When it comes to your projects, are you creating a budget?
Or do you just have a general sense of how much certain things are going to cost and keep a tally in your head?
(This question applies both to your life and any project you might have…but since I am a business coach for musicians, I’m going to talk about a music project.)
Look, I get it. Who wants to sit down with spreadsheets and numbers when there’s art to be made? Plus, how the heck do you know how much everything is going to cost anyway?
My clients are highly intelligent overachievers, fully capable of creating a simple spreadsheet…and in my two years of coaching, not one has said “yes” when I ask them, “Do you have a budget?” Most of them haven’t thought of it, and one even asked me why they should bother.
I’ll tell you why.
A budget helps us get a tangible understanding of how big our goals are. It helps us ourselves ask tough questions about what is necessary and what is nice to have, and it can even act as a to-do list as we get further along in the process.
Your budget is the scaffolding for your project: something that provides structure and a point of reference as you grow and build out.
So…where do you even start?
To keep things simple, break down your expenses into categories. I like to use the following:
• General & Administration (known in the biz as “G/A”)
• Program Expenses
Then under Program Expenses, I break it down even further into the following buckets:
• Marketing & Advertising (all the money that goes into promoting the project)
• Talent (artists, engineers, production crew, etc.)
• Facilities & Equipment (instrument rental, equipment, space rental, etc.)
• Royalties & Rights (any licensing or royalties that you need to pay for the music you are performing)
If you want to see a sample of what this looks like, check out my Sample Project Budget & Cash Flow for free here. If I’ve shared this spreadsheet with you before, I’ve made a few changes! Feel free to save a copy to your drive and tweak it to make it your own.
Of course you can categorize these expenses any way you wish! Sometimes you’ll need to categorize it according to the way a particular grant application wants the numbers to be displayed, or your accountant has suggested something different. These are simply the way my brain likes to lump things together.
Try to think of every expense you might possibly incur. Add line items and categories as needed. The point is to get a clear idea of what your project will reasonably cost (and if you want to think even bigger, you can create a separate pie-in-the-sky budget that has all the things you would pay for if you had unlimited funds).
Once you figure out how much it’s all going to cost, then it’s time to figure out how to pay for it all.
I’ll get into that next week.