Hopefully, you will greet the new year better positioned than you began in last year. It’s time to think about your art gallery year-end business review, which is so essential to the strategic planning process.
There are steps you can take to wrap up the business year strong.
In this article, you will learn how to conduct a year-end review to provide insights that can help plan for what’s to come in the new year.
The art gallery year-end business review process helps you step outside of the day-to-day of running the gallery and really reflect on your business’s “big picture” vision, the artists you represent, collector base, and gallery staff.
The goal of your review process should be to:
- Recognize and celebrate gallery successes
- Identify what worked well and what did not
- Understand what you can do differently next year (minus a global pandemic, please)
As you sit down to create your art gallery’s year-end review, do it in a place where you will be uninterrupted and can be allowed to do some critical thinking.
Let’s look at five essential elements of a year-end gallery review.
A great place to start is to go back to your plan for the year. If you outlined your goals for the year back in January (and I hope you did), get that plan out, dust it off, and review it.
Remember your intentions for including some of those goals in your plan. What hasn’t been completed or even started? Can you make any progress in the remaining weeks of the year? It’s ok to simply begin a project that you have intended to get to all year but haven’t. The sense of accomplishment will help to boost your inspiration and motivation going into the new year.
Make a list of priority unfinished business. Identify one or two projects that you want to complete (or at least start) before the year ends. Are some projects no longer important?
Be realistic about your time and choose projects that will have the most significant impact on your business. We all have endless to-do lists, but honestly, most list items on that list will not contribute to your big picture goals.
Art Gallery Business Review Progress
This is the big one.
Make a list of everything your gallery accomplished this year. Did you add an online marketplace, create digital viewing rooms, become a master of Zoom?
This list should be comprehensive to get the most out of this exercise by seeing the big picture. Review your accomplishments in different categories of running a gallery. Your list might include things such as:
- Gallery management goals
- Unexpected opportunities and setbacks
- Sales and marketing initiatives
- Gallery events
- Artists roster changes
- Employee role changes
- Gallery space improvements
- Changes to your brand or gallery program
- New vendors or services used (Internet providers, shippers, framers, contractors, etc.)
You might be thinking, “I know what the gallery did last year. I don’t need to make a list”. Creating a list like this and seeing it in front of you, in black and white, is liberating. And sometimes an eye-opening. You may find that what you think is not the same as reality – for better or worse.
It helps you see the elements required to run your business with greater totality. You may find glaring inefficiencies, redundancies, and money wasters.
Next, analyze the impact each item on your list had on the business by briefly describing the success, lesson learned, and what you might change for next year.
The exercise allows you to look more closely at certain items on the list. You may recognize some areas where your efforts are taking time and resources that may be better allocated somewhere else next year.
Preparing your Financials
Getting the books in order is probably the least fun activity at the end of the year, but it is a necessary evil. This is an important task to complete as part of a year-end review and will help you go into the new year with a better idea of where your business stands financially.
Tax season also tends to fall during the busiest time in the art world. Getting your books in order now will help alleviate stress when the taxman comes knocking.
Here are a few basics for preparing your financials at the end of the year. Some of these may seem obvious, but they can be too easy to put off for another time.
- Resolve outstanding accounts and ensure all contractors and artists are paid in full by the end of the year. Each contractor will need a 1099-MISC form sent by January 31st.
- Identify any outstanding payments due for artworks sold.
- Get your books in order by creating an income statement, ensuring all revenue and expenses are updated and itemized.
- Review your cash flow to determine if you will have enough cash on hand to get through the end of the year and the beginning of next year for upcoming expenses.
- Make an appointment with your accountant to discuss the taxes your gallery may owe; discuss any moves you can make before year’s end to reduce that burden, and be informed of any new changes that may affect your filing.
Your gallery’s business banker can also be a beneficial resource for guiding your financials and setting overall goals for the years ahead.
Review your Client List
You may have heard that 80 percent of a company’s revenues typically come from 20 percent of their clients. An art gallery business may generate the majority of their income from fewer than 20 percent of their collector base, making them even more valuable.
Do you know what percentage contributes to the majority of your art gallery’s revenue? The collectors who make up that percentage possibly change from year to year. This year, in particular, may have been different if you focused on online sales.
As part of your art gallery’s year-end business review, examine your collector base to identify and determine how you can better serve them in the upcoming year. Tag them in your contact database so you can quickly identify them throughout the coming year. Knowing precisely who these supporters are is critical to your gallery’s success and should absolutely be part of your year-end review.
You may want to consider doing something special for them before the year ends to show your gratitude for supporting your artists and the gallery during such a challenging time.
The Small Things That Make a Difference
Ending the year strong might also include clearing out some clutter that can weigh you down productively, mentally, and physically. Spend a little time cleaning up storage rooms, office spaces, computer files, and overflowing inboxes.
Take an inventory of your printed sales and marketing materials and eliminate anything outdated and place orders for what’s running low.
The end of the year is also a perfect time to clean up your mailing list. Get rid of bounced email addresses and those who unsubscribed. You might also consider segmenting those who have been un-engaged so that you can send them a re-engagement campaign.
Clearing the clutter can be so very satisfying.
To the Point
As a gallery owner or director, you’ll likely be the one driving the year-end review, but you don’t have to do it alone. It makes sense to involve your artists and gallery staff. At some point in the review process, seek out their input. Their perspective will be unique and can provide you with a broader view of the gallery business’s health.
Information is power. You want your art gallery year-end business review process to reveal actionable ideas that can best guide your business planning next year and help you work more efficiently.
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