I read an interesting book recently. It was about business. I find myself reading business ideas and twisting them to apply it to our lives as musicians.
The book was called Profit First by Mike Michalowicz. It had a simple premise. The way a business makes profit is by taking the profit first from any income. Whatever cash comes in, 50% of it is taken as profit.
This business coach had turned many failing businesses around simply by taking the profit first. The business then had no option but to cut its expenses. The profit (the lifeblood of the business) was guaranteed. The expenses would have to be adjusted to fit.
Makes sense huh?
You may have heard of Parkinson’s Law. That’s the idea that work grows to fill the available time. It applies to expenses too. When businesses get lots of money in, they spend more than they need to on expenses. The expenses bill rises as the income does.
So no matter how much a business earns, the profit stays just as low. The standard approach towards profit is that we see how much we’ve spent out, then we take whatever is left over as profit.
Mike Michalowicz makes the expenses shrink instead by taking the profit first.
I got to thinking about the music industry.
How many times have you been asked to play a gig. Then when you discuss pay, the organiser says that they don’t have a budget for that.
I’ve experienced this a lot.
It bugs me. There’s a budget for the room, the caterer, the bar staff, the sound equipment, the advertising and a whole lot more.
But no budget for the artist.
Imagine if the “Profit First” principle was followed, but Artists First instead.
Here’s how it would work. The organiser would check their budget, and give 50% of it to pay the artists. The advertising, the venue hire, and all the other stuff would have to fit into that smaller budget.
They’d cut corners on those things instead. And we’d get paid.
It makes no sense to run events that are focused on live music, yet have a budget for everything except the musicians!
A campaign started to form in my mind. We could lobby for this I thought.
But then it hit me.
We do this to ourselves all the time!
Think about your album fundraising. I’ve spoken a lot about things like grants, sponsorship and crowd funding. These are all great ways to run a successful fundraising campaign. All are effective and bring in cash.
But how much of that will go to you as payment?
If you plan to raise $10,000 – was it all going on studios, and artwork, and printing and promo?
How much were you planning to take yourself?
The Profit First guy would say that you need to take 5k for you, and get your album done with a smaller budget.
That’s perfectly possible too. If you think you need 10 grand, you could do it differently and still get it done with 5. I know – I’ve done great albums on a shoestring and great albums while spending out cash.
If you work hard to raise all that money, why give it all away to others?
Isn’t that just like those frustrating gigs, where there’s no budget for the musician. But there’s plenty of money for everyone else involved!
Unless you take your share of the cash up front, your fundraising efforts turn you into someone who works like crazy so that everybody else involved gets paid. You become a middle man that money simply passes through on its way to other people.
So here’s for a different campaign – one that needs no lobbying because we can implement it for ourself.
Whatever you earn from this day forth, whether that be gig fees, fundraising, or CD sales – take the first 50% of it for yourself. Raise your fists in the air and yell after me: “Artists First!”
It’s about time musicians started to guarantee our earnings from the music we create.