“if you can’t measure it, you can’t change or improve it.” -Peter Drucker
“I often say that when you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind.” -Lord Kelvin
The two most important documents in your producer’s toolkit are the work plan and the budget. We go into great detail on both in The Vs. Studio Producing Workshop and I’ve discussed the work plan in a prior post. Below are some basic budgeting principles…(I use the example of producing a stage play but the principles apply to any passion project.)
(1) Just like the work plan, the budget is a living document. It’s fungible and changes every time you gather more information on your project. Once you create the budget, you need to constantly update it (at least once a week).
(2) Be ruthlessly honest. Figure out ALL costs and include them. Don’t leave anything out. Don’t assume you can get things for free or cheap. (Maybe you really can lower costs, but that producing work comes later.) Figure out what it will realistically cost for now, and budget accordingly.
(3) Err on the side of generosity when it comes to paying people. Yes it’s theatre and as such, there’s no money to be made. But generously paying people (your artists, your stage crew, etc…) is the right thing to do. Always. Always. Always.
(4) Make your budget well in advance of opening night. You need numbers BEFORE pre-production. A huge part of the decision to go forward with a project is whether or not you can afford the vision you have for it. You’re excited about the play and don’t want to lose momentum, I get it. But you gotta know what it will actually cost to produce. This is where time is your ally. Why you need a long runway. So you can make an accurate budget. Talk to others who’ve done it before. Ask tons of questions and get specific costs. You wouldn’t buy a house if you couldn’t afford it, right? The same thing applies here. Careless optimism—thinking it’ll all just “work out”–doesn’t win the day.
(5) Don’t rely on ticket sales to fund your project. A useful exercise…Assume you’re not gonna sell one single ticket and strive to have enough money in the bank to still pay for the production. You wanna know that if the proverbial shit hits the fan and it’s a total disaster, you’ll still be okay. (It won’t be a disaster, but better to have peace of mind so you can then focus on making the art the best it can possibly be.)
(6) Have a contingency line item. This should be 10% of your overall budget. So for example if costs amount to $20,000, add an additional $2,000 Your final budget is now $22,000. This way, you can cover any unforeseen expenses or overages. (Hopefully you won’t have to use the contingency but again, it’s always nice to know it’s there.)
There are several other budgeting principles we cover in the producer’s workshop, but this is a great start.
Good luck and hope you raise lotsa dough!