Tuesday, June 09, 2009

mind your business

I run an art-based business, which means I am not only an artist, but a businessperson. A lot of my friends, who are also full-time artists, think I'm a business genius. The fact that I have an accounting system which helps me track invoices and expenses is what gives me the genius award. And last spring I paid back a very large business loan in about a year, which has also raised my status among my peers. Let me just say, the bar for being a business genius in the art world is very low. Many of my friends, who shall go unnamed, have no idea how much an item actually costs them to make, or what any of their profit margins are. As long as there is money in the bank, they are all set.

I have a confession to make: I am not a business genius. As my business has grown larger, my ability and willingness to handle my money has grown smaller. I get all kinds of statements from my bank, my credit card, and my credit card processors. I throw it all into a pile marked "statements" (in my mind) and that's it. I don't open them. As long as there is money in my bank with a balance around where I think it should be at when I go to the ATM, I am good to go.

Last week, I actually wanted to open a statement because I needed to make sure a transfer from PayPal had gone through. At the bottom of my statement I see this weird thing I've never seen before, because I don't open my statements. It says, "Business Link Reserve Account" and it claims I have a balance of ... let's just say a figure well into the four figures. Not the low four figures either. According to this statement, my automatic finance payment had just been made on this balance, and my finance charges to date this year was hundreds of dollars. I panic. It's after 5 pm and my bank is closed, so I scramble around for about an hour, tracking down all my unopened statements-- the fact that I don't just throw them away is what helps convince me I'm not completely irresponsible-- and find that I've been paying finance charges on a very large overdraft from two years ago. This reserve account is something I applied for through my bank to make sure all overdrafts on my business account were paid immediately. And then I immediately forgot that I had this account. The next day, after the manager at my bank did some research, it turns out that when that overdraft was made, I had the money, just in the wrong account. But I never realized any of this because... I don't open my statements. And I am not a business genius.

It took me about 24 hours to mentally recover from this snafu, and I'm not being shy about sharing my experience with my friends and with the people who read this blog. I feel like an failure, a loser (my husband very lovingly said to me, "You're not a loser baby, just kind of a fuck-up!") but I'm determined to start being a better businessperson. So I'm treating this issue like I'm an alcoholic, first by admitting that I have a problem: I'm scared of handling my money, and I hate making time to do it. Secondly, I need help. My mother, who is a genius, is flying into town in a few days and she is going to straighten my shit out. She's going to get my accounting program all up to speed and actually interfacing with my bank accounts, so I can start noticing when I'm paying finance charges. And I can spit out these things called "profit and loss statements".

One of my very successful artist friends told me she doesn't want to know what's going on with her money. She claims it's better that way for her. Of course I understand this feeling, since I am guilty of the same behavior. But I also know this is a fear-based reaction, and not knowing is not better, you just don't have to take any responsibility for what is happening in your business. You also don't have to take a long, hard look at any decisions you are making around your business that involve money. Think about that for a second. All the money you spend-- on supplies, on rent, on shows, on freight, on travel, on advertising, on labor, on commissions, -- is money you are spending without the analysis you need to know for yourself that you are making the best decision possible. How is that better?

Bottom line: a fully successful artist has to be a good businessperson too. You cannot have one without the other. I can sell work until the cows come home-- or whatever it is that cows do-- but if my money is not being used wisely once it hits my bank account, then what is it all for? You can post your nightmare money stories here.

25 comments:

  1. I bought a copy of quickbooks in November, installed it on my fancy new computer, and I still have yet to set it up.
    I am so guilty of intuitive banking! Thanks for cracking the whip Whitney!!!

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  2. Intuitive banking... that's exactly what it is! I like it.

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  3. Good post; thanks for sharing. I appreciate transparency like this, and it should help other artists out . . .

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  4. I'm much better tracking my minuscule in & outs of $$$ on my business than my real life. But I think I'm re-inventing the wheel with my huge excel spreadsheets, so I'm going to look into quickbooks. But I'm head in the sand when it comes to our family money with huge credit card accounts and being WAY upside down on our house...sigh...

    Thanks for sharing!

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  5. "Art Based BUSINESS" is a great term. I have been reading Heather King's lively clay posts and discussions on the business of art... this must be Business Week! Hopefully artists will be inspired to clean up our ways to succeed. Though finances are distasteful to me as well, I view it like the business side of my art is the only way I am able to make more art. My husbands says being successful has always afforded us more "options" and enables us to choose how we want to live -simply. Money is not such a bad thing. Thanks again for the honesty.

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  6. i'm glad you didn't name names . . . but more importantly, that is the most BEAUTIFUL teapot i've seen in a long time !!

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  7. You KNOW I wasn't talking about you baby (snicker) and thanks-- I LOVE the Teapot too!

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  8. "a fully successful artist has to be a good businessperson too", yes, exactly right, all too often we think the two are mutually exclusive. Excellent post!

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  9. You hit the nail on the head when you said that it was "a fear-based reaction". I was the same way with my personal finances for years and am slowly getting better about it. Sometimes it is tough to remember that just because you ignore a problem or situation, that does NOT make it go away.

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  10. I love your guts! This is my weakest link as a human being let alone a business person. I think making art a business is my way of getting in touch with money and the issues that surround it. Thanks for sharing your experience with such genuineness and heart :)

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  11. Thanks for the post! Business finance is always a touchy subject so appreciate your sharing. We all need to learn how to better manage the business of art!

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  12. I was an art-based businesswoman, so I can totally understand your points. I had different problem from yours. My another professional career is finance, therefore, I was extremely good at money. I believe the reason your friends called you "genius businessman" is that your are a good marketing person. I can do ok mareketing job but not as good as you and that is why I am not in that art-based business anymore.

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  13. oh yeah, Whitney I hear you!...you know, I was very lucky in school to have a professor who used to say "art is a BUSINESS, dont kid yourself!" hmmmph!...

    you are absolutely spot on on all accounts, but if I might add that one should not feel guilty if you dont have the gumption to set up quickbooks yourself and deal with it...I tried that and spent so much time entering and dealing w/ data, it sucked up half a day a week of precious studio time ( I AM pokey, I admit it!)..I think the important thing is to know when to call in help!...I save up all my scary papers in a big file box in categories, write em down in an old fashioned $10 ledger book as they come in and pass em off to a $50 a hit bookeeper every 2 months.....worth EVERY penny, as time is money in my book, and you need to know your strengths and when you need help!....thanks for outing yourself...my friend Michael who does the bookeeping, had great fun telling everyone he knew what a paper mess I am!..

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  14. I had a great laugh at your husband's statement. Mine would have said the same thing. Lovingly of course. I had to schedule a time each week to take care of my business finance issues. Boring, but if done each week it helped keep it from getting to be an overwhelming task. I like that part. Thanks for sharing and be well.

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  15. "I save up all my scary papers in a big file box in categories, write em down in an old fashioned $10 ledger book as they come in and pass em off to a $50 a hit bookeeper every 2 months.....worth EVERY penny, as time is money in my book."

    Yes, I absolutely agree with this. I called a bookeeper about 2 years ago. She said to get a years worth of statements together and she would get started. I hung up and didn't do a damn thing. My investment back then-- in time and money-- would have saved me thousands--literally!

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  16. It is very important to be in charge of your money. Otherwise it is in charge of you. I think that's what's wrong in this country. People choose to ignore their money or where it goes or who is handling it and what exactly they are doing with it... and then you have all this shit... yet it is sooo hard to take charge. Just like with exercise. My lifelong quest: Why is it so hard to do the things that are actually good for you! If anyone has an answer, just let me know! Another useful tracking device that I'm planning to use every day: mint.com!

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  17. Thanks for sharing both the good and the bad of being a successful artist!

    The business side of things is the unglamorous part of the job at least in my book - otherwise I'd be an accountant or economist or financial genius! ;)

    I was going to start the year off by setting up my accounting software...pause...it's installed but that's about it. All receipts, statements, etc go into a see through binder (as if that will remind me to take care of business).

    Glad to hear you're getting it straightened out.

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  18. I use a program called MYOB (mind your own business). I bought it because I liked the name. Once it is set up, you can write all your checks from it and it will automatically file them in the correct categories, making it very easy for end of the year taxes.
    You still have to open your statements to balance the books though, but it is easy to do on the computer.
    Great post, as usual.

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  19. Plan B: Marry someone who is good with money & such. Sure I love my wife, but she knows the real reason I married her was for her business degree. Just like I know she married me for my ability to kill spiders and lift heavy things

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  20. What a great post! Thanks so much for sharing. I'm 'trying' my best to get my shit together this year. Holy crap is it ever hard going from 'art brain' to 'business brain' and back. Where are those minions when you need them...

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  21. Great post...and good to read all the responses. I am hitting the lessons for MYOB..."mind your own business" programme... for the very reasons mentioned by you and others. Its a bout time to feel some kind of control, proper relationship to money. It is such good stuff when spent well and wisely. I'm over worrying about all the "cant dos" and trying to get better, bit by bit, at things I always put off...thinking I'm not good at them. It really is about not giving into fears by burying one's head. Small steps!

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  22. I love this post! Thank you, Whitney.

    It's good to be reminded that, as an artist, we aren't alone in this aspect of the business being a challenge. It's good to be kind to ourselves even as we work on getting better.

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  23. You are so funny! Thanks for telling it like it is. I throw all of my statements into a pile, too and open them every few months or so to check that I entered all of my bills into Quickbooks correctly. The only thing that saves me is online banking!

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  24. I've stumbled on the solution to compel me to keep on top of my bookkeeping; to store all of my physical statements and receipts in the biggest, most fabulous receptacle that I can find. Right now its a handmade reed basket and and its become a pleasure to deal with the chaos inside.

    Now if only I could fit all of my receipts into one of your domed cake stands I'd be organizing my finances ALL the time...

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  25. “I have a confession to make: I am not a business genius.” – That’s what I thought too. When I started my own business, I had some problems with accounting. I’m not a big fan of numbers and I’m afraid that I might screw my own business. I started searching for ways to keep me afloat of everything. Good thing I came across an accounting software that keeps me on top of my finances.

    Alyssa@GoItWorks.com

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