Trish and Harold's Weblog

News, information, and random thoughts from the busy lives of Trish Egan and Harold Phillips.

Monday, June 14, 2010

Back To Business: The Right Time To Invest In Your Business

**Note: And we're back! Thanks for hanging with me, folks... I'm re-starting my regular Monday series today; feel free to email or Twitter me questions and/or comments; I'll respond to those messages each Wednesday!

The Back-To-Business Series: Index

If you can remember back that far, you may recall that I didn't follow my last Back-to-Business post about using PerformerTrack (remember - you can save 20% off a one-year subscription to PerformerTrack by using the coupon-code PORTLAND9 at check-out) with my usual Wednesday "Mailbox" post. That's because, for the most part, all the responses I got went something like this:

It sounds like a good system. Maybe once I start making money I'll buy-into-it. (Ft. Washington, MD)
Once I get more auditions to track, I'll think about using something to track them. (Miami, FL)
Maybe once my career really takes off, I'll set PT up. (Richmond, VA)

I responded to each of these folks individually (and the 20 or 30 others who said essentially the same thing) with the following note:

Hi ______! Thanks very much for your response. I certainly understand your need to watch your spending - we're all poor actors, trying to save whatever money we can! I might suggest, though, that you're looking at things the wrong way. Is the right time to invest in your business after you've become successful? I don't think many businesses can make that equation work - they have to invest in their business to become successful! We'll talk more about this in next week's post.

Of course, "next week's post" was a bit misleading :) My little vacation aside, though, think about the logic of what these people were saying... Did General Motors say they'd hire people to make cars once they'd sold some cars? Did Coke say they'd buy a case of bottles after they'd sold a few bottles of soda? Of course not... those businesses had to invest some money to start up, and once they'd sold a few products they had to invest the money they'd brought in to make more and better products.

That doesn't mean these businesses had to drop a million dollars at the beginning, of course - they were small businesses run by individuals, just like we actors are. They had to keep their costs down to maximize their profit and build the funds they needed for re-investment.

Ok, hold on there... I actually felt your eyes glaze over as I wrote that - that "Nightly Business Report" language tends to make actors - and, indeed, most Americans- blood pressure go up, I know... take a breath. All I'm saying up there is that these businesses - and we, in our acting businesses - need to keep costs down, so they - and we - make more money when we get paid. (ok, you probably got that part...) The toughie, though, is that once you - and they - get paid, some of the money brought in needs to be re-invested to make your business grow.

Here, let's take a look at the proto-typical American "garage business" - Apple computers. A group of friends literally started building computers in Steve Jobs' garage (That's a picture of "The Woz" working away in the upper-left of this post!) Once they'd sold a few computers, though - they didn't stay in the garage! They re-invested their earnings in the business they were building and moved out to larger facilities... and started making Apple into the giant it is today.
Sadly, a lot of business owners - and a lot of actors - never mentally move out of the garage. Their businesses might grow beyond their garage, but their mind-set doesn't. Let me tell you a little secretâ„¢: most Americans are afraid of money. It's a hard truth - but a truth nonetheless. We're trained to worry about money from an early age. When we don't have it, we're desperate to get it; when we do get it, we don't want to part with it - OR, on the other side of the spectrum, we spend it on things we want (as opposed to the things we need) as quickly as possible - thinking we'll never get any again!

Actors are even more fearful when it comes to their money than most Americans - because our income comes in sporadically. We're never sure when the next job is coming, so we hold on to our shekels with a tight fist... and then, when we get cash in our hands, we're even more extreme about holding onto it... or we enjoy it a little too much.

We've had this attitude towards money drilled into us because Americans have come depend on "the steady paycheck." It's part of what we were brought up with - this 1950's ideal that we're going to work for a single company our entire life - a company that will keep us employed, pay our benefits, and take care of us into retirement. It's a nice ideal, and certainly one I'd like to see the country to strive to rebuild - but lets be honest, we don't see many jobs like that in this day and age and haven't for a good long while.

The acting profession doesn't work that way. Sure, maybe it used to for the lucky few who were put under contract in the "Studio Era" of Hollywood... but those days are long gone. We actors get paid on a per-project basis; we're hired on to a project, do the work, and then we move on to the next project to start the cycle over. The only way to make a sustainable living from this model is think ahead - to manage our resources (and believe me, money is just one of those resources) so we can line up a number of projects to fill out our yearly income. In essence, we need to have a certain number of "sales" (the contracts we sign with various production companies) in a given year to make a living.

And here's the thing... if you think about it, there's not much difference between that and the way GM, Coke, and Apple make their livings. These companies don't have a "steady paycheck," either. Like we actors, they don't a number of guaranteed sales each year; they have to produce their product, market it, make the sale, and then manage the money that comes in so that some goes to profit and some goes back into the business to help it grow. Just like we want to grow our careers. It's that simple.

This is what I was talking about in my video post last week - we can run around chasing our tails looking for a "job" to do until the work runs out - and then run around looking for the next "job - " or we can run our careers like GM, Coke and Apple do. We can manage our resources - money included - to grow our businesses, and increase the number of projects we work.

I've talked a lot in the past few Back-To-Business posts about the expenses related to an acting career. There are things you have to spend your money on - such as head shots and training - and there are things you can spend your money on - like a car, a web site, or the commission you pay to an agent. You can get by without spending money on those "can" things I just mentioned... but what are you giving up by doing so? How many opportunities to book that next project - and fill out your income for the year - are you giving up by NOT having a car, web site, or agent? When thinking about places to invest your acting money, that's the question you need to answer. Not "what will I get for my money," but "what will I lose out on by NOT spending the money.
Like I said above, money's just one resource that we as actors - and any business person - needs to manage. I'll get into some of those other resources in next week's post. As always, feel free to email or Twitter your comments and questions. For now...
Let's get to work!

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