9 Tips to Help you Better Manage Sporadic Cash Flow in your Art Business

Managing cash flow successfully is one of the greatest challenges for any small business. It is a particularly difficult issue for artists and galleries where sales often spike and dip. Artwork doesn’t tend to sell in regular patterns, and because of the high value of many pieces of artwork, when sales do occur they often cause a real spike in an artist’s or gallery’s income.

This irregular cash flow can cause logistical (and emotional!) problems for those of us in the art business. I would like to share a few things I’ve learned over the years about managing cash flow in the hopes that my experience might help make you a better manager of your cash flow.

1. You Need Cash Flow Before You Can Manage It

First, I think it is important to note that for many artists, and also for many galleries, one of the most crucial issues to solve first is to create cash flow by generating sales. None of what I’m going to share today is going to be particularly useful to you if your total annual sales don’t generate enough profit to cover your costs. No amount of clever management is going to solve your problems if there simply isn’t enough cash to meet your expenses. If your sales aren’t where they need to be, job #1 is to generate more sales. I’ve written extensively about how to generate more sales (see the archives of this blog or my books), but the main keys are to produce inventory and get out there and show your work as much as humanly possible (in galleries, shows, etc.). In other words, hustle!

Even if you aren’t generating the sales you would like at this point, it would be wise for you to begin thinking about how you will manage your money when sales do increase. Put your cash flow plan into practice now so that you are prepared and have good habits established for the day when you are selling more work.

2. Develop a Cash Flow Plan

As you develop a stream of sales it is critical that you implement a spending plan. You need to understand exactly what your monthly expenses are and when all of your bills are due. It’s a good idea to have an exact number in mind when you think about your total expenses. Saying, “I need to generate $2,500 per month in order to cover all of my expense” will then give you something very concrete to work toward.

Try to set up routines that allow you to have consistent time to stay on top of your books and pay your bills.

3. Prioritize your expenses

While it’s important to stay on top of all of your expenses, it’s also important to recognize which of your expenses  have the highest priority. This is particularly true during slow periods when there may not be enough cash to go around. At times like these it’s important to be able to look at your expenses and say, “I first need to buy supplies so that I may keep producing – I may be evicted from my studio, but I could paint in the basement if that happens. A studio doesn’t do me any good if I don’t have canvas and paint.”

Only you can figure out what your highest priorities are, but it’s important to prioritize your expenses before you run into a cash crunch, otherwise you will be tempted to pay your urgent bills before your important ones (and there’s a big difference between urgent and important).

4. Learn to Negotiate your Bills

Which leads to the next principle – learn that your suppliers and vendors may be willing to work with you when your sales slow down. Obviously, it’s best to stay on top of your bills and never get behind. When that’s not possible, however, you may need to talk to your vendors and suppliers and ask if they can give you some leeway in paying your bills. Sometimes a vendor with whom you have had a good relationship will extend you informal credit by allowing you to partially pay and partially defer your payment. During the financial crisis in 2007-’08 we were fortunate to have vendors that were willing to work with us and allow us some breathing space when paying our bills. Remember, you’re no good to your vendors if you are out of business.

It’s also important to remember, however, that negotiating your bills should not be a regular tactic. Cause too many delays, and you go from being a valued customer to being a deadbeat.

5. Try to Equalize your Spending

Just as slow-downs can be a problem, a sudden windfall of sales can be a problem as well. When sales do come, they often come in clusters (not necessarily from the same sources, but just by coincidence at the same time). Suddenly your bank account is awash in cash – a feast after a time of famine. If this comes after a slow period, you may feel tempted to quickly pay off your lingering bills and buy that new doodad you have been waiting on for so long. Before you know it, your bank account is right back where it started and you are scrambling again. Instead, I would encourage you to spend your money slowly and methodically. If you are saving up for a major expense, don’t suddenly dump all your money into a purchase. Instead, continue contributing to your savings at a regular pace. Having cash on hand  gives you stability.

As an example, let’s say you would like to buy a new delivery van for hauling your art to shows, galleries and for client deliveries. You’ve shopped around and know you can find a used van that will suit your needs for about $7,000. When you suddenly make a $10,000 sale you are going to be sorely tempted to go out and buy the van. Instead, I would encourage you to save slowly and steadily. Try saving a regular monthly amount toward the purchase – say $700 a month. Now, when you make a big sale you have cash in your bank account to fund the monthly saving toward the van, but you also keep more cash on hand to stay on top of your expenses and deal with slow-downs in sales.

This approach to spending has been one of the most important things I have learned after having been in business for myself for 13 years.

This approach has an added benefit. There are many times when I decide I need some shiny new dumaflache  desperately. I start saving toward the purchase and then, a few months in, decide that I actually don’t need whatever it was I thought was so critical when I saw it.

Even if I do end up deciding to make a purchase when I’ve saved enough, there is something very gratifying about having saved up for it instead of having rashly splurged on it.

6. Save Automatically

If you are saving for a purchase, I encourage you to move the money for the purchase out of your general checking account and into a separate savings account where you will be less tempted to raid the funds during a slow period. I have also found that it is hard to save if I have to rely on myself to regularly move money into the savings account. Several years ago I discovered Capital One 360 – an online bank geared toward saving that allows you to easily, and automatically (if you wish), transfer money from your checking to savings account. You can set up weekly or monthly transfers that take the work out of saving. I like to break my saving deposits into weekly amounts so that they seem smaller.

Another advantage of this online bank is the fact that they allow you very easily to set up multiple savings accounts that you can transfer money into automatically. Whenever I have a new item I want to save toward I just start a new account and name it the same as the goal I’m saving toward.

This automatic saving is incredibly powerful. I promise you will save more money  by doing small regular investments than you will by saying “I’m going to save as much as I can, whenever I can.”

7. Avoid Debt

The flip side of saving is credit and debt. Just as saving can be an incredibly powerful tool to help you build your business, debt can have the same power to hinder your business. Don’t get me wrong, there are times when building a business that credit can be a powerful tool. Credit can be leveraged to help you buy expensive tools or set up your studio. Credit can help you ramp up your marketing or take on large projects you wouldn’t otherwise be able to undertake. I couldn’t have started my gallery without credit. While I’m not one of those who feel that credit and debt are completely evil and are to be avoided at all costs, I do recognize the crippling effect debt can have on a business.

While credit can allow you to do things you would be otherwise unable to accomplish, debt creates drag on your monthly cash flow and can eventually drag your business under if you are not careful. Even if it doesn’t it has other negative effects.

For a time I had a commercial line of credit with my bank. When I got the line of credit, the bank sold it to me as a great way to stabilize cash flow. When sales were slow, they said,  I could draw on the line of credit to make up the shortfall. Though it seemed like a great idea at the time, I quickly discovered something interesting. Suddenly, it seemed like I was constantly having slow times that required me to draw on the line of credit, and when sales picked up, they never picked up quite enough for me to pay down as much as I had used from the line. Before long I had built up quite a debt and maxed out the line. Now, not only could I not use the line during slow times, I had a monthly payment that added to my monthly overhead. I looked at the situation and realized my folly. I decided I was going to pay down the line and never use it again. I redoubled my efforts, tightened the belt and started paying off the line of credit. It took several years to completely pay it off, but once I did there was a sense weight having been lifted off the business.

If sales slow down in the gallery now, I just work harder and increase them. I’ve realized that there’s just no way out of the work – I can either work harder now and get ahead, or, with debt, I can wait to work harder until the debt mounts and then have to work even harder because of the interest that is accumulating.

My bank is always trying to get me to take another line of credit and it’s very satisfying to tell them, “no thanks, I don’t need it.”

Credit cards offer an even more dangerous path to debt because they are so easy to use.

Again, I absolutely understand that there are times when credit is useful and can help businesses grow, but I try to find other ways to finance our growth.

8. Keep your Production Steady and your Sales Pipeline Full

Another important factor to keep in mind is the very human tendency to relax when things are going well. When you have good sales the sense of urgency you felt when you were starving for sales diminishes. As the sales roll in, you start focussing on dealing with the logistics and paperwork that surrounds them. If you aren’t careful, you can very easily neglect your production and sales pipelines, setting yourself up for a future drop in sales. Try to equalize your production and sales efforts just as you’ve equalized your spending.

9. Give to Charity

Finally, I encourage you to find a charity and devote a fixed percentage of your sales to the charity. Giving back to the community will make you feel more connected, keep you from becoming too self-centered and has, I’ve found, a positive impact on your cash flow.

I was recently in the act of writing out a check for a non-profit that I donate to regularly when the phone rang. Out of nowhere, seemingly, we made one of the largest art sales we’ve had in the gallery this year. Coincidence? Perhaps. I’m one of the least superstitious people I know, but I’ll take all the karma, or blessings  or coincidence I can get!

How Have You Managed your Cash Flow?

What have you learned in managing your art business cash flow? Do you disagree with anything I’ve said in this post? What are your biggest cash flow challenges? Share your experiences and thoughts in the comments below.

About the Author: Jason Horejs

Jason Horejs is the Owner of Xanadu Gallery, author of best selling books "Starving" to Successful & How to Sell Art , publisher of reddotblog.com, and founder of the Art Business Academy. Jason has helped thousands of artists prepare themselves to more effectively market their work, build relationships with galleries and collectors, and turn their artistic passion into a viable business.


  1. My LLC business is small, probably like that of the majority of fine artists, but I’ve found I’m most comfortable when my business savings account is around $10K and I start to get real nervous if it drops below $5K. Admittedly, I am in a better position than many artists because I do not have to depend on my art business for my living expenses. However, it is a point of pride with me that I have never “dipped into” any of my personal income except for the $800 I loaned my art business as start-up cash in 2000, its first year, paying that back in just a few months, and have always made a little profit from the get-go. But I characterize my art business as “self-sustaining” rather than “self-supporting.”
    This year, knowing that my fiscal year nearly always starts off with more expenses than income, I planned a 2-day studio sale for mid- January, even though I had just held my annual holiday studio sale in early December. It was a gamble, because a snow day would have killed it, but enough people came and enough sales were made that I was in the black on my books for the first time in years for the months of January and February. I also try to even out monthly income by working with galleries that have their high seasons at different times of year, and that helps, too.

  2. I think you are spot on there Jason. Unfortunately as an Artist, although your advice is all very logical & sensible, us creatives find it so hard to follow… After being made bankrupt at the age of forty for £100,000 I have made it at the age of fifty by trying to do everything else right & preying that everything else would follow, including money & it has worked magnificently!

  3. Oh, Jason. Oh, oh, oh. The serious side of running a business, any business, is rarely as much fun as the rest of it, but what a good and useful post. I also enjoyed reading the comments to see what others have done. Thank you, all, especially Jason.

  4. Although I do not recommend credit cards (and currently do not have one, or two, or three) there was a time in my art career that I could not have exhibited in an art gallery in New York City when invited or advertised in the Georgia Artist’s Magazine, or exhibited in Atlanta at the Art Buyers Caravan sponsored by Decor Magazine, to name a view events. I haven’t always had a cash flow but have managed to do everything I wanted in my art career, and it has been exciting.

  5. Approaching the break even point, but it always seems two steps and a good Christmas away from happening. I am good at keeping expenses down but have not been able to make that leap from red to black. But of course I’m not giving up.

  6. Gertrude Stein said, “The money is always there, but the pockets change. It is not in the same pockets after a change, and that is all there is to say about money.”

    I realised the truth of this when I had sold a large painting and was broke again the next day. Then I realised thd money had simply traveled on. I paid my (few) bills, laid in non-perishable foods, and put gas in my car. If I had both money and need, I bought more art supplies, and got back to work. I still operate this way 40+ years later. I produce far less but now am “independantly wealthy” thanks to Canada’s Old Age Supplement.

  7. Great post – one thing I would add is what I think of as negative spending – I do alot of cooking, making do with less, and cut down on frivolous expenses, so I can spend money primarily on art materials. Sometimes you need to buy someone a gift – I do a painting of something they love, and gain an image for my portfolio, or better yet – an opportunity for an online contest that may even mean some cash.

  8. I find no virtue in living in poverty for our art if it isn’t necessary. Neither does it diminish your calling or its purity if you augment your income with another job. The peace of knowing you can pay your rent next month surely frees your mind to create. So you lose some hours every week in the studio? When you do get there it will be productive.
    I vehemently reject the notion that because I have another source of income I’m not serious about my work. Where is the merit in hardship?
    Yes, do all the things Jason suggests. If you haven’t had financial problems some time in your life, wait, because you will … I don’t know anyone who hasn’t.
    In exploring ways to reap more income examine what you are doing, and do something different. Try something you’ve not done before. Explore other venues that you previously discounted as, “that won’t work.” Maybe. But repeating the same nonproductive plan will repeat the same results.
    Life is cyclic … ups and downs, affluence and lean times. Just keep creating.

    1. I’m with you on that one; I have never subscribed to the “starving artist” scenario. This being said, my career definitely goes from feast to famine. The way I have gotten through lean times has been to facilitate workshops. I build traditional birch bark canoes and there has been an increasing interest by communities to have master builders come into their organisations to run a canoe building workshop. It pays well but it’s also time consuming and keeps me from carving. So it’s a mixed blessing. I made nearly $50 000 last year building canoes. Unfortunately I injured my bank and had to pay for extra apprentices to help so I just broke even on those. I’ve already got 5 workshops scheduled for this year but I don’t want to do more than that because it’ll keep me out of the studio too long.

  9. Being older some of my living expenses are being handled by a monthly income and I spend some of that money on my artwork. I love it that I can continue to paint and not have worry inhibit me.
    I am working hard this year to be in more exhibits and hopefully begin to repay myself. I find it very important to track my spending and to use a credit card to make on-line purchases. My goal is to give myself the freedom to continue to be creative.

  10. Excellent advice! Saving for purchases is especially important. I saved art money for several years before building my dream studio in 2016, and it was rewarding knowing that I wasn’t in debt (though my savings was depleted) and that my art paid for 100% of it. Since then I haven’t had a huge goal and have been saving less, and working less to sell, so I really, really needed to read this article. Thanks so much for the reminder!

    BTW, FYI: on Chrome, EVERY time I open your blog from gmail, I click the “never see this ‘sign up for email’ message again,” and I always see it again:)

  11. Hi Jason,
    I really appreciated and agreed with all you said re. cash flow. I have totally experienced the feast and the famine. My bank account going from lot’s of money to almost zero. This post has so much wisdom on how to handle money. I am going to implement your ideas!!!
    So Thank You,
    PS The last point you made giving to charity or tithing is one of the keys to abundance. There seems to be a Law in the Universe that the more you give the more you receive, and it isn’t always money!

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