Let’s Recap. Last month I congratulated you on owning your own business (huzzah!) and we compared your acting business to the Fortune 500 companies on Wall Street. Big takeaway: schedule check-ins! Checking in with your goals and the state of your business on a recurring basis is crucial to make sure you are on track and will help you analyze what is and is not working. Still not jogging your noggin? Check out last month’s piece here.
This month we are going to talk about another way our acting business is like a larger company: the importance of a Budget! As an actor, there are many things you have to factor into your monthly/quarterly/yearly budget. I am going to assume you already know what these things are but they are usually: housing (and utilities), food, transportation, training (acting classes), personal appearance, and communication (phones, marketing materials, etc). If you want this list broken down further, check out this awesome article at Backstage on an actor’s budget.
Now let’s look at those expenses a bit more with the eye of a businessperson. That list has fixed costs and variable costs. A fixed cost is something that does not change month to month. Those items are generally your rent and phone bill. The other costs vary month-to-month and year-to-year.
For example, one month you might need new business cards, postcards and a website redesign but the next month you can leave those expenses out. That is a variable in your budget. This does make it a bit more difficult to budget, but it also means that you have infinite ways you can save money on those variable costs and stash some extra money away for the future. There are tons of resources about how to budget out there, but some that I can recommend are Mr. Money Moustache and Mint (awesome money management tool as well).
Let’s bring this back to big business practices. There are some really great ways those big companies run their budgets, which we, as actors, can learn from.
1) Be dynamic with your budgets! – Companies have accountants that look at their budgets daily. This is valuable, because they immediately see what is working and what is costing the company more than originally expected. You should be realistic about sticking to your budget, but be flexible when it will help you grow your business.
2) The importance of investments – Ever heard the expression, “You must spend money to make money?” Even though it is difficult to support yourself on your acting, the same principle applies. Acting classes, headshots, treating your favorite director to coffee, these are expenses that you can consider investments in your future. You may not see the return immediately, but these investments WILL pay off in the long run.
3) Return on Investment (ROI) – After you invest, you expect returns on those investments. These are called your ROIs and in the stock market, these are the dividends paid to their shareholders every quarter. ROIs, however, do not have to be monetary. Did you make a new contact? Did you help out a friend in need? Did you take an acting class that has helped you gain confidence for when you walk into an audition? This is a version of those check-ins we talked about last month. Celebrate those ROIs, whatever they are, and remember that your ability to invest in yourself means that you are still a proud business owner.
4) Other forms of currency – Unable to invest in yourself monetarily? Think outside the box when it comes to currency. Do you have a skill you can trade with a friend or offer to a production company? Maybe you can volunteer some time to an acting studio in exchange for classes. Think about your strengths and how you can help others with those things you are super good at. I am a firm believer in what goes around comes around and you never know what sort of benefits your skills may offer others (more on this next month in Part 3!).
5) Value your time – This goes hand in hand with tip number 4. Even though it is important to think outside the box and donate your time, remember that your time is valuable! If you don’t think your time is worth something, no one will. So the next time your sink breaks. Call a plumber; don’t try to fix it yourself. You may think that you are saving yourself money, but your time is valuable and it is always a good idea to get a professional to do a professional’s job. You don’t have to be perfect at everything!
Feeling overwhelmed by budgets now? Don’t worry! Just remember that according to surveys performed every year, 8 out of 10 business fail in their first year of operation. 8 out of 10! If you have been operating as an acting business for over a year, you have beat the odds! Celebrate that and remember that your budgetary issues are the same ones that big businesses face. Learn from their successes and mistakes, keep on learning and evolving, and keep kicking butt. Go you!
Note: I originally wrote this post for Ms. In the Biz, an amazing resource about women in the entertainment industry. I write a monthly column comparing entrepreneurship to the entertainment biz. Check out the original post here: http://msinthebiz.com/2014/09/29/ways-actors-can-budget-like-a-big-business/