Ed Winkleman on Opening an Art Gallery (Recession Be Damned)

Ed Winkleman on Opening an Art Gallery (Recession Be Damned)
During the depths of a recession — when keeping tabs on the number of art galleries that have closed has become something of a hobby among certain journalists, and one notorious blog even features a death watch — would seem an unlikely time to publish a how-to guide for opening an art gallery. And yet the intrepid and astute Ed Winkleman, who runs his eponymous gallery in New York's Chelsea art district when he's not posting on his popular blog, has done precisely that. His new book, How to Start and Run a Commercial Art Gallery, comes out today from Allworth Press. ARTINFO cornered Ed in his gallery last week and pestered him about how much money we would need to borrow from our parents in order to open a gallery, why we would need to grit our teeth and write a business plan, and why being an art dealer is the best job in the world. He also told us the top five things not to do when opening a gallery (see podcast at left).

Ed, before we discuss how I should go about starting a gallery, tell me, how did you get this gig?

Only a handful of people know this, but at one point I was an enthusiastic amateur painter. Arriving in New York from Washington, D.C., in 1994, I began doing studio visits with other painters and realized I just didn't have their talent. I was like Salieri, who could recognize Mozart's genius but couldn't duplicate it.

That's rather sad.

But I realized I enjoyed having a dialogue with artists. That doesn't always naturally lead to opening a gallery, but in my case it did. It all started with a series of guerrilla-type exhibitions I organized called "Hit and Run." There were five in New York and one in London. Each would happen over the course of a weekend. It was almost like an art rave.

Jumping ahead, in May 2001 you opened Plus Ultra gallery in Williamsburg, with the artist Joshua Stern, and five years later you struck out on your own, with Winkleman Gallery in Chelsea.

Yes, I changed the name. I talk about that in the book. I ran into someone on the subway who had been very encouraging of Plus Ultra but admitted that he'd forgotten its name. And everyone else I talked to said, don't underestimate how much value you can get out of the name.

How did you get the idea for the book?

Two years ago I was approached by the publisher. They'd asked an author they'd worked with, Daniel Grant, to write this book. But not having owned a gallery himself, he recommended me.

But then everything changed. The global economy tanked, the art market started to slide, and there you were writing a book about how to open a gallery. What did you do?

I talked with the publisher four months before I turned in the final manuscript because the landscape was changing dramatically. Two sections in particular have been affected by how the economy changed: the art fair section, which will become the most dated, and the cash flow section. When I began writing that, there was every reason to believe that sales would continue along steadily. But by the time I was getting ready to hand in the manuscript, people were already seeing the spigots being turned off and were having to quickly reevaluate how they managed their money. So I added a section about how to raise cash quickly.

How do you feel about your book coming out during a recession?

It sets it up for easy potshots; two artists I know are already working on a parody of it. But I really believe that if you start with an emerging art program on the primary market, a recession is actually a good time to open your gallery, because you have to go through an incubation period anyway.

This sounds like very encouraging news for my new enterprise! What do you mean exactly?

With an emerging program of wholly unknown artists it takes three to five years for that business to become profitable. If you are more or less going to be struggling during that time regardless of what the economy is doing, and you have an eye toward the economy improving in a few years, you can imagine that your name recognition is going to start rising when people are going to start buying again. Whereas if you wait, you will be starting at ground zero on the name-recognition end of it and playing catch-up when a whole bunch of other people are trying to get into the game.

Great. So I'd like to open right away and do it relatively inexpensively. I'm thinking about taking over a space that's recently been vacated on the Lower East Side. Can you put a dollar amount on the capital I'll need?

Let's say you don't have build-out costs. Any small business adviser would tell you to start with three months of capital, but for an art gallery I would highly advise you to start with a year. You have to figure out what your monthly overhead is going to be — not just your rent but also staff and advertising — and multiply that by twelve. Then add in what I would consider the essential initial advertising burst, just to let everyone know where you are. Then add in your seed money for shipping and travel, which you need to do in the beginning to go out and meet and greet people and let them know you're there. Depending on what your rent is — and that's the number one factor — you could do all of that for $80,000. But that's fairly shoestring.

How important is it for me to develop a good business sense?

Look at Williamsburg in the early 2000s. You had a number of really excellent galleries that didn't last. Even though their vision was critical — their artists dispersed to other spaces almost immediately after they closed — a lot of them went out of business because they just didn't have any business sense. If you want to do something important with the gallery, and for your artists, you have to stay in business.

But do I really need to write a business plan? Did you write one when you opened?

No. I actually wrote my first business plan years after I opened, and I wrote it for what I cite in the book as the number one reason to do it, which is so that you can go to a bank and get funding. Without the business plan, the bank wouldn't have given me the time of day. But I wish I had done it earlier. It forces you to connect the dots with your promotional strategy, your mission, your identity, and how those things influence your location and where you seek out your artists and collectors.

I may secretly harbor some romantic myths about what it's going to be like when I open my gallery. Would you mind dispelling some of them for me before I sign my lease?

One thing that surprises a lot of people when they open a gallery is that there are legal responsibilities, not only to the collectors whose checks you are cashing but also to artists. The moment you bring an artist's work into the gallery on consignment you have legal responsibilities to them, whether you make them sign an agreement or not. One of the myths is that it's all just done on a handshake. Well, even if it is, there are laws to protect the artist. And you must file your sales and corporate taxes and do quarterly reports. It's a business, not a hobby.

What's another myth I might be entertaining?

That it's all a party. That myth comes along because most people interact with galleries during receptions or at art fairs or other kinds of events geared toward making sure everybody is having a lot of fun. But there really are a lot of hard-working hours that go into preparing those events. Between exhibitions, my gallery is a total disaster. We're all covered in plaster and paint. It's not a genteel environment.

Right, but in your book, you talk about the social side of the art world being part of the job — networking with other dealers and people in the art world. That makes art different from other businesses, no?

It’s more like a service industry than other retail businesses, because you’re not targeting everybody who lives within a five-mile radius, like a supermarket would. You are very specifically targeting the people who collect art, and that's a tiny fragment of the overall population.

So how do I target collectors?

Build trust. The focus isn't all on moving product. I never approach a collector by talking about my artists. I try to get to know them and build a relationship with them. After I have some information, I can say, "Oh, by the way, you might like this." It's almost the reverse of most marketing approaches.

My artists wouldn't go sneaking around selling work from their studios, would they?

I have a very frank conversation with artists in the beginning where I tell them that would end our relationship. There is a lot of debate about how much information you should give artists about who is purchasing their work, and I side on giving artists as much information as they want. The more transparency you have, the more trust you have, and the more trust you have, the less they can go behind your back. The collectors I interviewed for the book all said they understand the value a dealer brings to their art-buying experience and would never go behind the gallery's back.

I've been hearing a lot lately about artists who are suffering during the recession because their dealers pushed their prices up too aggressively beforehand. How should I handle pricing my artists' work over time?

In the book, I focus on something I believed in even before the recession — keeping your prices at a point where they offer true value. That is something I knew instinctively from having worked in the secondary market before, and it was confirmed in a conversation with Pavel Zoubok, who has a unique program in his New York gallery, where he works in both primary and secondary market. He emphasizes that you build your reputation one sale at a time, and if you overprice and somebody can't get back out of a piece what they paid for it — sometimes they will need to sell, because they just have to get the money, life happens — you have done that person a huge disservice. That seems like a high moral or ethical issue, so why haven't prices been controlled across the board? The answer is that during the frenzy of the recent boom, when there was so much demand and you had waiting lists for artists, it just felt right to start raising prices. I haven't. No art in my program is priced at six figures.

What went into that decision?

I'm friends with a generation of artists who had galleries in the ’80s, then lost them and went into the wasteland of not being able to sell anything because the dealers had raised their prices too much. Their stories horrified me. When a downturn comes, the worst thing that can happen is for people to start questioning whether the art is worth it. A lot of artists don't understand that if people stop buying your work for an extended period of time, something happens in the minds of the public, and collectors in particular: They start to think not that the art is overpriced, but maybe that it isn't that good. That's the worst thing that can happen to an artist's career.

If you had had access to a time machine when you were opening your gallery and could have transported yourself into the future and read your own book, what would you have done differently?

The number one mistake I made was not keeping it all even. Dealers of my generation came of age in an era when you could go to an art fair and make enough money to survive for six months. In some cases we allowed that to artificially encourage us to do things during the rest of those six months that probably weren't the soundest business decisions, like overadvertising, spending too much on travel, or putting on three installation-art exhibitions back to back.

What do you wish you had spent more time talking about in this book?

The relationships with collectors and artists, because that's the real joy of this business. Most of the book is about the mundane, day-to-day stuff. I haven't necessarily expressed enough why it's the best job in the world. I hope that doesn't end up discouraging somebody from opening a gallery.

Now's your chance to set the record straight. What makes this the best job in the world?

The conversations I have with my artists in their studios. I spend far too long there, because I'm addicted to learning new things.

Sarah Douglas is Senior Correspondent for ARTINFO, Art+Auction, and Modern Painters.