If the art world is all about finding the next big thing, Los Angeles might be it.

A slew of well-known galleries has opened branches here this year, including Hauser Wirth & Schimmel, Sprüth Magers, and Maccarone.

While that’s generated lots of buzz for L.A.’s art scene, those moves mean a more competitive environment for homegrown gallerists who have their own following of notable collectors and links to prominent artists.

Michael Kohn, founder of Hollywood’s Kohn Gallery, said there’s always strength in numbers, but he’s not oblivious to what this influx might mean to his bottom line.

“The competition is a little tighter than it’s ever been,” Kohn said. “I mean these are people with billions of dollars and they can buy whatever they want. How do you fight something like that? You just have to try and be a little smarter and a little more inventive.”

Running an art gallery can be tough, as margins are often paper thin. But operators from Santa Monica to downtown Los Angeles said the key is appealing to more than just wealthy collectors. That means hitting the road to art fairs, turning to institutions, and even owning their property.

Laura Peterson, director of Rosegallery at Santa Monica’s Bergamot Station, said about 40 percent of business is generated locally.

“The days of being sustained solely by resident collectors has come to an end,” she said.

For example, last week the gallery returned from Photo London, the second annual international photography fair that drew roughly 45,000 visitors and 80 of the world’s major galleries.

François Ghebaly, founder of Ghebaly Gallery in downtown Los Angeles, said he participates in about eight fairs a year to connect with collectors and boost the international reputation of his artists.

But participating in fairs, which typically last a few days, can cost a gallery as much as $200,000 when accounting for booth and setup costs.

“It can sound really good – the artists are the ones creating the work and we’re just, on paper, selling it,” Ghebaly said. “But there are a lot of things that come in to play in order to do it properly, which makes it very difficult to maintain a level of sustainability.”

Hard sell

Kohn said when he first opened his gallery in 1985 it was slim pickings.

“If you sold anything, once a month or every couple months, it was a big celebration,” he said. “The art world was small. The communication was terrible and being in Los Angeles was tough.”

But Kohn, a former art critic for Arts Magazine and U.S. editor of Flash Art Magazine, had deep connections with the New York art world and artists such as Andy Warhol and Keith Haring, which ultimately helped his business.

Kohn moved his gallery two years ago from West Hollywood into a 12,000-square-foot space on Highland Avenue with large windows and 22-foot ceilings.

Ghebaly moved his shop downtown three years ago, when there were just a handful of galleries nearby. He estimated that about 30 have since opened in his neighborhood.

“It could potentially be difficult,” he said of the competitive environment. “But the more almost the better, because it brings more collectors to our cities and then it’s down to what we have to offer.”

Drawing collectors is one challenge. The other is developing a stable of artists – who then need to be kept happy. More competition puts pressure on both sides of the equation.

For example, Esther Kim Varet, founder of Hollywood gallery Various Small Fires, said there are instances when an artist’s exhibit is a success followed by several rave reviews but only one or two pieces are sold.

“For artists I work with, I always say there are different forms of capital,” she said. “You can have a critically acclaimed show and leverage that and use it for other opportunities that will get you funding in the future.”

It is why Varet said she will often look to museums, as their interest can help boost the market value of an artist’s work.

Thomas von Lintel, owner of Von Lintel Gallery in South Robertson, added that the art world is a very disparate market. At the high end is Beverly Hills’ Gagosian Gallery, which deals in blue-chip pieces, and then there are those such as himself who stay in the middle segment of the market.

“Collectors don’t necessarily have needs, because nobody needs to buy art,” he said. “So it has a lot to do with trust. You build a name and people come and they trust your eye.”

Good parties

Kohn said it’s about building relationships through friends and acquaintances, and attending art fairs.

“Another huge part of the art world – you have to throw good parties,” Kohn said. “Wealthy people come into the art world because partially they want something fun to do with other interesting people. It’s like belonging to a really great private club, and that’s how you market. You market by socializing.”

Varet opened her gallery, named after Ed Ruscha’s 1964 book, about four years ago. Originally housed in Venice, she bought a building in Hollywood to use as its new home. Money that used to be spent on rent is now invested into artists’ exhibitions.

“I own the property so I can take big risks and put on very difficult shows,” she said. “But I know that Los Angeles has been a city where there have been expansions and contractions in the art world and I’m very aware of that.”

It’s why Varet said she will also look to institutions to help the business. For example, this year she has already sold about eight works to the Los Angeles County Museum of Art.

However, Von Lintel noted that process is difficult because gallerists often have to help museums raise funds to buy a particular work and it could take up to a year for an institution’s board to approve a purchase.

However, said Kohn, landing coveted space in the halls of museums can be a boost to piquing the interest of collectors.

He has represented Bruce Conner for almost 30 years and is gearing up for the opening of a major retrospective of the artist’s work at the Museum of Modern Art in New York next month. And now he’s finding collectors are asking to purchase Conner’s work.

“I’ve waited 30 years for people to be aware and to appreciate (Conner),” he said. “And I can sell the work for a lot more money than it used to sell for and the whole system works at that moment.”