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How to Open an Art Gallery

Written by:

Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.

Edited by:

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

How to Open an Art Gallery

Fast Facts

Investment range

$4,050 - $14,100

Revenue potential

$130,000 - $400,000 p.a.

Time to build

1 – 3 months

Profit potential

$26,000 - $80,000 p.a.

Industry trend

Growing

Commitment

Full-time

How to Open an Art Gallery

You might not think of art as a business opportunity, but the US art dealers’ market is worth $9 billion and growing. If you’re an artist or an art lover who’s always dreamed of having your own gallery, now might be the perfect time to take the leap. You can live out your dream, add some culture to your community, and make a good living all at the same time! 

Wouldn’t it be great if opening an art gallery were as easy as Picasso painting a picture? Sadly, a good deal of research and preparation is required. Fortunately, this step-by-step guide will sculpt your knowledge with insight and information that will put you on the path to gallery greatness.

Step 1: Decide if the Business Is Right for You

Pros and cons

Opening an art gallery has pros and cons that you should consider before deciding if it’s the right path for you.

Pros

  • Live Your Dream – Rewarding work sharing culture and helping artists
  • Good Money – 50% commissions mean strong profits
  • Low Startup Costs – No inventory needed, just a gallery space

Cons

  • Lots of Lookers – Many people browse galleries without buying
  • Inconsistent Income – Prices on art are high, so sales can be sporadic

Art gallery industry trends

The US accounts for nearly half of the global art market((https://www.statista.com/statistics/885531/global-art-market-share-by-country/)), valued at $65 billion in 2021.((https://www.statista.com/topics/1119/art-market/#dossierKeyfigures))

Industry size and growth

art industry size and growth

Trends and challenges

Art gallery trends include:

  • Virtual art exhibitions emerged during the pandemic and that trend is continuing, giving people a chance to view and buy art online.
  • 3D motion graphics, which are moving animated images like holograms, have become popular. For example, there is a piece of art in New York City that is a glass dome with floating hearts inside that move, but those hearts are graphic 3D images.
  • Interest in nature depicted in art has been rising, as well as interest in contemporary African art.

Challenges in the art gallery industry include:

  • The art world has begun working to make art prices more affordable. This may cut into the profits of art galleries, or it may attract more buyers. It remains to be seen, leaving art gallery owners uncertain.
  • Crypto art is sold via non-fungible tokens (NFTs), unique digital files published on the blockchain with only one owner. Collectors purchase NFTs at often exorbitant prices. In April 2021, a single NFT artwork sold for $69 million. Some see the NFT trend as a threat to traditional art galleries. 
art industry Trends and Challenges

What kind of people work in an art gallery?

A curator manages a museum or art gallery.

art gallery demographics

How much does it cost to start an art gallery business?

Startup costs for an art gallery range from around $4,000 to $14,000. The largest expenses are for gallery space rental and the preparation of the space. To prepare the space, you’ll need tables or shelves to display art that is not hung on the walls.

Start-up CostsBallpark RangeAverage
Setting up a business name and corporation$150 - $200$175
Business licenses and permits$100 - $300$200
Insurance$100-$300$200
Business cards and brochures$200 - $300$250
Website setup$1,000 - $3,000$2,000
Deposit on gallery space$1,500 - $5,000$3,250
Space preparation and decor$1,000 - $5,000$3,000
Total$4,050 - $14,100$9,075

How much can you earn from an art gallery business?

The price of art can vary widely, and you’ll have to negotiate the prices and commission with the artists. Commission rates are usually around 50%. Your profit margin after paying rent and overhead should be about 20%. The below calculations assume an average art piece price of $1,000, so your commission would be $500 per piece sold.

In your first year or two, you could sell five pieces a week, bringing in an impressive $130,000 in annual revenue. This would mean $26,000 in profit, assuming that 20% margin. As your gallery gains popularity, sales could climb to 15 pieces a week. With expected annual revenue of almost $400,000, you’d make a healthy $80,000.

Art Gallery business earnings forecast

What barriers to entry are there?

There are a few barriers to entry for an art gallery. Your biggest challenges will be:

  • Having enough knowledge of art to select strong artists
  • Finding a good space in an area with high foot traffic

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Step 2: Hone Your Idea

develop a business idea

Now that you know what’s involved in starting an art gallery, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research art galleries in your area to examine their products, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a sculpture gallery.

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as Impressionist art.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your products or services

You should determine what type of art you want to offer. You may decide to display a variety of artwork or specialize in something like Impressionist paintings. You could also offer art-related small gift items to increase your revenue.

How much should you charge for art?

Prices vary widely, mainly depending on the artist’s reputation. Prices and commissions will be negotiated between you and the artist, but your commission should be at least 50%. After other expenses, you should aim for a profit margin of about 20%.

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will be art lovers, particularly those who are well established and can afford art. You can find those people on sites like Facebook and LinkedIn. 

Where? Choose your business premises

You’ll need to rent out a gallery space, preferably in an arts district or an area with a lot of foot traffic. Find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a commercial space, you may want to follow these rules of thumb:

  • Central location accessible via public transport
  • Ventilated and spacious, with good natural light
  • Flexible lease that can be extended as your business grows
  • Ready-to-use space with no major renovations or repairs needed
art gallery business idea rating

Step 3: Brainstorm an Art Gallery Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

  • Short, unique, and catchy names tend to stand out
  • Names that are easy to say and spell tend to do better 
  • Name should be relevant to your product or service offerings
  • Ask around — family, friends, colleagues, social media — for suggestions
  • Including keywords, such as “art” or “gallery”, boosts SEO
  • Name should allow for expansion, for ex: “Art House Gallery” over “Abstract Art Gallery”
  • Avoid location-based names that might hinder future expansion
  • Use online tools like the Step by Step Business Name Generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create an Art Gallery Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

  • Executive Summary: Brief overview of the entire business plan; should be written after the plan is complete.
  • Business Overview: Overview of the company, vision, mission, ownership, and corporate goals.
  • Product and Services: Describe your offerings in detail.
  • Market Analysis: Assess market trends such as variations in demand and prospects for growth, and do a SWOT analysis.
  • Competitive Analysis: Analyze main competitors, assess their strengths and weaknesses, and create a list of the advantages of your services.
  • Sales and Marketing: Examine your companies’ unique selling propositions (USPs) and develop sales, marketing, and promotional strategies.
  • Management Team: Overview of management team, detailing their roles and professional background, along with a corporate hierarchy.
  • Operations Plan: Your company’s operational plan includes procurement, office location, key assets and equipment, and other logistical details.
  • Financial Plan: Three years of financial planning, including startup costs, break-even analysis, profit and loss estimates, cash flow, and balance sheet.
  • Appendix: Include any additional financial or business-related documents.
what to include in a business plan

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

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Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to art galleries. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your art gallery will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

  • Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
  • General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
  • Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
  • C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
  • S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just needs to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.
types of business structures

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.

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Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist, and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

  • Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
  • SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
  • Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
  • Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
  • Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
  • Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best options, other than friends and family, for funding an art gallery business. You might also try crowdfunding if you have an innovative concept for your gallery.

types of business financing

Step 8: Apply for Art Gallery Business Licenses and Permits

Business Licenses and Permits

Starting an art gallery requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as, health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your art gallery as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

  • General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
  • Business Property: Provides coverage for your equipment and supplies.
  • Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
  • Worker’s compensation: Provides compensation to employees injured on the job.
  • Property: Covers your physical space, whether it is a cart, storefront, or office.
  • Commercial auto: Protection for your company-owned vehicle.
  • Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
  • Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.
types of business insurance

Step 11: Prepare to Launch

Launching a Business

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.  

You can use industry-specific software, such as artgalleria, Lucidea, or Artlogic, to manage your inventory, sales, commissions, and marketing.

Accounting

  • Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero
  • If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial. 

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

Marketing

Some of your business will come from the casual passerby or online visitors, but still, you should invest in digital marketing! Getting the word out is especially important for new businesses, as it’ll boost customer and brand awareness. 

Once your website is up and running, link it to your social media accounts and vice versa. Social media is a great tool for promoting your business because you can create engaging posts that advertise your products: 

  • Facebook: Great platform for paid advertising, allows you to target specific demographics, like men under age 50 in the Cleveland area. 
  • Instagram: Same benefits as Facebook but with different target audiences.
  • Website: SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Buy Now”. This can sharply increase purchases. 
  • Google and Yelp: For businesses that rely on local clientele, getting listed on Yelp and Google My Business can be crucial to generating awareness and customers.

Kickstart Marketing

Take advantage of your website, social media presence, and real-life activities to increase awareness of your offerings and build your brand. Some suggestions include:

  • Signage – Put up eye-catching signage at your store and website. 
  • Sponsor events – You can pay to be a sponsor at events that are relevant to your target market.
  • Email marketing/newsletter – Send regular emails to customers and prospects. Make them personal. 
  • Seek out referrals – Offer incentives to generate customer referrals to new clients. 
  • Press releases – Do press releases about gallery events.
  • Paid ads on social media – Choose sites that will reach your target market and do targeted ads.
  • Pay–per-click marketing – Use Google AdWords to perform better in searches. Research your keywords first.
  • Influencer marketing – Pay people with large followings to promote your gallery. You can find micro-influencers with smaller followings and lower rates.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your art gallery meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your art gallery business could be:

  • Impressionist masterpieces to complete your decor
  • Treasures from local, up-and-coming artists
  • Cutting-edge sculpture, multimedia, and video art 
unique selling proposition

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running an art gallery, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in art galleries for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in art galleries. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

Building a Team for a New Business

You will likely need workers to fill various roles. Potential positions for an art gallery business would include:

  • Gallery Assistants – sales, customer service
  • Event Planner – plan exhibition openings and other events
  • Marketing Lead – SEO strategies, social media 

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run an Art Gallery – Start Making Money!

Running a Business

It’s not only possible to live out your art world dreams, but now might be the perfect time to do it! You can start your own gallery with any concept you choose, hold exhibitions and other events, and make your happening space the talk of the town. You’ll meet interesting people, do what you love, and build a lucrative business all at the same time. 

This guide has painted a detailed picture of how you should approach your new business, now it’s your turn to develop your plan and begin your journey as an art entrepreneur!

Art Gallery Business FAQs

How does an art gallery make money?

The gallery owner takes a commission on the sales of the art. That amount is around 50% of the sales price, sometimes more. The gallery owner and the artists negotiate the commission, as well as the price of the art.

How can I differentiate my gallery from competitors?

To stand out from competitors in the art gallery market, focus on creating a unique and memorable experience for visitors, develop a strong brand identity, showcase emerging artists, collaborate with other businesses, and prioritize exceptional customer service.

Are art galleries profitable?

The profitability of an art gallery can vary widely depending on various factors, including the size of the gallery, the quality of the artwork on display, the location of the gallery, and the marketing and sales strategies employed by the gallery.

While some art galleries can be highly profitable, it’s important to note that many galleries operate as small businesses and face significant challenges in generating consistent revenue. The art market can be highly competitive, and galleries must contend with changing consumer tastes, economic conditions, and other factors that can affect demand for art.

How to make an art gallery successful

Making an art gallery successful requires a combination of artistic vision, business acumen, and effective marketing and sales strategies. Here are some general tips for making an art gallery successful:

  1. Build a strong brand: Develop a clear and distinctive brand identity for your gallery that reflects your artistic vision and values. This includes creating a logo, developing a visual style, and establishing a consistent voice and tone for all communications.
  2. Curate compelling exhibitions: Host exhibitions that showcase high-quality artwork and create a sense of excitement and interest among visitors. This may include featuring emerging artists, exploring new themes or styles, or collaborating with other galleries or curators.
  3. Provide exceptional customer service: Create a welcoming and professional atmosphere that makes visitors feel valued and respected. Offer personalized attention and support to collectors and buyers, and provide clear and accurate information about the artwork on display.
  4. Leverage online platforms: Use social media, email marketing, and other online tools to expand your reach and engage with potential buyers and collectors. This may include showcasing artwork online, promoting upcoming exhibitions and events, and sharing behind-the-scenes glimpses of your gallery and artists.
  5. Network and collaborate: Build relationships with collectors, other galleries, and key players in the art world. Attend art fairs, conferences, and other industry events, and seek out opportunities to collaborate with other galleries or artists.
  6. Emphasize professionalism and ethics: Operate your gallery with transparency, integrity, and professionalism. Follow best practices for pricing and selling artwork, and maintain a high standard of ethical conduct in all aspects of your business.

Overall, creating a successful art gallery requires a strong commitment to both artistic excellence and business success. By developing a clear vision, leveraging online platforms, building relationships with collectors and other galleries, and maintaining a high standard of professionalism and ethics, you can create a gallery that thrives and contributes to the broader art community.

How to display art in a gallery

Displaying art in a gallery requires careful consideration of various factors, including the size and nature of the artwork, the layout and design of the gallery space, and the overall aesthetic goals of the exhibition. Here are some general tips for displaying art in a gallery:

  1. Lighting: Proper lighting is crucial for showcasing artwork effectively. Use track or spotlighting to illuminate individual pieces and create a dynamic visual experience.
  2. Placement: Plan the placement of artwork carefully to create a sense of flow and balance in the exhibition. Consider the relationships between different pieces and how they can be grouped to create a cohesive display.
  3. Height: Hang artwork at an appropriate height so that it can be easily viewed and appreciated. Generally, artwork should be hung at eye level, but the height may need to be adjusted based on the size and placement of the piece.
  4. Labels: Provide clear labels or plaques that identify the artist, title, medium, and other relevant information for each piece. This helps visitors to understand and appreciate the artwork on display.
  5. Presentation: Consider the presentation of the artwork, including framing, matting, and mounting. These elements can enhance the overall visual impact of the exhibition and create a sense of professionalism and attention to detail.
  6. Traffic flow: Plan the layout of the gallery space to encourage a smooth flow of visitors and minimize congestion. Consider how visitors will move through the space and how different pieces can be positioned to create focal points and visual interest.

Overall, displaying art in a gallery is both an art and a science. A successful exhibition requires careful planning, attention to detail, and a strong sense of visual design.