Many gallery owners are now selling art online, which has opened the industry up to a lot of new players. Canadians, however, are still very likely to visit galleries.
Across the country, there are galleries that sell more craft-based work to those that sell high end contemporary fine art. No matter what type of business you own, however, similar methods can be used to sell your art gallery and make sure you secure the highest price.
Marketing the sale
There are around 1,400 art galleries across Canada, with close to three-quarters making a profit. However, to be successful you need to have extensive knowledge, a passion for art and history, and enough capital to cover your initial operating costs.
So when it comes to selling a gallery, you will need to find the best method to target relevant entrepreneurs. Find a broker who has experience buying and selling galleries; the more experience they have in the sector, the longer their contacts list.
The buyer of an online art gallery may differ to an entrepreneur who is keen to acquire a bricks-and-mortar business. It’s good practise to host your listing through a variety of means such as online, local and industry publications or radio advertising.
Never underestimate the power of networking; use the list of contacts you’ve built up from working in the industry and make the sale of your gallery known to specialists. It won’t only be your employees that you will need to talk to about the sale of the business before word gets back to them but also the artists that you have signed to your gallery.
Before you calculate the asking price, make an inventory and include the price of all the artwork which you intend to sell off with the business. If you’re selling a gallery that has a strong brand and presence in the sector, you can raise your asking price.
Make any necessary repairs to the frontage to improve the building’s curb appeal, this could include fixing signs, putting plants outside or repainting the building if necessary. You want to make a good first impression on any potential buyers.
If you are selling an online gallery, make sure your website is running seamlessly and there are no glitches, missing photos or inaccuracies. You should make sure all your recent reviews are positive and your social profiles have engaging content.
This will also apply to selling a bricks-and-mortar gallery. You will need to have a website that is up to date and contemporary.
Get all your accounts in order and have trading figures accessible for any serious buyers to examine. Art galleries can have regular clients, make a list of your major customers and their sale figures, and demonstrate your service and staff standards.
If you have artists signed to your gallery, you will also need to be able to tell potential buyers why you have gone with those artists and give a projection for future values of their work.
Determining the value
No matter who the buyer is – a friend or a limited company – you will need to determine a realistic, fair valuation for your business. This can be difficult as you will also be valuing the art that is currently in your gallery.
Hiring a professional broker who has knowledge in selling art galleries could be hugely beneficial for the sale of your business; they can also help mediate fairly between buyer and seller to make sure both parties are satisfied with the end deal.
Consider the value of the intangible elements of the business; if you have a team of highly motivated and knowledgeable employees and managers who plan to keep working at the gallery after the sale, this could greatly increase the business value.
Tangible assets, such as an inventory of artwork, framing equipment, fixtures and furnishings, can also increase the value. There are a variety of methods used to value a business; investors generally prefer projected revenues or cash flow.