There are many opportunities for artists and designers to showcase their work today. But how do you know if you are being overcharged for exhibition space? A high break-even point can seriously affect your ability to sell in a fair. If you are new to exhibiting (and by ‘new’ that does not mean at the start of your career), it can be a minefield. This brief essay will give you the inside track on what an event costs, so that you can assess whether you are being overcharged or not. Having run events for over a decade in London, and being partly responsible, along with other fair owners, for the development of niche fairs for indie artists and designers, this essay will focus on the capital (but the strategy could be used with fairs outside of the capital) and what we call ‘entretive fairs’. These are fairs where independent artists and designers apply directly for exhibition space. We do not cover, then, exhibiting opportunities where artists pay a gallery or agent to display in a dealer fair. Although this method is increasingly popular, mainly because dealer fairs are struggling to find traditional galleries in the new economic climate, it is different because the structure of entretive fairs differs considerably from dealer fairs. We also do not cover fairs that rent space in other larger events, thereby latching on to the larger event’s audience, nor do we cover fee-paying biennales.
The first questions an artist should always ask when considering exhibition space are ‘who am I dealing with?’ and ‘who is the company?’. Company websites, as we all know, are full of marketing ‘fluff’ (Instagram or Tiktok followers can easily be bought through a company), and independent review sites are just as untrustworthy due to fake positive reviews or the psychological tendency of people to only record negative thoughts from their own perspective. If the poster is anonymous that is usually a double red flag! But what you are really wanting to know is fact-based financial information not emotive inferences or hearsay. This is the only information that can help you assess costs and make a rational decision based on finances. Even if someone tells you they achieved excellent sales in a fair, it does not mean that will happen for you because it depends on numerous variables, including type of work, personality, price, competition at that time, and season, to name just a few. The first place to start looking for information is in the company accounts. In the UK, these are in the public domain by law (this is not the case in other countries) and are freely accessible online. You can access any company on the HMRC website here: https://find-and-update.company-information.service.gov.uk If you do not know which name to input, you can usually find the company’s registered name or number on their invoice, sometimes on their website.
What should you be looking for? Firstly, how long has the company been in business? If the company representative told you twenty years, or you got that impression from their website, but the register shows they only just signed up with HMRC last week that would be an obvious red flag. Equally, if they are not registered at all or if they are registered but are requesting you to deposit money into a foreign bank account, it would be wise to avoid that company. It is illegal to operate an event in the UK whilst invoicing attendees using a foreign bank account because it is likely tax avoidance. When looking at the accounts, the first thing to look for is who owns the company. Is it a person or another company? Where are they based? Are they involved in day-to-day operations? If it is another company that owns the company running the fair, where are they based? Do you feel comfortable about that? Some artists think entretive fairs are run by independent owners but often they are managed by multi-national companies. The way the event industry works is like most industries, larger companies buy up smaller operations into their portfolio. For some artists, this is no problem but for others feeding a corporate firm may not fit their ethics or politics.
The next thing to observe in the accounts is whether they are signed off by an accountant. This is usually in the front of the accounts, after the accountant’s statement. Most company accounts for entretive fairs are what are called ‘micro-accounts’. They do not show all the financial information, only key figures. However, a company does not need to hire the services of an accountant to submit accounts at a certain level in the UK but it would be unusual, especially if a fair has been going for a number of years. Who is the accountant and have they signed off previous accounts for that company? A company that is forever switching between accountants should raise some questions (though it could suggest incompetent accountants!). The next thing is to read the accountant’s statement. Do they raise any concerns about the company? By law, they must outline any potential problems that investors or financial partners (that would include you) should take into consideration. Now look at the debt owned by the company in the accounts. Debt is always indicated by brackets. So, ‘(£3000)’ would mean a £3000 debt. You should look for the total debt of the company, once creditors (those owed to by the company) and debtors (those owing money to the company) are considered. You can find numerous helpful videos online to help you identify this part in the accounts. It is worth spending time doing it. However, we should explain that UK accounts are usually one year behind (they do not represent the present financial moment), and you should also bear in mind that debt is not necessarily something adverse. Most companies hold some debt (even Amazon). But what you are looking for is the amount of debt owned by the company in relation to its income (which can be estimated based on some of things we outline below). If the amount is £10,000 that would be low for an entretive fair, but if it is hundreds of thousands or millions of pounds, you should probably make some inquiries with the company. It may not be as negative as it appears in the accounts, but it is something you should ask the company about and request to see their current financial position. After all, you do not want them going bust just as you arrive in the city with your art! Checking the accounts gives you some important indicators about a company. If a company holds a lot of debt it could be influencing their price structure, and, bearing in mind the average budgets mentioned further below, that could be a problem. But there is also the ethical issue. Debt isn’t simply personal. It is also a social problem and tends to help push up prices, making it harder for the poorest in society, especially if that debt is based on loans. If you do not feel comfortable about that, then you should avoid that company on ethical grounds. However, what counts is the size of debt (and whether that debt has come from loans) relative to its income generated from events, rather than simply that it has some debt on paper, which may not be actual but technical.
After you have checked over the accounts, you should turn your attention to the venue itself. You should call the venue and ask them how much it costs to rent. Venues in London typically charge anything from £300 per week in East London up to £30,000 per day in some parts of central and West London. Some venues charge per week, others per day then. It is important to note that difference. On average, a typical entretive fair venue in East London, capable of holding 2000-4000 people, would cost around £10,000 to rent. In West London, it is around £25,000; in North London, around £15,000-£18,000. You can usually spot venues with lower prices because all the entretive fairs gravitate towards them, which can be a little ridiculous! After knowing what a venue costs, you can then begin to work out the cost of a booth. If the venue costs £10,000 and there are 100 exhibitors each paying £1000, the venue only costs 10% of the revenue. That would be a very small percentage on average for an entretive fair and would suggest the company was overcharging for booth space. If it is even lower, then most definitely. Some of the other £90,000 will obviously be taken up with other costs, as we will see below, but the ratio could still suggest possible overcharging.
The next thing is to find out how much the boards and lights cost. This can be near impossible for exhibitors to find out because events tend to be protective of their contractors. But we will give you the inside track. Contractors have pretty standardised prices in the UK. All of them operate outside of London (so they likely supply fairs in other cities). On average, boards for 100+ exhibitors in an entretive fair would cost anything from between £10,000 - £15,000. That includes either traditional wooden boards or the newer modular systems. If they also do electrics, lights are often (but not always) included in that price. It typically takes a contractor 4-6 hours to prepare the exhibiting structure, perhaps a bit longer for wooden boards because they have to be painted or touched up with paint. Adding all this information together and considering our hypothetical entretive fair of 100 exhibitors each paying £1000, we can see that the venue plus boards/lights would cost around £25,000 in an East London venue. That would leave £75,000 or 75% profit.
What would the other costs be? These would be staffing, catering, insurance, and marketing. If the fair does international shipping, there would be storage and administrative costs. The average cost of a security guard in London is around £25 per hour, and the minimum wage for promotional staff is £7.49 - £10.42, depending on age. Those prices could be higher if an agency is used but not much more. Catering can cost anything from £2000 or £4000 upwards, though partnerships and sponsorship would reduce costs in that area. Insurance can cost anything from £90 up to £2000, depending on the specifications of the event. Marketing costs vary. Entretive fairs, because they do more than one fair a year, have annual marketing that benefits each specific event, so it can be hard to tie down the particular cost. Social media, rather than traditional marketing (like leaflets, street marketing), also plays a larger role in entretive fairs. But on average, an entretive fair would need to spend around £10,000 - £20,000 on marketing. If they are experienced digital marketers, it would be at the lower end. The longer a fair has been operating, the more likely it will have visitor lists, and in-house email marketing would likely play a bigger role in the marketing mix than for a newer fair. What do these extra costs add up to then? We could roughly say a ball-park figure of around £20,000 for all these extra costs, but it could be higher or even lower depending on the company and venue cost.
The final budget, then, for our hypothetical fair of 100 exhibitors each paying £1000 in an East London venue would be around £45,000. This includes venue, boards/lights and other related costs. If the total income is £100,000 that would leave £55,000 profit per show – a profit margin of 55% and a break-even point of 45%. In reality, the income of a fair would be much higher because exhibitors pay different amounts for exhibition space and £1000 could be at the lower end. Profit margins could be significantly higher. However, marketing and catering costs could be higher too but not significantly more than stated above. Would it be worth taking part in our hypothetical fair? It would depend on how you feel about the 55% profit margin and your long-term strategy. Could the company reduce exhibition space costs? Yes, quite easily. Even a 20% cut would still give £35,000 profit. A £1000 break-even point for a potential market would also be high and not really a market you could develop over the long-term, unless you had the perfect product and sales strategy and made significant profit from sales. But given that most exhibitors sell art on speculation in a fair, and most have travel and hotel costs, and are competing with other exhibitors, that could be a challenge.
To summarise then, the relationship of exhibition space and the overall event budget is important but something artists never take into account. The first place to start is the company accounts, where related issues might also be found (such as being asked to pay into a foreign bank account), and these can be found in the public domain on the website of HMRC. The company name is often on its invoice or website. We should be looking for the owners of the company and the length of its registration time. Reading the accountant’s report in the accounts and looking at the level of debt are also key for possibly assessing a company’s price structure. For some, it might also be important for considering ethical issues. Following this research, we should find out the costs of the venue and contractors working on the event, as well as related costs. Once we have this information, and considering the number of intended exhibitors and advertised prices, we should be able to work out with some accuracy the cost of our exhibition space relative to the overall event budget. Of course, we cannot base our entire decision on this ratio because there are other factors to take into account, and some of these will be personal to our work and financial situation. However, it does enable us to compare and contrast similar fairs, especially if they are operating at the same venue, and the different levels of pricing. If an entretive fair is making excessive amounts of profit, or holds substantial debt from loans, then questions need to be asked about the culture of the company and why they are in the industry, indeed, why they want you in their event. As many entretive fairs (even in other countries) are often not run by people with a background in fine art that question might be pertinent to both the seasoned artist and those returning to art from a different professional background.
Dr C G Barlow. Copyright © 2023 C. G. Barlow.