyourart.de/sya_welcome.php?lan=EN (last visited Feb. 1, 2019).
Photo Credit
http://clipart-library.com/clipart/di4oMLABT.htm
Remaining photos sourced from personal collection.
I’d suggest, too, that having a separate entity may help when dealing with copyright conflicts. Even local artists have concerns about how posting their material online may make their art vulnerable to infringement.
The rent-to-own websites sound like a great idea: creative. I wonder what progress is being made with virtual galleries and VR/AR technology…
Marisa, I really like the theme of your overall blog and the post itself! Both features are very inviting and are not something I would have thought of, but I am glad you did. I liked the organization of your blog. I thought it was effective to start with a general overview of some basics and then introduce some new concepts on a different topic as well. I appreciated how you combined the entity information with the online sales overview. After reading this, I am hoping you will stick with the art theme and maybe talk a little bit about copyright law or some other issues that affect artists that I am not yet aware of.
I like the friendly tone of your blog post it makes it easy to get into. You take an issue that does not get a lot of exposure and create a good starting point for thinking about it That being said I would have liked if you had talked more about the online curation more rather than starting with the entity opening. Still given that it acts as a starting point for layman it works in context. There seems to be plenty more to be said on the topic and it looks like a good place for a start that can springboard into future posts.