Art Gallery Business Plan Template
If you want to start an art gallery or expand your current art gallery, you need a business plan.
The following art gallery business plan template gives you the key elements to include in a winning art gallery business plan.
Art Gallery Business Plan Example
I. Executive Summary
Business Overview
The [Company Name] art gallery has been exhibiting a wide variety of art mediums since [year]. Located at [address], we present thousands of oil paintings, watercolor drawings, handmade crafts (sculpture, wood and ceramic artworks) made by amateur and professional artists. The wide range styles featured in [Company name] art gallery varies from classics, realism, social realism to abstractionism and surrealism.
Products Served
[Company Name] focuses on featuring various artists’ paintings, drawings, sculpture, and artworks in its gallery, as well as its online platform. It also fulfills individual orders from clients. The [Company Name] has a team of artists that will create the works of the client’s choice in any required colours and of any required size. The founder will also show and sell his own work in the Gallery, as well as produce commission portraits and other work.
Customer Focus
[Company Name] will primarily serve the residents who live within a 10 mile radius of our gallery. The demographics of these customers are as follows:
- 27,827 residents
- 1,750 workers (who do not live the neighborhood)
- Average income of $54,700
- 38.9% married
- 49.6% in Mgt./Professional occupations
- Median age: 34 years
Management Team
[Company Name] is led by [Founder’s Name] who has been in the art industry for 20 years. He has an in-depth knowledge of the art industry including creation, operations (e.g., running day-to-day operations), business management (e.g., staffing, marketing, etc.) and education, which includes art history and trends.
Success Factors
[Company Name] is uniquely qualified to succeed for the following reasons:
- There is currently no art gallery devoted to both international and local artists in the community. In addition, we have surveyed the local population and received extremely positive feedback saying that they explicitly want to frequent our business when launched, both from clients and artists.
- Our location is in a high-volume area with little direct traffic, and will thus be highly convenient to significant numbers of passersby each day.
- The management team has a track record of success in the art industry.
Financial Highlights
[Company Name] is currently seeking $460,000 to launch. Specifically, these funds will be used as follows:
- Art gallery design/build: $170,000
- Working capital: $290,000 to pay for marketing, salaries, and artwork costs until [Company Name] reaches break-even.
Top line projections over the next three years are as follows:
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $1,080,000 | $2,472,768 | $2,830,825 | $3,240,728 | $3,709,986 |
| Total Expenses | $962,000 | $1,539,107 | $1,719,742 | $1,901,321 | $2,112,641 |
| EBITDA | $118,000 | $933,661 | $1,111,082 | $1,339,407 | $1,597,344 |
| Depreciation | $25,600 | $25,600 | $25,600 | $25,600 | $25,600 |
| EBIT | $92,400 | $908,061 | $1,085,482 | $1,313,807 | $1,571,744 |
| Interest | $29,946 | $26,202 | $22,459 | $18,716 | $14,973 |
| Pre Tax Income | $62,455 | $881,858 | $1,063,023 | $1,295,091 | $1,556,772 |
| Income Tax Expense | $21,859 | $308,650 | $372,058 | $453,282 | $544,870 |
| Net Income | $40,595 | $573,208 | $690,965 | $841,809 | $1,011,902 |
II. Company Overview
Who is [Company Name]?
The [Company Name] art gallery has been exhibiting a wide variety of art mediums since [year]. Located at [address], we present thousands of oil paintings, watercolor drawings, handmade crafts (sculpture, wood and ceramic artworks) made by amateur and professional artists. The wide range styles featured in [Company name] art gallery varies from classics, realism, social realism to abstractionism and surrealism.
The wide range styles featured in [Company name] art gallery varies from classics, realism, social realism to abstractionism and surrealism. The works are made in different techniques: oil, acryl, watercolors, ink drawing, etc. We update our artworks sections as we invite new artists and curate pieces that fit the taste of our clients.
[Company Name]’s History
An artist himself, [Founder’s Name] graduated with a Bachelor of Fine Arts degree from [University]. He has been painting since [Year] and teaching since [Year]. His work has been featured at many art galleries and shows and even sold [x] of his pieces in the past 12 months.
With his extensive experience in art, he decided to open up his own gallery to feature not just his own works but other artists’ and his students’ pieces. He desires to promote art appreciation and creative self-expression through his art gallery.
[Company Name]’s Products/Services
[Company Name] focuses on featuring various artists’ paintings, drawings, sculpture, and artworks in its gallery and online platform. It also fulfills individual orders from clients. The [Company Name] has a team of artists that will create the works of the client’s choice in any required colours and of any required size.
[Founder’s Name] owners will also show and sell his own work in the Gallery, as well as produce commission portraits and other work.
III. Industry Analysis
The Art Gallery industry is highly fragmented, with only a small number of large operators. Over the past five years, the industry has benefited from increases in disposable income and in the number of households earning incomes of more than $100,000. However, the period was also marked by political and economic uncertainty that drove revenue declines enough to offset growth. Overall, revenue for the Art Dealers industry is anticipated to decrease an annualized rate of 2.2%.
The majority of industry revenue is generated through the sale of affordable pieces, both by large auction houses and by small gallery operators. Online sales are generating an increasingly large portion of sales for industry operators and contributing to the globalization of the industry but also increase the level of external competition posed by foreign markets.
Over the next five years, industry revenue is forecast to rebound and grow at an annualized rate of 4.3%. Industry growth will be driven by continuing the popularity of contemporary art, rising disposable income and an increasing number of museums seeking to make high-priced purchases to entice visitors.
IV. Customer Analysis
[Company Name] will serve the residents of [company location] and the immediately surrounding areas.
The area residents we serve are affluent and are expected to spend more on art pieces per capita than the national averages.
The precise demographics of the town in which our retail location resides is as follows:
| Springdale | Wyndham | |
|---|---|---|
| Total Population | 26,097 | 10,725 |
| Square Miles | 6.89 | 3.96 |
| Population Density | 3,789.20 | 2,710.80 |
| Population Male | 48.04% | 48.84% |
| Population Female | 51.96% | 51.16% |
| Target Population by Age Group | ||
| Age 18-24 | 3.68% | 3.52% |
| Age 25-34 | 5.22% | 4.50% |
| Age 35-44 | 13.80% | 13.91% |
| Age 45-54 | 18.09% | 18.22% |
| Target Population by Income | ||
| Income $50,000 to $74,999 | 11.16% | 6.00% |
| Income $75,000 to $99,999 | 10.91% | 4.41% |
| Income $100,000 to $124,999 | 9.07% | 6.40% |
| Income $125,000 to $149,999 | 9.95% | 8.02% |
| Income $150,000 to $199,999 | 12.20% | 11.11% |
| Income $200,000 and Over | 32.48% | 54.99% |
Customer Segmentation
We will primarily target the following three customer segments:
- Couples Residing In Area: The art gallery will attract both young couples decorating and furnishing their first home and older couples replacing decorative items or outfitting a second home.
- Professionals Residing in Area: Art enthusiasts who are willing to spend money on artworks are mostly professionals with great art appreciation.They are expected to be interested in the high quality sense offered with our products.
- Tourists: Tourists visiting the area will be interested in locally made art pieces rather than looking at furniture they could purchase anywhere. [Company Name] will become a tourist destination due to its large showroom of local artworks.
V. Competitive Analysis
Direct & Indirect Competitors
The following businesses are located within a 20 mile radius of [Company Name], thus providing either direct or indirect competition for customers:
The Center for Art
The Center for Art is a nonprofit organization in the U.S. devoted to the exclusive presentation of outsider and contemporary self-taught art. More than a gallery, the center is a vital resource for students, scholars and the art enthusiasts, featuring a permanent collection containing 1,100-plus works of art, the Henry Darger Room collection, the Robert A. Roth Study Center, educational programs and more.
Richard Smith Gallery
Nestled in the heart of the city is the Richard Smith Gallery, which hosts rotating exhibitions by artists primarily working with paint and sculpture. The space is named for its late founder, local art dealer Richard Smith. Notable artists that have had work exhibited at the gallery include Josef Albers, Roy Lichtenstein, Mark Rothko, Robert Rauschenberg and Pablo Picasso.
Emily Paulson Gallery
The Emily Paulson Gallery was founded in 1976 and recently expanded to a second gallery. Specializing in international contemporary art in all media, particularly of the socio-political variety, the gallery exhibits young and emerging artists alongside established ones. Early on, it was one of the first galleries to offer exhibitions to women artists such as Jenny Holzer, Barbara Kruger, Sylvia Plimack Mangold and Cindy Sherman. Other notable artists who have shown here include Sol LeWitt, Gordon Matta-Clark, Fred Sandback, Lorna Simpson, Nancy Spero, Richard Tuttle, Carrie Mae Weems and Kehinde Wiley (among many others).
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- Locally-Made Products: [Company Name] will work with the best local artists for its items, ensuring that 90% of items will come from within a 100 mile radius of the art gallery. Local residents appreciate this support for local manufacturers and tourists appreciate that they will find items that they cannot find where they are from.
- Management: Our management team has years of business and art experience that allows us to sell to and serve customers in a much more sophisticated manner than our competitors.
- Relationships: Having lived in the community for 25 years, [Founder’s Name] knows all of the local leaders and newspapers, as well as artists. As such, it will be relatively easy for us to build branding and awareness of our art gallery and to establish a product line.
VI. Marketing Plan
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
- Offering high-quality, local and international art pieces from various artists
- Creatively telling the “stories” of the artists and each featured artwork
- Providing excellent customer service, from a hands-on sales team to delivery options
Promotions Strategy
[Company Name] expects its target market to be individuals living within the city as well as abroad. The Company’s promotions strategy to reach these individuals includes:
Direct Mail
[Company Name] will blanket neighborhoods surrounding its locations with direct mail pieces. These pieces will offer discounts and/or provide other inducements for people to visit the art gallery.
Public Relations
We will contact all local and area newspapers and television stations and send them a press release describing the opening and unique value proposition of [Company Name].
Advertising
[Company Name] will initially advertise in local newspapers and sponsor community events in order to gain awareness.
Ongoing Customer Communications
[Company Name] will maintain a website and publish a monthly email newsletter to tell customers about new events, products, and more.
Pre-Opening Events
Before opening the art gallery, [Company Name] will organize pre-opening events designed for local merchants and press contacts to create buzz and awareness for [Company Name].
Pricing Strategy
[Company Name] pricing will be appropriate for the high quality and level of service associated with the art gallery.
VII. Operations Plan
In order to execute on [Company Name]’s business model, the Company needs to perform many functions including the following:
Administrative Functions
- General & administrative functions including legal, marketing, bookkeeping, etc.
- Sourcing artists and managing artworks
- Writing and producing copy for featured artist’s “stories”
- Hiring and training staff
- Gallery Functions
- Art storage management
- Delivery services management
- Janitor/maintenance personnel to keep the art gallery clean
Milestones
[Company Name] expects to achieve the following milestones in the following [] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] art gallery |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of marketing efforts/campaign |
| [Date 5] | Launch [Company Name]’s art gallery |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is led by [Founder’s Name] who has been in the art industry for 20 years. He has an in-depth knowledge of the art industry including:
- Art gallery management and operations
- Delivery management
- Art design
- Hiring and training workers
[Founder] graduated with a Bachelor of Fine Arts degree from [University] and he is very much capable of creating and communicating art to its clients and art gallery visitors.
Hiring Plan
[Founder] will serve as the art gallery manager. In order to launch [Company Name], we need to hire the following personnel:
- Sales manager (requires retail experience in a related field)
- Salespeople (2 to start)
- Part-Time Bookkeeper (will manage accounts payable, create statements, and execute other administrative functions)
- Art gallery/Delivery staff (2 to start – responsible for warehouse stocking, deliveries, and set-up of art gallery as directed by art gallery manager)
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come from sales of [Founder’s Name]’s art pieces and commissions from the sale of other artists’ artworks sold to its clients.
The major costs for the company will be storage of the artwork, salaries of the staff, and rent for a prime location. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.
Capital Requirements and Use of Funds
[Company Nameis seeking a total funding of $460,000 to launch its art gallery. The capital will be used for funding capital expenditures, manpower costs, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Art gallery design/build: approximately $170,000
- Working capital: approximately $290,000 to pay for Marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions
Below please find the key assumptions that went into the financial forecast and a summary of the financial projections over the next five years.
| Number of customers per day | |
|---|---|
| FY 1 | 75 |
| FY 2 | 100 |
| FY 3 | 125 |
| FY 4 | 150 |
| FY 5 | 175 |
| Annual Lease ( per location) | $50,000 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRETAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
