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WDavis Inner circle 1276 Posts |
Hi guys,
So I've been busy working on a few projects and events leaving me little time here, but thought this would help many. With many performers I have interacted with, I've noticed two key points, most are struggling to break a profit or just treading water. Both of these situations aren't good for either the pocket book or the psyche. Additionally, I've identified one key unifying characteristic with these individuals, they all "shoot" then "aim." I'd like to give an approach for many of you on how to identify your business problems, that keep you from making money. I take a fact based problem isolation approach,because I find using this with the Pareto principle is great for getting the biggest return with the least effort. First start with either a sheet of paper or a spreadsheet in excel. Next make 5 column headers: category year 2015 year 2016 $ change % of change. Input the last 2 years and categories from your income statement or tax return. Then you will subtract 2016 from 2015 and enter that under $ change. On the bottom of the $ change total the amount then peoceed to calculate each items respective % of influence over your economic oss. To start look for the largest expense % and then see how you can reduce that expense as much as possible. After doing that with all of your expenses we move to revenue/income. There we will do the same (hopefully you've listed out each revenue category separately, I.e. Kid shows, hypno show, readings, mentalist, restaurant, etc-if not do it now) then you do the same find by identifying the causes of the largest drop in revenue. This can get a lot more granular, but for most people this is good enough. Also, this step identifies the "what is going on" for not making money but not the why. The "why" is another approach which is based on the results of your "what" Start here with the what is going on, then you work out the "why it's happening" the final step is "how to fix it" Or to return to the original hunting analogy, point (missing from most people) then aim, finally shoot. Hope this helps you guys, Walter |
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Dannydoyle Eternal Order 21219 Posts |
Walter can you add a bit of context for us? Where are you in your career? How long have you been performing and do you do so full time?
Danny Doyle
<BR>Semper Occultus <BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell |
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WDavis Inner circle 1276 Posts |
Sure Danny,
I've been performing off and on full time since 2010. The reason I say off and on is during those years I took a hiatus from performing to build a business vertical for a publicly traded bank. I did that for 3 years and then decided to return back to performing. It's hard to explain but I have 2 big distinct pulls - entertaining and advising others. As many will attest, when you walk away and come back you start at ground zero with respect to a pipeline. So I've been building back my performance business to a level I'm comfortable and capable of managing effectively for the last 2 years I consider myself in the growth and establishment stage of my magic and mentalism As I have reestablished a stable pipeline and client base. Overall, I'd say I'm in the expansion stage across all of my business ventures. When someone says full time to me, I interpret that as a sole driver of income. In my case that's not true, I have a portfolio of businesses that I own and run. But magic/mentalism is a significant contributor to my bottom line. Hope that provides you some context. And thanks for holding me to it as I asked everyone to do it, I should too. =] |
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Dannydoyle Eternal Order 21219 Posts |
So your theories are not proven over decades. They are relatively new, and do not provide 100% of your income.
Not a bad thing, not a good thing, just how things are. I only say this as others have pointed out it seems as if you are positioning yourself as a guru and it is important to understand where people are in a career. You have hardly begun. Again not necessarily bad, but it is what it is. Basically you are 2 years in.
Danny Doyle
<BR>Semper Occultus <BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell |
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WDavis Inner circle 1276 Posts |
I see it slightly different, Danny,
I will offer my view of the situation and where I'm coming from, so others may decide for themselves. 1. I'm not going to sell any program. The juice just isn't worth the squeeze. 2. These unproven theories are developed and used by companies such as McKinsey, Bain, BCG, Citigroup, and others 3. I'm not misleading people where I am as a performer or my advise. I've started, stopped, and restarted because of business opportunities that generated more ROI for me. I've an established show and a proven model, my model is based off of best practices from multiple professional services companies targeting the middle market. My model has provided self sufficiency for me twice in my life and both times when I walked away from corporate America. 4. Just because I own and operate more than one profitable business doesn't discount the advise I'm giving specific for magicians. That's like saying Ken Weber's advise in Maximum Entertainment should be discounted because he owns and operates a financial brokerage. 5. I'm not calling myself a guru, ninja, growth hacker or any other term people call themselves. Especially because I'm not particularly fond of them. If anything I'll call myself Walter. 6. If people want my advise feel free to accept it. If you want to get into details, we can talk - pm, email, phone or skype, what ever. 7. Again I'll help others magicians because of a promise I made to a recently deceased friend. "Remind mentalists it's called show business and Walter show them business" Walter |
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WDavis Inner circle 1276 Posts |
To bring the thread back to its purpose,
This is called the profitability framework and is the foundation before the 3C's and a P can be applied. If the profitability framework tells you the what then The 3C's and a P will tell you the why. The 3Cs and P are: Customer Company, Competition and Product. Magicians will rarely have to deal with the company vertical because your not using structural components. If you do it's almost your corporate structure and/or manager. So we will focus on the remaining parts, customers, competition and product. If you have exposure with marketing then you've seen these topics before. If not then read on, Customers need to be placed into buckets to better understand. Buckets are based on your choice but a good way would be consider your market are you dealing with businesses or families? If families then break it down by event type, age, location likes dislikes, businesses you do something similar but the categories could be industry type company size event type etc. then cross reference them from your identied revenue drop and cost drop (if applicable). You do the same for the product category against your expenses and revenue (if applicable) If these two don't identify the why in your profit problem then you look into competition. Here you look at what your competition is doing is it successful what's different then you. How can you use that difference to benefit. Etc... There are a lot more questions that go into the 3C's and a P but this will give you a good start on identifying the "why" of your problems. After you know what's going on and why, you can tackle the How. That's a post that I won't do because how to fix each individual situation is different because of micro economic and social factors. Good luck and hopefully you all learned something out of these posts. Walter |
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Dannydoyle Eternal Order 21219 Posts |
See I think Tom hit on something a while ago that matters and I want to expand on it.
99% of the guys here will never be performing on national levels and none will be billion dollar companies. Adding low them makes no sense. The companies that use the strategies you speak about have entire departments devoted to such things. Every minute you spend pretending you are a big company is a minute your competition is spending in development and selling their show. It is that simple. Most won't have the time to do the things you say and in reality shouldn't. Billion dollar companies are different than single person entities.
Danny Doyle
<BR>Semper Occultus <BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell |
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WDavis Inner circle 1276 Posts |
Your right most work nationally. Danny, the frameworks I've provided work for everyone regardless of size, if you go to a SCORE event or ask SBDC to help you (both are for small business owners) they will be using the same techniques. In the end, these performers don't have the time because they busy themselves with things that don't matter or don't get results. Which goes back to the performer is shooting then aiming.
You are saying it's a waste of time to do this instead of developing and marketing your show. My rebuttal is 1) you shouldn't market your show before it's developed 2) marketing without knowing your customers competition and product is again shooting before aiming. I feel someone should know their numbers in their business. If you don't know your numbers your driving blind. How can you improve if you don't have data/facts to support your case. Everyone in business files taxes. So everyone has their returns, in 20 minutes they can quickly do what I said here regarding the profitability framework to identify problems in their business operations. To say you are too busy to identify and fix your businesses problems means most likely your business will end up failing. Yes large corporations have departments (accounting and marketing ) to do these tasks, but they usually hire someone to do it for them (a consulting firm) but as small business owners (who have to wear all the hats) if they are empowered with the knowledge they can do it too. This is because we either spend time or money to fix a problem, small business owners usually don't have the money so they spend time. Again just my opinion. |
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Dannydoyle Eternal Order 21219 Posts |
After 2 years you may not know but you NEVER stop developing an act.
You have no idea of this stuff will work at all. 2 years is simply not anywhere near enough time to tell.
Danny Doyle
<BR>Semper Occultus <BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell |
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WDavis Inner circle 1276 Posts |
Danny,
I think this last point may be semantics. I believe the development and refinement are different as I've use that to explain my position. Development is the creation of something new from raw resources and refinement is the improvement to an existing development. For example, a bunch of tricks get developed into a show. then as the show evolves and is improved with tricks scripting blocking dropped or added that's considered refinement. And yes I agree a show is constantly being improved upon or as you put it developed. |
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55Hudson Special user Minneapolis 984 Posts |
I concur with Walter's approach to understanding your business and your numbers.
The lack of many years of experience he has in magic does not detract from the sound advice of understanding your expenses, your income, and how they have changed year-over-year. These are basic business fundamentals that cross all industries - from banking, to manufacturing, to entertainment. From all sizes - lemonade stand to billion dollar corporation. Most magicians I have known, even those making a good living performing, have little understanding of business basics. It would be a great exercise for anyone in a small business to do some basic analytics on their business or find someone else who can do it for them. Hudson |
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Dannydoyle Eternal Order 21219 Posts |
It would be a waste of time for most.
99% of guys do not need it. They offer one product, they sell it and move on. All this fake work gives them busy work to do for no reason. Most don't have marketing strategies or any reason to worry about analytics. So after 2 years what analytics does one even have exactly? There is no history to analyze! It is ridiculous to think it matters at that stage. Understanding expenses is really easy. To make things more complicated just for the sake of complicating them is a waste of time and effort.
Danny Doyle
<BR>Semper Occultus <BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell |
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55Hudson Special user Minneapolis 984 Posts |
I disagree.
1) completing this type of analysis shouldn't take more than an hour to set up and can be updated in a few minutes after every gig or every month 2) understanding your business is exactly what 99% of performers should be doing. Even if this is a hobby, they should at least understand where and how they are spending. 3) although most performers may have only one product (a single show) they likely sell into multiple markets. I've said before, Mindpro's segmentation of two markets, Professional and Consumer, is simplistic. Most magicians that perform more than a few shows each month should sub-segment, e.g., kid's birthday party, company picnic, adult holiday party, company holiday party. Each of these events will have different average pricing, different advertising channels, and potentially different shows. I personally track my spending very much as Walter has described. Looking at year-over-year data, using tax forms is simple. As a single member LLC, all of the required information is on a single tax form. Takes only a few minutes to transcribe this into Excel and compute (or even just look at the changes. After every gig I record revenue and source, keeping track of my average realized price per gig, per market, and compare with my annual goals. Once the spreadsheet is set up, this takes 5 minutes or less. It's just not that difficult to understand your business, no matter how large or small it is. I certainly recommend taking these simple actions. Hudson |
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Ken Northridge Inner circle Atlantic City, NJ 2392 Posts |
I’ve been doing a little bit of what Walter is suggesting for all of my career. I think it’s a habit I picked up from being in management at JCPenney. I also have my income recorded by month and year, and by category. Its interesting to see what percentage of my income comes from each segment of my business, and it has helped me to make decisions about what direction to go.
For example, about ten years ago my “adult show” category ended being a very small percentage of my total income, and yet I was spending lots of time developing routines, investing in props and materials to improve my act. I decided it wasn’t worth it anymore. Why spend time and resources into an area that was not producing when there were other categories that were growing. I guess I instinctively knew, but to see in it on paper helped me to make a more confident decision.
"Love is the real magic." -Doug Henning
www.KenNorthridge.com |
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TomBoleware Inner circle Hattiesburg, Ms 3163 Posts |
Walter, well said.
Yes, to see it on paper makes a world of difference. Not only does it show you where you are today it can be your blueprint for tomorrow. Tom
The Daycare Magician Book
https://www.vanishingincmagic.com/amazekids/the-daycare-magician/ My Blog - https://boleware.blogspot.com/ |
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Dannydoyle Eternal Order 21219 Posts |
You guys do understand that pretending you are a big business in no way makes you one right?
Giving yourself busy work to pretend you are successful does not make you more money in the end. Do all the spread sheets and score cards you want and in the end you have EXACTLY as many dollars as you do if you don't. It is about action. This is not action that will create anything except you feeling like you are accomplishing something. It wastes time. 90% of guys here do kids shows mostly. They are not full time pros. There is nothing wrong with that. Most of them don't even have marketing or advertising budgets to try to understand. They do intelligent internet things to get word out, place a few ads and do mostly word of mouth. They have a 40 hour a week job doing other things, and simply do as many shows on the weekend as they can. They get a show, they do a show it is that easy. Giving them busy work like this to find out what they already know is idiotic. You claim things like "understanding your business should be done." OK who disputed that exactly? I am telling you that approaching entertainment like most other businesses is crazy. I hired a guy to do EXACTLY that. He came in and instead of trying to learn what we do and how it is done and why it is different he tried to push us into his corporate way of doing things. Entertainment businesses simply do not run like other businesses. It was a very expensive lesson. You can throw around all the corporate language you want to puff up yourself as a guru on the internet and everyone can go slack jawed because they never saw the terms. It will not change the facts at the end of the day. After 2 years you have nowhere near enough data to claim this stuff works. It simply is a fact.
Danny Doyle
<BR>Semper Occultus <BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell |
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Ken Northridge Inner circle Atlantic City, NJ 2392 Posts |
Quote:
On Jul 8, 2017, Dannydoyle wrote: To feel like you're accomplishing something is a good thing, and kind of necessary for me. And it really doesn't take much time. A few hours once a year. And as I said, it has helped to make sound decisions going forward. On a list of important exercises all businesses must do its near the bottom. There are far more important things to do to create a successful business. If that's what you're trying to say, I agree.
"Love is the real magic." -Doug Henning
www.KenNorthridge.com |
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Dannydoyle Eternal Order 21219 Posts |
Yea very near the bottom.
See my point is why not spend that fine ACTUALLY accomplishing something? How much better would that feel than having to just feel "like" you are accomplishing something? The problem is this was presented as a way to break out and if it is done sort of big secret to success. A way to stop treading water. It is no such thing. It is just busy work that is common sense. It is just using new words to use them and as I say 2 years is no kind of track record. Why does the business guru not see that or address that?
Danny Doyle
<BR>Semper Occultus <BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell |
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TomBoleware Inner circle Hattiesburg, Ms 3163 Posts |
True there are a lot of hobbyist doing paid shows and record keeping, projecting and planning for the future, etc, is no big deal to them. They just allow things to happen and hope for the best. But if you calling it a business you should probably treat it like any other business would. Business is business and it’s not all fun and games, it requires some work. Of course those who have been doing it for years may not always see it as work; they take many of the required little things for granted and assume newcomers and others will do the same. Not always the case, some need details, details, details.
And then sometimes even the experienced needs to get back to the basics in order to see improvement. Many important business meetings are simply restating the basic things that must be done. What works works and when it fails you can often find the answer by simply rereading the original instructions. Not a lot of new ideas to having business success, but there are a lot of old ones that is worth, and should be, repeated. Tom
The Daycare Magician Book
https://www.vanishingincmagic.com/amazekids/the-daycare-magician/ My Blog - https://boleware.blogspot.com/ |
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Dannydoyle Eternal Order 21219 Posts |
No you should not treat it like any other business would. It is not.
Danny Doyle
<BR>Semper Occultus <BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell |
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