If you have eyes for good artworks, as well as a penchant for doing business, then you may want to start your own art gallery. The market for artworks has continued to soar from generation to generation because people still appreciate art.
Depending on the scale you want to start, the startup capital for this type of business can range from moderate to high. As a matter of fact, it is advisable to run an art studio alongside your art gallery if indeed you want to maximize profits in this business.
If you are sure you want to do this business after you must have conducted your market research and feasibility studies, then the next step to follow is to write a good business plan; a detailed blue print of how you intend raising your seed capital, setting up the business, managing the flow of the business, sorting out tax and marketing your services amongst others.
A Sample Art Gallery Business Plan Template
Table of Content
- 1. Industry Overview
- 2. Executive Summary
- 3. Our Products
- 4. Our Mission & Vision Statement
- 5. Roles and Responsibilities
- 6. SWOT Analysis
- 7. MARKET ANALYSIS
- 8. Our Target Market
- 9. SALES AND MARKETING STRATEGY
- Sales Forecast
- 10. Publicity and Advertising Strategy
- 11. Startup Expenditure (Budget)
- 12. Generating Startup Capital for Parkston Livermore® Art Gallery, Inc.
- 13. Sustainability and Expansion Strategy
1. Industry Overview
The art gallery and museum industry comprises of art galleries, museum and art auction houses that primarily retail original and limited-edition artworks. Art galleries usually purchase artwork from an artist or individual owner and then sell the artwork to consumers, with little or no further development to the product. Auction houses that bring buyers and sellers together and collect a commission are part of this industry.
The gallery and museum industry is highly fragmented, with most operators having from one to four employees. However, on the opposite end, though smaller in number, the industry also includes multi-billion dollar institutions such as Sotheby’s and Christie’s International.
Over the five years to 2022, industry revenue is projected to grow. Contemporary art has become a considerable growth segment as the number of traded artworks increases and this trend is not expected to slow down anytime soon.
The Art Galleries and Museum industry is a thriving sector of the economy of the united states and the industry generates over billion annually from more than 3,561 art galleries and museums scattered all around the United States of America.
The industry is responsible for the employment of over 23,213 people. Experts project the industry to grow at a 1.5 percent annual rate. Christie’s International and Sotheby’s Holdings Inc. are the market leaders in this industry.
A recent report published by IBISWorld shows that in the art gallery and museum industry, capital intensity is determined by the ratio of capital to labor. In the absence of official data on capital and labor costs, depreciation and wage costs are used as proxies.
For the Art Gallery and Museum industry, the average operator spends $0.06 on capital for every dollar spent on labor. This ratio indicates a low level of capital intensity and reflects the industry’s emphasis on hiring and retaining high-quality personnel.
Sourcing and valuing artwork is crucial to the success of an art dealership, and these activities require highly skilled labor. Retailers and auctioneers are also required to provide knowledge of the products and an ability to place a value on new stock.
The art gallery and museum industry is a profitable industry and it is open for any aspiring entrepreneur to come in and establish his or her business. With the right location and network, you will just be fine with this business.
2. Executive Summary
Parkston Livermore® Art Gallery, Inc. is a registered art gallery that will be located in one of the busiest roads in Orlando – Florida. We have been able to lease a facility along a major road that is big enough for the kind of art gallery that we intend launching and the facility is located in a corner piece property.
Parkston Livermore® Art Gallery, Inc. will be involved in auctioning off art, retailing art privately, retailing art through galleries, art gallery exhibitions, merchandise sales, other products and services and renting of art works. We will also partner with leading artists in and around the United States of America.
We are aware that there are several large and small art galleries all around Orlando – Florida, which is why we spent time and resources to conduct our feasibility studies and market survey so as to offer much more than our competitors will be offering.
Much more than retailing and renting out various types of art works, our customer care will be second to none in the whole of Orlando – Florida. We know that our customers are the reason why we are in business which is why we will go the extra mile to get them satisfied when they visit our art gallery.
Parkston Livermore® Art Gallery, Inc. will ensure that all our customers are given first class treatment whenever they visit our art gallery. We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large they are. We will ensure that we get our customers involved when making some business decisions that directly affect them.
We are aware of the trend in the art gallery and museum industry and we are not only going to operate a system where our customers would have to come to our art gallery to make purchase, but we will also operate an online art gallery and our customers can order art works and related merchandize online and they will get it delivered to their houses or any location they want us to deliver the goods to.
Parkston Livermore® Art Gallery, Inc. is a family business that is owned by Parkston Livermore and his immediate family members. Parkston Livermore is an artist par excellence, he has a B.A. in Fine Arts, with over 15 years’ experience in the art gallery and museum industry, working for some of the leading brands in the United States.
Although the business is launching out with just one outlet in Orlando – Florida, but there is a plan to open other outlets all around Florida and perhaps in other key cities in the United States of America.
3. Our Products
Parkston Livermore® Art Gallery, Inc. is in the art gallery and museum industry to make profits and we will ensure we go all the way to make available a wide range of art works from different artists and other related merchandize to our clients. Our product and service offerings are listed below;
- Other related artifacts and merchandize
4. Our Mission & Vision Statement
- Our vision is to become the leading art gallery in Florida by running a one stop art gallery.
- Our mission is to establish an art gallery that will make available a wide range of art works (paintings, drawings, prints, sculptures, photography and other merchandise) at affordable prices to our clients.
Our Business Structure
Parkston Livermore® Art Gallery, Inc. does not intend to start a small art gallery; our intention going into this line of business is to build a one stop art gallery in Orlando, Florida. Although our art gallery might not be as big as multi-billion dollar institutions such as Sotheby’s and Christie’s International, but we will ensure that we put the right structure in place that will support the kind of growth that we have in mind.
We will ensure that we hire qualified, honest and customer centric people that are ready to work to help us build a prosperous business. As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of ten years or more.
In view of that, we have decided to hire qualified and competent hands to occupy the following positions;
- Chief Executive Officer (Owner)
- Gallery Manager
- Human Resources and Amin Manager
- Merchandize Manager
- Sales and Marketing Manager
- Information Technologist
- Customer Services Executive
5. Roles and Responsibilities
Chief Executive Officer – CEO (Chief Florist):
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
- Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
Admin and HR Manager
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products
- Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs
- Enhances department and organization reputation by accepting ownership for accomplishing new and different requests; exploring opportunities to add value to job accomplishments
- Defines job positions for recruitment and managing interviewing process
- Carries out staff induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for arranging travel, meetings and appointments
- Oversees the smooth running of the daily office activities
- Responsible for managing the daily activities in the art gallery
- Ensures that proper records of art works are kept and our racks and warehouse does not run out of products
- Ensures that the art gallery facility is in tip top shape and art works are properly arranged and easy to locate
- Controls goods distribution and supply inventory
- Supervises the workforce
- Manages vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
- Responsible for the purchase of art works (paintings, drawings, prints, sculptures, photography and other merchandize) for the organization
- Responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
Sales and Marketing Manager
- Sources for avenues for us to exhibit our artworks and generate sales
- Manages external research and coordinates all the internal sources of information to retain the organizations’ best customers and attract new ones
- Models demographic information and analyzes the volumes of transactional data generated by customer purchases
- Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
- Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
- Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
- Develops, executes and evaluates new plans for expanding sales
- Documents all customer contact and information
- Helps to increase sales and growth for the company
- Manages the organizations website
- Handles the eCommerce aspect of the business
- Responsible for installing and maintenance of computer software and hardware for the organization
- Manages logistics and supply chain software, Web servers, e-commerce software and POS systems
- Manages the organization’s CCTV
- Handles any other technological and IT related duties.
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides management with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions
- Responsible for financial forecasting and risks analysis
- Performs cash management, general ledger accounting, and financial reporting
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensures compliance with taxation legislation
- Handles all financial transactions for the organization
- Serves as internal auditor for the organization
Client Service Executive
- Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with customers on the phone, uses every opportunity to build client’s interest in the company’s products and services
- Manages administrative duties assigned by the human resources and admin manager in an effective and timely manner
- Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to customers when they make enquiries (answer customer queries regarding the store and the merchandise)
- makes suggestions and encourage purchase of products
- Bags, packages or gift wrap merchandise
- Responsible for cleaning the art gallery facility at all times
- Ensures that toiletries and supplies don’t run out of stock
- Handles any other duty as assigned by the gallery manager
6. SWOT Analysis
Our intention of starting just one outlet of our art gallery in Orlando – Florida is to test run the business for a period of 2 to 5 years to know if we will invest more money, expand the business and then open other outlets in key regions within the United States of America.
We are quite aware that there are several art galleries all over Orlando and even in the same location where we intend locating ours, which is why we are following the due process of establishing a business.
We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be welled equipped to confront our threats.
Parkston Livermore® Art Gallery, Inc. employed the services of an expert HR and Business Analyst with bias in new businesses to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives.
This is the summary of the SWOT analysis that was conducted for Parkston Livermore® Art Gallery, Inc.;
Our location, the business model we will be operating on (physical art gallery and online art gallery), varieties of payment options, wide range of art works and related products and our excellent customer service culture will definitely count as a strong strength for Parkston Livermore® Art Gallery, Inc.
A major weakness that may count against us is the fact that we are a new art gallery and we don’t have the financial capacity to compete with multi-billion dollar art galleries who are already determining the market direction for the art gallery and museum industry in the United States.
Factors such as improved household expenditure from wealthy consumers will lead to renewed demand. The fact that art dealers reduced minimum price guarantees, inventory and advertising to remain stable will encourage spending on art
The fact that we are going to be operating our art gallery in one of the busiest streets in Orlando – Florida provides us with unlimited opportunities to sell our art works and related products to a large number of people. We have been able to conduct thorough feasibility studies and market survey and we know what our potential clients will be looking for when they visit our art gallery; we are well positioned to take on the opportunities that will come our way.
Just like any other business, one of the major threats that we are likely going to face is economic downturn. It is a fact that economic downturn affects purchasing/spending power. Another threat that may likely confront us is the arrival of a new art gallery and museum in same location where ours is located.
7. MARKET ANALYSIS
- Market Trends
Despite a highly competitive environment, the Art Galleries and Museum industry has achieved modest growth over the last five years. Art galleries and museums contend with other leisure, sporting and entertainment organizations for a share of consumer expenditure and government funding. As a result, the industry has developed special exhibitions and interactive educational displays to attract new visitors and retain existing patrons.
Art galleries and museums have continued to reposition themselves as social institutions, widening their appeal to new audiences and helping them secure government grants. Successful art gallery and museum operators have made use of existing and emerging digital media to offer online virtual museums.
In this era when the online community is growing rapidly, you would do your business a whole lot of favor if you create your own online presence. One of the easiest ways to get people to see you as an expert in your line of business is to blog constantly about art works.
You may also want to leverage on social media platforms like Instagram, Facebook, and Twitter, and others to publicize your art gallery and art works. You can as well go ahead to open an online art gallery where people can order art works and related merchandize from your art gallery. You must ensure that your delivery system (shipping) is efficient if you intend to do well with your online art gallery.
8. Our Target Market
There are loads of people who love to have art works in their houses or offices. This goes to show that if an art gallery is well positioned, they will continue to sell their art works to a wide range of clients on a regular basis.
In view of that, we have positioned our art gallery to service residents of Orlando, Florida and the entire United States via our online art gallery shop. We have conducted our market research and we have ideas of what our target market would be expecting from us.
We are in business to retail a wide range of art work and related merchandize to the following groups of people;
- Interior Decorators
- Home Remodelers
- Event Planners
- Churches and other religious centers
- Funeral Homes
- Bachelors and Spinsters
- Corporate Executives
- Business People
- Sports Men and Women
A close study of the art gallery and museum industry reveals that the market has become much more intensely competitive over the last decade. As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in this industry. We are aware of the competition and we are prepared to compete favorably with art galleries and other leading art studios that retail art works in and around Orlando – Florida.
Parkston Livermore® Art Gallery, Inc. is launching a standard art gallery that will indeed become the preferred choice of art lovers in and around Orlando – Florida. Our art gallery is located in a corner piece property on a busy road directly opposite one of the largest residential estates in Orlando – Florida.
One thing is certain; we will ensure that we have a wide range of art works and related products available in our art gallery at all times. It will be difficult for customers to visit our store and not make a purchase. One of our business goals is to make Parkston Livermore® Art Gallery, Inc. a one stop art gallery. Our excellent customer service culture, online store, various payment options and highly secured facility will serve as a competitive advantage for us.
Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the art gallery and museum industry, meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives. We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Parkston Livermore® Art Gallery, Inc. is in business to retail and rent out a wide range of art works to people who live in and around Orlando – Florida. We are in the art gallery and museum industry to maximize profits and we are going to go all the way to ensure that we achieve or business goals and objectives.
Our source of income will be the retailing of a wide range of art works and other related products at affordable prices. We will generate income by;
- Retailing Paintings
- Retailing Drawings
- Retailing Prints
- Retailing Sculptures
- Retailing Photography
- Other related artifacts and merchandize
One thing is certain when it comes to art gallery, if your art gallery facility is well stocked and centrally positioned, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.
We are well positioned to take on the available market in Orlando – Florida and we are quite optimistic that we will meet our set target of generating enough income from the first six months of operation and grow the business and our clientele base.
We have been able to critically examine the art gallery and museum industry, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projection is based on information gathered on the field and some assumptions that are peculiar to startups in Orlando – Florida.
- First Fiscal Year: $250,000
- Second Fiscal Year: $750,000
- Third Fiscal Year: $1.5 Million
N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same products and customer care services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.
- Marketing Strategy and Sales Strategy
Before choosing a location for Parkston Livermore® Art Gallery, Inc., we conduct a thorough market survey and feasibility studies in order for to penetrate the available market and become the preferred choice. We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want to attract per time.
We hired experts who have good understanding of the art gallery and museum industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Orlando.
In other to continue to be in business and grow, we must continue to sell the art works and related products that are available in our art gallery which is why we will go all out to empower or sales and marketing team to deliver. In summary, Parkston Livermore® Art Gallery, Inc. will adopt the following sales and marketing approach to win customers over;
- Open our art gallery in a grand style with a party for all
- Introduce our art gallery by sending introductory letters alongside our brochure to organizations, religious centers, interior decorators, home remodelers, households and key stake holders in Orlando – Florida
- Ensure that we have a wide range of art works (paintings, drawings, prints, sculptures, photography and other merchandize) in our art gallery at all times
- Make use of attractive hand bills to create awareness and also to give direction to our art gallery
- Position our signage/flexi banners at strategic places around Orlando
- Position our greeters to welcome and direct potential customers
- Create a loyalty plan that will enable us reward our regular customers
- Engage on roadshows within our neighborhood to create awareness for our art gallery
10. Publicity and Advertising Strategy
Despite the fact that our art gallery is well located, we will still go ahead to intensify publicity for the business. We are going to explore all available means to promote Parkston Livermore® Art Gallery, Inc.
Parkston Livermore® Art Gallery, Inc. has a long – term plan of opening outlets in various locations all around Florida which is why we will deliberately build our brand to be well accepted in Orlando before venturing out. As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand.
Here are the platforms we intend leveraging on to promote and advertise Parkston Livermore® Art Gallery, Inc.;
- Place adverts on community based newspapers, radio and TV stations
- Encourage the use of word of mouth publicity from our loyal customers
- Leverage on the internet and social media platforms like YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Google+ and other platforms to promote our business
- Ensure that our we position our banners and billboards in strategic positions all around Orlando – Florida
- Distribute our fliers and handbills in target areas in and around our neighborhood
- Advertise Parkston Livermore® Art Gallery, Inc. business in our official website and employ strategies that will help us pull traffic to the site
- Brand all our official cars and vans and ensure that all our staff members and management staff wear our branded shirt or cap at regular intervals.
Our Pricing Strategy
Pricing, uniqueness and quality are some of the key factors that gives leverage to art galleries, it is normal for art lovers to go to places where they can get art works and related merchandise at cheaper price.
We know we don’t have the capacity to compete with bigger and well – established galleries, but we will ensure that the prices of all the products that are available in our art gallery are competitive with what is obtainable amongst art galleries within our level.
- Payment Options
The payment policy adopted by Parkston Livermore® Art Gallery, Inc. is all inclusive because we are quite aware that different customers prefer different payment options but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that Parkston Livermore® Art Gallery, Inc. will make available to her clients;
- Payment via bank transfer
- Payment with cash
- Payment via credit cards / Point of Sale Machines
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
In view of the above, we have chosen banking platforms that will enable our client make payment for products purchase without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.
11. Startup Expenditure (Budget)
In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting a place, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.
This means that the start-up can either be low or high depending on your goals, vision and aspirations for your business.
The tools and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked. As for the detailed cost analysis for starting an art gallery business; it might differ in other countries due to the value of their money. These are the key areas where we will spend our startup capital;
- The total fee for registering the business in the United States of America – $750
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300
- Marketing promotion expenses for the grand opening of Parkston Livermore® Art Gallery, Inc. in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580
- The cost for hiring Consultant – $2,500
- Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400
- The cost for payment of rent for 12 months at $1.76 per square feet in the total amount of $105,600
- The cost for facility remodeling (construction of racks and shelves) – $20,000
- Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500)
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
- The cost for start-up inventory (stocking with a wide range of art works, and other related merchandize) – $250,000
- The cost for store equipment (cash register, security, ventilation, signage) – $13,750
- The cost of purchase and installation of CCTVs – $5,000
- The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $4,000
- The cost of launching a website – $600
- The cost for our opening party – $5,000
- Miscellaneous – $5,000
We would need an estimate of $450,000 to successfully set up our art gallery in Orlando – Florida.
12. Generating Startup Capital for Parkston Livermore® Art Gallery, Inc.
Parkston Livermore® Art Gallery, Inc. is a private business that is solely owned and financed by Parkston Livermore and his immediate family members. They do not intend to welcome any external business partners which is why he has decided to restrict the sourcing of the startup capital to 3 major sources.
These are the areas we intend generating our startup capital;
- Generate part of the startup capital from personal savings
- Source for soft loans from family members and friends
- Apply for loan from my Bank
N.B: We have been able to generate about $150,000 (Personal savings $100,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $300,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.
13. Sustainability and Expansion Strategy
The future of a business lies in the number of loyal customers they have, the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business close shop.
One of our major goals of starting Parkston Livermore® Art Gallery, Inc. is to build a business that will survive off its own cash flow without the need of injecting finance from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to retail our art works and other related merchandize a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.
Parkston Livermore® Art Gallery, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of.
Our company’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Leasing of facility and remodeling the art gallery: In Progress
- Conducting Feasibility Studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Graphic Designs and Printing of Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Purchase of the Needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business both online and around the community: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Opening planning: In Progress
- Compilation of our list of products that will be available in our shop: Completed
- Establishing business relationship with artists and vendors – suppliers of art works and related merchandise (paintings, drawings, prints, sculptures, photography and other merchandise) In Progress.