Let me ask you a couple questions and be honest with your answers: Do you like expenses? Do you like paying bills? Do you like spending money? Do you like going shopping? Do you like buying things?
Your answers may vary: yes to some, no to others. In the end, every question equals one thing: money coming out of your pocket and going into someone else’s.
Now, let’s just stop here for a moment. In the last bookkeeping blog, we talked about income being a validation that someone enjoyed your art enough to want to buy it. Realistically, this is an expense for them. It’s money out of their pocket that came into yours.
Realize and become comfortable with the fact that your expenses are another person’s income. It’s the flow of abundance. When I make a sale, I know that someone is spending their money with me in good faith. Faith that I will pay my bills and stay in operation as an artist (which increases the value of their art as I build my successes). I’ve heard people grumble about paying their bills, paying their taxes, buying gas, buying groceries, and everything is getting more expensive. I’m sure you have too.
Now take a moment to flip it and think about who’s getting the income. The electric company gets paid so they can keep giving me power — without which I have no light from my natural light bulb or electricity for my computer. I pay my taxes so the firefighters can come to my house when something tries to catch on fire or so the road department can maintain the roads I need to use to get to and from my shows safely (not to mention the gas that goes in my car for these shows). I eat the groceries I buy from the store and they use the money to get more product in and pay their employees (who then have money to buy my art) and this keeps me from having to grow my all own food which would take time away from my art. And yes, if nothing else this last recession should have proven to you that the economy seeks balance and when it doesn’t do it naturally then bottoms fall out of markets until an equilibrium is reached.
Do you see what all these have in common? In some way, I as a person also benefit from paying my bills, usually both before and after paying the expense. It is the nature of income and expenses. So, I say it again: your income is someone else’s expense and your expense is someone else’s income. Love the flow.
Website costs, eBay/Paypal/Etsy/etc. fees, supplies, postage, envelopes, reference material and books, education costs, jury fees, booth costs, lodging, meals, travel — these are all examples of expenses.
Now the trick it to make sure that your income is always more than your expenses. It may take careful budgeting to do this since artists don’t usually have an even flow of income. But then again, a lot of businesses don’t have equal months. That’s why we have “Black Friday” – the day when retail businesses usually get out of the red because everyone does holiday shopping. Can you imagine having to support your business for ten and a half months before having one and a half where you actually make money? But, if your business is heavy in expenses in months where you don’t have the income to cover it, you may have to personally invest in your business. Let’s face it, every artist starting out will have to make a personal investment. It’s the nature of the business. Unless you can get “love money” — money from friends and family — you’re “hobby” isn’t going to get a business loan. If you do art shows, jury fees and booth fees aren’t going to be collected after they see how you do at the show. Nope, those are collected before the show. Brushes, printer paper, cleaning supplies, chisels, knives, pencils, pens, etc. are all expenses that need to be purchased so you can create your art.
Even after all your initial investment costs, you’ll have regular costs that will be maintained – websites to renew, brushes to replace, etc. These make it easy to budget. But they are still expenses. Hopefully, now that you understand the true nature of expenses, you won’t see expenses as a pure evil, but rather to see the cycle and have more understanding of the quote, “It takes money to make money.”