The latest free webinar in the Creative Exchange program co-produced by ArtsHub and Creative Victoria was held last month and, for all those who missed it, is now available for viewing online.
This time we’re shining a spotlight on how you run your business.
Are you a creative sole practitioner or micro business bursting with creativity and artistic potential, only to find yourself facing struggles with the nuts and bolts of running your business? This webinar provides tips and practical advice on managing the day-to-day business side of your practice, plus pointers as to where to go when you need expert business advice.
The webinar, moderated by Creative Victoria’s Paul Bateman, features insights from accountant Line Paras, singer-songwriter and Milk! Records co-founder Jen Cloher and arts accountant and valuer Michael Fox. The trio deep dive into their experiences, successes and lessons learned along the way to arm you with the knowledge and skills to overcome the hurdles of running an arts business.
A transcript is provided below.
Our presenters
Line Paras
Line is the founder of Counting Clouds, a Fitzroy-based firm that provides bookkeeping, accounting and business support services to artists and musicians and other creative small businesses.
Line has a background in hospitality, jewellery and music. In 1999 she left her dream job running a cabaret boat in Nyhavn, Copenhagen to chase love and fortune Down Under.
Line dreamed up Counting Clouds in 2011. She had been studying bookkeeping while on maternity leave and knew she had to make herself a job that would accommodate motherhood and also earn her a living.
There weren’t many specialist bookkeepers servicing creative small businesses at that time and it made sense to focus on a niche market, using cloud accounting technology while working within and around Line’s existing network.
Jen Cloher
Jen Cloher (Ngāpuhi and Ngāti Kahu) is an award-winning singer-songwriter and performer, and Milk! Records co-founder living on unceded Wurundjeri land in Naarm (Melbourne) Australia. Cloher’s taut, terse brand of rock is charged with the static tension that comes with being an eternal misfit; they have spoken truth to power with the shrewd eye that only an outsider can possess. Admirers have naturally gravitated towards Cloher’s incisive, generous songwriting. Over the course of five albums, they have won a J Award and an AIR Award and been nominated for an ARIA and the Australian Music Prize.
Michael Fox
Michael Fox is the Principal of Michael Fox Arts Accountant & Valuer and the Director of Fox Galleries. He is a certified accountant, fine art valuer and art collector. He holds a Master of Tax from the Melbourne Law School, University of Melbourne. Fox is a member of the Auctioneers and Valuers Association of Australia AVAA and is a Fellow of the Institute of Public Accountants.
In 2009 Fox established Michael Fox Arts Accountant & Valuer when he relocated from Brisbane to Melbourne to provide accountancy and art market advisory services to select clients. In 2016 Fox re-established Fox Galleries. In 2020 he established an office in Hobart and relocated his Melbourne practice and the gallery exhibition spaces to 63-67 Wellington Street, Collingwood, thus realising his vision of unifying a professional practice with an art gallery at the same location.
Transcript of the webinar:
Claire Febey (Chief Executive of Creative Victoria)
0:03 Hi everyone, on behalf of Creative Victoria and ArtsHub, welcome to today’s Creative Exchange webinar: Managing the Business of Creative Practice – an Expert Roundtable.
While we’re all joining from different locations today, I want to start by acknowledging the Traditional Owners of the lands on which we each live and work. I’m in Dja Dja Wurrung country today in beautiful central Victoria and want to pay my respects to Dja Elders past and present and to any First Nations people who are joining us today. This webinar is taking place on Aboriginal land and sovereignty has never been ceded. If we haven’t met before, I’m Claire Febey, CEO of Creative Victoria. My preferred pronouns are she/her and cis white woman with short brown hair and glasses, and today I’m wearing a black coat.
A bit of housekeeping before we get started, this webinar is being live captioned. If you’d like to access the captioning, just select ‘Show Captions’ from your Zoom menu. And if that doesn’t work, click the link in the chat. We’re also recording this session today. So any questions you ask will be on the recording. The recorded webinar will be available through the Creative Exchange page on the Creative Victoria website and also on ArtsHub. We’re going to send out a survey following the webinar. So please fill that in and let us know how we’ve gone and what you’d like to hear about in the future. The hashtags for today’s event are #CreativeVic, and #CreativeXchange.
At Creative Victoria we are delighted to be working with ArtsHub to bring this Creative Exchange webinar to you today. Because forging a sustainable career and a successful business in the creative sector requires you to wear multiple hats. You need passion, skill, talent, creativity. But often you also need to know about marketing, business development, finance, the law and much more. That’s why today’s webinar brings together three experts in their respective fields to discuss their experiences, their successes and also the things they’ve learned along the way.
This session is designed to empower you to better manage the hurdles of running a creative business. The panel of experts that we have with us today are Lina Paras, founder of Counting Clouds, a Fitzroy-based firm that provides bookkeeping, accounting and business support services to artists, musicians and other creative small businesses. Jen Cloher, acclaimed songwriter, multi award-winning artist and no stranger to the business side of the music industry, as co-founder of Milk! Records, and Michael Fox, a certified accountant, fine art valuer and art collector, who is the principal of Michael Fox Arts Accountant and Valuer and the director of Fox Galleries.
Today’s webinar will be moderated by Creative Victoria’s own Paul Bateman. We’re really lucky to have Paul with us today, because as well as his work with Creative Victoria, Paul is a State Library Victoria Creative Fellowship recipient, who has a background in writing for publication across a variety of media. Paul will moderate the conversation and facilitate the Q&A before ArtsHub’s Madeleine Swain wraps up today’s webinar. Before we start though, I’d just like to make a really quick mention of the next Creative Exchange live event, a special panel that will coincide with Melbourne International Games Week. This session is titled Mind Games: Mental Health and the World of Digital Games. And it’s going to be held in-person at Melbourne Town Hall on Thursday 5 October from 11am to 12:30pm. It’s sure to be an important and robust discussion. So if you’re interested in attending, you can register by the Creative Victoria website. I really hope to see you there. But now I’ll pass over to Paul Bateman to kick-start today’s discussion. Thank you, Paul.
Paul Bateman
3:49 Thank you, Claire. And good afternoon everyone. Welcome to this Creative Exchange session. Yes, my name is Paul. I’m lucky enough to work at Creative Victoria and very fortunate to be hosting today’s webinar – fortunate because it’s such a great topic. Because there are nearly 750 people I’m told registered for this event today, which is extraordinary. And of course, because we’ve got three really stellar guests joining us today to offer us tips and tricks, insights and information for your benefit. Those guests and I will speak today for about 30, 35 minutes and then I hope to take as many questions as possible in the 15 to 20 minutes after that. Down the bottom of your webinar ribbon should be a tools bar and in that is the Q&A button. If you’d like to ask a question of any of the panellists throughout the session, go to the Q&A button, type your question in and hit ‘submit’. And at the end of our conversation in about 35 minutes’ time. I’ll get through with the panellists as many questions as we can. If you see that someone has typed in a question you were going to ask anyway, rather than retype it just hit the ‘like’ button, because we’ll aggregate the most popular questions and try and make sure we get through those first.
As Claire suggested, we have scheduled this session today, in large part because you asked for it. We know from our own research and from past Creative Exchange surveys, that many individual creatives and micro creative businesses often feel lost in the financial and business side of what they do, are sometimes wary of financial and business types, but definitely need and want clear, practical, straightforward advice and support. And that’s the intent of today’s webinar, to support you through that part of your business, to help you build your business, and to ensure you’re aware of your rights and obligations. Let’s jump straight in. I’m going to kick things off by asking each of the panellists in turn, and in under two minutes, if that’s possible, to introduce themselves a little further, tell us a little bit more about what you do, why you do it, and how specifically your insights and experience might be relevant to our audience today. And Line, let’s start with you.
Line Paras
6:21 Oh, sure. My name is Line Paras, and the founder of business called Counting Clouds. We provide bookkeeping and now also tax services to creative small businesses, musicians, and artists and designers and such. We’re based in inner North Melbourne.
I have a team that’s spread out through the country and I also have a handful of people working for me in the Philippines.
I’ve been in business now for almost 10 years as Counting Clouds. And I started out just myself with just a couple of clients and my laptop and have grown it now to 18 staff and I think about 200 clients.
Paul Bateman
7:11 And of all the areas Line you could have chosen to specialise in, what drew you to the creative industries in particular?
Line Paras
7:18 Well, I’m a little bit of a creative myself. I wouldn’t say a failed musician, but definitely it was an expensive hobby for me to be… I play in a band. And also my background is in jewellery making and hospitality. And I guess I worked in a few venues and I was, you know, hanging out with all the other creative people and I just felt really at home in that community. So yes.
Paul Bateman
7:50 Nice. Well as a self-described, failed musician, and I’m sure, you’re not, that’s a nice segue to an established and very successful musician, Jen. Over to you – a little bit more of the work you do and how specifically, your insights and experience might be useful to our listeners today.
Jen Cloher
8:08 So thanks so much, Paul. My name is Jen Cloher.
I’m coming in from Wurundjeri land in the Kulin Nation and I pay my respects to their Elders past and present, remembering a rich culture thousands of generations strong in storytelling, songwriting and art making.
Yeah, look an expensive hobby. Beautifully put. I think that’s probably where I have the most to offer. It was the moment when I realised that my hobby had crossed over into a business. And I’ll talk to that today because I think that’s when things really changed, was when I came out of denial that may be what I was doing was no longer a hobby, but a career path. A little bit about my background, I’ve been writing and performing, releasing music and touring independently as a self-managed artists now for close to actually 20 years. And in that time, I’ve also been a co-founder of a Naarm-based record label called Milk! Records, which was founded with Courtney Barnett, who was also a member of my band for many years.
And over the past decade, I’ve run – and I’m sure there are people in this room who have come along – a series of online masterclasses and in-person workshops with self-managed artists, like the ones in this room, where we, you know, bring in other artists to talk to the challenges that we face in this huge, expensive country with a relatively small population. So yeah, I can talk to more of that today. But really great to be here. Thanks.
Paul Bateman
Thank you, Jen. Word perfect. Michael, you’re an arts, accountant and valuer? Would it be cliche of me to suggest you don’t have a creative background? Or did you have a creative background as an accountant as well?
Michael Fox
10:25 Well, what actually happened was that I grew up in a creative family of artists and musicians on my mother’s side. But that was counterbalanced by having a very non-creative family of accountants on my father’s side. So in some way, I’ve ended up straddling the two, creative and non-creative. And it’s taken a bit of a journey to do that. I initially had qualified as just an accountant, but had always wanted to do something more than that. My mother was a painter, but not not a commercially exhibiting painter, but a talented painter, who put her work into into the odd show here or there.
And I just loved, you know, curating exhibitions and putting shows on and what have you. And I decided to start my first gallery, when I was quite young. And over a period of time, it’s just practice, I guess. You know, like, you just get better at what you do. But at the same time, I continued to do my work as an accountant. And over a period of time I managed to do the two. It was quite tiring when I first started doing this. Left brain, right brain. But you know, where I’ve ended up, I guess, is having my own accountancy practice. So I’m a tax agent. I’m a specialist in the creative industries, look after clients in the visual arts, music, writers, you know, performers on stage film and TV, radio professionals.
Now I’ve got four offices, I’ve got a main office in Melbourne, I’ve got an office in Sydney, Hobart is where the processing before the client accounting work happens. Very proud of that, too, because I’ve helped a lot of new arrivals to the country get their visa qualifications, but doing it that way. And just making sure I don’t offshore, because I don’t really believe in offshoring, and also just about to open an office in Perth. So yeah, I’ve spent a long time, you know, advocating for a fairer deal for the arts. And it’s particularly through lobbying for reform to taxation.
And one of the big turning points, I guess, in my life was when I was the campaign manager for the Save Super Art campaign, over a decade ago, and I’m not sure if you remember this Paul, but the government changed the rule so that you were no longer allowed to use your super fund to buy artworks. Because of this very arcane rule that by looking at art, in a superfund gave you a pre-retirement benefit, because you’re enjoying it. And that always to me was incredible, that they decided to go that far, to stop people buying art. And following the campaign, I decided I really needed to know more about how this all works. And that’s what led to my completing a Master of Tax at the Melbourne Law School.
Paul Bateman
13:39 So Michael, you sound like a very good blend of yin and yang. Thank you. This could be a question for everyone. But Jen, I might get your response first. I want to get back to first principles like a threshold question. There must be a moment for each individual creative practitioner when almost psychologically they decide, I’m in this for real, I’m going to make the leap of faith. I’m going to establish my practice as a business as well. When they reach that moment, what’s the first step? What are the first things they need to know when they’re about to make that leap of faith from hobby to career and business?
Jen Cloher
14:19 Yeah, well, Gareth Liddiard once put it beautifully at one of the I Manage My Music workshops, where he said, you know, if you’re going to sell albums and tickets to shows you’re running a business. So you know, you got a business, whether you like it or not. And I think that really sort of resonated for a lot of us in the room, because no one really teaches you this stuff, right? I mean, unless you kind of work as an accountant or bookkeeper, artists generally, don’t learn a whole lot about how to manage a business or you know, look after how you save and how you plan for future projects.
So I guess, the way I put it is this is like, it doesn’t really matter whether you’re making money in your business yet. It’s really about just acknowledging that you have one. And that you have an intention to release music and play shows, and record music. Even if you’re not doing it yet. You know, that’s the plan. And I think one of the best things and best ways to acknowledge this is to open a separate business account. And I often share this, like, I just had one bank account, and everything came in and everything went out. And I had no idea where my money was going, and what I was doing. So having a separate business account, which was simply Jen, Cloher Music, brought in that business separation. And it also set up some really good guidelines for me, which was if I wanted to go and record a single or an EP, and it was going to cost me $3000, and I had $1000, in my business bank account, then I had to go and find that money.
I couldn’t debt to myself, I couldn’t debt to my family, my partner, my friends. I cut up my credit card, I got really, you know, sort of hardline, because I had debted to my business, you know, and I think a really, I guess, like, my biggest takeaway to any artist is, and it’s much easier sort of said than done, I know, it’s a big call. But whatever you do, don’t go into debt. If you can fundraise, play shows, work a B job. That’s another thing, don’t lose your B job, keep working, there’s no reason to throw… people are like, ‘Oh, I’m just going to throw it all in and just like, give everything to my art.’ And I’m like (laughs) have a good time, because I haven’t. You know, and that’s the thing is, like, getting realistic about, you know, there’s maybe sort of like 2% of artists and musicians in this country, who make their entire living from their music or their art.
And just, you know, like, knowing that, I think just lifts all of that stuff around, like, ‘I’m a failure. If I work a B job’. You’re not, you know, it’s really good to have that there. And I guess the last thing, you know, to think about it this way, as like, if you have a baby, let’s say your business is your baby, right? And you want to grow that baby up, you know, you’re not going to turn to that baby and go ‘pay my rent, buy me clothes, feed me’, you know. You have to take care of that stuff. So having a separate business account really helped me to start to see how much am I earning in my business? What do I have to spend? And what do I need to go and make in order to keep, you know, making my work?
Paul Bateman
18:02 That’s really good. Jen. Line, Jen said, it starts with an intention. Is that your experience and what comes next?
Line Paras
18:11 Well, I guess the intention, yes, it has to be there. I would also, you know, recommend, it doesn’t have to be a formal business plan, but writing it down, and figuring out, you know. Obviously, because if this is something that you’re going to try and make money from, and you are, you know, starting it as a business, you do need to earn money, and you do need to work out how much money you need to earn. If you’re keeping your day job or something on the side, that’s definitely very good advice. Because I do find that sometimes people maybe go all in too soon. And then they end up disheartened and possibly then give up. And don’t try again. Because the money that you can earn, you know, be it freelancing, or in selling your art or playing music, the money that you earn that comes into your bank account, it’s not only yours, it has other things that it has to cover, such as taxes, such as, hopefully also like your own superannuation.
You may need to pay other people that are involved in in the work that you do. Most certainly, if you’re an artist, you’d have to pay for materials or equipment and things like that. So it’s not I think… it’s easy to go ‘oh, I just made like, you know, $3000 from selling something or for doing a performance’, and then, you know, so then you’re like, really rich that month and then next month, there may be nothing. And I think it’s very hard to plan your finances on a longer period. So that’s why I would say, sit down and write down your plan, work out how much you need to actually live. And also, you know, put money aside for the taxman and then go from there and be realistic around around it. Yeah.
Paul Bateman
20:29 Michael, you might be uniquely qualified to comment on people who are just making that leap of faith, you would have seen pros and cons by the dozens, I would have thought, What’s your thoughts on people who are making that leap into taking their art into a business?
Michael Fox
20:49 Well, I kind of have done that leap myself, when I started my first gallery. And I think that a really good way of looking upon this issue is a great phrase, which is the ‘magic or the money’, and trying to get a balance between the two. And a lot of arts practices, there’s lots of magic, there’s very little money, and some arts practices, it’s all driven by the money. And for that reason, it doesn’t have artistic validity, and it doesn’t kind of carry through. So I think that you have to have some sort of balance. And you have to start at a point where, you know, your intentions are good. And I really agree with what Jen was saying before about making sure that you really do, you’re able to to sustain your practice, build an audience, don’t get into too much debt, etc. And what Line was also saying, of course, as well, is true, which is you should have some sort of plan there as well.
But again, a lot of arts is also trial and error. And you don’t really know what will work. I’ve held many exhibitions with artists where I’ve just scratched my head: what are they on about? And the work has sold. And it’s just an astonishing, you know, and there’s some sort of connection there. Because they’re not really necessarily connected to what’s going on in the day to day world, mightn’t be reading, well they’ll not read the papers. We don’t read the papers anymore, of course, but you know, not following the news. So that’s kind of the starting point, I think is really just trying to look at the validity of the arts practice itself. And once you actually then get to a point where you can keep it going. It’s then more an issue of sustainability. How do you keep this going, because a lot of artists, you know, they get to a point in their lives, where it’s gets very difficult to keep going. And there is only a small percentage that really do make it as a full-time living.
Paul Bateman
23:04 And how do people navigate the tension between things they can do for themselves, and things for which they need to ask for assistance? How do they know which is in their circle of control and which they might need assistance with? And that’s an open question to anyone, but maybe you first, Michael.
Michael Fox
23:22 I think you build networks. And it’s very important in the arts, that you build the networks for the right people. And I think that success or finding people who are successful, finding people that you can look up to as a mentor is very important. That’s what I would say, that would be the starting point. And from there, quite often, those people will introduce you to other people who might be able to help you in accounting or legal issues or other issues that you might be facing. And that means that you don’t necessarily have to be paying top professional dollar to get that advice. You might be even able to be introduced to someone who could sit down for coffee, and talk through things, you know, because not everyone in the professions are necessarily out to make a dollar from everything they do
Paul Bateman
24:16 Jen, you sound like you sorted a lot of it out for yourself by trial and error. But looking back, are there any shortcuts or tips to distinguishing between things you can do for yourself to get established and things for which you should ask assistance?
Jen Cloher
24:32 Yeah, look, there’s a couple of things that I just wanted to touch on. First of all, you know, I’m only speaking from my own experience when I say don’t give up your day job or your B job. If it’s something you want to go and do and give all of your energy to, then by all means do, but I’m just being really honest in letting people know that I don’t derive all of my income from my music. So I’m not going to sit here and pretend to be some sort of like level of success, you know, blah, blah, blah, I feel like I’m really successful. And I love what I do. But here I am sitting on a panel. And, you know, I’ll be doing all sorts of things around my music practice; it all leans into my music practice. So the work that I do around my music is, you know, related to my music. And I think that’s been something that’s really helped me in good stead.
I think a really good way to work out whether or not you need a B job or not, is when you no longer have the time to do your day job. Because your business is so busy, and you’re fielding so many requests, that you can no longer actually work another job. I guess the other thing to sort of think about is, you know, we don’t need to be across everything. So whilst I manage myself, I have a bookkeeper, I have an accountant, I have a booking agent. And those people are really good at what they do. And they’re able to guide me, and they’re able to take some of that sort of stress out of my hands. I’m not trained in those fields. But I am able to make, you know, really good decisions. And whilst I have an accountant and a bookkeeper, I’m really across my finances.
I know, I could actually tell you to the dollar, what I have in my business account, what I have in my super fund, what I have in my cash in hand, cash on hand account. And I actually look at those figures daily, you know, like, it’s something that I really practice. And I guess the last thing is, once you open that business bank account, whether you’re making money from your business, or not, just whack $20 in there every week, just start to build savings. Because savings are an intention, and they’re energetic, and they build abundance. I don’t want to sound like one of those new age like white feminists, crystal hugging people, but they actually do. I think where you put your energy and your thought, things grow? You know?
Paul Bateman
27:17 Line you once said or wrote that understanding your financial position is like knowing what you have in your kitchen, before you start cooking a meal. You don’t just start peeling the carrots and hope you dinner will work itself out as you go. What were you implying there and suggesting there?
Line Paras
27:34 I was implying that this this was from, from during COVID trying to help creative businesses sort out their financial position in order to weather the storm, so to speak. And I guess it was it’s about planning. So and that was, as I said before, so I really think, again, that it comes back to also of course, your intention, but actually practically having some sort of a plan forward. And maybe, ‘if this, then that’ – like if I make this much money, then I’m going to do X Y Z and just sort of being a little bit ahead of yourself by thinking into the future.
Paul Bateman
28:29 And what are the typical and some specific business issues that you helped solve for some of your small creative clients?
Line Paras
28:40 Um, well I guess, it can be anything from people coming to me with with several years worth of accounts that that needs to be bookkept and put into some sort of order and then presented to the tax office. It could be if there’s if someone has taken on a large project and they suddenly have to employ a team to work for them, so we can help them set up payroll and we can help, you know, run that side of things for them, so they can focus on what they do best and not get stuck in admin.
I would also say that a lot of the work that I tend to do, and I quite enjoy doing this part of it, is kind of helping people get their head out of the sand and actually see the reality of the numbers, because I think there’s often a lot of fear and shame around it. And there’s really so much to that part of what I do and I think it’s one of the reasons why I’ve managed to grow my business, because I’m able to really speak to that side of things for people, and they feel comfortable talking to me about it, where they wouldn’t maybe, you know, they couldn’t even go to their own family and talk about it because they’re just so ashamed that they possibly have no idea what’s going on.
Paul Bateman
30:17 Jen several years ago, you elected to start your own record label, instead of joining an established label. Was that a creative or business decision? Or both?
Jen Cloher
30:29 Yeah, well, actually, I didn’t decide, Courtney Barnett, decided to start a record label and just did it from, you know, her bedroom office. And I kind of watched with one eyebrow raised, because I was like, ‘Oh, really, like you want to do even more work as the artist? Like, are you insane?’ This would have been 2011. So it’s a few years ago now. But I then sort of watched her sell music, you know, and digital music and physical music, just from a Bandcamp account and a Facebook page. I think Instagram was just coming in and streaming wasn’t yet a big thing. So it was a different time, granted. But, as I looked at it, I was like, ‘Wow, like, why would I give away 50% of my earnings to a record label, who at best might give me like a $10,000 advance, if I could maybe take on some of that work, put it out through Milk! Records. And, you know, hire a publicist for some of those opportunities with media, radio television?’ And, you know, it was a great choice.
Because as I released my third album through Milk! Records, Courtney, Barnett’s career started to take off internationally. And so there were all these eyes, on her and on Milk! Records by default, from all around the world. And in a way that was its own sort of marketing and promotion. Like we didn’t have to yell too loud, because people were just naturally attracted to it. And I guess, as I started to see the benefit, you know, I’d been speaking about community at workshops, I’ve been talking about how important it is, as artists, to have our own community and to treat our fans and audience as community, you know. Patreon has really taken on that concept and run with it. I was like, well, here’s another opportunity, you know, to build community, within the music industry and walk together rather than an idea of competing with one another. And I guess the last thing that I’d say there is, you know, a lot of my business.
A lot of my involvement in business has been intuitive, because I don’t allow myself to go into debt. I have a huge security blanket. You know, that bottom line has really saved my arse, but I don’t know everything. You know, like, I’m just lucky that I was registered for BAS when we went into the pandemic, so that I could get some of those Creative, not Creative Victoria, those Business Victoria grants, or I would have been screwed. I mean, we saw what happened to our industry during the pandemic. I have friends who weren’t registered for GST, you know, who, you know, were there in the gig economy, and really up against it. So, you know, I think the reason why I tell that story is like, we don’t know everything, but the fact that people are sitting in here, and they’re asking questions, and they’re interested, that is a huge asset. You know, that you’re actually engaging, because you’re probably going to have, you know, less chance of running into you know, dangerous territory.
Paul Bateman
34:14 Michael, how important is it to tackle business issues and business problems early and head on? And in which ones Line’s referred to the shame sometimes people feel of not knowing. Jen has admitted you can’t know everything. Which problems and in what order?
Michael Fox
34:34 Yeah, that’s a very interesting question indeed because quite often, well, the rules around taxation of business, don’t really square with the reality of being an artisan practice. And I’m not quite sure whether it’s because of people being shamed. It might also be that they are so engrossed in what they’re doing as an artist that they just kind of… that’s their priority, their priority is actually doing their art, their priorities are not doing their books. And I’ll come back to what I was saying before you have to somehow get to a balance between the two. I just think that, regardless of whether you’re an artist or whether you’re working for a bank, you do need to do the same thing, which is to be compliant with your tax obligations. And what I find a lot with artists sometimes is that they don’t really grasp the necessity of doing this.
And I think COVID was a very good example of where a lot of artists missed out on COVID grants, because they simply had not put the returns in that they had not taken this part of their practice seriously. We had to do so many rescue missions to recover COVID grants for for clients all over the country, including New South Wales. And a lot of it had to do with just the interpretation of the various COVID lockdown rules, etc. How do they qualify or not qualify? I had a very interesting example of a musician who survived through COVID by doing Zoom, yoga classes. And he had answered a COVID questionnaire from New South Wales Health Department. And he filled it out saying that he had ceased business; however, they had leapt on to the fact that he was still operating his Zoom yoga. And I had to argue, and was successful, that actually it was not a business activity. That saved him about $30,000. Actually, that whole that whole situation. And it’s also a good example of what is a business and what is not a business. And the tax rules around that really concern a number of key criteria, and one of those is regularity of activity.
Another one is the profit motive. So we just look at those two, for a moment – regularity of activity, I mean, most of the artists will actually demonstrate that they are actually serious with what they are doing. Every day, they go to the studio, every day they paint, every day, they go to the rehearsal room and every day they they they compose music, etc. But the next one, which is the profit motive, that’s where it gets into a very grey area. Because, you know, as I was saying before, the whole nature of this, I mean, to be exciting, there’s got to involve trial and error. And that doesn’t necessarily square with, are you doing this to make money. Sometimes you make the most money, when you don’t actually have an attention to make money. It’s almost like the Mel Brooks film The Producers. I mean, it’s like that in a lot of creative industries.
Paul Bateman
38:15 A reminder to our audience that we’re taking Q&A, as we go through this. That’s in the toolbar at the bottom, you can submit a question or vote for a question you like, and we’ll come to those questions in just a minute. I’m going to whip through the panel again now with a question for you all. Maybe starting with the Line. Just your one or two top tips for people making the leap to a business and a short-term tip and a long-term tip. What’s the first thing they can do? And longer-term? What can they do? And then over to you Jen and Michael again. But Line first.
Line Paras
38:54 Keep your receipts and know how much money you need to earn from this business of yours. Rather than just kind of flying blind, so know how much money you need to, you know, pay your own way.
Paul Bateman
39:15 Right. And Jen?
Jen Cloher
39:17 Yeah, well, as mentioned, open a separate business account for your music. I guess the other thing that I really recommend to people is to go for as many grants as possible, whether that’s sort of local government, Creative Victoria, Creative Australia. Even if you don’t get the grant, you have a business plan for your next project. So I kind of see grants as like a business plan with a carrot dangling at the end of it. I think a lot of artists initially are really intimidated by grant writing. But like anything, once you sort of start to get the gist of it, it becomes a lot easier. Yeah. And it’s actually not as much work as people think. So yeah, another thing that I’d really recommend is having an action buddy, so someone in your field, or even a small group of other artists in your field, and just meet up once a week, with some hot promises that you are going to fulfil for that week.
And then you report back to each other. What are the actions that I’m going to take toward my business this week? What are three simple things that I can do? And how does it feel when I take those actions? And the beautiful thing about that as well is that you’re sitting with your community, you’re community building, you know, you’re working with your peers, you’re not going to someone further down the track asking for a job, looking for someone to rescue you, or a manager that will somehow come magically, you know, on a white horse and whisk you away to fame. It’s about really grounding it in reality. And I have found working with my comrades, with artists, has been… they’re the most important people. They’re the most important people in my arts practice, because managers and booking agents and labels come and go. But other artists are the ones that are going to lend you a microphone or help you out with some recording or actually show up for you when you’re losing your mind. Because you will many, many, many times, you know, so it’s really good to have that emotional support.
Paul Bateman
41:48 And the idea of registering how it feels to tick off those goals too. To sit with that feeling of achievement for a while. Lovely, Michael, a short-term tip, and a long- term tip for someone trying to get their stuff together.
Michael Fox
42:04 Short-term tip is to find a way to summarise your financial information. As an accountant, it’s very difficult to deal with people who give you essentially document dumps of data. It’s like, and I think some creative people are very keen to prove that they can show everything that they’ve spent and they can prove it in case of an audit. But, you know, with the tax system itself, it’s based on a self-assessment system that’s been like that. It’s not like there’s someone in the tax office who looks at your return and goes through it. And it says ‘Oh Paul, this year, you’re claiming this’, and it doesn’t work like that. So the starting point is to try to figure out a way in which you can summarise your information, so that it makes it easier for the accountant or bookkeeper to prepare your accounts. Because having your accounts that are in a readily accessible form is extremely important if you’re going to access grants, go to the bank, you know, etc, finances keep expending.
The long-term tip would be choose the right structure for your business, choose the right legal structure. So a lot of bands when they start out, they’re typically partnerships, what might be described as common-law partnerships because there’s not even a partnership agreement. It’s just like, you’re the drummer, you’re the lead guitar, you’re the bass with three of us. It’s a three-man, three-person partnership. But, you know, partnerships have problems because the profit share is split evenly in partnerships. But partner one might have investment properties and partner two could be on a disability pension. And so it doesn’t sometimes doesn’t make sense that you split the income that way. And a lot of tax planning revolves around essentially trying to find a way in which you can minimise tax in a legal way because tax is a very big part of any business. It’s not you know, if you’re if you’re paying tax, you shouldn’t feel, ‘Oh, wow, that’s terrible. I’ve got to pay tax.’ If you pay taxes, it’s just simply a business expense that you have to find a way to manage it.
So move beyond partnerships and look at possibly companies, possibly look at trusts. And the other thing is you might decide, ‘Well, we really should be a not-for-profit, because what we’re doing has got a charitable purpose, or it’s got an educational purpose or environmental purpose, etc’. And so you might find that it’s better to create a not-for-profit, and then you can look at, you know, looking at potentially salary packaging and fringe benefits. And providing rewards to people helping this organisation in that way. So I’d say that the long term and, particularly as all as your business matures, it’s just making sure that you get that structure right.
Paul Bateman
45:16 I’ve been fed tonnes of questions here. So let’s jump into them and try and get through them all. Let’s go through really short, sharp answers if we can. I don’t know who to direct this first one to; maybe to you, Michael, the question is, at what point do you think a micro or small business should hire an accountant or bookkeeper?
Michael Fox
45:37 I think you should hire an accountant or bookkeeper, well, I think you should right now. The tax system is pretty complicated. And I’m not trying to, you know, drum up more business for myself. But I think that if you’re going to want to succeed in business, you should be looking at hiring an accountant or bookkeeper almost from the beginning.
Paul Bateman
45:59 Right. Line, a good question for you. Someone’s pointed out that the creative process involves trial and error and experimentation, work that often comes to nothing. How can someone budget for those times and those errors in the context of dance or events? They’ve never seen this, they say, is a budget entry on any grant application? But it’s true, isn’t it? There’s a lot of time spent trying to arrive at a piece of work.
Line Paras
46:29 Yeah, I suppose research and development is a big part of the process. You know, tech companies use these terms, and there are tax benefits for that. But I would say that if there’s any expenses related to your research and development, of course, that can be deducted in your practice. That would be the main way to show that in the books, I suppose.
Paul Bateman
47:09 They’ve also asked where can they find out rules and obligations around transitioning to an art-based income, super, tax, pensions, insurance, etc? Are there trusted resources or destinations you go to for off the shelf advice on those kinds of issues?
Line Paras
47:33 Look, the ATO website is really an amazing source of information. It may be a little dry, but there’s a lot of information there. Or you could ask someone but there’s I mean, I suppose you, there are lots of things you can Google your way to and then perhaps gather information and sit down with with an accountant. I would recommend if you’re really not sure.
Paul Bateman
48:07 Jen, someone here has picked up on something you said about relying on your networks. They’ve asked: how do you build good networks in rural areas, rural and regional areas? I’m not sure what part of Victoria you’re beaming in from, but any tips for building good networks, especially outside of city areas?
Jen Cloher
48:30 Yeah, well, I guess I can’t speak from my own experience of that, because I haven’t lived regionally in in Victoria. What I would recommend is if there is a live music venue that seems to be really pumping somewhere like I don’t know like Meeniyan, you know, Meeniyan Hall, or there’s a really great gig down on the coast at the Anglesea Memorial Hall. But if you can find places where someone behind the scenes is getting it right, and they’re bringing in great music, and people are showing up and buying tickets and buying merch, get along to those nights. And if you can, you know volunteer, help out. Maybe ask if you could support and start building relationships around a place that feels like a hub.
Paul Bateman
49:33 Someone, Jen, has asked or noted that musicians are some of the poorest paid contractors and employees in the entertainment industry. Are you aware of and do you recommend backing the Musicians Australia current campaign requesting the $250 minimum fee for publicly funded gigs? Are you aware of that campaign and a supporter of it?
Jen Cloher
49:56 Yeah, I am. I mean, Musicians Australia is exactly what we need as far as changing the music industry as we know it today. We have to have unionised collective action. I think one of the conversations that needs to be had in that space is that there’s all sorts of different ways that we set up music businesses, and we’re all at different places in our career. You know, I wouldn’t dream of paying a band member $250. That would be under earning. But for someone starting out in their career, going and playing, you get the pub and getting $250 is a sweet deal.
So I think always we need to be focusing on the people coming through at the beginning of their career, to make those places where they’re performing, where they’re working, as safe and as regulated as possible. And when we do, it has an effect where it just changes everything. You know, it’s sort of like having an alignment of the spine. So yeah, I’m aware of that campaign. Have I been actively supporting and sharing about it currently? No, I haven’t. I’ve actually been having a little break. Because I’ve just come through three years of constant making and managing. So I just needed a bit of time out, but I’m aware of them. I think they’re doing great work.
Paul Bateman
51:33 That’s important too. Michael, final question for you in two parts. Is there a formula for establishing a fee rate when you’re producing creative work for sale? And, secondly, someone has asked, should I register a business with or without GST?
Michael Fox
51:51 OK, great questions. So you’re talking about establishing a value for, for example, an artwork based on… yep.
Paul Bateman
52:02 Or fee for service.
Michael Fox
52:04 Fee for service. Well the answer is it’s pretty much market based. But there is, what I would say is that what you should always do is have a minimum amount that you will do something for. So you might say, for example, my hourly rate is $100 an hour or something like that. But I won’t do any work for less than $300. In other words, I want to anything for unless it’s involves three hours of work, that’s one way of doing it. So I think that, you know, I guess we’re all in living in this gig economy, where people are kind of used to just accepting, you know, like, the minimum amount that they can, you know, receive for something. But in terms of services, I think also you need to look at your budget, and how much you need to live on actually. And so if you, you know, sort of almost like engineered back to front, before you go to the hourly rate. So that’s how I would approach it. The other question about GST? So the question, Paul, was the question about when do you register for GST?
Paul Bateman
53:19 Should I register a business with or without GST?
Michael Fox
53:23 Right, so the GST legislation provides for compulsory registration, except for certain industries like taxis, etc. But you don’t have to register unless you have a turnover of $75,000 or more, of course. In that case, you do have to register for GST. If your turnover is less than $75,000, you may decide to register because a/ it just looks like you’re more serious, you know, so instead of giving someone an invoice, you give them a tax invoice, which means an invoice for GST. And the other reason, of course, is that there are GST credits. So when you buy supplies for your business, or arts practice, you also can receive a refund of the GST components of your suppliers. And some of those suppliers you mightn’t even realise you can get credits for.
And they are things like your internet, phone bills, even for your car. And a car is a good one, because just about everyone needs a car to get around in Australia. And so if you buy a car and it’s new, and you have the necessary requirements through logbooks, for example, that you can get the GST back on a car which is quite a big outlay or computers or what have you. So that’s the other reason why, because sometimes when you start out in business, you might potentially even have more GST credits and you have more in GST that you receive through sales. Of course, if you keep the situation going, where you’ve got more GST credits coming in than GST sales, you’re kind of broke. So you don’t want to be that guy.
This is more like when you start out, you could start out to get the GST credits back. But the other thing about GST, which is with the visual artists more than anyone else, is that it’s more like a situation where you can’t put it on top of your services. So businesses that have got services is quite easy to add GST to their price. But when you’re selling paintings, people aren’t… you really would struggle if you said to someone, this painting is $1000 plus GST. It just doesn’t work that way.
Paul Bateman
55:57 Michael, thank you. And thank you, Jen for putting that comment in the chat the Manage My Music masterclass and workshops. That’s fantastic. I have to hand back over in just a second to Madeleine from ArtsHub. Because I’ve already gone over time. But I want to squeeze in one last question to all of you. Starting with you, Line, to just offer you the chance in 30 seconds to a minute. One final note of encouragement or insight that you might like to share with the 750-plus people who have listened in today.
Line Paras
56:26 I would say that, that if you are making the leap into a creative business, go for it. And you don’t have to have all the answers from the start. Just keep your receipts.
Paul Bateman
56:39 Right, thank you. Jen.
Jen Cloher
56:41 Yeah, I think all the stuff that I’ve touched on – don’t go into debt, cut up your credit card, just have a business debit card, don’t spend the bank’s money. Don’t spend your family’s money, don’t spend your partner’s money and watch those relationships, transform and become full and whole again, and find your community. Find the community of artists who can support you. And I just want to sort of say to everyone in this room, the very fact that you’re here is awesome, like good on you. You’re taking affirmative action toward your business. Once you get systems in place.
And you’re asking all the right questions in that Q&A you will be surprised at how much easier it becomes to run your business. Really, the people in this room are just talking about systems that can support you. So we can use them. And as mentioned, I will be running some masterclasses, workshops and things, I don’t know at some point later this year, early next, so jump on managemymusic.com and just join my mailing list, and I’ll chat to you about more stuff.
Paul Bateman
57:54 And Michael, final word to you.
Michael Fox
57:56 Yeah, I just would say that. I agree with both panellists about the support we all have for people making a living from a very difficult thing from their creative endeavours. I really have always admired people who can do that. And just have to find the right people around you. Just make sure that you use your intuition. And make sure that, you know, the, your mentors, even patrons, for example, that they’re the people that will support you. And the role of the professionals is really to it’s like a check and balance type of system, I guess, really. And yeah, so there’s no reason why you can’t make a go of this long term. And there’s plenty of support for you out there in the community. And particularly with organisations like Creative Victoria.
Paul Bateman
58:58 Michael, Jen, Line, thank you so much, Madeleine from ArtsHub, I’m going to hand over to you to wrap up and talk about next steps. But before I do, thank you, everyone for your participation today. And thank you to those listening on. Madeleine.
Madeleine Swain
59:16 Thank you, Paul. Thank you very much. And I’m still smiling because I just saw the last question in there from Jasper that which was , does anybody know where to find a sugar daddy? Which I think I can’t answer that. But if anybody can, we will in due course. Hello, everybody. I’m Madeleine Swain. I’m the managing editor at ArtsHub. I’m a middle aged white woman with brown tied back hair and glasses and I’m wearing a dark jumper and a stripey jacket. My pronouns are she and her and I’m speaking from the land of the Kulin nations, and I’d like to acknowledge the Traditional Owners of this land and I pay my respects also to their elders past and present and extend that respect to any Aboriginal or Torres Strait Islander peoples joining us here today. We’re coming to the end of our time now.
So on behalf of the teams at ArtsHub and Creative Victoria, I’d like to thank everyone for joining us. I’m sorry, we couldn’t get to all of your questions. But we’d like to thank all of those people tuning in who are answering each other’s questions, which was really wonderful. It shows there’s a real community out there. And I’m sure you’ll also join me in thanking our fabulous panel, Line Paras, Jen Cloher and Michael Fox for sharing their expertise and insights and Paul Bateman for his formidable work in moderating the discussion and your questions. Do look out for our Creative Exchange podcast series, which are coming up soon. And we’ll look a little more depth at some of the topics raised in these webinars so far. And if you haven’t yet, don’t forget that you can catch up with the first three previous webinars via ArtsHub at artshub.com.au or Creative Victoria’s website. And you can track them down on YouTube too. And this one for somebody that asked in the chat will be available to view shortly when we’ve tidied up the captions and put it online.
And to find out about upcoming events in the Creative Exchange series, please subscribe to the Creative Victoria enewsletter or follow it on social media. And finally do remember to use hashtags I don’t think we mentioned them this time but the #CreativeVic with uppercase C and V and the #CreativeXchange with an uppercase C and then an uppercase X with no E. It’s a bit of a strange one that one that we are sharing with you now. And please do complete the feedback survey, which will help us with our next webinars. And thank you again for joining us today and we’ll see you all next time.
To catch up with the previous webinars in this series:
Webinar #1 – Thinking outside the box: what the creative industries can learn from innovators in other fields.
Webinar #2 – A new way forward: how inclusive leadership is driving change.
Webinar #3 – AI: A point of inflection for the arts.
