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The Magic Cafe Forum Index » » Tricky business » » Cash Flow (0 Likes) Printer Friendly Version

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NJJ
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How do the full time pros amongst us handle cashflow and making sure you have enough cash on hand to buy your next expensive trick?
Jim Snack
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Managing cash flow is an ongoing concern for any small business. Here are some simple strategies for magicians to manage cash flow:

1) Get 50% deposits on shows. This is my number one technique. Then there's money coming in even when there are no shows for a week.

2) Offer a discount (say 5%) for full payment in advance. Not only is this a negotiating strategy for clients who do not have your full fee, but it gets the money in your account sooner.

3) Don't delay when sending invoices to clients. Send them in advance of the gig, then double check that the final check will be there at the show.

4) Accept credit cards. This works well especially for my federal government clients, since it can take much longer going through their regular payment system, but employees can charge their card and get re-imbursed themselves.

5) Use OPM (Other People's Money) whenever possible. If the client is covering an airline ticket and/or hotel room, have it direct billed to them rather than having to invoice them for the expenses after the show.

6) Don't buy the next expensive trick. Improve your act by working on yourself, your personality, and add more humor.

Just a few suggestions. Good question.
Jim Snack

"Helping Magicians Succeed with Downloadable Resources"
www.success-in-magic.com
TheDean
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Jim ROCKS!

This is awesome advice and Jim knows of where he speaks! PLEASE do yourself a favor and heed his advice well!

Here is one resource that you may also wish to consider. It's Dave Ramsey's Financial Peace University and it is amazing!

I have been trough this system and it is the BEST personal, business and financial program I have ever done... bar NONE!

http://www.DaveRamesy.com

I am at your service and in His Service,
Deano <== Financially Peaceful in Reno. (Hehehehehe!)

PS
He has a few New your Times Best Selling Books too...
- Financial Peace University
- More Than Enough!
- How To Have More Than Enough!
- Total money Makeover!
...all available from his site and Amazon.com
Dean Hankey, *M.D. - The Dean of Success Solutions!
Serving & Supporting YOU and Your Success!
"Book More Shows... Make More Money... SERVE MORE PEOPLE! - Not Necessarily In That Order…"

(*Marketing Doctor) Smile
David Todd
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Great advice as usual, Dean.

NOTE:
The URL to Dave Ramsey's site given above is one letter off . It will take you to a generic search site with one of those "this domain for sale"
notices.

Dave Ramsey's site is :

http://www.daveramsey.com/
TheDean
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Oops... Te He! Good thing is "Financial Peace" and not 'spelling peace'... *snicker*snicker*

THANKS brother! Yooz da' BEST!

I am at your service and in HIS Service.
Deano
Dean Hankey, *M.D. - The Dean of Success Solutions!
Serving & Supporting YOU and Your Success!
"Book More Shows... Make More Money... SERVE MORE PEOPLE! - Not Necessarily In That Order…"

(*Marketing Doctor) Smile
NJJ
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Quote:
On 2003-08-09 08:14, Jim Snack wrote:
Managing cash flow is an ongoing concern for any small business. Here are some simple strategies for magicians to manage cash flow:

1) Get 50% deposits on shows. This is my number one technique. Then there's money coming in even when there are no shows for a week.

2) Offer a discount (say 5%) for full payment in advance. Not only is this a negotiating strategy for clients who do not have your full fee, but it gets the money in your account sooner.

3) Don't delay when sending invoices to clients. Send them in advance of the gig, then double check that the final check will be there at the show.

4) Accept credit cards. This works well especially for my federal government clients, since it can take much longer going through their regular payment system, but employees can charge their card and get re-imbursed themselves.

5) Use OPM (Other People's Money) whenever possible. If the client is covering an airline ticket and/or hotel room, have it direct billed to them rather than having to invoice them for the expenses after the show.

6) Don't buy the next expensive trick. Improve your act by working on yourself, your personality, and add more humor.

Just a few suggestions. Good question.


1) I do that for corperate guys but not kid's parties.

2)I have found that the worst late payers are big business who don't seem to care about 5% discounts. The people who take advantage of it are smaller gigs where the cash is less important and the usually on time anyway.

3) I send out the invoice at the same time as the contract with a clause in the contract saying "I agree to the details in invoice no 130503A etc".

4) I looked into a credit cards but to get a phone account (i.e. the ability to take CC numbers over the phone) costs quite alot in Australia. Instead, I use EFT a lot. My bank has a GREAT internet banking system.

5)Yes! I REALLY need to do this!!!!

6) Awwwww! But can't I just buy one...PLEEEASE!
Chris Berry
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Nicholas, a small suggesstion on #2:

I don't know if this would work or not, but why not have it stated in the contract that you must be paid in full no later then 3 business days after the performance. That way, if you don't receive the money the other party can be sued (or at least threatened with a lawsuit) for breach of contract.

Like I said, don't know if it would work or not, just an idea.

Chris
Salazar Magic
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How do you accept credit cards? Ever think about using PayPal for payment?
NJJ
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You can put all sorts of clauses in your contract but, at the end of the day, if they take six weeks to pay you for a $500 close up gig you are not going to take them to court.

I always seem to have enough money in the bank but have trouble keeping track of future expenses and future gigs.
TheDean
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Hmmmmmm...

I NEVER get "hung-out" (having to wait, that is...) for money with the 'rare' exception of billing for overtime or additional 'on-the-spot' services, (which is NOT rare) but they usually they pay me that right always as well. Like I said, in 30+ years and over 25,000 live events, I NEVER have been placed on any "terms" like net 'anything'. (30, 60, 90 days) No way!

My regular business practice (for very FIRST-TIME customers) is that the balance of the agreement is 100% DUE and PAYABLE a full 7 days prior to the contracted performance date. (No dough... no show!)

After our first positive show experience, it ALWAYS due the night of the show like 99% of all the other guys... no problems. And I rarely use contracts per-say.

Don't know?

Deano
<><
Dean Hankey, *M.D. - The Dean of Success Solutions!
Serving & Supporting YOU and Your Success!
"Book More Shows... Make More Money... SERVE MORE PEOPLE! - Not Necessarily In That Order…"

(*Marketing Doctor) Smile
NJJ
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Wow!

The clients I work (shopping centres, event managers etc.) have very strict policies that will not pay any contractor until the work is completed!
p.b.jones
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Wow!

The clients I work (shopping centres, event managers etc.) have very strict policies that will not pay any contractor until the work is completed

Hi Nicholas,
I can understand where you are coming from. I have many clients particularly Local authorities which pay good fees but can be a little slow 30 days is the norm here. Most will pay you in 7 - 14 days if you ask if they do BACS (this is what it is called here... I do not know what it stands for but they have your bank details and they simply transfer the money in rather than sending a cheque). This month I have 26 such bookings all of them for multiple hours. Fourtunately I know this happens to me through the summer so I am not desperate for the money even though it is quite a substantial sum. look for patterns like this and plan your finances to allow for it. The money we make we should not really be desperate for cash. I still want what's owed paid as soon as possible but if you plan I do not think it is too much of a hassle.
philip
TheDean
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I LOVE the internet! I get to learn soooo much here!

Actually, I guess there is "one" sort of exception to the rule for me, at least. That is when I'm in a casino one with one of my review shows. I submit a bill for the week or we are on a regular "schedule" for check disbursement, which is the very next Monday (or what-ever day checks get cut THAT WEEK) I submit he billing by Monday at 10:00am and I have it in my hot little hand no latter that THAT Wednesday (two days later) and I cash it right there IN the casino.

Yes, I have been asked if I would wait up-to 90 days before signing the contract (Like working for the Federal Government) when we used to work for all the military bases, and I said NO, (in a nice way...) and not once did we have to wait till after the gig.

That's the GREAT thing about communication and discussion boards such as this... we get to learn for a broad range of situations and experiences.

I wonder what would happen if you just "required" your money no-later than the day you perform so you don't have to wait? Would you loose gigs cuz they just won't?

I didn't... It was never a problem, but like I said, that's the beauty of the internet and situations like this...

THANKS for sharing this question and consideration for ME to learn form!

Have an awesome day!

I am at your service and in His service,
Deano
Dean Hankey, *M.D. - The Dean of Success Solutions!
Serving & Supporting YOU and Your Success!
"Book More Shows... Make More Money... SERVE MORE PEOPLE! - Not Necessarily In That Order…"

(*Marketing Doctor) Smile
Salazar Magic
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So... what about this PayPal thing?
magic4u02
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Yes, I would also be intersted in knowing more about paypal as well.
Kyle Peron

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Eldon
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Basically PayPal allows merchants and individules to receive payment online. Here is a link. http://www.paypal.com
magic4u02
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Thanks. I will have to go there and check it out and read more about it. I knew what it was but just did not understand the details of it.
Kyle Peron

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Scott Grimm
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Let us know how good it is. I am not looking to try it out untill I hear from people that it is all it's cracked up to be.
Faith is at the heart of all magic.
RobertBloor
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I'd like to step back to basics...

Why do you need a new 'expensive' trick?

I initially invested several thousand into my show. Most of which now sits in the closet.

Between December of '02 and January of this year (about a 30 day period total) I dropped another $1200 into my show. I've since quadrupled my amount of income with this program.

Trust me - it's not 'what' you're doing.
It's HOW you're doing it.

As for adding to my show - absolutely. We all should look at additions from time to time.
However, I'm starting to believe much of the product out on the market is ****.
If you're going to spend hard earned dough on something, don't do it because, "It's a killer trick and laymen will be blown away." Do it because it's practical, and effective.
Also when adding to your act, remember that you're fooling laymen, NOT magician. Tricks don't have to be complicated.

And finally, remember as a business person if you're not generating enough cash flow to add to your show, you probably don't have enough cash flow to put food on the table.

Which is more important?

Robert Bloor
"That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government,"
-The Declaration of Independence
NJJ
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But I really like wasting my money on expensive tricks! Smile

I actually spend very little on magic these days. I have strict guidelines for what I will and won't buy.
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