The Art Of Starting A Business In Art (From A Woman's Perspective) An ever-evolving industry fueled by creativity and passion, art has transformed to play an increasingly important role in supporting economies through tourism, developing cultural understanding, and facilitating innovation.
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An ever-evolving industry fueled by creativity and passion, art has transformed to play an increasingly important role in supporting economies through tourism, developing cultural understanding, and facilitating innovation.
The global art market was valued at around US$65.1 billion in 2021, and it is forecasted to grow even larger. Given the impressive figure, it is safe to say the industry is driven by both male and female creative professionals.
There has been an increased female presence in recent years across exhibitions, museum boards, and new ventures within the sector. This can be attributed to a proliferation of strong and smart female entrepreneurs with aggressive business acumen over the last decade plus.
Even with the recent advancements, opportunities to learn new skills and make valuable connections, the art world can be tricky to navigate. Therefore, if one is keen on investing time and money into an art-focused business, here are some tips to consider:
1. ESTABLISH CREDIBILITY (STUDY ART HISTORY) Art history provides the basis for understanding the progression of art through the centuries, and why and how some works are more valuable than others. In short, a sound art history knowledge base establishes sector credibility and increases visual literacy.
Often, the story behind the artwork provides most of its meaning and value, and this is learned through traditional and contemporary courses and applications. Many pieces of art also act as a reflection of historic moments in time, therefore depicting important opinions of culture and politics. This knowledge can be beneficial when curating collections and advising clients on valuations.
In the art sector or elsewhere, and regardless of whether you're male or female, the ability to demonstrate and present immense knowledge of a particular industry and subsector further builds a professional's expertise and position.
2. STREAMLINE OPERATIONS (DEVELOP A NICHE, AND UNDERSTAND YOUR TARGET MARKET) There are numerous art vectors, and understanding your best attributes will help your business to excel. Whether collecting specific types of art, curating exhibitions, or handling brokerage, it is essential to develop a distinctive position in the market for customers to notice.
For instance, sourcing fine art for high-net-worth clients is drastically different from selling affordable art. Both segments have different types of supply and demand. Specialized operations to streamline a company's activities and fostering developments in that specific space ensure targeted efforts when finding buyers and artworks.
Likewise, deciding on a niche can help identify relevant marketplaces for doing business. For example, coveted fine art is usually displayed in traditional commercial galleries and museums, whereas affordable art can be found online and in smaller art fairs.
The onset of digital art, the rise of non-fungible tokens (NFTs), online auctions, and new technology means that digital art is also becoming an important sector to consider. Female entrepreneurs can also venture into niches such as female-made art and curating exhibitions to build a unique value proposition.
But regardless of the niche chosen, the key points to consider when establishing an art business include:
- Focus on good, investment-quality pieces: Whether you are planning to buy or loan, focus on items for positive attribution and authenticity. This will also help to engage with the investor-focused segment of the sector, which is covered in the last tip.
- Avoid uncertainty Stay away from your business being connected to works with any questionable history or negative associations.
- Aim for a positive profit margin Assess potential sales by the next owner, taking into account the profit, which is essential for business longevity.
- Showcase ownership Clearly understand your chosen niche, and engage authentically.
Related: Surviving The Art World During A Crisis: A Crash Course For The Art Entrepreneur
3. FORWARD PLAN: NURTURING PURPOSEFUL AND PROFESSIONAL RELATIONSHIPS Developing and sustaining relationships is an essential part of doing business. Whether with potential buyers, artists, gallerists, or auctioneers, well-sustained relationships can facilitate exciting opportunities and access to prestigious and exclusive networks.
Similar to professionals across industries, art stakeholders in particular, cherish relationships. Such affiliations can lead to new customers, repeat purchases, and much-valued business credibility when securing artists' work for gallery exhibitions and commissioning work to artists.
As women, we also appreciate engaging with partners built on foundations of trust. Therefore, it is key to continuously connect, and share knowledge, skillsets, and connections with other females across the industry as we collectively bring a multi-dynamic approach by virtue of our DNA.
4. THE "APPRECIATION" OF ART: A RISK-AVERSE INVESTMENT VEHICLE AND ASSET From an economic perspective, art objects are consumer durable goods that deliver aesthetic pleasure, and can act as capital assets whose value tends to appreciate. Art is increasingly being viewed as the latter by investors who want to diversify their portfolios in a relatively safe manner, as the art market does not fluctuate with stock market changes.
Further, artwork has been shown to retain and increase in value over time as pieces become rarer. A large contribution to an artwork's value is its creator's fame. If the artist receives significant recognition from the public and industry, or their work is displayed in prominent museums, included in reputable collections, or wins awards, the value of their art will most likely rise.
For example, The Savior of the World (Salvator Mundi), painted by Leonardo Da Vinci in 1499, is now worth more than $450 million, and Pablo Picasso's The Women of Algiers is valued at almost $180 million. For a more modern take, Banksy prints have consistently increased in value over the last decade with the latest year-on-year increase rate being 375%.
Nevertheless, art has its own set of risks. Creations from emerging artists can be riskier over established artists, but they also offer a higher potential return on investment (RoI) as their career progresses. As an investment strategy, it is essential to conduct thorough due diligence ensuring authenticity and reputable sourcing. Deciphering art's investment scheme as a long-term approach rather than an attempt to make a quick buck is also necessary.
Having a clear understanding of the various costs can also be advantageous. Art tends to have high transaction fees such as auction fees and droit de suite, an artist's resale right where they can receive a fee on the resale of their work. Likewise, costs even include maintenance, storage, and transport, which are subject to restrictions at any given time to political influence, and, more recently, a global pandemic. Tax costs are also common, and they can be hefty if the piece is already at a high valuation.
Although like any investment vehicle, there are factors to consider, overall, art can be an excellent, value-added, investment asset that stands the test of time. And here's a tip: recent studies have shown work by female artists to rise in value significantly more than male counterparts (72.9% vs. 8.3% over seven years). Although there is no conclusive evidence that female-made art yields greater returns, it is a welcome sign for Investing in female art.
The takeaway: "appreciate" female creatives and wider industry professionals in the world of art.
Related: The Arts Supported Us During The COVID-19 Crisis- Now, We Need To Make Sure We Return The Favor
