I remember when I was preparing for my thesis show in my second year of grad school at NYU. I was studying Cross-Cultural Dance and Theater, with a focus on Classical Indian Dance performance, so my show included a performance I wrote, directed, produced and performed in for over 100 people, along with a 75-page thesis that I defended to my panel of advisors. Needless to say I was completely focused on this project, and this project only, with barely any time to sleep or eat, let alone teach the yoga classes that were the source of my income at that time. I was super over-worked, firing on all cylinders.
I remember stopping in the middle of a rehearsal and thinking to myself, “how am I ever going to pay that bill on time?” I owed the theater a large down payment to secure my show (much more than I originally understood I would have to give). So I was not able to pay my utilities for the month for my apartment, and the electric company turned off my power. I was able to borrow what I needed to pay that bill from a friend the following week, but I remember the time and energy it took to take care of that in the middle of a mad rehearsal schedule- and living by candlelight- was daunting, and over such a small amount of money!
I knew then I needed to figure out a way to ensure that didn’t happen again. The stress alone was enough to put me over the edge, as I know any artist getting ready for a big show can relate to. I tried every way I could think of to organize myself to keep my bills clear and always cover what I needed, but there were still months where I fell short. I felt like I was missing something, and falling into the trap of the “starving artist” mentality that I was working hard to not represent.
You see, there is a marked difference between cash and profit when running a business that I didn’t understand at that point, or even know about (because as artists, we are all running our own businesses, whether we realize it or not!). I go into detail about how this works and how you can put it into action to begin growing revenue with your art in my free 14 Day Art Biz Challenge, which you can sign up for here. But for now I can share with you that the difference is simply that you can be making a profit but still not have cash. In other words, you can bring in what looks like more than you need to cover your expenses, but you may not have accounted for unknown bills or costs that come up and leave you in the negative (in my case, having to put such a large down payment on the theater for my show). You may be able to cover that negative the next time you get paid (or bring in revenue, as it were), but until then you have a negative cash flow. At that time I had no idea how to account for these “unknowns” ahead of time, and was baffled at how anyone who wasn’t making millions of dollars could possibly do that.
It wasn’t until I started working with some very successful entrepreneurs who owned multi million dollar businesses that I finally learned why and how this happens, and when I understood why so many artists, especially those who freelance or self-produce shows, suffer.
These entrepreneurs taught me how to always make sure I had cash flow, the simplest and most powerful methods to never missing a payment again, no matter what was going on in my life. I have been practicing this method ever since, and it has allowed me to help several other artists, passionate creatives and multi-million dollar businesses get back on track as well.
There are some deeper skills an artist needs to grasp around the way finances relate to your business with your art, which I cover in my FREE 14 Day Art Biz Challenge (which you can sign up for here!). But the below three steps will get you started on putting the first steps into motion. These steps are the most simple, elegant and effective ways to stop yourself from getting tripped up along the way to creating streams of revenue with your art:
Know what you need to make
It’s important that you know exactly what you need to make to cover your most basic expenses: food, shelter and bills. I refer to this as your Financial Baseline. It seems obvious, but they are surprisingly the three items we most often forget to add up and know what the number is for it that we need to bring in each month.
The easiest way to do this is to pull up your bank statements for the last 6-12 months and add up how much you’ve spent on these three items each month. Add these up together and divide by either 6 or 12, and you have your financial baseline- the minimum amount you need to bring in each month in order to cover your basic expenses.
Create a Priority List that cuts out all the fat you don’t need
After you have your baseline established, make a list of the other items you spend money on each month. Now that you have your bank statements out it will be easy to do this. From that list, circle the top ten that you need to continue spending on. These can include household items you need each month, classes you need to take to continue working on your craft, supplies you need to replenish. Add up what this list of top ten items costs you each month and divide by 6 or 12 to get the monthly average for them. This amount is your known expenses for each month.
Create a Player Baseline that gets you out of the weeds (and in the money!)
Take the amount you came up with above for your known expenses and add between 10-20% on to that number to cover additional unknowns that will inevitably come up each month. This total is your financial cushion that you can now add onto your financial baseline to determine what I call your Player Baseline- the amount that you are currently in need of making as a player in your own game of life. This amount will shift as time goes on and as you grow and fluctuate within your life and business, so you will want to revisit your Player Baseline every six months to ensure you are on point with what you need to bring in to cover all your bases and feel secure in what you are making.
Would you like to know how to create streams of revenue for your work as an artist that gives you the time you need to focus on creating your work rather than taking you away from it? If so, I have a FREE 14 Day Art Biz Challenge I’ve designed so you can create revenue with your art, now, regardless of your discipline: dancer, actor, painter, sculptor, jewelry designer, multi-creator. This Challenge is for all creative minds that seek a way for their art to support them in creating more, fine-tuning their craft and sharing their vision with the world on a larger scale.
Sign up to take the Challenge NOW to begin designing revenue streams for you and your business with your art!