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Stage Your Business Essentials

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Short introduction to starting and running a theatre production business

Short introduction to starting and running a theatre production business

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  • 1. Stage Your Business EssentialsJohn Spindler CEO of Capital Enterprise
  • 2. Key Learning Points of Presentation• Overview of The London Theatre Market Box Office Data.• How to start- Theatre Company- Basics• First Show Essentials• Basic Budgeting• 10 minute Business Plan• 1 minute Elevator Pitch• Sources of help & funding.• Homework Exercises.
  • 3. 2010 SOLT Box Office Data Over View 2010 Average Average Av Income Box Office No of Average % Tickets Ticket Price Ticket Price Per Receipts Performances Attendence Sold Asked Paid PerformanceSOLT Members(43 Commercial & 8subsidised LondonMembers) £512,331,808 18615 760 70% £45.12 £36.20 £27,512.00SOLT Affliates(8 mainly non West EndTheatres) £8,995,312 2993 202 65% £17.37 £14.86 £3,001.72 Source: Box Office Data Report 2010-SOLT
  • 4. What the Public wants to see? 2010 Genre- Attendance Entertainment & Musical Play Dance Opera PerformanceSOLT Members(43 Commercial & 8subsidised LondonMembers) 59.5% 26.2 7.0% 3.6% 3.7%SOLT Affliates(8 mainly non West EndTheatres) 8.00% 72.5% 0.2 2.4% 17.1% Source: Box Office Data Report 2010-SOLT
  • 5. Types of Play Performed. 2010 Types of Play Performed Contemp (Post Modern (20C pre New 1945) 1945) ClassicalSOLT Members(43 Commercial & 8subsidised LondonMembers) 40% 35% 7.0% 17.0%SOLT Affliates(8 mainly non West EndTheatres) 63% 17% 6% 14.0% Source: Box Office Data Report 2010-SOLT
  • 6. Basic Step-by-Step Guide to Starting a Theatre Company1. Decide on who will be involved, roles, responsibilities, levels of commitment (investment) and management structure.2. Agree on a mission/ value statement- The criteria for determining what you are about and what type/style of productions you are going to stage .3. Create a name and a look. Brainstorm ideas on names and develop a logo and an identifiable “look” for your publicity, etc.4. Decide on profit/non-profit status. The main advantage of non-profit status ( Charity/Social enterprise) is qualifying for grants and special discounts. It’s a lot of work, so be realistic about whether the effort is worth it. You can always wait and turn non-profit in the future.5. Register your company @ Companies House and possibly trade mark your name.6. Open a bank account. This enables you to keep track of your company’s financial situation and to accept checks written to the company’s name.7. RESEARCH-RESEARCH-RESEARCH- Market (Audience)-Competition- Funding.8. Identify your costs (direct and fixed) for on-going operations, pre-production, marketing and production.9. Make funding decisions. Determining funding sources ( Investment, Grants, Loans) and likely amounts of income . ( Ticket Sales/ Sponsorship/ Donations/ Sweat Capital)10. Create a marketing/promotion plan of Action. Use “AIDA” and develop a plan to build audiences through additional activities such as social network participation, teaching classes or hosting staged readings.11. Create a database. Consider keeping separate databases for general mailings and for press contacts.12. Call in favours- Marshall your “Sweat Capital”13. Work backwards. Put your first production date far enough into the future that you have time to lay some groundwork. You won’t do your best planning under the deadline of an approaching opening night.
  • 7. First Show Essentials• Play• Cast/Crew• Venue• Ticket Sales Operations• PublicitySo you need:A “SMART” Production Plan that incorporates:• Marketing Plan• Budget &Cashflow
  • 8. First Steps into ShowBusiness• “fiat ars,pereat mundi”• Think of your Audience- Who are they- what do they want?• Choose something for you first show that is relatively easy for you to execute- something you know?• Match ambition to resources e.g. Small Cast’s are cheaper• Choose something simple to stage & portable• Make it contemporary ( No costumes)• Think of what will get your production noticed- media exposure• Open Cast- Attract talent that can sell a show• Don’t pay unless you have too• Call in favours and do “quid pro quo” deals.
  • 9. Theatre Budget• Your Salary- Personal Survival Budget.• Scripts - both for reading in order to select a show and for production• Royalties - varies depending on the demand for the show and the size of the hall• Specialty props or consumables that you cant borrow• Rehearsal/performance hall rental• Janitorial/security services (as required by the performance hall)• Utilities (as required by the performance hall)• Lighting/sound equipment rental, depending on what the performance hall offers• Costume construction, purchase or rental (this can be a cast responsibility)• Set construction - lumber, paint, screws, hardware, etc.• Advertising - fliers and/or posters, possibly newspaper or radio ads• Playbills (print costs and possibly design services)• Musicians fees (for musicals)• Insurance• Storage (costumes, sets, props, etc.)
  • 10. Resource Need• A director• A stage manager• A lighting/sound tech• Someone who can design sets• Someone who can build sets• Someone willing to be in charge of publicity, including the playbill• A music director (who will probably expect to be paid) and a choreographer (if you plan to do musicals)• At least three people willing to serve as the Board of Directors, or Steering Committee, or whatever else you want to call the group that will take responsibility for running the company. One of these should be willing to act as treasurer.Likewise, you will need the following:• A place to rehearse• A place to perform• A place to store costumes, props, etc. between productions• A source for lighting/sound equipment rental
  • 11. Homework ExercisePrepare A Production Budget for a 10performance revival of -“Who’s Afraid of Virginia Wolf” ( See Hand Outs)
  • 12. Pricing & Sales Forecasting No of Tickets X Average Ticket Price = Sales Forecast Cost of performance or production run / No of tickets @ “Market Price = Target Sales Requiredto Break-Even.• Price for Profit?- Need to cover the cost of performance by selling only 50-70% of theatre capacity.• Other Income- Subsidy or profit?• Customer Pricing Expectation- Set by the competition, your positioning in the market and the theatre• Volume Vs Margin- If you give discounts you need to sell more tickets.• Trade Profit for Cash- Importance of Advanced Bookings for Cash Flow.• Think Long Term- Bigdifference between funding a production and funding a business.
  • 13. Homework ExerciseBoot Camp Productions has booked a SOLT Affiliate Theatre tostage 10 performances of a revival of “Whose Afraid of VirginiaWolf”. The Production Budget for 10 performances is £15,000and the development, marketing and rehearsal budget is afurther £10,000. The Theatre has 140 seats (all good views).• Will the show make a profit or require a subsidy to Box office income?• How much profit will be made/ subsidy required?• Given what you know about the 2010 box office data – what is the “optimum” total budget for producing this play at this theatre?• What would you do to make a production of “Whose Afraid of Virginia Wolf” work?
  • 14. 10 minute Business Plan• 7 Slides• Challenge- “ Catch a fish”- an “investor”Grab ttentionSpark nterest- What’s in it for them?Create a esire – Leave them wanting moreMake them ct- What’s your ask?
  • 15. Slide 1- Introductory Slide• Who are You?• Short Pitch- Your business/ production in one line• Tell the Business Plan “Reader” what want them to remember
  • 16. Slide 2- Audience/ Customer• Who are you selling too?- Who has the money?• Audience Profile/ Market Size?• Why will they come?• Comparable success stories• Specific examples
  • 17. Slide 3 : Your Product/Service• What are you offering- features/benefits• Unique Selling Proposition- Why choose to come to your production?• Better than the competitor because….. ?• How are you going to first reach then secondly convince your customers to buy? – i.e. marketing plan.
  • 18. Slide 4- Why Now• Market Trends- Good opportunity now because…..?• Time Critical Decision making process- Who do you need to “get on side” to start the business (get the production of the drawing board), how is it done and how near are you to getting a yes?• Compelling Reason to “invest” now
  • 19. Slide 5 - Why Us?• Team Today ( Credentials, roles & responsibilities)• Team Future ( Staff, Associates, Partners)• Connectivity & Partners. – Who do you know and why are they useful ?• Sustainable competitive advantage- What are you going to do make sure you are not a “one show/trick pony” ?
  • 20. Slide 6: FinancialsKeep it Simple ( i.e. A graph?)• Top Line Sales• Costs/ Cash Flow• Investment Required & for what• Forecast Value of IP/ Company ( based on payback, NPV, IRR)• Exit Strategy- How will the investor get more than his money back.
  • 21. Slide 7: The Elevator Pitch1 minute to sell your 10 minute Business PlanRemember:1. Think like an investor/ commissioner- Resonate2. Start strong-End Strong3. Be direct and clear4. Get the audience to engage- questions not statements.5. Have an ask they can say Yes too6. Enough & No more.7. Be passionate- Be Entertaining
  • 22. Guide To Pitching
  • 23. Sources of Start-up Finance• Personal resources (time and money = sweat equity)• Friends, Family & Fools ( Your Supporters)• Customers and Suppliers• Government Grants &Loans• Corporate Sponsorship• Debt Providers – Banks – Specialist lenders• Equity Providers – Private Investors-AngelsMatching the right mix of sources to the right stage and type of finance is the key to successful fundraising
  • 24. Looking for Funding?Grants &Awards• Stage One (Bursaries & Awards for New Producers)-• Arts Council-• London Councils-• Fundraising Resources & News -• FoylesFoundation-• Welcome Trust-• Shell Livewire -£1000 award for new entrepreneurs 16-30 -• UK Film Council-• New Enterprise Allowance ( August 2011 in London) -• J4B- Portal for grant finding• Skillset:• NESTA-• British Council-• Angels- Sponsorship••••• Paste & Wait Investment (USA only)• Paste & Wait Investment. www.indiegogo.comBank• Natwest-• Big Society Bank :
  • 25. Theatre AngelsThe capital is raised through independent investors, or ‘angels’, who individually invest a specific agreed amount of finance into the production, and whose liability ends at that amount. The first profits from the production always go straight back to these investors until they have recouped their initial investment, after which the production is deemed to be in profit. Once this capital has been repaid, the investors will share in 60% of the production’s profits, with the producers retaining the remaining profits of 40%. Usually, the minimum amount required to invest in a commercial play is £2,500 and a musical approximately £10,000 but smaller amounts are possible if agreed with the producer. You will need a Lawyer to draw up the Agreement.
  • 26. Useful LinksGeneral Information:• Capital Enterprise-• NESTA Guide to Starting a Creative Business-• Business Link -• British Library-• HMRC• Companies House:• Guide to Early Stage Investment: pdfEssential Theatre link:• Society of London Theatre-• British Theatre Guide:• Theatrical Management Association-• BECTU- Technicians Union Rates-• Equity-• Scripts-• Power to the Pixel:• Circalit:• Production Base:
  • 27. Contact us for more information or to arrange a follow up meeting 020 7 679 4598 07968 470901