How to Start an Art Gallery
Art galleries provide local artists an opportunity to gain exposure and profit from their work. While the primary goal from a business standpoint is to make profit based on art sales and special events, providing a vibrant art scene can help create a more vibrant community. Customers for an art gallery's work typically include collectors, investors, decorators, and private companies.
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Learn how to start your own Art Gallery and whether it is the right fit for you.
Start an art gallery by following these 10 steps:
- Plan your Art Gallery
- Form your Art Gallery into a Legal Entity
- Register your Art Gallery for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Art Gallery
- Get the Necessary Permits & Licenses for your Art Gallery
- Get Art Gallery Insurance
- Define your Art Gallery Brand
- Create your Art Gallery Website
- Set up your Business Phone System
There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your art gallery. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
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STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening an art gallery?
One important cost for your art gallery is renting your space. This cost will vary by both region and specific areas of town: an art gallery in Soho may pay as much as as $100,000 a month in rent. Meanwhile, a small 3 room studio and storefront in Key West costs only $1,600 a month. Many art dealers and gallery managers begin as artists themselves and may be able to network with artists who rent studio spaces to find the best intersection of price and space. Additionally, you will need to spend $99 to $129 on a modest inventory business management system and up to $20 a month for a reliable email delivery platform.
Business license fees will vary by state but must be paid. Additionally, you must pay up to $255 a year to register and keep a domain name and website for visitors, and you may pay up to $75 per hour for a website designer if you cannot design it yourself. More variable costs include marketing (clever social media marketing is free, though you'll want to pursue traditional advertisements locally), frames and furniture (the cost of which are respectively contingent on the amount of product and the amount of space available), salary for staff (which may be negligible for a small gallery), and the utility costs and other monthly operating expenditures. Equipment needed is a cash register(s), bins to hold items for sale, appropriate lighting, and decorations to make the store attractive. The other thing needed is exterior signage. These add up to an additional $10,000 to the startup costs. Finally, a deposit is often required to sign a long-term lease. The deposit amount depends on the monthly rent and the size of the retail location.
What are the ongoing expenses for an art gallery?
The ongoing expenses for an art gallery include paying monthly rent and the salaries of any employees that you may have. You must also continue to pay for any special events you throw, such as local art fairs. There are ongoing costs associated with the safe transport of the artwork as well as insurance for your entire business. Finally, you must pay for continual marketing in your area and beyond.
Who is the target market?
Of the four primary types of art buyers, the most preferred client is typically the art collector. These clients often have the most time to explore an art gallery and the most dispensable income with which to make purchases. They are also likeliest to enjoy discussing the finer points of different art and different artists. By contrast, art investors purchase many works of art, but they are more interested in buying art for low prices and selling it for a much higher return.
How does an art gallery make money?
The primary way that an art gallery makes money is by taking a percentage of artwork sales throughout the year. This percentage is negotiated with the artist but is typically no less than fifty percent. Additional revenue may be gained by throwing different events throughout the year or even renting the gallery space out as a special venue for other businesses.
How much can you charge customers?
The amount that you can charge clients and customers is dictated by factors such as region, competition, and the artists themselves. Artists with a long history of their work selling well will safely command a higher price and essentially represent a safe “investment” for your gallery. The prices from local competition also dictates your own prices, as it's not wise to charge more than, say, $4,000 for a work of art if no other local galleries charge more than this amount. It is also wise to offer a range of different art at different prices to increase the perception of your gallery's accessibility to the entire community.
How much profit can an art gallery make?
The profit an art gallery can make is variable. Bloomberg reports that the average profit margin for this kind of business is 6.5 percent. Obviously, the amount of profit is tied to the amount of art sold and the price of that art. It's important to work out a fair price with the artist: they want to feel properly compensated for their materials used and hours spent, while you want to receive at least fifty percent of the sale.
How can you make your business more profitable?
One immediate way to make your business more profitable is to negotiate a higher cut of art sales. While a 50/50 split is more of the industry norm, some argue that a 70/30 split in favor of the gallery is more equitable: after all, the gallery is typically paying for the marketing, production, transport, and insurance of the art. Finding areas with more affordable rent is also a consideration, as is using the gallery space for more of your own special exhibitions, fairs, and parties as well as leasing it to others for their own events. Finally, it's wise to consider a smaller staff: a few higher-paid employees actually perform better in gallery-related roles than paying smaller salaries to a much larger staff.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Art Gallery Name Generator
If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your art gallery is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
- LLC Taxes
- Sole Proprietorship vs LLC
- LLC vs Corporation
- LLC vs S Corp
- How to Start an S Corp
- S Corp vs C Corp
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
Besides being a requirement when applying for business loans, opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.
Open net 30 accounts
Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.
NetMany net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our best net 30 vendors, guide and start building business credit.
Get a business credit card
Getting a business credit card helps you:
- Separate personal and business expenses by putting your business' expenses all in one place.
- Build your company's credit history, which can be useful to raise money later on.
Recommended: Apply for an easy approval business credit card from Divvy and build your business credit quickly.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate an art gallery business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
In particular, most states require art dealer businesses to obtain a seller’s permit. A seller’s permit allows states to record and collect taxes from goods (and sometimes service) sales.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
In addition, certain local licensing or regulatory requirements may apply. For example, If you want to offer complimentary alcohol at special events or showings, you will need an Art Gallery Liquor Permit, the specificities of which vary locally. For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
When dealing with artists, it is always advisable to draft a standard contract regulating terms of conditions under which you may sell their artwork. This type of agreement is often referred to as a consignment agreement.
- A sample gallery-artist agreement can be found here.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
Recommended: Learn what business insurance for your Art Gallery will cost.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
Recommended: Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market an art gallery
Traditional marketing for an art gallery includes television and newspaper advertisements as well as fliers and other promotional materials in cafes and other cultural centers that support the local art scene. Local businesses may also enjoy being associated with the art scene via your business. As mentioned before, social media is a major way to reach a large audience at no additional cost.
How to keep customers coming back
One of the best ways to retain existing customers is to stay in contact with them. Create a mailing list of previous clients and keep them apprised of new artwork and events that keeps them coming back for more. To attract new customers, it's best to perform a combination of the above marketing techniques and collaborations with your artists on ways to advertise their work. This takes some of the pressure off of you and helps leverage their natural connections to the community you wish to reach.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
Recommended: Get started today using our recommended website builder or check out our review of the Best Website Builders.
Other popular website builders are: WordPress, WIX, Weebly, Squarespace, and Shopify.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.
Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.
Start a Art Gallery in your State
- District of Columbia
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
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Is this Business Right For You?
The best art gallery manager is an artist himself: someone who is aware of different modes and styles of art as well as its history and future trends. The manager should have a sense of individual style that the different works on display help accentuate, which helps the business stand out from its competition. Running a gallery means having a somewhat flexible schedule, but sales can be contingent on a willingness to deliver and display artwork to prospective buyers' homes, and often on short notice.
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What happens during a typical day at an art gallery?
Some of the day-to-day activities of running an art gallery include greeting and speaking with customers, handling and displaying artwork, and dealing with a variety of administrative tasks that can range from managing a database of contacts to creating unique advertisements and updating your website and social media pages. It's also important to deal with framers, manage your inventory, and always be planning for your next major event. Most importantly, you must take care of your artists, which can include finding additional opportunities for existing artists while also researching and reaching out to new artists.
What are some skills and experiences that will help you build a successful art gallery?
The most valuable experience for running your own art gallery comes from having served as a gallery assistant, art curator, or other related position in someone else's art gallery. This provides invaluable experience for the different parts of the job, which is doubly important because managers of smaller galleries are doing much of the work on their own. It is possible to pick up both the practical and soft skills of gallery management by beginning and running the business, but it is vital to have a background in art. Prospective gallery managers should consider joining the Art Dealers Association of America in order to pursue answers to business questions and to explore networking opportunities.
What is the growth potential for an art gallery?
One quality of running an art gallery is that the job doesn't really change as the business scales up. That is, a really popular art gallery may eventually lead to expanding via larger buildings and better venues, and may spawn multiple galleries in different areas. Ultimately, though, the nature of the job still involves negotiating with artists, marketing to clients, and seeking higher profits, with the added complexity of hiring additional employees and managers to work under you.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
How and when to build a team
Determining when to expand your art gallery business is a fairly organic process: once it gets to a point that you can no longer do everything on your own, it makes sense to begin hiring employees. This may happen very soon: you may wish to have someone who can process payments while you show other customers around, or someone to “mind the store” while you deliver some artwork to a loyal customer. Once you begin to host special parties and events, additional employees are an absolute must. Typical roles for employees are gallery assistants (who are typically paid $35,000 a year) and office managers (typically paid $36,000 a year), though it is possible for businesses just starting out to hire part-time help on an hourly basis.
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Real World Examples
- Article addressing common misconceptions about galleries
- Start-up tips from two gallery owners
- Advice from gallery owners and employees
- Advice for opening an art gallery as well as ideas for gallery themes
- Start-up tips from gallery owners
- Advice for opening an art gallery