Working as an artist and budgeting for my own business started out as a frustrating tug of war, until I learned a few easy budgeting lessons and started to simplify things.
In the beginning, I would shove all of my receipts into a bag and wait to log them at the end of the year. In addition, I instantly turned over all of the money I earned into more supplies and failed to invest money into ways I could promote my business or learn new skills. Worst of all, I started to use a lot of credit cards and found myself digging a hole.
After asking my other self employed friends, I started to track how I spent my money and how much I made. Every single penny. In addition, I had a meeting with my tax accountant to discuss tips as to what I could deduct for my business and other ways to be financially smart with my business.
Six months later, I created a budget based on my initial information, but continued to track my money, as I wanted to better learn the ebbs and flows of my particular business.
Based on my six month budget, I took the month with the least amount of earnings and started my budget there. From that amount, I based my budget. I took one amount for my salary and insurance, another amount for my materials and third amount for expenses such as communications and advertising. I labeled three envelopes and put the appropriate amount of money in each of these envelopes. On a month where the amount goes over this base budget goes into savings. This money is set aside for new equipment, travel or education.
Then I created a flat year-long calendar. There, I jotted down potential art shows and their costs, yearly fees for organizations, website renewals and the yearly glass sale that where I get a good portion of my discounted materials. I broke down these costs into a monthly fee and created a money envelope for each of these expenses.
Since creating this uncomplicated, basic, but efficient budget, my business finances have been easy to manage.
What has been trickier was managing my own creative wants and needs. As an artist, I am always interested in purchasing new supplies and having a vast array of supplies around me. In an ideal world, I would have a stocked studio. By following my budget, I only purchase what I need, occasionally purchasing experimental items, when my budget allows for this sort of expense.
Instead of finding this thrift limiting, I have found the opposite to be true. By working with a limited selection of glass, I have created cohesive collections, using all of my creative skills.
As a marketer, I now look for more creative and inexpensive ways to promote my work. I started to teach glass, as well as donate my jewelry to non-profit auctions. I began to network and collaborated with creative circles, pooling our advertising money.
Lastly, with my savings, I have taken advantage of multi-year discounts for website hosting. I have also taken some intensive courses to learn new skills. Most of all, I have a bit of a cushion, and peace of mind, something that all business owners appreciate.