What if every product you sold was unique?

One of the benefits of my job as a consultant is meeting interesting people. Normally I work with executives in IT, aviation or engineering companies and help them think through their business to simplify it and automate it. 

This month I took some time to consult for one of Canada’s most talented nature artists, president of Studio Quatre, Dominique Normand, and found it a refreshing change with a whole different set of business problems.

Art is a bit different than engineering in terms of business. In engineering, you can create endless copies of a product, but in oil paintings, the main sale is the ONE original. That means that inventory disappears forever, the minute it’s sold. You can of course these days make digital copies, but the reproduction business is a pretty low margin business with a lot of steps and a lot of competition.

So how do you optimize a “one-of” business? The main trick I think, is time management.

Original Art requires very different strategies to how things are managed in terms of time, output, pricing, from a standard business model. Artists typically feel like they’re on a never-ending treadmill of work because the steps to produce art and then sell it are remarkably complex involving galleries, agents, exhibitions, framing, complex shipping, and an inordinate amount of time tracking down wealthy buyers who have a tendency to agree to purchase and then wander off.

The first task was for me to understand the business cycles, so we setup a simple mind-map identifying key areas for investigation - Production, Marketing, Art Classes, Sales, and Shipping and flushed it in by brainstorming the known key facts of each part of the business cycle.

Once that was in place, the client brainstormed every other element of her business around those categories into her copy of MindManager for Mac, and returned to me a rather large mind-map filled with details.

Next we took each detailed item in every category and prioritized it in terms of it's importance to cash flow.

We looked at how various possibilities of income streams from originals, prints, and art classes would contribute to Studio Quatre income and marketing to find the optimum "income versus effort" blend to focus on.  Something like an art class might be low profit and take a long time to prepare, but result in ongoing sales through word-of-mouth and reputation, in the same way that a training class for brainstorming often results in sales for MindManager. 

We looked at “pipelines” which are the steps you go through to land a sale...in this case, of a painting.  Pipelines simplify business flows so that's it's easy to understand where you're at on a particular project. At any time an original art project can be in any of these stages...

Note the first critical step in the Pipeline - Inspiration! Engineers might gain inspiration from reading technical journals or attending trade shows, or by studying problems that need solutions. Nature artists need nature and time to rejuvenate in the wild, and it becomes an important part of the business cycle...not a bad life, eh?

It became apparent as is often the case in businesses that have never been analyzed that the 80/20 rule was in play whereby 20% of Studio Quatre’s business was bringing in 80% of the cash and 80% of the work and effort expended was resulting in only 20% of sales. 

Practically, that meant that instead of spending 20% of time producing originals and upping that to say 60% of time would result in perhaps a tripling of sales figures....I’ll take a 300% increase in sales any day.

As a surprise bonus, the artist realized she could spend more time doing what was enjoyable and have a more successful business.

A check of the competition on local and online galleries showed that the quality of the work produced in the originals had been underpriced and undervalued and they were due for a moderate elevation.

The rest of the work was trimming costs in the very complex shipping process as shipping to US was costing 30% or more of the price of a painting, and improving exposure through higher level exhibitions, of which I was pleasantly surprised that by simply questioning directors of exhibitions, resulted in instantly favorable reviews and entry into shows such as the upcoming Montreal ExpoArt show in October.

Now it's starting to look like a pretty nice business - low overhead, organized, interesting clients, good profit and you know you’re doing a service to humanity by making the world a more beautiful place.

To review the steps we did to analyze this business...

1. Brainstorm all Steps - Brainstormed all the steps that it takes to operate the business
   
   
2. Categorize Steps - Categorized them into groups - in this case Production, Marketing....etc.
   
   
3. Prioritize Steps - Prioritized the steps to determine what was most key to cash flow 
   
   
4. Pipeline Approach- Designed a pipeline to make the steps of production obvious and easy-to-think about. 
   
   
5. 80/20 Rule - Planned schedules to make more time available to the activities that bring in the most value 

Finally, we added a Daylite CRM system for Mac to make it easier to track opportunities...and voila! A nice, profitable, easy-to-manage business!

Would you like to see some of Ms. Normand’s art? Check out http://www.dnormand.com and if you enjoy dramatic, vital visions of horses, check out the this collection called the Chevaleresque Collection

The sites are bilingual so you might just learn some French while you’re there! :-)

Many thanks to the individuals who last newsletter took the initiative to purchase African Saxaphonist George Lee’s CD. His family was very grateful and South African TV is now doing an honorary show on his life’s work.

http://www.myspace.com/georgeleelarnyoh