Mark my homework for me, Part 1: Budget

[charl.ie]

Before we start, It would be prudent to note that this is neither actual homework (I'm not at college yet and I'm not doing an industry related course), or a real event (as if anyone would trust me to do that). It is a purely hypothetical exercise, to try and expand my knowledge and while away a slow summer holiday's day.

 

So, I have been (hypothetically) asked by a charity to completely organise the technical side of their one-night gig. They plan to hold the event in a local farmer's field, which he has kindly donated for the event (he will be using it for pigs afterwards). Let us assume there is sufficient access and that the charity have gained a license for this event. Our first meeting was to decide how the budget should be allocated, and I came up thus:

 

Predicted Ticket Sales: 1000

Price Per Ticket: £20.00 [1]

 

Total Income: £20,000.00

 

Profit (20%) = £4,000.00 [2]

Marketing (40%) = £8,000.00 [3]

Site + Misc (25%) = £5,000.00

Technical (15%) = £3,000.00

[1] Based on being cheaper than Guilfest's £35

[2] Made up, but sounds like a reasonable figure

[3] I read somewhere that marketing is a large (50% ish) part of any event

 

So, my question at the moment is: are these figures reasonable? Or would you expect something radically different?

After I have confirmed a suitable number for my technical budget, I will proceed to post a breakdown of where that will go. I will then follow with an equipment list, designs and other plans, provided people are interested enough. I would also be interested to see what others, especially other students, come up with.

Thanks in advance for your replies, as I'm sure it will be a great learning experience for me.

[richard]

Site + Misc (25%) = £5,000.00

Assuming this includes security, fencing, trackway and repairs this isn't a lot of money. You would have to get a PEL for the site, although you may be able to get away with a TEN if you are lucky.

Technical (15%) = £3,000.00

Again very low, if a daytime event (no lighting) with simple events you may be OK, but once you factor into it power generation (and fuel), staff to set up, sign off, operate and remove. Accomodation (if site is not near the supplier) etc etc the costs rapidly rise.

 

One thing you are missing from there is a contingency, this would usually be around 5% if you are confident in what you are doing, but a newer event should be more like 10 - 15%, you could suggest that your profit is your conitingency, but you should probably show it in your budget as you shouldn't be afraid of spending it!

 

Hope that helps!

[Doug Siddons]

I see the bands aren't getting paid!

[Robin D]

An interesting budget which has the profit as the first item of expenditure. That's the one element that you cannot reasonably fix! Profit is what is left after you take the expenditure away from your income. Fine to have it as a budget 'target' that perhaps forces you to trim your costs or find ways of increasing expenditure.

 

The predicted sales figure I'll have to take on trust but the gig had better be darn good if you are to get away with £20 per punter!

 

What do you mean by 'site and misc'. If its to include a whopping great gennie set, or bringing power in from elsewhere, portable loo's, staffing (security and crowd safety), staging, weather protection, Site lighting, etc, etc, etc, £5k is not going to get you very far. (This is in a farmer field after all).

 

£3k on sound and light for an open-air gig for 1000 people would also be extremely limiting. What about the cost of operators and crew?

 

I think your fundamental problem is that you are looking at an outdoor 'gig' which is fraught with difficulties. I can tell you that hiring a 44foot curtain sided trailer as a 'stage' with average generic lighting and sound will cost you at least a couple of grand and would not be powerful enough to project to 1000 punter unless very close. OK as a charity you might get a haulier to 'loan' you trailer, but that's getting progressively more difficult as the industry fights for survival.

 

Now a nice weatherproof barn with a fortuitous 3 phase supply would be much easier to plan and budget.

 

Budgeting is a bit of a black art as you really need to do it both top down and bottom up simultaneously. It's very easy to optimistic on the income side and also underestimate the costs - especially if you want it to happen. With a good few years of experience I can tell you your initial thoughts on income are rarely met, and cost are always higher - somewhere. I always do the top level budget 3 times. 1. First thoughts, 2. hard nosed 'realistic' approach and 3. worst case. If 2 delivers a profit and the loss from 3 is not too painful, I then go into the detailed budget cycle in which I validate all the assumptions made in the top level budget. However I usually start by building a list of everything I need in the category before trimming it to meet the headline budget, (or finding that the headline budget is inadequate! :) ) It's only when you've been round the cycle at least a couple of times that you can then revisit the top level budget and see if you still anticipate a profit.

 

Marketing is indeed a big cost but where I've done similar things for a charity, they did all the marketing and provided much of the physical resource for marshalling etc, so its something you would have to check in the brief.

 

Have fun with this 'fantasy gig'. You're approaching it the right way, but you do need to ensure that the realism tempers any decisions.

 

Edit: I see others have beaten me to it.

[Thirdtap]

Hello,

 

Interesting topic, one thought about the capacity would the guest list be in addition to the quoted 1000 people? Generally each band requires a few complimentary tickets for family etc. If not then you would not have the potential of 1000 ticket sales.

 

One example is The Cult played Finsbury park around mid 90's with three stages and quite a few bands including Pulp & Pearl Jam. Attendance for the day was reported at 20,000 with a guest list of 2,000 people

[Bobbsy]

I think Robin D is pointing you in the right direction but it's worth saying that your budget starts with the two items that should come last.

 

Instead of aiming for a profit and setting an arbitrary number of punters and charges, instead begin with a really detailed view of your costs.

 

Don't just say "Site + Misc". Sit down and brainstorm every foreseeable cost, be it stage hire, portacabin hire, generators, permits, security etc etc etc. Get some realistic budget costs over the phone or off the internet. Don't guess and very specifically don't make it cheap because you feel you have to. Don't forget insurance...see a thread in lighting about a 20 year old who now owes a rental house £78,000 because the gear was stolen while in his care and he didn't have coverage.

 

Do the same with "Technical". Break it down line by line with real hire costs for all the lighting, sound and ancillary gear you might need. Again, be realistic and brutal.

 

Yes, you need a lot of promotion for a one-off event but, again, find out what 10,000 handbils...or posters...or 10 TV ads...or whatever will cost you and use some real numbers.

 

By all means add on a 10-15% contingency.

 

Add this all up. Faint.

 

At that stage, start playing some what ifs with numbers of people attending and the cost per person. See how many bodies you need to break even at what charges...then see what you'd have to do to make various levels of profit. Don't be over optimistic....if it's outdoors and it rains, you could be in serious do-do.

 

Once you've done all that...THEN you have a budget.

 

Bob

[paulears]

Excel spreadsheets are excellent ways to play with variables. You can use it to enter fixed costs, and then adjust others to see the impact on profit. The word misc means zilch - it's simply a fudge.

 

PPPPPP

 

Proper Planning Prevents P1ss Poor Performance.

 

Always a handy mantra for me. I come up with hairbrain schemes every week.

 

SWOT and SMART analysis usually squash every one before wasting too much time.

[charl.ie]

Thank you very much to all for your well-thought-out, detailed responses. It has already been a vast learning experience for me. I was hoping for some rough numbers and then be able to plan out the lighting and sound in more detail, but that was clearly the Wrong Way™ to do it. I'm now in the process of going through a more detailed plan, and drawing a budget up from that.

 

I have a feeling that my friendly farmer has a spare nice weatherproof barn with a fortuitous 3 phase supply, which he could be persuaded to lend me.

 

Again, thank you so much for the replies, it's great being able to build my knowledge up like this.

[Chris Adam]

Price Per Ticket: £20.00 [1]

 

Total Income: £20,000.00

 

[1] Based on being cheaper than Guilfest's £35

 

I'm guessing that you are aware of how many stages guilfest actually had for their £35 ticket? Although a small scale on the grand scheme of things, it was still a fairly substancial site. The artist I work for passed through there on our tour and we were all surprised at how large it was for quite a young festival.

 

It should be noted that if you are basing your ideas around a festival, a huge chunk of the organisers money doesn't come from ticket sales. The stall holders and food vans pay through the nose to get into a prime site like that. It's not a fiver for a burger for no reason. Ticket sales is fairly down the list of income on something like that. Advertising (from other companies is pretty high up though - that's why most festivals have a big name sponsor)

 

If it's just a gig (ie no food stalls, 10 band bills etc) you want to do, then you have to have good bargaining skills to get the artists fees / ticket percentage splits to a nice level for you. And if you are a new unknown promoter, that would not happen.

 

This is a really good thread though for this forum and will hopefully pass on some good knowledge from people who have been doing this for too long and have seen that kind of event done wrong -very wrong.

[rooftop]

It would be a lot more cost effective (assuming you only want to sell 1000 tickets) to hire a local venue which already has sound, lighting, technicians, stage, toilets, bars, etc, box office facilities all included.

 

Typical cost for one night hire - say £1k - £1.5k +VAT plus box office commission.

 

Granted you probably want to do it in a field for a reason, but it does mean the event stands a much better chance of being profitable.

[Jivemaster]

Start listing ALL the cost centres and ALL the profit centres! Sponsorship sponsors name checks on commentary and brochures, printing vs saleable advertising, concessions (food and drink etc)

 

Be realistic

 

1000 tickets will attract some guest list so not all tickets are worth face value, if an agency sells tickets they sell on commission (etc) so those tickets sell at less than face value. VAT is incurred on tickets sold so income is not the face value.

 

The skills come in knowing where to use specialists and where to DIY If someoe can sell all your tickets but wants 17% commission, is is worth it?

 

If you go greenfield 100% DIY have you all the skills, if you hire a venue with licence, seats, sound, lights power etc you get all the hardware set up for you but they get the bar and food take, and possibly take a % or the tickets that they sell.

 

Add up all the costs see what the break even point is? can you even make a profit? If things go really wrong can you cover the loss? Some aspects can be insured some cannot. How can you minimise risks of failure and incidents

[rooftop]

VAT is incurred on tickets sold so income is not the face value

 

Not if accounted for properly! VAT only applies if the company/person/organisation selling the tickets is VAT registered. If an agency/box office is selling tickets for you then they should be holding the monies in a client or holding account, which is not affected by their own VAT status. (but the commission they take will very probably be VATable) :)

[Jivemaster]

Note also that a Registered Charity cannot trade. Though it can have a separate trading company who's profit is 100% returned to the charity.

 

Look at the issue of the status of the "promoter" as they are responsible for everything and unless protected by a Limited company structure the promoter can become liable for debts incurred by the organisation.

 

Consider insurance 5 - 10% may be a good price to incorporate, more if star names will be present.

[ImagineerTom]

1000 paying punters

a greenfield site where you have to build everything or a brownfield site (aka the barn) when you have to build most stuff

for one night only....

 

No way, not a hope in hell; for JUST what you would have to spend on toilets and harris fencing (2 tiny elements of your overall project cost) that you would be legally obligated to have you could rent a fully equipped 1000 capacity existing venue for the night. A ready made venue fully licensed up with everything working and no heart-stopping crisis like gensets going down and the site being flooded.

 

Build-from-scratch live events/performances only start to become even vaguely comercially viable when you're talking of 5000 punters upwards (5000 people in one day, 5 days of 1000 different people, etc) and really need to be in the 10,000's to be truely viable.

[Chris Adam]

If you are seriously looking to get into gig promotions, then a lot of the above advice should be taken on board, and not forgotten at all. We get many, many groups in here that want to put on a "gig night" and then get a big fright when the REAL costs are given to them for putting on an event like that. Even in a venue with LX, Full PA and Power.

 

I think the best piece of advice I could give you would be: if you cut corners, you'll get burned.

 

ie, if the tech spec doesn't meet the artists riders, you could have breached the contract and the might walk. If your insurance isn't right and something goes wrong, you could end up sharing a room with a large man who wants to be very friendly. and if things like toilets, food, access, parking and lineup aren't right, your punters can very quickly turn into an angry mob. EVERYTHING is important - just to different people.

 

There are lots of Music Promotions courses out there, and some combine this with event management etc. They are pretty good to get the theory, but the best way to learn, is to watch a professional work and get involved. I'd contact your local promoter (the bigger the better) and see if you can get work experience / shifts as a runner. Best foot in the door around.