How To Work Out Your Expenses
Put simply, everything you spend money on for your art business is an expense. It’s important to keep track of all these items in order to make informed decisions so that you can get a clear picture of how much you are actually generating from your business.
It also takes some of the emotion out of pricing your art. Knowing how much each artwork cost to produce helps you price each piece from a more objective perspective. It can also help you stand firm on your pricing in the face of a price negotiator and see ways in which you can cut back on costs.
And perhaps most importantly, knowing your expenses can help you better predict for the future of your art business. As artists, we don’t rely on a steady pay check. There are busy months, then months that see just a few sales trickle in. Knowing what your expenses in the past have looked like can help you budget for your future.
If you are committed to making a lasting art career, you will need to understand the expenses that come along with your art practice so that you can get a real picture of your net revenue.
Ideally, you should have a separate business bank account for your art business, and charge all your expenses to this, so you know what has gone out. Keep your receipts (can be done digitally) and make a habit of recording your income and expenses at the end of each month.
Here are some examples of expenses artists have:
- Studio rent
- Art supplies and materials
- Software subscriptions
- Packing materials
- Shipping and courier fees
Ideally, your expenses should be no more than 30% of your total income from your art.
Tracking your expenses is not just about making sure that you don’t lose money while building your art career. Knowing your expenses allows you to thoughtfully shape your art career and align your finances with your art career goals.
No matter where you are on your journey, you can continue to benefit from staying on top of your expenses. The best advice? It's better to start early and to stay consistent. It's much harder to go back and try and sort through receipts to catch up with past expenses.
You can track your expenses yourself using a spreadsheet if you are just getting started, or you use software such as Xero or Zoho Books if your business is growing, or hire a bookkeeper to help.
As you keep tracking expenses and learning the ins and outs of your finances over time, it will become easier to make it a habit and the insights will become more powerful.
I hope that has given you some insight into how to work out your expenses as an artist. Once you get into the habit of doing this, it becomes easier and part of the business of art.
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