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.