Art Co-op Cooperative Studios - Artists Working Together

Q: Several of us are thinking about starting a design studio with the goal of wholesaling handmade items like lamps and picture frames to galleries, museum stores and other retail outlets. I currently work in a museum store and see a potential income opportunity. How do we legally go into business? What steps are necessary in order to create a studio or company?

A: Every city and state has its own rules and regulations for obtaining business licenses, paying taxes, establishing businesses under fictitious names, and so on. Check with your state and local tax and resale agencies for specifics. As for agreements or contracts, hiring an attorney or mediator who specializes in the arts is the best way to go. They can review or assist you with formulating arrangements while pointing out areas of potential difficulty.

You're moving a bit fast here, though. None of you have experience being in business for yourselves or working with each other and your monetary situations aren't that great either. Since lack of experience and lack of funds are two major reasons why new businesses fail, consider approaching this venture a little more gradually and without too much structure.

Rent a modestly priced space for a trial period of six months to a year where you can create, show and sell your work. Have at least six months of rent money in the bank before finalizing agreements with a landlord. Share everything equally. Each person pays equal rent, receives equal gallery and work space, and spends an equal amount of time and effort maintaining the operation during business hours.

Remain contractually independent in all other areas. Each artist is responsible for their own tools, raw materials and production processes, and all revenues for sold art goes directly to the artists who produce it. Don't get involved with commissions or referral fees. That comes later.

Each artist owns all of his or her art and is the sole recipient of moneys generated from its sales even though someone else may be running the store at the time of a sale. If you start acting as agents for each other and trying to figure out who gets how much for selling whose work under what circumstances, things get complicated fast. The point of this trial period is not to see who can make the most money, but rather to sell art, stay in business, get a feel for how you all work together, and to figure out how to be maximally productive while avoiding conflicts.

During the test run, see which types of art sell best, which sales techniques work, who has special talents in areas like selling or managing finances, and pay close attention to all customer feedback. Address problems as they arise and experiment with different business models. Maybe having shows and sales at the studio/gallery is better; maybe making cold calls and visiting prospective clients generates the most sales.

Be aware of your fellow artists at all times. Don't let animosities build up until it's too late to settle them amicably. Failure to express grievances in a timely manner can result in a premature break-up.

If you decide that you fare better as a group than you do as individuals and can make a profit while enjoying working together, then you'll be ready to develop a more formalized organization. You'll know much more about each other and you'll have a much better idea of how the business needs to be set up in order to make a go of it. That's the time to hire an attorney or mediator, work through remaining differences, define job duties, delegate responsibilities, structure commissions, decide who gets paid how much for which services, and finalize a contract.