Artist as Entrepreneur
August 11, 2013
Artists Summer Institute
Lower Manhattan Cultural Council / Creative Capital
Amy Wh...
agenda
I. Creative Business Planning 11:00-11:30
Matthew Deleget 11:30-11:40
[break] 11:40-11:50
II. Time and Money 11:50-...
I. Creative Business Planning
Business plan = artist statement =
grant proposal = a plan for your
organization = hopes for the future
committed to paper...
Why design a business
structure as a creative
practice?
To protect the space of your work.
To make time to create. To own ...
Everyone is an artist, and a businessperson.
Goals:
To migrate business thinking to the creative part of your brain
To dev...
• “The founder of the
science of business
was one of the most
unbusinesslike of
mankind.”
- Walter Bagehot on
Adam Smith
T...
attention
participation
generosity
letter vs. envelope
Warby Parker
Maria Sacarias sports her first pair of glasses alongside Warby Parker co-founders Dave Gilboa
and Neil Blumenthal and Ama...
brick vs. house
Think of everything you can possibly
do with a brick. . . .
The Brick
What else can I do with what I have?
Where can I go from here?
Sometimes you’re dealing with a brick.
Sometimes a whole house.
what is your lighthouse?
S.M.A.R.T. Targets
As you move forward with your art, you are trying not just to accomplish known
outcomes, but to discove...
Point
A
Point
B
Point
A
Point
B
Point
A
Point
B
+ Design+ Art
Asking
Questions
Refining
Answers
The biggest most
important question even
if messy to answer
Iterative meth...
That purpose—that “lighthouse” goal—is an important part
of your story. It is the “major dramatic question” (the MDQ)
that...
MDQ?
• Can men and women really be friends?
• What will happen with Harry and Sally?
Harold and Maude
Can love transcend age?
Will Harry live? Will he save everyone else?
Can you be ordinary and extraordinary at the same time?
Can bravery triumph o...
Guest Artist
Matthew Deleget
[break 11:40-11:50]
II. Time and Money
Ugo Rondinone at Rockefeller Center
Christo and Jean Claude
Wrapped Reichstag, 1995
The Gates, Central Park, 2005
Wrapped Motorcycle
1962
Activity: Spending Time and Money
Day job vs. Art 1962 Day job vs. Art 2005
Time and Money Example. . . .
In your ideal future?
Ugo Rondinone at Barbara Gladstone
Aligning purpose & time & formal
mission & logistical work that supports
the mission & the art itself & day jobs
& activit...
III. Business Plans
More than anything
else, a business plan
is a format for telling
that story.
It is also a
living, breathing, cha
nging pla...
Example:
Keith Hennessy and Circo Zero
How does Keith
Hennessy tell his
story?
The plan is a basic structure to communicate:
what, when, how, whom, where, why:
what are you offering?
when why now?
how ...
I. Executive Summary – summary of the whole what
II. The Marketplace – snapshot of the ‘big picture’ when/where
III. Descr...
Guest Artist
Caroline Woolard
[lunch 1:20-1:50]
Resource:
tools for seeing the big picture
Company
Suppliers
Customers
ComplementorsCompetitors
Adam Brandenburger and Barry Nalebuff’s Valuenet
(from Co-opetition, ...
IV. Break Even and Market Size
Does it run?
Market Size, Cost Structure, and
Breakeven
What does success—economic sustainability or surplus—look like?
How big is my a...
Cost Structure
Fixed Costs: overhead (rent, utilities). Does not vary with level of production.
Variable Costs: materials,...
market size
How many people are interested? How many of them can I reach?
Example: Warby Parker donations
• 1,000,000,000 ...
Breakeven Analysis
At what point to I recoup my costs and start making a profit?
Example:
To start a school, I need $5000 ...
Break even. . . .
Fixed Costs
/ OverheadUnit
contribution
Profit
Why is market size so important?
Market Size:
Income Statement Example
Revenues 1,000
Cost of Goods Sold 400
Gross Profit 600
Sales, General & Administrati...
Revenues 1,000
Cost of Goods Sold 400
Gross Profit 600
Sales, General & Administrative (SG&A) 300
Operating Profit 300
Int...
Break even. . . .
Fixed Costs
/ OverheadUnit
contribution
Profit
Break Even
Exercise
1. Identify all of the fixed costs of your organization.
2. What are the variable costs for each unit?...
5 strategies for bettering your breakeven –
finding sustainability and success
1. spread fixed costs over many units
2. share fixed costs by collaborating
3. Collaborate with “competitors” to increase
the size of the pie before you divide it up
Business models that increase th...
4. Be self aware about your business model and
its inherent strengths and vulnerabilities
Uniqlo sold 26 million fleeces in a market of 120 million people (22%)
5. Can you build your audience?
5. conclusions
review
Ultimately:
•why it’s special
•where it sits
•what’s at stake
Two types of
creativity:
letter and
envelope
The bric...
“Ask what econ can do for you and what you can
do for econ.”
It can help your work and life. And you can help shape
the cr...
attention
participation
generosity
Artist as Entrepreneur - LMCC Artist Summer Institute 2013
Artist as Entrepreneur - LMCC Artist Summer Institute 2013
Artist as Entrepreneur - LMCC Artist Summer Institute 2013
Artist as Entrepreneur - LMCC Artist Summer Institute 2013
Artist as Entrepreneur - LMCC Artist Summer Institute 2013
Artist as Entrepreneur - LMCC Artist Summer Institute 2013
Artist as Entrepreneur - LMCC Artist Summer Institute 2013
Artist as Entrepreneur - LMCC Artist Summer Institute 2013
Artist as Entrepreneur - LMCC Artist Summer Institute 2013
Artist as Entrepreneur - LMCC Artist Summer Institute 2013
Artist as Entrepreneur - LMCC Artist Summer Institute 2013
Artist as Entrepreneur - LMCC Artist Summer Institute 2013
Artist as Entrepreneur - LMCC Artist Summer Institute 2013
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Artist as Entrepreneur - LMCC Artist Summer Institute 2013

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A workshop given August 11, 2013, to artists, co-sponsored by Lower Manhattan Cultural Council and Creative Capital.

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  • As much as the problems with business are in the headlines, it is a creative time for legal and strategic structures for business.
  • 1776. Theory of Moral Sentiment in 1759 (sympathy)At a time when nations were like hoardersRead passage from bio of adam smith as a person
  • Attention – profound distraction – text-messaging etc. choose to be present. Chopping wood, carrying water.Participation – being gameGenerosity – especially if you are going to understand economics, generosity is that much more important. Assuming best intention. Doing work you believe in that might not be recognized, economically or otherwise, for years. Getting to be happy for your friends.
  • Making a painting is like writing a letter. Designing the envelope is building the structure of your working life, creating the ecosystem in which your artistic practice can thrive.
  • http://www.liquidmatrix.org/blog/wp-content/uploads/2009/09/brick.jpg
  • Met as prospective student. Didn’t like each other. Made search program. Couldn’t sell it.
  • A behavior not an identity. Steve Jobs was an artist and a designer. Being able to ask the biggest, messiest questions and not just ones where you can tell it’s going to have a perfect answer.
  • Emilio Grossi
  • http://www.altfg.com/Stars/h/harold-and-maude-cort-gordon.jpg
  • http://cdn2.mymovies.ge/backdrops/6d2/4d5ff62a7b9aa154cf0036d2/when-harry-met-sally-w1280.jpg
  • Could go off cliff for a number of reasons. Cost structure – fuel. Will people give you gas? Will others do what you do and run you off the road?
  • Plumbing store next to fancy boutiquesWhat if earthquake, no rents, and theneveryone needed plumbing fixtures(John Harvey boat)
  • Especially for performing arts organizations
  • 3 financial statements – balance sheet (what you have and what you owe), cash flow, income statement (what you make)
  • 3 financial statements – balance sheet (what you have and what you owe), cash flow, income statement (what you make)
  • (Photo: Levi Brown)
  • Education platform – making a bet on increasing the size of the art market. Andrew and the $1 billion. A rising tide lifts all boats.
  • What are your risks and vulnerabilities? Your possibilities?
  • Uniqlo founder Tadashi Yanai, above, is worth over $9 billion. "He is like Warren Buffett in Japan," says Uniqlo USA COO Shin Odake.   (Photo: Sarah McGee (Wall); Tomohiro Ohsumi/Bloomberg via Getty Images (Yanai))
  • Attention – profound distraction – text-messaging etc. choose to be present. Chopping wood, carrying water.Participation – being gameGenerosity – especially if you are going to understand economics, generosity is that much more important. Assuming best intention. Doing work you believe in that might not be recognized, economically or otherwise, for years. Getting to be happy for your friends.
  • Transcript of "Artist as Entrepreneur - LMCC Artist Summer Institute 2013"

    1. 1. Artist as Entrepreneur August 11, 2013 Artists Summer Institute Lower Manhattan Cultural Council / Creative Capital Amy Whitaker
    2. 2. agenda I. Creative Business Planning 11:00-11:30 Matthew Deleget 11:30-11:40 [break] 11:40-11:50 II. Time and Money 11:50-12:30 III. Business Plans 12:30-1:20 Caroline Woolard 1:10-1:20 [lunch] 1:20-1:50 IV. Break Even and Market Size 1:50-2:20 V. Conclusions and Questions 2:20-2:30
    3. 3. I. Creative Business Planning
    4. 4. Business plan = artist statement = grant proposal = a plan for your organization = hopes for the future committed to paper = your own to create = a work in progress
    5. 5. Why design a business structure as a creative practice? To protect the space of your work. To make time to create. To own your work so you can benefit or freely give it away. To amplify its reach. To find audiences. To get the most out of your own effort.
    6. 6. Everyone is an artist, and a businessperson. Goals: To migrate business thinking to the creative part of your brain To develop tools for seeing the big picture To practice business plan writing as a story-telling device
    7. 7. • “The founder of the science of business was one of the most unbusinesslike of mankind.” - Walter Bagehot on Adam Smith The founder of economics was an artist.
    8. 8. attention participation generosity
    9. 9. letter vs. envelope
    10. 10. Warby Parker
    11. 11. Maria Sacarias sports her first pair of glasses alongside Warby Parker co-founders Dave Gilboa and Neil Blumenthal and Amaya Xoch, a local entrepreneur trained by non-profit Community Enterprise Solutions to provide glasses to those in need. San Jorge, Solola, Guatemala
    12. 12. brick vs. house
    13. 13. Think of everything you can possibly do with a brick. . . .
    14. 14. The Brick
    15. 15. What else can I do with what I have? Where can I go from here?
    16. 16. Sometimes you’re dealing with a brick. Sometimes a whole house.
    17. 17. what is your lighthouse?
    18. 18. S.M.A.R.T. Targets As you move forward with your art, you are trying not just to accomplish known outcomes, but to discover new ones. How do you plan for this? You focus on what your lighthouse is, your guiding principle. This may be your mission, as in a nonprofit, or your defining question or idea, as in a start-up business. Specific Measurable Achievable Realistic Time-Bound
    19. 19. Point A Point B
    20. 20. Point A Point B
    21. 21. Point A Point B
    22. 22. + Design+ Art Asking Questions Refining Answers The biggest most important question even if messy to answer Iterative methodology driving toward optimal solution
    23. 23. That purpose—that “lighthouse” goal—is an important part of your story. It is the “major dramatic question” (the MDQ) that compels you forward. M.D.Q.
    24. 24. MDQ? • Can men and women really be friends? • What will happen with Harry and Sally?
    25. 25. Harold and Maude Can love transcend age?
    26. 26. Will Harry live? Will he save everyone else? Can you be ordinary and extraordinary at the same time? Can bravery triumph over evil?
    27. 27. Guest Artist Matthew Deleget
    28. 28. [break 11:40-11:50]
    29. 29. II. Time and Money
    30. 30. Ugo Rondinone at Rockefeller Center
    31. 31. Christo and Jean Claude
    32. 32. Wrapped Reichstag, 1995
    33. 33. The Gates, Central Park, 2005
    34. 34. Wrapped Motorcycle 1962
    35. 35. Activity: Spending Time and Money Day job vs. Art 1962 Day job vs. Art 2005
    36. 36. Time and Money Example. . . .
    37. 37. In your ideal future?
    38. 38. Ugo Rondinone at Barbara Gladstone
    39. 39. Aligning purpose & time & formal mission & logistical work that supports the mission & the art itself & day jobs & activities that inspire the work & rehearsal & a work in progress
    40. 40. III. Business Plans
    41. 41. More than anything else, a business plan is a format for telling that story. It is also a living, breathing, cha nging planning document for you.
    42. 42. Example: Keith Hennessy and Circo Zero
    43. 43. How does Keith Hennessy tell his story?
    44. 44. The plan is a basic structure to communicate: what, when, how, whom, where, why: what are you offering? when why now? how what is your business model? who are you and your partners? where what is the market you are serving? why what is your mission and purpose? What contribution is being made? What need is being filled? What is at stake?
    45. 45. I. Executive Summary – summary of the whole what II. The Marketplace – snapshot of the ‘big picture’ when/where III. Description of Business – what you will do what/how IV. Financials – start-up costs and operating costs how V. Management Team – about you and the team who VI. Supporting Materials www.sba.gov
    46. 46. Guest Artist Caroline Woolard
    47. 47. [lunch 1:20-1:50]
    48. 48. Resource: tools for seeing the big picture
    49. 49. Company Suppliers Customers ComplementorsCompetitors Adam Brandenburger and Barry Nalebuff’s Valuenet (from Co-opetition, 1996)
    50. 50. IV. Break Even and Market Size
    51. 51. Does it run?
    52. 52. Market Size, Cost Structure, and Breakeven What does success—economic sustainability or surplus—look like? How big is my audience? What contribution do I get from each thing bought? When do I clear the hurdle?
    53. 53. Cost Structure Fixed Costs: overhead (rent, utilities). Does not vary with level of production. Variable Costs: materials, hourly workers. Varies with level of output. Opportunity Costs: the cost of your next best alternative. The value of your time.
    54. 54. market size How many people are interested? How many of them can I reach? Example: Warby Parker donations • 1,000,000,000 people need eyeglasses. We aim to reach 1%, that’s 10 million people. 10% would be 100 million. • They have reached 50,000, which is 0.005%
    55. 55. Breakeven Analysis At what point to I recoup my costs and start making a profit? Example: To start a school, I need $5000 for rent, supplies, equipment. For each student, a foundation gives me $150. I have to spend $50 of that on supplies for that student. At what point do I break even? Break Even = Total Fixed Cost = 5000 = 5000 = Revenue – Variable Cost 150 – 50 100 50 students
    56. 56. Break even. . . . Fixed Costs / OverheadUnit contribution Profit
    57. 57. Why is market size so important?
    58. 58. Market Size: Income Statement Example Revenues 1,000 Cost of Goods Sold 400 Gross Profit 600 Sales, General & Administrative (SG&A) 300 Operating Profit 300 Interest Cost 50 Profit Before Taxes 250 Tax Cost 63 Net Income 188 You sell 100 x $10 tee-shirts. They cost you $4 to make. 60% 30%
    59. 59. Revenues 1,000 Cost of Goods Sold 400 Gross Profit 600 Sales, General & Administrative (SG&A) 300 Operating Profit 300 Interest Cost 50 Profit Before Taxes 250 Tax Cost 63 Net Income 188 They still cost you $4 to make. Now you only sell 50. 300 0 500 200 -50 0 -50 Market Size: Income Statement Example 2
    60. 60. Break even. . . . Fixed Costs / OverheadUnit contribution Profit
    61. 61. Break Even Exercise 1. Identify all of the fixed costs of your organization. 2. What are the variable costs for each unit? 3. What is the unit contribution? 4. What is the breakeven point? 5. How does this breakeven point relate to the size of your audience or market, existing or potential? 6. Are there points of collaboration or in-kind donation that would change the fixed cost base and create more flexibility or possibility or protection against risk?
    62. 62. 5 strategies for bettering your breakeven – finding sustainability and success
    63. 63. 1. spread fixed costs over many units
    64. 64. 2. share fixed costs by collaborating
    65. 65. 3. Collaborate with “competitors” to increase the size of the pie before you divide it up Business models that increase the size of the art world: You would rather have one quarter of a larger pie than half of a smaller pie.
    66. 66. 4. Be self aware about your business model and its inherent strengths and vulnerabilities
    67. 67. Uniqlo sold 26 million fleeces in a market of 120 million people (22%) 5. Can you build your audience?
    68. 68. 5. conclusions
    69. 69. review Ultimately: •why it’s special •where it sits •what’s at stake Two types of creativity: letter and envelope The brick and the house: material resourcefulness Finding your lighthouse Telling the story of your business plan Your business as a work of art
    70. 70. “Ask what econ can do for you and what you can do for econ.” It can help your work and life. And you can help shape the creative design problems of the economy itself.
    71. 71. attention participation generosity

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