ARTSMART COST + BENEFIT MATRIX

This is another classic business tool that I’ve adapted for artists. If you want to take an unemotional look at combinations of effort, cost, and revenue generation, the ArtSmart Cost+Benefit Matrix (ACBM) is the way to do it. The ACBM, which you’ll find in the toolkit, is not about making work based solely on creative ambitions, it’s about making choices based on the outcomes of different combinations of your goods in the market.  

The ACBM factors the revenue, production costs, and expenses or overheads of your personal life and studio. It’s a satisfying—and truly empowering—way to play with the quantity, production costs, and sales potential of different types of output to see the projected outcome variations of your choices.

I find it has two main uses for artists. The first is choosing a balance between mediums or types of work. For example, the cost and benefit of making five paintings and three drawings for an exhibition, versus making three paintings and five drawings. 

You can generate the outcomes of dozens of combinations by tweaking the numbers and letting the tool do its thing. You can do this while planning a series or show, or even in real time. For instance, if 80% of one series is selling on your website and 20% of another series is selling, you can see the financial implications of changing your production line to reflect market demand.  

The other main use for this tool is in figuring out how to balance work you do solely for income with your art practice. 

Building an ACBM

You’ll need your completed ArtSmart Budget on hand and a personal budget/list of monthly personal costs as well.  

You’ll also need the estimated production costs for the type of work you’re analyzing. For example, the relative costs of painting versus screen printing, or site-specific installation versus video art.

Finally, you’ll need the projected revenue for the types of work you’re comparing in the matrix. This will include the retail price, buyer discount, and production costs reimbursed by the gallery if there are any. You can base this on previous experience.

Once you get the hang of it, the ACBM is an enjoyable tool that lets you consider all types of scenarios. This forethought is empowering.

Cost + Benefit Matrix Step – by - Step

Step 1: Fill in the Live Budget / Light Green Tab

Go down and fill in each category for the amount spent on average per month. Fill in all cells that are highlighted Yellow. Necessary expenses are expenses such as mortgage or rent, secondary needs are such as exercise or meals and entertainment and can be reduced in times of a cash crunch or eliminated altogether if necessary. The most important component is to be realistic. Look at your actual spending over the course of a year to get a real number. This isn't the time to guess. This is an important exercise to do as it tells you how much it cost you live.

Step 2: Fill in the Studio Budget / Blue Tab

Again go down and fill in each category for the amount spent on average per month.  Fill in all cells that are highlighted Yellow. As with the personal expenses, be diligent about to getting the most accurate numbers so that you can be sure this analysis gives you the maximum benefit.

Step 3: Fill in the Production / Orange Tab

Production is broken down into three main categories: materials, labor and outsourced fabrication. Fill in all cells highlighted yellow. You may need to change some of labels if you work in a different medium. You may have to add some cells in order to customize to your specific art practice. Again be as detailed as possible. You must also figure out how many works you can make in a month. This number is needed in order to calculate the overall cost of production for the month.


Step 4: Fill in the Revenue / Dark Green Tab

Revenue has a few components to consider when calculating how much you will actually get into your bank account. Retail price, discount, production cost reimbursed, and how many works are actually sold. Fill in all cells highlighted yellow. If you know that you are not going to get reimbursed for your production then zero out those fields in grey.

Step 5: Fill in the ArtSmart Cost + Benefit Matrix

Enter the cash on hand in your bank account right now. All of the other tabs feed into this main page showing you clearly when you will run out of money, when you will go into debt and when the revenue will kick into the equation. You will need to customize the matrix based on how many months you will be in production. The bottom line shows you when you actually make a profit from your sales.