Have you ever felt like organizing your finances within your business will never be your cup of tea? Do you feel that as an artist you don’t have the big piece of the financial organizational puzzle in place, and that perhaps that is how it has to be since you have never been taught how to manage that?
I used to feel this way, and wasn’t sure what was holding me back from figuring it out, until one day I met with a group of stock brokers and lawyers who helped catapult me in the right direction toward profit growth. (and it wasn’t from the advice I received from them!)
I grew up within a family of artists and creative people- my father’s a fine artist, my mother writes poetry and my uncle has a jewelry line. This same uncle is also a savvy investor who has been talking with me about the stock market since I was six years old. As an artist myself I didn’t have an interest in numbers, and found it impossible to retain any information he was giving me.
Fast forward to age 33, when I found myself in a very tight spot financially and was in the middle of writing a solo show that I was planning to submit to festivals everywhere. I needed a certain amount of funding for my show, so I was looking for ways to increase my personal income to fund it. I was running a fashion showroom at the time for a PR firm in New York City, and happened to meet a lawyer for one of the designers who invited me to a networking breakfast with some of his colleagues. I thought I would go to see if there might be a potential opportunity for a better paying position.
When I arrived there was a room full of about 12 men, mostly all stock brokers, investment bankers and lawyers who were there to discuss their challenges for the week. I was admittedly intimidated, as I didn’t expect to know anything about what they were discussing, nor did I expect I would be able to contribute.
The first man began to talk about a problem he was having with a client of his who wanted to “short a stock” on a business he knew very little about and he didn’t know how to advise him. Mind you, this was after the housing market bubble had burst, so those in the market looked upon shorting stocks with extreme caution in general. (If you want to learn more about what “shorting a stock” means, watch the movie The Big Short. It will educate you on exactly what happened to our housing market and the world financial market in general during that detrimental time in American financial history.)
As I listened to his colleagues mull this issue over, half of them were in favor of him telling his client to go ahead with the transaction, as it was not his responsibility to tell him what to do, but instead to let him do as he wished and simply take the commission.
To my great surprise I happened to know the company they were talking about, as my uncle had bought stock with them years ago and was always talking about how the company was growing at a “good speed”. He felt it was a wise company to invest in. I also realized I knew more than I thought I did about what “shorting a stock” meant, as thanks to my uncle I knew a bit about options and how they are traded in the market.
I decided to contribute what I knew. I raised my hand, and they all turned to listen to me with great anticipation and focus.
I said, “I happen to know this company, and from what I know they are going through an upper management change, so their stock has been down for a while. But I heard they’ve finalized their decisions as of late and their investors seem to think they’ve made the right moves, especially with the new CEO. So considering the history of the company and the recent report they sent out (which my uncle had chirped in my ear about) it looks like this company is going to move in a better direction. So shorting their stock may not be the best move.”
They all looked at me for a moment, and then the man who was having this dilemma to begin with said, “we know the history of the company. We’re talking about the commission side of things.” He then turned to the group again and said, “Can I let him do it once and then pull him back once the company makes their formal announcement?” The others seemed to agree with this tactic, but I didn’t.
I raised my hand again, and said, “Sorry, I just want to be clear- you’re going to let him short this stock for the sake of making a commission, even though you believe it may not be the right decision?”
“That’s not exactly how it works,” he said. Another man jumped in: “You need to let the client make his decision and advise him as much as possible, but in the end it’s his decision.”
“But why not pull him back now instead of later, since the evidence is pointing more toward growth?”
“Well, he could,” said one man, “but it’s not illegal either way, and so it’s between him and his client to work that out. And that can be tricky at times.”
I didn’t agree with this way of doing business, as they were not looking at the best interest of the client and the company, but instead at whether or not they might make a better commission one way or another.
I walked away from that meeting feeling completely empowered around money in a way I had never before because I realized that I knew way more than I thought I did, but more importantly I knew I had a vision I wanted to bring to life and I wanted to invite those who most resonated with it to see it. That meant I needed to find the funds for my project so I could uphold my vision. And I saw that if those men could become stockbrokers and manage money then I could certainly manage my own money in a better, more effective and honest way.
I pulled out my phone and made an appointment with my accountant, who happened to work with many artists. As I sat down with her the next day, I told her I wanted to go over all my options for growing my income- what little income I had at that time. We had one of the most productive meetings I had ever had around finances because I finally asked the right questions and she had the exact answers I needed to make informed decisions for myself.
I finished my show, found the funding I needed to promote it from both my own income, my own investments and premiered it at the Midtown International Theater Festival in New York City. Most importantly I began to mentor with three entrepreneurs who would never make the kinds of decisions the stockbroker in that room had made that day, and because of that I became financially savvy in ways I never thought I would possibly reach.
There is a common gap within the art world when it comes to the topic of how to organize the financial part of our businesses with our art, yet it is one of the most crucial parts of a business to manage, both for yourself and for the vision you have for your art. The truth is you hold all the power within, and it’s just a matter of bridging some simple gaps between your vision and the way in which you merge that vision with your profits.
I believe artists are hardwired to run the best businesses in the world. Help me prove my belief by taking action and sharing a theme that is integral to your art in the comments below or share a visual on Instagram using #artistsinbusiness and tag me: @alexisfedorpics!