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 Introduction
Whether you rely on magic for your income
or simply perform for money on occasion, you can be more successful than you are today if
you have the desire to learn and evolve. If you think you already know everything, good
luck to you and please jump to another page. On the other hand, if you have a willingness
to improve your business skills, and do not have the time to pursue an MBA, then please
consider the following advice.
To Turn Pro or Not? That’s The
Question.
Performing magic for a living is akin to
starting a small business where you are your product. No matter how great a performer you
may be, and no matter how technically adept you may be, if you handle your business
affairs sloppily, you will lose business unnecessarily.
Anyone who decides to perform for a living needs to do some
preparatory work to insure they start off on the right foot. Not everyone should turn pro.
Having skill in magic is not an immediate ticket to long-term financial success. And even
if you turn your affairs over to an agent, attorney or accountant, you still need to be
able to stand on your own two feet.
In order to turn pro and start your own business, you need to
gain some objectivity about yourself. If you have trouble doing so, then you would do best
to gain some assistance in this early analysis from someone who can mentor you through
some tough introspection and analysis.
The Odds are Against You
Nine out of ten small businesses fail
within the first two years of operation. As a performer, this means you may not break even
on your time and investment or even begin to show a profit for two years or more. Are you
willing to face those odds? Believing in yourself is, of course, important, but truly
comprehending the challenges ahead of you is even more important.
Money Talks
What is your starting cash flow like? Most
people who start a small business are under-capitalized. This means they start on the
wrong foot by under-estimating their cash requirements for the first two years of
operation. So your first step is to determine your budget for a two year period.
You’ll need to include a myriad of things in addition to rent, food, and insurance.
Remember to include magic-related things such as props, consumables (flash paper,
streamers, etc.), and costumes. You will also need to think about travel and
entertainment, a portion of which may be tax deductible if it revolves around business.
You need to be careful, though, that you do not adopt a carefree and cavalier attitude
about these types of expenses. They add up fast and quickly erode your bottom line.
Budget carefully and thoroughly. Experts agree that you need
to have at least as much capital as is required to pay your personal and business bills
for a minimum of six months to a maximum of two years.
If you are single, living in an apartment, with no dependents
and few bills, you might be able to live on $25,000 per year if you live simply. However,
if you have a family and mortgage payments, and future concerns about your children’s
college education or your own retirement plans, then you need substantially more money to
launch your career as a performer.
Most of us do not have access to such savings, and so this
may be a hurdle you can not get past. What happens to those people who make a go of it
anyway? With no capital to pay the bills, they frequently go into debt and dig themselves
into a hole they will have trouble climbing out of for years to come. Certainly changes in
the personal and small business bankruptcy laws can help individuals in trouble, but your
credit will never be the same. Living with poor credit for seven years is a terrible price
to pay. I know several people who are living without credit cards and the ability to get
loans for cars and homes, and it has truly upset the balance of their lives.
With the increase in corporate downsizing, it may be far
easier for a displaced executive to turn pro then it would be for a younger, less
established individual. There are many reasons for this including having better business
contacts for possible future bookings, and the likelihood of available cash through a
severance package, stock options, or prior retirement investments. Younger magicians
seeking to create a nest egg for themselves will be more widely challenged to get enough
cash up to manage their affairs for months or years.
There are plenty of get rich schemes on the market which
promote the use of OPM – other people’s money – to buy real estate or other
things. While I do not condone these principles, I have used OPM successfully to stay
alive during tight times. In the early 1980’s banks sent unsolicited credit cards and
checkbooks for unsecured loans through the U.S. mail. By the time I was 25, I had
accumulated over $50,000 of credit and I was unemployed.
I used this money to start two businesses. Eventually, my
credit lines dried up (in under two years thus proving the theory about failure to be
correct), and I spent the next 10 years paying off my credit debts to avoid personal
bankruptcy and injury to my excellent credit history. In fact, I never missed a payment.
But I did suffer in many ways for over a decade, often living from check to check and
frequently having to live below my expectations and preferences. Even when I was making a
substantial living in comparison to my peers, I was still living hand to mouth.
In the long run, I was able to pay off all of my debt, and
become financially stable, but living this way is not for everyone, so care must be taken
when you elect to use credit to finance your new business. There may be an element of luck
involved with OPM – or it may an art. Regardless, you need to weigh the benefits and
risks before you make the decision to move forward with this form of finance.
 Tools
to Consider:
There are many excellent software
packages for creating and managing budgets, bank accounts, investments, etc.
Packages:
Books:
Desire + Cash Flow Do Not Equal
Success
If you believe you have the desire and
funds to get started, you still have a long way to go before you can get your first
booking. What are your short-term and long-term goals? Do you want to use magic to see the
world for a few years and then join the corporate world, or do you foresee endless decades
of performing magic in Vegas or Monte Carlo? The first goal is easier to achieve then the
second goal, and much more realistic. You need to set your goals for the first five years.
Without them, you will be hopping aimlessly from gig to gig and never be happy. Once you
know the answer to this question, you need to put it down in writing, stick it on your
bathroom mirror, and read it everyday. You need to be able to recite your goals in your
sleep.
Have A Road Map?
Okay, so you have the desire, the cash and
the goals. Where do you go from here? If you simply start looking for business, you
probably won’t reach your goals. You can’t get to your destination without a
road map. You need a marketing and business plan.
This process must not be rushed. Do not plug in some
arbitrary information and assume you have a clear path to success. I suspect if you are
honest with yourself (not an easy thing to do), then you will discover all too quickly
that attempts to connect the dots will most likely reveal some huge leaps of faith and fat
claims. If you can not connect the dots on your road map, then you need to dig deeper for
answers.
Time estimates for writing multiple drafts of a solid plan
could take as long as 90 days depending upon how much time you dedicate to the process and
how great a writer you are.
Tools to Consider:
There are a variety of software
tools designed to help you jump start the development of your marketing, business,
publicity legal or financial plans. There are also many places you can turn to for
assistance for help in writing a solid marketing and business plan. Try any of the
following popular packages or services:
Packages:
 | Business Plan Builder Interactive
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| Agreement Builder
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| Marketing Builder
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| Publicity Builder
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| Write for Results
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| Business
Plan Pro
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| Winning Business Plans in Color
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| Small Business Advantage
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Services:
Have Plan, Will Travel
The hard part is done and now you need to
get the show on the road, but before you can, you still have a few last minute tasks.
First, you need to set your company up on the books. This means you need to set-up a legal
business entity. There are number of ways to do this such as setting up a sole
proprietorship, a DBA, an LLC or S Corporation. Discuss this with a reputable accountant
and/or tax attorney. Based upon their recommendations, you will need to spend a few
hundred dollars on the legalities. You can do this over the Internet or through a local
attorney.
In setting up your business as a legal entity, you may have
complicated your annual tax preparation, but you can now begin to make legitimate
deductions. For instance, all of your props, books, costumes, mileage, etc. are now all
necessary costs of doing business. You will probably pay more to have your taxes prepared,
but the deductions should make it worth it, and in the long run you will keep more of your
income. Keep contemporaneous records of every financial transaction. Maintaining a formal
ledger is advisable and keep all receipts for end of year reconciliation and in case you
are ever audited. You need to keep these records for a minimum period of four years.
Once the paperwork has been completed and filed, you should
have letterhead and business cards printed. Keep the look and feel of all communications
vehicles and stationery consistent and conservative. Now is the not the time to spend your
money on fancy full color graphics.
Once you have your plan, you will probably want to visit your
local bank to set-up a business checking account and a credit line, if possible. You want
to keep these things in the name of your business and separate from your personal accounts
in the event of a future legal, financial or tax dispute.
Tools
to Consider:
There are many places to turn to
for free legal information about incorporation and other small business services. Here are
a few popular sites we found in our search for legal service providers:
Services:
If you are marketing on a limited budget, but want to
project a professional appearance, you can save a great deal of money by purchasing
pre-printed color coordinated paper and using your laser printer to create beautiful,
inexpensive marketing collateral. Magical oriented graphic libraries are also available to
produce your own materials.
You might also consider creating a variety of
inexpensive promotional items with your photo and slogan. You can browse a library of such
items online at iPrint. Just click on the link below.
Marketing Tools:
Books:
Setting Up The Office
Now turn your attentions to your office.
Most people find they can run small businesses very successfully from home. If you have a
spare room which can be used only as a business office, transform it, and you have an
instant tax deduction (part of you rent or mortgage and your utilities may now be
deductible).
Do not rent a private office; after all, you should be out
selling yourself or performing and not sitting in your office. Many office buildings and
hotels will rent meeting rooms for a day, and many airlines offer free or low cost
hospitality suites within their frequent flyer’s clubs located in the airports of
most major cities.
Reliable communication services are critical to your business
for phone, fax and email. You will need a separate phone line, telephone, answering
machine and fax machine. Many combination devices are available, but realize that if one
feature stops working, the whole unit needs to go in for repair and could leave your
office disconnected and you hard to reach. Some phone-answering machines now come with the
ability to forward calls in your absence or to page you. You might consider the purchase
of a cell or PCS phone and set up your home system to call you with messages.
You will need a computer system complete with printer and
modem and tape back-up unit. A full system can be found for well under $1000. Having been
in the PC manufacturing business, I feel relatively safe in stating a box is a box is a
box. No sooner will you buy the latest and greatest, then the technology changes and you
will feel the need to upgrade and replace. Resist the urge. Since you will be using your
system primarily for word processing, book keeping and email, you need not spend thousands
on a feature-rich, over-powered system. In addition, we recommend a reliable palmtop
computer like the 3Com Pilot, so you can carry your contacts and schedule with you
wherever you go.
If you do not already have an email account,
consider your options wisely. Too many people use cryptic, difficult to remember email
addresses which are limited by the naming conventions of the Internet Service Provider
they are using. Vanity email addresses are available and can help you to create an easier
and more memorable email address. For instance, which would you rather use:
technomktg@aol.com or steve@pickacard.com? Free generic email services do abound through
the Internet. If you just need standard email services, Juno provides a free software
package to send and retrieve messages without attachments.
While you are considering email and Internet Service
Providers, you may also consider establishing your own Internet web site to help publicize
yourself. Domain names are available for a $70 fee for two years. Limited sites may be
established for free from services such as Geocities or Tripod, or you may elect to create
a site on your own virtual web server which is hosted by a local Internet company. Server
space may be rented fairly inexpensively, and you can either opt to have a professional
design your site or do it yourself with packages such as Microsoft Frontpage.
A copy machine or combination scanner-copier-fax machine
would also be recommended. The latter is now available in most computer stores for under
$1000 and can be a real savings over time. Of course, you will probably go through a lot
of paper, so you will need standard office supplies which also have a way of adding up
over time.
Wardrobe is an often under-looked essential for any small
business man. Make sure you have appropriate clothes to meet your prospects. Corporate
America has dressed down, and three piece suits may not be required. Always ask what the
dress code is at your prospect before visiting. Always be neat, well groomed and in style.
Do not dress in costume. Clothes do make the man or woman, and people do judge you by your
appearance.
Tools
to Consider:
Books:
Services:
Packages:
| Microsoft Frontpage
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Ready, Set, Whoa!
You may think you have all the bases
covered, but you don’t have them all just yet. If you are in business for yourself,
you need to provide benefits for yourself and your staff (such as your assistant). You
need to consider medical and life insurance in the event of an emergency as well as a
retirement plan. Shop around for smaller insurance companies who specialize in small
business programs. Many major insurance companies will not underwrite you or will not be
competitive in their rates and services. Retirement plans can range from KEOGH or SEPs and
both may be tied to mutual funds for moderate risk and moderate growth. Talk to your
banker and your accountant about your options and be sure the plan you choose is flexible
and allows you to switch directions or banks at a moment’s notice with little to no
penalties.
Putting Your Best Foot Forward
Now that you have all the trappings of a
business and you look real to prospects, you need to start looking for business. According
to your plan, you should have decided upon a target market. Will you pitch hotels for
table-hopping in their fine dining restaurants, or will you go after the trade show market
and focus on corporations? These are two different markets requiring different approaches
and different types of services. To pitch hotels, you need a listing of the three and four
diamond restaurants in your area. This can be procured from your local AAA group at no
cost if you are member. If you want to do it yourself, use the Internet to research
popular hotel chains and see what kind of restaurants they offer. While you may have some
success and gain popularity in smaller, less fancy eating establishments, you won’t
get rich from tips or be seen by the upscale clientele who could hire you for private
shows, so target your audience carefully. There are also many CDROM packages on the market
for under $50 which allow you to create your own mailing and call lists for different
business sectors. These can be a great way to jump start your telemarketing and direct
mail campaigns.
If you elect to go the corporate route, try to narrow your
market even further by niche such as technology or even further such as
telecommunications. The narrower your focus, the better the opportunity for understanding
their needs and the potential competition. Attend trade shows in your city and pay
particular attention to the quality and size of trade show booths as this is a clear
indicator of budget. The larger the booth, the more money they have to spend. Look at
booth traffic, and gather company and product backgrounders. Once you have read all of the
information, you can begin to attack the market.
Make a concerted effort to develop a file on all major
prospects and get accurate and up to date phone numbers, addresses and business contacts
of decision makers. If you do not know how to make a sales call or to determine decision
makers, you need to attend a sales seminar and read about selling skills. If you have
never sold before, you are going to be extremely challenged in finding business
opportunities. If you go about this poorly and unprepared, you will waste endless hours
and money trying to close business which was never properly qualified.
Crafting the right cover letter can make all the difference
in the world. If it is well written and personalized, you will get read. It will probably
take several different email pieces to insure they remember you and are intrigued to speak
with you when you finally get them on the phone. According to generally accepted theories
of direct mail, you will probably need to touch a prospect 9 times before they will speak
with you or buy from you. And you can expect to call someone about 10 times before you
have a quality conversation. Of the people you do contact, only a small percent – 2%
to 3% – may actually go through the sales process with you, but as little as half a
percent may actually close. This is a numbers game, and the more people you contact, the
better your chances for attaining your financial goals.
Once you get your appointment, ask questions of your prospect
to insure you gain a thorough understanding of their business and their concerns. Take
copious notes and be an active listener. Recite back what you have learned and begin to
suggest ways to help them achieve their goals. Now is a good time to make a proposal, hand
out literature, or invite them to a forthcoming performance. Ask for an opportunity to be
considered to do business with them either now or in the near future. Make sure you ask
the basic sales questions to qualify the opportunity:
Do they have an immediate need or desire to use a magician?
Do they have an available and approved entertainment
budget?
Are you speaking with the decision maker?
If you could provide the service in question at an
economical fee, would they use you?
What do you have to do to earn their long-term business?
Asking these questions either on the phone before your first
meeting or during your first meeting will help you categorize and prioritize the prospect
as either an immediate opportunity, a long-term opportunity, or no opportunity. Don’t
waste your time. If the time is not right, thank them for their time and be on your way.
Maybe they will develop into something in the future.
Whichever direction the first call or meeting goes, you must
manage the sales cycle appropriately. Be prompt with follow-up calls and materials. I
recommend using a contact and opportunity management package to track all business
information and to better manage your daily calls, scheduled appointments and sales
funnel.
Tools
to Consider:
Services:
Books:
You’re On Your Own
This just begins to skim the surface of
the many things you will need to consider when turning pro and going into business for
yourself. For further assistance, drop me a line at info@m-a-g-i-c.com
to discuss our marketing consulting services, and I will be happy to help where I can.
Tools
to Consider:
Books:
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