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

1. Artist as Entrepreneur
August 11, 2013
Artists Summer Institute
Lower Manhattan Cultural Council / Creative Capital
Amy Whitaker

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. I. Creative Business Planning

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. 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. 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. • “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. attention
participation
generosity

9. letter vs. envelope

10. Warby Parker

14. 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

15. brick vs. house

16. Think of everything you can possibly
do with a brick. . . .

17. The Brick

18. What else can I do with what I have?
Where can I go from here?

19. Sometimes you’re dealing with a brick.
Sometimes a whole house.

20. what is your lighthouse?

21. 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

22. Point
A
Point
B

23. Point
A
Point
B

24. Point
A
Point
B

25. + Design+ Art
Asking
Questions
Refining
Answers
The biggest most
important question even
if messy to answer
Iterative methodology
driving toward optimal
solution

28. 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.

29. MDQ?
• Can men and women really be friends?
• What will happen with Harry and Sally?

30. Harold and Maude
Can love transcend age?

31. Will Harry live? Will he save everyone else?
Can you be ordinary and extraordinary at the same time?
Can bravery triumph over evil?

32. Guest Artist
Matthew Deleget

33. [break 11:40-11:50]

34. II. Time and Money

35. Ugo Rondinone at Rockefeller Center

36. Christo and Jean Claude

37. Wrapped Reichstag, 1995

39. The Gates, Central Park, 2005

40. Wrapped Motorcycle
1962

42. Activity: Spending Time and Money
Day job vs. Art 1962 Day job vs. Art 2005

43. Time and Money Example. . . .

45. In your ideal future?

46. Ugo Rondinone at Barbara Gladstone

47. 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

48. III. Business Plans

49. 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.

50. Example:
Keith Hennessy and Circo Zero

53. How does Keith
Hennessy tell his
story?

54. 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?

55. 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

56. Guest Artist
Caroline Woolard

57. [lunch 1:20-1:50]

58. Resource:
tools for seeing the big picture

59. Company
Suppliers
Customers
ComplementorsCompetitors
Adam Brandenburger and Barry Nalebuff’s Valuenet
(from Co-opetition, 1996)

62. IV. Break Even and Market Size

64. Does it run?

65. 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?

66. 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.

67. 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%

68. 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

69. Break even. . . .
Fixed Costs
/ OverheadUnit
contribution
Profit

70. Why is market size so important?

71. 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%

72. 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

73. Break even. . . .
Fixed Costs
/ OverheadUnit
contribution
Profit

74. 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?

75. 5 strategies for bettering your breakeven –
finding sustainability and success

76. 1. spread fixed costs over many units

77. 2. share fixed costs by collaborating

78. 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.

79. 4. Be self aware about your business model and
its inherent strengths and vulnerabilities

80. Uniqlo sold 26 million fleeces in a market of 120 million people (22%)
5. Can you build your audience?

81. 5. conclusions

82. 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

83. “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.

84. attention
participation
generosity