In this video about structuring costs, Lova Ruth Cohen-Sizyandji shares her views on:
- how do you set your margin
- how to establish different options
- how long until it becomes profitable
- and in the meantime
Lova Ruth launched her rental and sales of artwork business in 2018. Find her on ruth-gallery.lu.
Subtitles are available in english and french.
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Bookworm? Read the transcript!
How do you set your margin?
I started by looking to see what my competition was doing in other countries, then what people were doing in Luxembourg. There’s little competition in Luxembourg, almost none. So I decided: “I’ll do the math to see, first, if I were to rent a piece of art for myself how much would I be willing to spend?” And based on that, I worked with an expert from House of Entrepreneurship. And that’s how we tried to determine what rate would be reasonable.
How to establish different options?
It comes with time. At the beginning, when I started my company it was just rentals of art for a minimum 12 month period. Because I thought that renting for under 12 months would be tough, that I’d need to find 100 clients to live… I thought “no way, not possible.” But at the same time, I faced reality. I realized that in reality, for a company to sign a 1-year contract for them to commit for a year, it takes time. Then again, I had companies contacting me saying: “We have this event, can you lend us some art just for that event?” And I had to adapt in 2 seconds flat while on the phone. “Would that be possible?” It’s either yes or no because the customer doesn’t want: “I’ll call you back in 10 days…” No. So right away I said “Yes, it’s possible.” I hung up and thought “Alright Lova, now you need to make a proposal, you need to think, they need art for their event 10 days from now.” So I didn’t have much time, and I started imagining scenarios. I thought “OK, say a company wants to rent for one month, or a company wants to rent for 6 months… “What would I do?” So I adapted to all those circumstances.
How long until it becomes profitable?
After two years, I can already get enough, with enough contracts I can get enough rent to be able to say: “OK, from here on out, I’m fine.” Even if I’m not quite breaking even, the company can hold good.
And in the meantime?
Before the 2 year point, if I want to live I have to sell. The best way, and it’s a high point of working in the art world, there’s always a fair going on. At first I was too shy, but after 3 months once the company was up and running I took the plunge and went to my first fair. And after 2 more months, not even… in 2 months I did 2 fairs including the International Fair in Luxembourg, which allowed me very quickly to have enough resources to keep going without constantly injecting money into the company.