RECAP: The Nexus of the Arts and Entrepreneurship seminar

Operating as a business is often the hardest thing to do for artists. Artists prefer to just create and let everything else take care of itself. However, the world is changing. More tools that ease the management process and make it directly accessible are at the disposal of creatives from all walk. Their business success and the reach of their art is dependent on the mastery of the same. Admittedly, while it is not necessarily expected that the artists will necessarily manage all the nitty gritty details of their business operations, it is expected that they will have the knowledge and tools needed to monitor the same and successfully expose their art to various markets. In comes the Art is Risky Business: The Nexus of the Arts and Entrepreneurship seminar held at the Edna Manley College of the Visual and Performing Arts on Tuesday, April 18, 2017.

The Art is Risky Business seminar was focused on getting artists to refocus and start seeing themselves and what they do through the eyes of target markets and the benefit to the consumer so that they can build their artistic offering (whatever their discipline) into a viable business that offers great value and is successful. We also gave them the tools to do just that. We had journalists, videographers, filmmakers, marketers, media-technology educators, graphic designers, actors, and musicians on deck. All points fell under one of the three topics discussed: Success Mindset -the Artist as an Entrepreneur, Identity Design – Branding, Money Talks – Pricing Design. Here’s some of what was shared.

The Arts and Entrepreneurship Conversation

Success Mindset -the Artist as an Entrepreneur

“change your thinking, chart your success”

Become more market and business focused

While artists love to create, and this is primarily what they should focus on, the truth is if the art they produce is not being consumed and they are not being paid for their work, then they are hobbyists and not professionals. With that being said, it is important that artists focus on potential markets for their goods and services and how they can leverage the same. As such, artists must:

  • Identify their target market and create a prototype of what their ideal customer looks like
  • Engage the business planning process for all their creative ideas
  • Focus on providing value to their target customers as opposed to merely creating for self-expression
  • Consider innovative ways they can use the resources they have to tell their story, meet the needs/wants of their target customer and

Identity Design – Branding

“branding is the story you tell yourself about yourself”

Identify your Unique Selling Proposition (USP) and the best ways to communicate its value

Your USP, is essentially what makes you different. For example, all photographers take photographs. What is it about the way you approach your photography or your story that makes you different? Artists, irrespective of discipline, should consider the following:

  1. What they have to offer
    • What you have to offer goes beyond the art product or service itself as buying is emotional. Customers need a story to buy into.
  2. How they can offer it
    • How you communicate your story will depend largely on who you are trying to reach. This will determine how you package your products and services with the stories or visual presence resources you have.
      • What colours will you use to represent your brand?
      • What images will you use?
      • What kinds of media will you use to disseminate information?
  1. To whom they will offer it
    • Become familiar with the segments of your target market that are most likely to buy into what it is you’re selling. Look closely at their age, locale, consumption habits, sex/gender, language (the ‘kind of speak’ that resonates with them) and so forth.
  2. What do you have at your disposal?
    • What special skills, idiosyncrasies or personality quirks, for example, do you have that allow you to approach your art differently from similar practitioners in your discipline
    • What resources do you have (e.g. technology, language skill, money, manpower, network, etc.) that allow you to communicate value to your target audience

A word about social media:

Digital media representation through social media platforms is becoming increasingly important for brands reaching out into the marketplace. Artists hoping to successfully use these platforms to expand the reach of their art goods and services must understand the personalities of the different platforms and how to best utilise their features considering goals, objectives, and unique brand and select the appropriate platform(s) accordingly. Additionally, the algorithms (programming design) of the various platforms are constantly changing, and so artists should remain informed and adjust as well,

Money Talks – Pricing Design

“set prices at the level of the value you offer”

Pricing is a funny thing for artists. It is often the part of the arts and entrepreneurship that artists tend to struggle with. Many artists set their prices using arbitrary, random variables that have nothing to do with anything. Artists can develop a pricing system based on quantifying information and numbers they can justify.

Your cost of production determines the minimum amount you should charge to cover expenses. Your brand value determines how much you can charge.

Assessing Costs

If you do not know how much it costs you to produce each ‘unit’ of good or service you produce (unit price), then you will not be able to price your good or service properly. To calculate your costs, you need to be able to quantify (have dollar amounts) for the following:

Admittedly, arts and culture goods and services are not like those in other industries. Arts/culture good and service are often transient and are being created and consumed simultaneously (think of a concert for example).To calculate your costs, you need to be able to quantify (have dollar amounts) for the following:

Take a close look at the goods and services you offer, the materials and resources that affect how you offer them, and the costs associated with the same. Your costs serve as the starting point to develop your pricing system and calculate your sales price.

To calculate your costs, you need to be able to quantify (have dollar amounts) for the following:

Cost of Production

  • Fixed costs (remain constant irrespective of output)
  • Variable costs (increase constantly relative to labour and capital)
  • Marginal cost (the decrease or increase in cost to produce one additional)
  • Mark-up (the amount added to cover expenses and profit – usually measured in % of costs)
  • Opportunity cost (the benefit given up when a decision is made in favour of an alternative and the benefit that comes with)

There are sometimes mixed costs to consider where a particular cost or element of the cost of production has elements of variable and fixed costs.

Brand Value

  • Your reputation and product/service quality
  • The value of the client’s brand and what they will stand to earn from your good/service

Revenue

  • Break-even (when revenue amounts is equal to total business costs)
  • Gross profit margin (amount of profit earned per unit)
  • Sales Price (The price charged for goods and services)

Important formulas include:

  • Cost of production = Fixed Costs + Variable Costs + Mixed Costs
  • Sales Price (per unit) = Total Cost of Production + Mark-up
  • Mark-up = Unit cost of production + (% x Unit Cost of production)
  • Gross profit = Revenue – Cost of Goods Sold
  • Gross profit margin = Gross Profit / Total Revenue
A working example: – A music producer operating from a music production studio

N.B. For the purposes of this example, the production of one song qualifies as one unit.

Fixed Costs (FC)

Must be paid whether a song is being produced

 

 

 

Variable Costs (VC)

These costs are associated with the variables involved in producing a song. They may change (increase or decrease) with the production of a song, and/or as the number of songs produced increases

Mixed Costs (MC)

 

 

 

 

 

Studio rental Session musicians
Utilities

(Electricity, water, Wi-Fi, etc.)

Songwriters
Administrative & technical staff salaries (audio engineer, business manager, security, etc) Composers
Studio and Administrative Equipment (computers, switchboards, mics, speakers, software, etc) Producers
Your Brand Value

(try to quantify what you bring to the table as an artist – in this case, producer – what makes you different. This is a feature/variable/element that the customer client is unable to get elsewhere – perhaps it is a signature production style, for example)

The Client’s Brand Value

(try to quantify what the end product of your service or product will do for the revenue potential of the client)

 

Total costs (TC)       = TFC + TVC + TMC

Conclusion: Coming Full Circle

Define Success

It is important for artists to clearly define what it is they want to achieve before they can even begin to think about embarking on the arts and entrepreneurship. A clear picture of what “ultimate success” looks like will make designing a road map to get there easier.

Become clear on what your qualitative and quantitative variable will look like by asking yourself questions like:

  • What means the most to you and the work you produce?
  • What will your revenue amounts look like?
  • What kinds of products, services, or operations structures will be in place?

Being able to answer these sorts of questions will help you understand artists understand the what, how, and why they do what they do. It helps them bring a blueprint.

Sometimes as artists go through the other processes and learn more about business and entrepreneurship that they can come back to this stage and write a succinct and clear statement of success. For this reason, it is included last, In many ways, your ‘success statement’ can be likened to the executive summary of a business plan.

 

 

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Kei Dubb
Kerri-Anne "Kei Dubb" Walker is a multilingual jazz-fusion musician, writer, and arts and culture management technopreneur. An astute business woman skilled both in the business and practice of the arts and entertainment, Kerri-Anne is the owner and face of Kei Dubb - which in part manages her Kei Dubb Forever (music) and The Short Girl Code (musings) brands, among other affiliated trade and service marks.

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