The following excerpt comes from a seven-part course on managing finances and achieving financial freedom. As such, it is only part of the guidance that could help an artist become financially successful. This excerpt focuses on the overall issues facing artists, musicians and people in creative industries, while the rest of the course provides business management guidance and a comprehensive understanding of practical finance.
In the section above on direct marketing, we made the distinction between the needs of a market and the creative exercise of addressing those needs. In the “straight” view of business, the world outside takes precedence over the world inside one’s head. For an artist, those priorities are reversed. No wonder there is often a conflict between artistic integrity and commercial interests.
Contrary to what you might suspect about my leanings, I am very sympathetic to the artistic mentality and have struggled most of my life to reconcile the normal business world with the artistic world. That is one reason I am including a special section for artists in this course. Another reason is that I strongly suspect more people would pursue artistic careers if it were easier to do so. And finally, in the UK the artistic sensibility is a major part of the culture, supported in part by a culturally-minded upper class and the welfare system.
In the last installment we discussed the issue of learning to approach even creative activities as a business, at least at the level of learning to manage money. After many years of viewing the great divide between art and business from both sides, I am convinced that any attempt to link art with money requires a firm foundation in business principles. As I stated before, you can do what you love for a living, but that means learning to manage your career with business skills. Or, you can bring aspects of what you love to your money-making activities, in which case being business-minded takes priority. Either way, business is part of the picture.
The third option, of course, is to pursue money-making activities outright. Of the three businesses presented in this course, real estate and direct marketing carry some potential of creative input. Trading involves a high degree of psychology, and in that sense it mirrors aspects of the artistic mentality, but is probably the furthest removed from an artistic career. All three offer excellent training in business skills that will be useful in practically anything you do. It is entirely possible to pursue an artistic career for survival purposes, but the cold hard reality is that great wealth is a bit of a crapshoot. For the few that make it big, the tendency is to squander the wealth because of inexperience with money.
Now you may be wondering about a contradiction in what I have been saying. Didn’t I make the statement in the first installment that reality follows from your beliefs? So if you believe you will be a hit songwriter, can’t that happen? Yes. In fact, I hope you wrote down personal desires as ambitious as that one. I am also pointing out that as you progress toward your goals, they will be changed by reality as you experience it, and ultimately what emerges is a blend of your desires and the reality you find yourself in. So yes, your beliefs come first, but the way in which those beliefs manifest in reality has something to do with reality! Let’s not forget that beliefs are meaningless unless they are applied in the real world. This may sound obvious but it is something easily forgotten by people with an idealistic bent.
I would go as far as to say that with the arts in particular, a core internal belief is necessary for that belief to exist in reality in a meaningful way. With straightforward business endeavours, the core belief can be simply about making money and lots of it, though there is a lot to be said for pursuing any business with a sense of passion and personal significance. With the arts, on the other hand, an internal belief about the value or purpose of doing some form of art is a necessary part of its existence. The question then becomes: To what extent do you want your art to make money, and how important is that goal?
If you want to be a pop star mainly because you want to make money, be honest about that. That means you will make conforming to a market a high priority. Certain types of music have bigger markets and certain places in the world can give you better access to those markets. Yes, you have a dream with all its personal glory, but really you want to ride a wave so your career gets propelled in a commercially significant way. There is nothing wrong with that, if that is what you want.
Many artists believe they have a statement to make and secretly wish that statement would be recognized and rewarded. I have been in that camp my whole life. It’s true that some of these artists do make it big, but often to tragic effect. In fact, every big movement of any form of art was started by some innovator who usually suffered for breaking conventions. Sometimes those innovators are rewarded financially, often not. Those that achieve wealth and fame can suffer personally from the attendant ills of a life in the spotlight, since the person in the spotlight is so internally focused. Others usually follow who cash in while being less daring.
If you believe you have a statement to make, then be honest about that and don’t expect wealth and fame from making that statement. Yes, you can steer your career in such a way that it will be more financially successful, and by all means I hope this course helps you do just that. But also realize that the rewards for this belief system are mostly internal and immaterial, and that financial rewards are not as readily available. Funny enough, the artists that stick to their internal beliefs and struggle along with hardly any compensation are the ones who, once in a while, get noticed and cause a big stir. While the odds don’t favor this happening to most artists of this sort, when it does I hope they learn to manage the results for maximum benefit, as opposed to becoming a casualty on the road to wealth and fame. And yes, you can learn to improve the odds of getting noticed, but pandering to a market with commercial expectations will likely reduce the value of what you are doing.
Let’s look at various artistic professions. If you want to make a living as a musician, you play what’s popular or what sells. If you want to make a statement, do that as loudly as you can. The former is less about innovating than it is extending a recent innovation with some sense of originality. The latter is all about innovating and trying to change the world, but with the strong likelihood no one is listening. Some artistic careers lean more readily in one direction or the other. Photography, for example, is quite possible to pursue commercially, while keeping a personal passion alive on the side. Painting, on the other hand, tends to be more about internal beliefs and collectible assets that get foisted onto an audience of collectors and museums. Acting is a mixed bag – the love of theatre versus the hunger for celebrity stardom. Obviously genres like conceptual art thrive on shock value and “gross” innovation, to the point where one wonders if the innovation is in fact a marketing ploy.
CASE STUDY – This Musician Does Well
If you thought being a musician was an unreliable way to make a living, then it depends on your definition of “a living” and how you approach making one.
As in other European countries, there is a substantial shadow economy in the UK. This is caused by a number of factors, such as the tendency toward “mom and pop” businesses, high levels of taxation and red tape, and relatively low wages in normal businesses. Dealing in cash is still quite popular in older countries, and this allows for a degree of unregulated economic activity. Interestingly, a large shadow economy can be a significant stabilizing factor in times of economic turmoil, so when the US is sliding downhill on weak employment figures, poor nonfarm payrolls, lagging production capacity utilization and rising deficits (all tracked diligently and exhaustively), European economies are still surviving on a cash basis to some degree.
So the question of legality is a bit different in the UK than in the US when it comes to reporting income. The Inland Revenue makes great efforts to encourage honest self-assessment of taxes, and publishes its endless tax rules for all to see. But the reality is that a large portion of the population is living below American middle class standards and making ends meet requires a bit of creativity. Well, creativity is the biggest strength of artistic people!
I am not advocating breaking the law or being dishonest. I am simply painting a picture of reality as it exists for the many people who simply can’t do very well working in an office, especially when they could live at about the same level working on their art with some creative approaches to finance.
I don’t know the person I will describe in this example, and have only heard about him through hearsay. He makes a substantial income busking on the street and in Underground stations. He has a license to busk in the Underground and makes the equivalent of what some people would call pocket change. But by adding to this income with occasional wedding and hotel gigs, he manages to do pretty well, at least by artistic standards. I have not examined his finances to know what he is paying in taxes, but common sense says that he pays his fair share, and not more than he needs to in order to survive. He was an accountant in his former life!
The traditional approach for an artist is to have no clue at all about income or expenses. But if you view your business as a real business, then accumulating income in various small ways and being aggressive about business expenses is a way to survive. What business expenses? Well, the person above would have transportation expenses, telephone calls, postage, office supplies, subscriptions to industry magazines, maintenance costs for his equipment, new equipment to buy, sheet music, producing tapes or CDs for sale, and marketing expenses (keep these to 11% of income or lower). A home studio would involve some expenses associated with the living space. If this sole trader business is your only form of income, show some net profit, otherwise how would you pay rent and buy food?
Being aggressive about marketing is the next step. Business cards, flyers, a website, an email list, special thank you’s or incentives offered for referrals, that sort of stuff.
Maybe this musician is not the type of artist who will change the world, but it doesn’t surprise me that a former accountant can figure out a way to make a living as a “poor, starving artist.”
Before we go any farther, it is time to address the issue of free money. Is there really such a thing?
There is absolutely no doubt that some of the finer aspects of life would not exist without some form of patronage and support. Cultural richness would not exist if all people did was pursue market needs. So there is obviously a place for patronage and philanthropy in the overall universe of the arts. Arts funding in the UK is well developed and exemplary. But the boundary between patronage and a free ride is fraught with peril.
There are two points to address on this subject. The first involves the value of money, and the second involves the reality of presenting something of value.
Let’s say there are two people who come from a poor background. Each is given the same amount of money as a gift. One person spends it on travel and parties, and in a few months goes back to ask for more. The other uses it to go to school and start a business, and eventually returns the money with interest. Which person appreciates the value of money? The value of money lies in its ability to create more.
A corollary to this principle is the inherent risk in large gifts of money, such as an inheritance. As we will discuss at the end of this installment, it is usually not a good thing to have too much money. “Too much” is defined by the degree to which a person values money. If you think about it, having too much money has a natural tendency to decrease its value in your eyes. J. Paul Getty, once the richest man in the world, was widely regarded as stingy. One could argue someone like that values money excessively. On the other hand, when someone thinks one million pounds is a huge, unimaginable sum, well then it probably is.
The point here is not to suggest pinching pennies is the way to wealth. It is simply meant as a warning to those with a sense of entitlement. Being given something comes with a distinct responsibility: to appreciate the value of what you are given and not take it for granted. Further, using what you have to maximum advantage is an important skill, and a fruitful way to approach life. Luck is all about how you take advantage of opportunities. Appreciating the value of money is a good start.
The second point looks at free money from the other end, the side of the giver. In the example above, which person would you give your money to? In order to receive grants, you must be worthy of achieving an aim. Just as you can’t get something for nothing, you can’t give nothing for something. So the ability to manifest your goals is a key part of receiving support. As you learn this skill and accomplish your goals, more support will be available to you. After all, the point of being an artist is not about getting a free ride, now is it?
One major pothole that creative people often stumble into is the notion that a business can be more than a business by virtue of being in a creative field. A graphic design agency, for example, may have a cutting-edge image and sense of flair about it. It may be true that the head of it is a creative genius. But it’s one thing to be creative about self-promotion and reputation, which for businesses like that is almost a necessity, and another to approach running a business as if it weren’t one.
We are now discussing the other end of the artistic spectrum, that of running a business with some creative aspects to it. Don’t lose sight of the fact that a business is a business first and foremost. I remember friends of mine who decided to buy a restaurant in a trendy part of town. They were proud of their ability to create snazzy gatherings and performance events, and thought a restaurant was a good way to turn that talent into a reliable income. In addition to decorating the restaurant with bohemian flair, they set up a stage in the corner so interesting bands and performance artists could entertain diners. Well, they lost sight of the fact that they were running a restaurant, and the food suffered in quality. No matter how good the band is, people will go to a restaurant for good food, and in a place like that the expectation was the food would be better than normal, not plain and uninspired.
This is not to say that once the fundamentals of a business are in place, it is not possible and perhaps desirable to modify the standard structure for something more innovative. Advertising agency Chiat Day is known for its innovative approach to team building and workspaces. This was done as a way to become more competitive as an agency, by fostering more creativity and productivity among its employees as well as a better responsiveness to clients. Innovative management structures and techniques can be useful for increasing a company’s competitive edge. Better and more flexible workplaces inspire employee loyalty and bring out the best in people. But all these innovations are for the purpose of improving the business, not proving that a business is creative.
EXAMPLE – A Charity is a Business, Too
In the early 80’s I started an artistic enterprise with a friend, and eventually turned it into a charitable organization. At the time, I thought our noble enterprise was worthy of charitable donations and that the tax benefits to donors would be a big help.
There were two nasty surprises in store for me: the tax authorities are extremely skeptical of the legitimacy of any charity just getting established, and funding sources prefer to back established charities with a large potential effect on a specific population. Makes sense, really. In the UK, plenty of small grants are available for community-oriented or small creative endeavours, and you don’t need to be a charity to get those.
The problem was, I had grandiose ideas for my venture and thought it could fill the cultural void of mainstream America. Basically, I was publishing a magazine of the arts to expose under-recognized artists to a broader audience. This would encourage artists to produce valuable statements and bring artistic values to the mainstream. Little did I realize how big a challenge that was.
Mainstream marketing requires large resources and plenty of expertise. Any investor, let alone a philanthropic funding source, would have laughed at me. During that period, I worked part-time at an art gallery for disabled artists, which was an official charity funded by grants. Only years later did I realize that there were reasons that charity received grants and mine didn’t. Fundraising is like a form of marketing: you better know your audience and how you will help them, as specifically as possible. This then reveals the kind of funding sources that are appropriate and makes it easier for them to evaluate the worthiness of your cause.
When the tax authorities began asking questions about the nonprofit character of my enterprise, I realized that whether something is for-profit or nonprofit, it still needs to function like a business. And the added headache of being a charity can make the decision lean toward the for-profit side. My argument was that my enterprise was anti-commercial, but that didn’t change the fact that it was a magazine. If you think something will work as a business, then it may as well be for-profit, unless there are specific compelling reasons to make it a nonprofit.
And if it won’t work as a business, then does it make sense to do? Only your personal situation can reveal the answer to that question. If you are able to live a life of leisure, the answer may be yes. But even then, a business-like approach is likely to produce better results.
What does every artist wish for? An agent that can take care of everything to do with money. Money skills and self-promotion are the biggest weaknesses of most artists and there is the widespread belief that someone else can bring those skills to the table.
There is no doubt that any artist who has become wealthy had some exceptional help with marketing and management. There are the stories of famous models being picked up on the street by chance, though even that initial opportunity can result in lots of different outcomes. It is a common view that someone with a commercial eye sees something sellable, and then invites the artist to come along. Mystique sells, and artists can be packaged readily as capsules of mystique.
The harsh reality is a bit different for most artists. If you don’t have a reputation, getting an agent or a gallery interested can be tough. And the ones that are interested are probably inexperienced and needing to build up their own careers. Simon Fuller, the pop music producer, is the classic case of the commercial maestro who can manufacture sellable artists. Sure, the artist has to be the right individual with the necessary drive, but the commercial eye takes the money to the bank. The only problem is, if you don’t fit his formula and you don’t have access to him, you can’t benefit from his touch.
As I said above, an artist trying to change the world or pursue an internal belief with little concern for the external world has to operate with a different set of expectations, but employing business skills will help. For those that are wanting commercial success as a primary goal, then being fluent in business skills is a necessity. Like many things in life, moving up the ladder can seem like a catch twenty-two: I can’t get help if I’m not well known, but how can I get well known if I can’t get help?
My first point to you is the same I would give to the CEO of a major corporation: Get a grip on your finances, at least to the degree that you know whom you can trust to manage your finances. Ultimately, the only person responsible for your income and expenses is you. No matter how good someone else may be with numbers, you are the person that is affected. The most common form of monetary loss on the planet is probably from the people charged with taking care of money. This is not necessarily malevolent crime; a lot of slippage results from ineptitude, poor judgment or plain old mistakes. On the other hand, someone who is strong with numbers can prevent and reverse slippage, potentially uncovering huge increases in savings or less taxes. If someone you hire can make the difference between a deep hole and huge gain, don’t you think it’s worth it to get somewhat up to speed?
So, if you haven’t yet completed your expenses worksheet from the first installment, don’t put it off any longer. Know where you stand, ideally at all times or at least monthly. Many people have a huge resistance to dealing with numbers, and in particular expenses. GET OVER IT! Aside from your beliefs, there is nothing else that is more important. Getting an agent or business manager does not solve this problem – in fact, it can make it worse. Why? Because a person like that can take advantage of you if you’re naïve. If you don’t know anything about the numbers, how can you tell how good your help is?
Now on to self-promotion. That skill is also a weakness for most artists, and it happens to be the one that will help the most in landing a top-notch agent. You can’t expect someone to find you, take you by the hand and lead you down the path to glory. You have to be inclined to make things happen for yourself, and then it becomes more likely you will find the right person. Remember, if you have your goals defined and pursue them out in the world, you will likely encounter a series of opportunities that eventually lead you to your goals. But get out there and keep trying!
Selling is tough for artists because they don’t feel it’s appropriate to blow their own horn. It’s a bit like the attitude of upper class people who never want to talk about money. How crass. Well, even in the Italian Renaissance when patronage of the arts was at its peak, a master like Titian knew how to navigate the halls of power to build up his reputation and his pocketbook, according to the BBC special with Matthew Collings. One technique he used was to do portraits of the rich and powerful, who would of course refer him to their friends – a trick that was employed to similar effect by Andy Warhol. Selling is different in the arts than in normal business because of the airs of the buyers, but that doesn’t mean self-promotion is not possible. It means you need to impress the right people who can spread the word on your behalf, and not be afraid to present yourself with confidence to anyone who is interested. Your art should speak for itself, but people don’t have the mental bandwidth to pay attention unless you make a point of getting their attention.
If your art is largely commercial in orientation, then chasing down contacts, issuing press releases and demos, and inviting key people to events is definitely in order. Put up a website, collect email addresses, do anything possible to create a buzz. Don’t underestimate the amount of effort required by promotion. It doesn’t have to cost a lot if you’re clever and diligent. But it takes time and plenty of work. If you thought your work was your art, then you haven’t factored in the work involved in promoting it.
Promoting your work is like a job in itself. No, it’s part of a business, a business in the arts. The next half of this course will provide an excellent grounding in business overall, as there are many lessons to learn from the three types of businesses we will explore in depth, including psychology of money and creative finance and promotion.
Note: Business management and entrepreneurship are discussed in depth in other parts of Fiscal Fitness for Life!
Fiscal Fitness for Life! is available as a home-study course for those wishing a helping hand toward financial freedom. For a low fee, seven monthly installments will provide a comprehensive and practical education in how to manage and make money for the purpose of living the life you truly desire.
For more information, contact Phil Chang at:
or
5 Spencer Rise
London NW5 1AR
or
07799 660 435
0207 482 5244
© Phil Inje Chang, 2005. All rights reserved worldwide.