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HypnotizeAmerica Veteran user 399 Posts |
Greetings Friends -
As I am on the slow road of paying off student loans, credit cards, and saving for a house I am wondering how you all started paying for your business in the begining? I am looking at money just to direct mail right now, not counting promo material, and everything else. Just looking for ideas or suggestions. Thanks. Tim |
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magicofCurtis Inner circle Los Angeles 2545 Posts |
I did lots of cold calling and sending photos copies of a broucher I made on my computer. As time progressed and I was booking shows I improved my equipment and adversitment.....
Make sure you are listed on the internet on the phone book sites and party sites.. Most of these sites have a free listing..... Hope this helps a bit
Curtis Lovell II
http://www.CurtisLovell.com http://www.MagicofCurtis.com www.facebook.com/curtislovellii Los Angeles, California - U.S.A. |
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Dannydoyle Eternal Order 21219 Posts |
Depends on your goals.
You need to find a business plan and follow it. Do you want to do only magic for a living or only a second job? Are you willing to travel? What kind of show do you do? Do you have a rich relative? all questions that need answers.
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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HypnotizeAmerica Veteran user 399 Posts |
Danny and others -
Here is the deal. I'm 26, have a little over $4k in debt and make about 1,900 after taxes a month. I am getting ready to move out a rental house and into an apartment to lower my cost of living so I can get rid of the debt and start saving for a down payment on a house. I am going to market to schools for my hypnosis/mentalism show with about 1,000 schools at about $300 a month for direct mail. That doesn't include the cost of promo, mailing, phone, etc. Now I should have some money coming my way (a few grand) in a month or so and was thinking of putting it towards my debt or savings but I don't want to rack up more debt marketing my business. I am just looking for some suggestions I guess - I hope this helps. Tim |
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Donald Dunphy Inner circle Victoria, BC, Canada 7563 Posts |
Hi Tim -
Something it took me many years to figure out, was not to look at my income as pure income. Track every expense related to shows, and then get a realistic idea of what your net income is. You never really mentioned if you were aware of that amount. Also, have you budgeted every monthly expense, personal and business-wise, you now have, on paper? How aware are you of your financial picture? From there, you need to find ways to increase your income with a modest investment. If you have more time than money, then phone and fax (with permission) can become excellent allies. Also, some mailings, but be wary of getting into debt by doing too many. Don't play mailings like some play the lottery. You have also mentioned it is a priority to you, to get out of debt. Good for you. At the same time, don't forget to build up some savings. Don't spend every penny on mailings and in your business, or in paying off debt. Tell me what you meant by this: Quote:
I am going to market to schools for my hypnosis/mentalism show with about 1,000 schools at about $300 a month for direct mail. That doesn't include the cost of promo, mailing, phone, etc. It is pretty ambitious to mail to that many suspects every month, unless you already have a lot of net income already. Can you tell me the exact amount that many mailings will cost you, including printing, ink, postage, envelopes, flyers, letterhead, etc? Have you worked it out? What about the idea of building up momentum? Start with 100 targeted letters, then 150 or 200 the next month (if it is working), etc. For excellent ideas on finances, and what to do with what you make, seek these two books: "The Richest Man in Babylon", by George S. Classon. "7 Strategies for Wealth and Happiness", by Jim Rohn. - Donald P.S. I don't speak as someone who is rich, but rather someone who has traveled the hard road of wrong choices.
Donald Dunphy is a Victoria Magician, British Columbia, Canada.
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HypnotizeAmerica Veteran user 399 Posts |
Donald -
I follow Geoff Ronning's direct marketing plan where I send a soft offer postcard out to 1000 schools for 30 cents per card (including postcard, mailing, printing, etc). They call in, book the show, and we go from there. Maybe if I cut that list in half until I land a couple of gigs I could save some money. Just a thought. I follow Dave Ramsey (sp) debt reduction plan, first step $1k in case for emergencies, next pay off the card, then save for a home. My day job offers all my money right now. No budget, but I should work on that first thing. Hope that helps. Tim |
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Donald Dunphy Inner circle Victoria, BC, Canada 7563 Posts |
Tim -
Dave Ramsey is a good person to listen to. And, yes, an on-paper budget of income and expenses is super-important. It can help you get realistic about things, and plan accordingly for expenses. It can also drive you to work harder to increase your income. Are you already following Geoff Ronning's mailing plan, or are you going to follow it (but haven't actually done it yet)? Do you already have your mailing list for your postcard mailing? Have you done a test run of 100 to see if your mailing to the list will work at all? I would do that before plunging ahead with 1000. - Donald
Donald Dunphy is a Victoria Magician, British Columbia, Canada.
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Bill Nuvo Inner circle 3094 Posts or 2742 Posts |
Well, sorry to say, but you will probably always be paying for your business.
To build up some income to start your business, you have a few of options. One is to have another "real world" job. Two is to focus on another aspect of your magical art. Do birthday parties. Relatively easy to book and can provide valuable experience working with an audience. Three is to provide a business plan to a financial institution and get a business loan. Four is to go on social assistance and go into programs that will pay for your living expenses while you build a business. I know there are a few here in Canada. Can't say for anywhere else. Five is to start off small and snowball from there. |
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Donald Dunphy Inner circle Victoria, BC, Canada 7563 Posts |
Another question, Tim.
With working a day job for your current income, do you have the spare time to produce and mail 1000 mailings a month? Or do you actually only have the spare time to produce 100 mailings a month (to start with)? Setting your goal too high might prevent you from taking any action. It might be too overwheming, and be the cause of what is holding you back. You started another thread recently about motivating yourself to take action. Some take baby steps to start, and some take massive action. The great thing about taking consistent baby steps, is that you can fund yourself without getting into more debt. Constant small action is more important than massive action once. You can adjust accordingly if things aren't working, you have a better chance of hitting some people at the right time, etc. - Donald
Donald Dunphy is a Victoria Magician, British Columbia, Canada.
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Dannydoyle Eternal Order 21219 Posts |
It sounded like the Ronning plan.
Well direct mail is a tough expence filled way to book any darn thing. Did you just learn the show? If so then plan on starving for at least 3 years before you see any result from it. The promises told to guys with these get rich quick schemes are truley misleading. If you get 1% return on direct mail that is HUGE. No matter what anyone tells you, no matter how many testimonials you read or hear, you can not depend on money rolling in right away from your first year. Heck you are still working on doing a good show. To build a business you have to be able to finance it with another soucre for at least the first year, probably 3. IF like you want to do you wish to specalize in one type of market, it may take even longer. I know most of the stuff sold to guys tells you something different, but this is true. Read the books Donald suggested. It will help you lay out a business plan. Without a properly formulated one, it is tough to even know if you are on the right track or not. Your costs of promo, if it is done right is going to be HUGE. Your costs of phone and office expences will be big if you are not already set up to do it. How about the money it will take away from your day job if you have to travel? THAT is an expence. Your trying to wade into the deep end and it is not possible. Do it or don't. Half way is costly.
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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rtgreen Inner circle Portland, Oregon 1322 Posts |
Quote:
On 2006-05-31 10:19, Dannydoyle wrote: Actually, if you're only getting a 1% return on your mailings, you need to make some modifications. I always expect at least 2%. If I get over that, I did something right and I try to duplicate what I did, if I get under 2% I make changes and try again. However, even on a mailing of 1000, 2% is only 20 responses and not all of those responding will actually book. The most important thing to think about in direct mail is your ROI (return on investment) It is a specific calculation that looks at all of your expenses for a promotion and compares it to the income you make. The basic calculation is this: ROI= 100*(Income-costs/costs) For example, is you mail 1000 pieces at .50 each, your cost is $500. You get a 1.5% response which is 15. Out of those 15 leads, you book 3 at $300 each for a total of $900. ROI= 100*(900-500/500) or 80% With this calculation, you now can estimate your return on your mailing cost will be 180%. If you invest $100, you can expect to have $180 when the promotion ends. If you invest $1000, you can expect to end up with $1800. Though ROI investment may seem simplistic, the real science comes from accurately recognizing your cost. Not only to you have the cost of the mailing, but you also have the cost of supplies, your time, your milage, you costume cleaning, your phone, electric, garbage, rent and all kinds of other overhead. If you are doing nothing but direct mail to promote yourself, then all of these things must be covered by the results of your direct mail. If 50% of your promotions are direct mail, then you need to pay for 50% of these things with it. I, like almost everyone else starting in business, made the mistake of only looking at a very basic ROI and didn't figure in my general cost of doing business. This has put me out of business more than once. But I did have a lot of fun each time and got quite an education Good luck to you, Richard |
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rtgreen Inner circle Portland, Oregon 1322 Posts |
If anyone is interested, http://www.brucejudson.com/index.html will take you to a site with the complete text of Bruce Judson's book, Go It Alone. This is a basic how to go into business for yourself book and is pretty good. Best of all, its free.
Thanks, Richard |
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Dannydoyle Eternal Order 21219 Posts |
Richard your making my point quite well.
To say you only have 300 bucks in a direct mail is simply disingenuous. THAT is how they get you with these things. Direct mail is most effective when used by HUGE companies who already have some sort of profile that is recognized. IF your getting 2% it is huge my friend. The biggest companies in the world get 1% and are quite happy. Your right maybe 1% of those 15 will actually book. THAT is the number which usually throws people. You don't get a 20% return on the ones who call back, (3 out of 15). At 1% of fifteen you are more realistic. The total cost of the package you are sending has to be included. The responce from a post card, well if it is 1% again that would be amazing. I personally think you would be better off with a great phone package and doing direct cold calling. A far more effective use of money.
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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rtgreen Inner circle Portland, Oregon 1322 Posts |
"I personally think you would be better off with a great phone package and doing direct cold calling. A far more effective use of money. "
I agree and here's why . . . Though the idea direct mail is often sold as a great idea for small businesses, it really isn't very effective on a small scale. You are right in saying big companies are able to use it effectively, but the reason is not so much the fact that they are sending to huge mailing lists, but their ability to do a large number of small mailings. The real power of direct mail is in the ability to accurately measure your results. For example, I do quite a few direct mail marketing pieces in the travel industry. Let's say I was to promote a vacation to the Great Wall of China. I know my total budget is going to allow me to send 50,000 pieces. It would be a mistake, however, to just gather a list and mail out all 50,000. What I would do instead is mail out 1,500 -- 500 to one group, 500 to a second, and 500 to a third. The groups would be differentiated either by demographics or differences in the message of the piece. I then measure the response. If group 1 returned 5 (1.0%), group 2 return 11 (2.2%), and group 3 returned 2 (0.4%) I would mail the remainder of the budget (48,500) to people based on group 2. My expectation would be to get 1,067 responses. If I mailed to groups 1 or 3, however, I would only expect 485 or 194 respectively. Looking at this example, you can see why ROI calculations are so important. They help you determine ahead of time whether a promotion is worth pursuing or not. However, (this is something I have a lot of trouble convincing the people I work with of) if you are not able to do the initial test marketing, either because of lack of time, or because you are mailing to a small list, the direct mail process is really just shooting in the dark. This, of course, doesn't mean that using mail to communicate your message isn't valuable, but be wary about all the courses and books the tout direct mail as a risk-free way of marketing. I think at most of our business levels, business cards and the telephone are the most valuable marketing tools. Thanks, Richard |
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Donald Dunphy Inner circle Victoria, BC, Canada 7563 Posts |
I think it is dangerous to imply that direct mail doesn't work at all, or will always work poorly. That is certainly an opinion.
The real point is to track everything, and don't be unrealistic. I routinely have mailings that produce a 2 to 20% response rate, and usually half who respond book the show. Of course, some of the higher figures are mailings to past customers, or on seasonal shows. Also, my figures might be higher than some others because I understand what to put in a mailing, and why, and understand about timing, and also I often take the time to pre-qualify the person before mailing. Plus I do mail to some of the same prospects year after year, but not so often as to be obnoxious ("no" to your show one year, doesn't mean "no" the next). Also, you have to account for the fact that I have been working in my area for 25+ years, and so, to a degree, have some name recognition (that helps a mailing work). I also have very strong testimonials -- if you don't have those, you can expect a weaker response rate, as well. I will keep on doing mailings because they work. However, I won't go overboard, and don't expect instant cash as a result of every mailing. I am always learning lessons, even after 25+ years. (I admit, I recently had a mailing that had a 0% response rate, and another one that had a 10% response rate. And I even think I know why in both cases.) Right now, I am trying a mailing technique, where the response will only be people ready to book a show, whatever percentage it is that responds. The only problem will be if I have their preferred date available. There won't be any price objections -- they will be totally pre-qualified by the time they call in response to the letter. - Donald P.S. Tim -- to give you an idea of a realistic mailing budget, I only spend about 10-20% of my gross monthly show income on my mailings (including brochures, ink, envelopes, stamps, portfolios, video, contracts, etc.) I use the balance of my income in other parts of my business and personal life.
Donald Dunphy is a Victoria Magician, British Columbia, Canada.
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rtgreen Inner circle Portland, Oregon 1322 Posts |
The numbers I am refering to are based on the direct mail equivalant of cold calling. Mail to past clients or qualified leads is a great use of resources. Also, as you gain more experience in your market, you will be able to generate higher response rates just by understanding where to best place your resources and how to best present your message. This is the benefit of experience. Being fortunate enough to get to work with a lot of the cutting edge guys in this stuff (I work with data that represents literally millions of people and have gotten to study with Arthur Hughs at DePaul University in Chicago), I just wanted to give the view of a large company and how we handle direct mail as opposed to a smaller business. As always with everything I say here, your mileage may vary
Thanks, Richard BTW: My highest return was 23% on a travel piece I produced, so I know it is possible to do, but not very easy. Congrats Donald! It's good to hear that experience and hard work pays off - very encouraging! |
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Dannydoyle Eternal Order 21219 Posts |
Donald Richard and I are speaking of a different mailing than you are.
You are maintaining a list. We are speaking of "direct mail" pieces to complete strangers. Apples and oranges. YOUR way of mailing is better no doubt. BUT to get a list together as you speak of is years of expence and years of doing customer service. You are correct in everything you say except when you refer to it as direct mail. It is maintaining a mailing list. Keeping up with clients. Direct mail is quite effective on a large scale. Those companies simply have the money to do it right. Send out half a million of them and at 1% return well it is pretty good. The OTHER reason it works so well for them is when you have materials printed up by the million, it is a LOT cheaper than .30$ each. The mailing itself is cheaper. So their costs are down, and their percentage is the same, but they have much higher return. (I guess a masters in marketing pays off at times). In other words their margins are a LOT better! In short the other reason cold calling works better, is simply YOU talk to them. Always a better scenario needless to say. Calling packages make it more affordable. Follow up is easier and rate of return makes it more attractive. You also get responses that if your smart you track. "Call back in August". Can't get that from direct mail. I guess I like the mail to keep up with clients, rather than finding new ones.
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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Michael Taggert Special user Fredericksburg Virginia 656 Posts |
I think we can all agree that "direct Mail" is an effective tool if applied with the right savvy. How ever this does not help the original situation here. The poor guy is knocking his socks off trying to get started. First my advice is an echo of wht was said earlier. Use part of the incoming cash for paying down debt. sage advice I wish my children would listen too. kepp part of the cash in reserve for emergencies (not that four freinds show up and you need to have pizza.) lastly use part of the money in VARIOUS marketing avenues.
A yellow page add is about $20 in my area. The IBM Gives you a web address for members. develope your own mailing list by going on the web and finding the name of those schools you are marketing to and mailing one letter a day directly to the school. Then pack up your show and head to the local park and work for hat untill you have cash in hand to continue. show business is just that a business like any other. Develope a budget and LIVE by it. Include expenses like advertisement, phone calls, postage, new props and routines etc.(dont forget to pay yourself as well.) every show fee gets devided by the budget. One may have to pass a hat and do a few birthday parties to get some cash flow but once the cash flows use it wisely. most importantly if you choose to mail mass mailing doe require mass mailing to give proven results no matter how much you break it down. it is still a lot like target shooting with a shot gun! It is best to do market researc first to determine if you wouldn't be more productive with a few well placed calls and sending a good package directly to someone you have already talked to. it is cheaper to call and then mail and Im also convinced it is more effective for someone just starting out. To put it to numbers I find that you can boost you response to 10% or higher and only have to send out 50 to 100 pieces that you create yourself. I suggest that you read "Booking the Trade shows" (I think that Is the right Title it has a great amount of low tech but highly effective marketing methodes that do work. Mike Taggert |
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icentertainment Inner circle 1429 Posts |
I have a large list of Marketing Professionals and I thought about it and I am going to call them up
Now I'm not a big fan of Cold calling but I have done it in the past and has worked- I just feel extremly uncomfortable doing it- but I feel that feeling will pass. I thought about sending the post cards and letters but for direct mail to work effectively requires multiple sending- I'm not sure if I am willing to spend the time and money in a direct mail campagne- so I will phone in and simply ask about their upcoming events- I would suggest with schools to do the same- this way you will also find out the right name of the person to send the post card to in the future. Also lately I have been getting great results with my products (corporate Gifts I call them) I always thought it was good but never fully understood the lovely top up sale until I actually started selling them- so when you do your business- It is important to give your audience every possibility to spend money without being unethical or selling things they don't need but magic tricks at schools are a given This way each show you do- you get more. I started off doing magic as a second job- I worked the hotel industry and was a great bar magician (even tho I say so myself) It did take me a while to understand the I'm the boss of the business as apposed to the I'm working for someone else and the "If I don't do it know one else will do it for me" so don't wait for someone to do it for you as it doesn't happen- |
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Dannydoyle Eternal Order 21219 Posts |
Well the best word of the thread was when you said CAMPAIGN! It is just that a direct mail "campaign". It takes one to be turley effective.
By the way off topic, your feeling about cold calls may pass indeed. Mine never did, but I had others do it for me. I was simply no good at it. Others can sell ice to an Eskimo.
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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