How to Start an Art Studio
If you are an artist, you may want to share your talent with others by teaching and giving them the opportunity to create their own art. If that is your passion, why not start your own art studio? It could be a great way for you to share your talent and make money at the same time.
Art Studio Industry Overview
An art studio offers a place for people to do various types of art, offering classes and individual lessons. They also sometimes have events such as a wine and painting night or art events for birthday parties.
According to IBIS World, the art classes industry size is $137 million as of 2021, with 5,220 businesses in the United States. The industry suffered during the pandemic due to the closures and restrictions.
Art classes and art studio space rental are popular with both adults and children. Wine and art events are growing as a part of the market. The industry, in general, is sensitive to economic fluctuations, decreasing during economic downturns.
Your target market will be those interested in art lessons or art events.
Skills, Experience, and Education Useful in Running an Art Studio
There are several specific skills that you will need to open your own art business.
- Experience. Experience working in an art studio would be valuable.
- Knowledge. You must be a talented artist and knowledgeable about art.
- Business knowledge and experience. You will need to have at least some basic knowledge of marketing, finance/accounting, and human resources.
- People skills. You’ll need to build rapport with your customers so that you retain them as customers and keep them coming back.
Checklist for Starting an Art Studio
Starting an art studio can be an incredibly rewarding experience, but it’s important to make sure you’re prepared for the challenges ahead. Use this checklist to help get your business started right.
Step 1: Write your Business Plan
After coming up with the idea, the next step in starting your art studio should be to write a business plan. The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, and more. You’ll also need to do some research to calculate exactly what your startup expenses will be and what your ongoing expenses will be.
Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you to think through all the aspects of the business and then serves as a guide as you begin.
Related: How to write a business plan
Step 2: Name the Business
Finding the perfect art studio business name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name. Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.
Step 3: Form a Business Entity
A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
When deciding on which business entity is best for an art studio, it normally comes down to the sole proprietorship and Limited Liability Company.
A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay. The corporation can be a good choice because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.
That leaves the sole proprietorship and LLC.
The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.
Related: Guide to forming your LLC
Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
Some popular LLC formation services include:
IncFile - $0 plus state fees & free registered agent for 1 year!
IncAuthority - $0 plus state fees & free registered agent the first year!
ZenBusiness - $49 plus state fees & free registered agent for 1 year!
Step 4: Select your Location
Starting an art studio from your own home is an excellent and low-cost way to get started, though you will want to verify if there are any city guidelines for running a home-based business. Many art studios start in a spare room, dining room, basement, or garage until deciding to move to a dedicated facility.
A commercial location provides the added benefit of higher visibility and dedicated gallery space, which brings the potential for more sales.
Since space isn’t needed to host an art class, consider working with an art studio or gallery to use their space. This helps the art studio or gallery owner by getting more people to their studio and you to only pay for space when needed and a built-in referral source for new students.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
A few common regulations for an art studio will likely include a state or local business license, sales tax permit, Employer Identification Number (EIN), and Certificate of Occupancy.
Step 6: Find Financing
Coming up with a good business idea and having the skills to run it are one thing but getting the funding to start an art studio is another. In order to get a loan, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total startup costs.
Step 7: Open a Business Bank Account
Keeping your business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.
Step 8: Get your Marketing Plan in Place
An art studio will need to set aside a budget to cover marketing costs on a continuous basis. Common marketing techniques for an art studio include setting up a booth at local art fairs, social media marketing, and online advertising. Developing a website can be a significant expense, but it can also give your art studio greater visibility online.
Step 9: Get Business Insurance
An art studio will want to consider several types of insurance to protect the business. A few of these include:
– General liability insurance can help protect you from third-party claims of bodily injury and property damage.
– Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.
– Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.
The cost to insure an art studio will vary based on a number of factors. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.
Step 10: Hire Employees
You may need employees to help you run your art studio. Make sure that you select people with appropriate experience and training.
In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system for your art studio is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.
The thought of accounting can be intimidating for a lot of new entrepreneurs. There are a number of ways of handling bookkeeping, from DIY to hiring a bookkeeper. These include:
- Pen and paper - Low expense, but difficult to track.
- Spreadsheet - Low expense, but easy to make errors.
- Accounting software - Medium expense, but owner typically inputs expenses. Some great accounting software programs include Freshbooks or Wave Accounting.
- Hire a bookkeeper - Higher expense, though very affordable at $100-$200 per month in most cases. A dedicated bookkeeper will probably save money because, in addition to handling all of the bookkeeping (so you can focus on the business), they also provide personalized tax advice and ensure the business is in compliance.
Find bookkeepers in your local area or use a service like 800Accountant.
How much does it cost to start an art studio?
Here are a few of the common costs you will face when you open an art studio.
– Studio space rental $500-$1,500 per month
– Furniture, shelving, tables, etc. $500-$5,000
– Art supplies such as paint, brushes, paper towels, easels, etc.
How profitable is an art studio?
If you charge $50 per hour for classes and get 10 people per class 5 days a week, plus $75 per hour for private lessons, and you do 5 per week, you will make $149,500 in revenue per year.
While this is an overly simple example, filling your art classes will be a challenge, and events will be very important to keep your revenue coming in. Being creative will be key!
Are there grants to start an art studio?
It’s extremely rare to find a grant to start an art studio. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.
Legitimate federal grants can be found at Grants.gov and you can check on your state’s economic development office to see if they have any grants available.
What is the NAICS code for an art studio?
The NAICS code for an art studio is 711510, which is classified as Independent Artists, Writers, and Performers.
The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.