Happy new year everyone. The following is my opinion based on running my own businesses and as both an investment banker and a management consultant.

Point zero is before you even start your business. These are factors such as financial matters, family matters, and making the choice to be an entrepreneur.

Before we tackle family and financial matters, lets discuss the choice factor. I hear people talk all the time about how they want to own their own business or in the magician world how they are a working pro. Let's really answer that question. Imagine this scenario...

You are at a wedding dinners for a family friend or at a reunion and someone comes up and asks you this question...

"What do you do for a living?"

How did you answer that question? Did you say you are a magician/entertainer... or did you say you are a "mechanic/dr/waiter/plumber/nurse/receptionist/construction worker/teacher/any other job occupation. Or even the I'm a "teacher" who also does magic on the side.

If you said you are anything but an entertainer/magician/performer etc. then you are just a hobbyist then. There is nothing wrong with that, but we should just accept that we can't even say openly we are a performer so we shouldn't pretend to be. If we do it costs us money, ego, and leads to more stress and problems. So I might get some flack for saying this but it's my opinion saying you have a side business is NOT a business. It's an excuse to fail. Or your just a hobbyist playing business owner.

If you can't commit to being a performer professionally and admit it to others, you will never be successful. This mindset is the first choice that needs to be made.

After we can make the commitment, we have to consider family matters. Many many businesses fail because our partners/wives/husbands/kids/parents/family don't support us. Especially your spouse,you need their support. They will most likely be the ones providing the income while you start out. It's stressful and they will be under pressure because of your new endevour. So talk with them keep them I formed of your plan, your progress, failures/struggles. They need to be invested in your success. Talk with them and get their commitment. if they doubt you ask why. Make a plan to give that confidence back. if they cannot get behind your choice, you are probably better off not trying to do it (unless you want to risk ruining your marriage/family life)

So lets say you've made the commitment, your spouse is on board, now we need to cover the financial matters. Since everyone's financial situation is different I'll cover just a few generalities to give you an idea of the mindset and needs to address.

1. Cut off all of your excess spending
Since you are starting usually your savings has to cover your living. And the money you put in the business needs to stay in the business. If you are spending money frivolously, then when you run out of cash it becomes very tempting to take out of the business to cover a purchase for personal wants. I'm not saying deny yourself, rather limit your wasteful spending and focus on needs more than wants and desires. Do you really need the cable tv package for $250 a month when you only watch 1 program a week? But a good choice to keep positive and not snap is to reward yourself for successes accomplished (a date night once a week, I.e. Dinner and a movie, etc)

2. Pay off revolving debts
Realistically it's near impossible to pay off all your debt especially if you just purchased a house. So lets focus on revolving debt like credit cards. Pay these off first. You want to preserve your cash for your business and living so credit should be used sparingly. The added stress and obligation from monthly payments will make your life harder especially when you are just starting your business and don't have a steady cash low yet. These unneeded bills add to the pressure to give up and go back to working for someone else.

3. Save up at least a years worth of monthly living expenses.
This is seperate from your business seed capital. Having a years worth of living expenses saved up to cover costs provides that peace of mind to focus on your business and really give your venture a fair chance of success without distractions. Also, if after a year of 100% commitment to make it work and you can't get it going then you can say you really gave it a shot and it didn't work out. And when going back to your day job you can do so without regrets.

These are points of consideration before you ever even open up for business. Good luck everyone.

Walter

I think there are some good points. I do disagree with the one year idea. Often it will take FAR more than a year.

Plus you completely neglect the idea of easing into it and the more you make the less you need a day job. I would hazard a guess this is the most common path followed by those who wish to entertain for a living.

The idea of having a years worth of wages set aside and having operating capital for a fledgling company sounds great and looks great on paper. Realistically you are telling someone to save a minimum of a hundred grand before even attempting to be a performer. Cool you are entitled to that viewpoint, but I'm not certain how realistic that actually is.

Also I consider the "part time pro" something of value. They are just as much performers as the full time guys. Just saying.

I'm in the midst of this right now. The support of family friends and SO is vital. Not necessarily as a "catch you when you fall" but just psychologically bolstering as you know there are people near-by that want you to succeed.

On the note about part time pro/pro, Danny I think you're correct but I don't think WDavis is wrong. Becoming a pro on a sliding scale makes the most sense for a lot of people but I agree with WDavis' point that we need to be confident enough in our efforts that we may put them on display when people ask. When asked what I do for a living, I tell people I own an entertainment business, the entertainment being mind-reading. Nobody gives two nods about my day job at a grocery store, and I certainly don't identify myself by that occupation.

Another thing to consider is patience. Flipping from enthusiastic and driven upstart to a sustained professional takes time and/or capital. The more you have of one, generally, the less you need of the other. For example, dealing in the wedding market you can network till you're blue in the face, and it'll take a lot of time OR you can pay to be part of a wedding vendors group for a price. Of course this isn't a rule, but I think we all need to work as hard as we can while having no expectations of what "should" happen. We need to be patient and be okay keeping our nose to the grindstone without seeing any immediate reward.

Yeah I can’t really agree with having the one year salary either.

My advice, and especially to a younger performer, that can save a full years pay would be to stay where you are and enjoy being a part-timer for as long as you can. If you can’t make a fairly good income part-time then you probably won’t do much better full time. Sure you need some working capital when you go into business, but if the business is not making enough to pay you a salary fairly soon then you better get out as soon as you can and not waste a year’s savings.

Keep in mind, if it fails, not only have you lost the years salary, you have lost that job that produced it.

Tom

Great post, and I believe it's probably the best way to go about things. Walter's suggestions are definitely valid, and if one can save enough money to cover a year's expenses, then more power to them, but I don't believe it's the only way. I recommend people start at it part-time. Keep the day job, and build the business at the same time, and when the time feels right, go for it! That's what I did, and it's worked out beautifully for me.

When I started as a professional magician 24 years ago, I did have a day job. I kept my day job for three years while building my magic business. Anytime someone asked what I did for a living, I told them I was a professional magician. I would never mention my day job. After three years, I saved enough money to eliminate all my debt and put a down payment on my first house. I had enough savings to last maybe three months. That was 21 years ago, and becoming a professional magician was the best decision I ever made.

That's not to say there haven't been ups and downs, trials and tribulations, and times of feast and famine. I've made huge mistakes throughout the years, and I've learned my lesson from most of them. In the end, its lead to an amazingly interesting and fulfilling life, and I never have to look back on my life and say, "What if..."

Wishing you all much success!

Lou Serrano

Perhaps in a perfect world, but having worked with and coached hundreds of clients and students over the years, few performers actually start out the "right,""proper" or legitimately planned way. Very few decide " I am going to start a business." It comes out of what I have long referred to the default business model most performers follow which, although many don't realize it, is exactly what prevents their actual success.

Yes, in a perfect world if one decides to start a performing business, and they approach and as an actual business, I agree with much of what Walter has said. However, my reality is the majority, and I mean 85%+, do not do it this way, and herein lies many problems with this approach and perspective.

In reality, most performers start with little or no money - less than $500. Most start from a negative point or perspective. Next, because of this they don't even see or approach it as a business, they view it only as a source for generating "some additional income" or "to just start performing for a couple of bucks doing something I love." Again, not at all approaching this as a proper business.

My whole Las Vegas lecture last year ay Mindvention and my own Entertainment Business Success workshop was based on this exact premise and reality.

The point is most don't have the support of spouses (good for you if you do) and family members (because they don't fully understand it, it just seems like a fun hobby or "thing" to them), most do not see entertainment as a business, they don't have the same interest and passion as you do, and many other additional reasons. Of course, it is often because of the lax or casual way most begin this. If they had a completed business plan, a structured system, money to invest upfront, had to scout a physical location (like say a restaurant or dry cleaners) this would seem more like a "real business" (I hate that term btw) and they would more likely understand and perhaps be more on board.


Truth of the matter is most do not have any or many of these things, let alone a savings as Walter mentions, and few if any have anywhere near a years worth of living expenses.

I say this not to discredit Walter's sentiments, as I agree with them, but simply am pointing out this is not reality to most performers.

The better topic may be how to transition from hobby to an entertainment business (which is often discovered as the main real problem for many performers during coaching or trainings).

Discovering these realizations is what first propelled me to write the Entertainment Business Opportunities featuring over 40 different jobs, careers and business opportunities in live entertainment. Most are based on low or minimal startups.

Plus very few have any entertainment business skills, knowledge or training - they just wing it the way they think it should be done. This, of course, is a huge mistake and sets most up for disappointment or failure.

The good news is now many current performers after having realized these difficulties, struggles and mistakes are now realizing the need for the entertainment business education and training. They can see they need assistance in the missing business side of things. Especially for newer performers just starting out wanting to go pro or full-time. The time to do this ideally is when they are still in the learning process, rather than the execution process. I have had more interest in these last couple of years, so much so to the point, I will be cutting back my performing schedule by a day or maybe two a week just to accommodate the additional interests. I think more and more are hearing the proper message that success as a performer is created in the business behind the performance.

Of course, this doesn't help newbies or startups. They will spend hundreds or thousands on performance-related things (tricks, effects, props, etc.) but invest very little in proper entertainment business education and training. Few other businesses would even think of not doing this.

This is a great topic that needs to be addressed and that can literally result in thousands of dollars, preventing years of frustration, setbacks and typical trial-and-arror approaches that can be costly and discouraging in so many ways.

Mindpro, I tried to send you a PM but it seems your inbox is full. Is it better to ask you questions in open forum?

Something that should also be considered is that most magicians ARE hobbyists. It's the way ALL of us get started. And I believe that is the time to invest in more magic related items, and learning as much as possible about performing. It is that passion that will carry one through if and when one decides to turn this into a business.

As adults, we should all realize that we're all selling something, and salesmanship and communication skills are the number one skills that can help in any endeavor. It doesn't matter if you're selling the most beautiful girl in the room to date you, or closing a magic gig. Salesmanship and communication skills are the most important skills you can develop for success, and those skills work in every area of life. Those skills along with great entertainment skills are a recipe for success.

Lou Serrano

Great hearing from you and having you back here again. Sorry, my PM inbox usually gets filled most days and I hadn't got to it yet today to clear some space. I just did so you can now PM me if you wish. I normally steer people who PM me to post things here so others can also benefit from the topics, answers and insights, however, I understand some prefer for their questions, issues and topics to be private and prefer not to have their interests subject to others opinions and derailments. So it's up to you.

Lou most are hobbiests and want nothing more. They are the lucky ones in my view.

Tom is right if you can save a years salary keep that job! Do magic as a hobby.

Most performers I know are not so by a decision. It is a calling. Not being called to go through what it takes to be a full time pro is not a bad thing. It probably shows quite a bit of common sense.

Again I can not stress enough how much more than a year it will take. The idea that you can build the needed income in just a year is a fallacy. The idea that of you don't do it in a year it is failure is setting yourself up to fail.

So glad to see the responses here. Let me elaborate my viewpoint on why I prefer the 100% focus vs a "grow into it" model and the 1 year capital coverage. They both serve as commitment factors.

If a person is willing to reduce costs/liabilities and save to cover 1 year living expenses (granted if you have other incomes it can slide up or down from a time perspecective) is it provides a commitment to pursuing the dream. Furthermore, that capital cushion provides a peace of mind to both spouse and self that you won't struggle as a family while building a business. Is it easy to do? No, it's not. Is it realistic, yes because you can have a dream but if it takes time to save up and you do that while still learning and developing your performance chops, you are actually showing commitment to the dream and actively pursuing it. If during the course you have an emergency that cash can save you additionally if you lose the dream then it doesn't hurt you economically with all the sunk costs.

With respect to the sliding scale model, I'm against that model personally, because as I've said earlier it allows someone to have a fall back so they don't truly commit to make it work. This potentially reduces the quality of offerings in the market. But the sliding scale model is easy to do because we are a service based industry. It's a low cost to start and easy to open up shop. The real failings is because of the low barrier to entry and most people's familiarity with product based models instead of service based ones.

In a nutshell see the following:
Service models primarily have
1. Low cost to start
2. A one on one marketing strategy
3. Incremental scalability
4. High labor costs
5. Personal branding

While product models are:
1. High startup cost
2. Group marketing strategy
3. Rapid scalability
4. Low labor costs
5. Functional branding

Since most magicians and entertainers don't see the difference of these models they mix the two. And yes some marketing tactics can overlap, such as group marketing for services, the final end is one on one. But the draw back for the sliding scale model is most understand the product model and end up pricing based on that model, labor costs and functional branding ( what I can do ((functional)) vs. who I am((personal)) ). Generic offerings at low prices lowering the market value of the industry. This lack of also generates the misunderstanding of the differences and growing into it causes so much more burnout and wasted time and money. As mindpro said it's great thet there is more interest in learning the business in show business.

There are those that can commit and make the sliding model work, and in the end I believe we all agree it's the commitment factor and support of the family that should be first.

Danny,

I agree 100% it will take more than the year for it to be successful and sustainable. The reason I'm advocating the year is usually within the year the performer knows if it's really something that they want to pursue or should pursue.

Walter

Walter,

I think you hit on two very important points. First, it is that commitment that will be a primary factor in one's success or lack of. Second, I disagree to a certain point that generic offerings lower the market value of the industry. Yes, if you are offering a generic solution, then yes, I agree. The challenge is to not be a generic offering. In every industry there are the lowball offers, yet, there are plenty of people who are being paid well above the average, and I know that you know this from personal experience. Communicating the "value you bring to the table" over "what you do" is a primary example of setting oneself apart.

Lou Serrano

Yes Lou is right. And that setting yourself apart will take FAR more than a year. A years results won't even be close to indicative of future success.

The year commitment sort of works against the commitment theory in my view. If you are committing then why put time frames on it at all?

Lou,

I just reread my point you disagreed with I meant to say "the markets perception of value". But you are correct overall market value won't be diminished by generic offerings. Thanks for catching that.

The "Who I am" is key for any service industry and this is the "value you bring to the table." Actually, I feel this point alone should be it's own thread.

Sorry for typos and missed words, been typing on my phone.

Danny,

Interesting point on the time commitment aspect. I guess for myself, while we may commit the 1 year time stamp allows for an assessment of our own capability and willingness. For example, if after a year we can't start to get some traction, it's probably not for us. While we may be willing we might not be capable. Also, we could actually commit and be able to do the work, but find out it wasn't what we wanted or expected. This one year guage allows for a recommitment after really testing the waters.

Walter

I know very few beginning performers (not yet even entertainers) that get much traction in the first year. Many are happy to get 3 or 4 show bookings in their first year. Like they say about mastering a performance effect - it takes 10 years or 10,000 performances, much of the same can be said for business operations, especially the way most performers approach the business. I think you can get a good read within 3-5 years if committed and the proper education and/or training is sought.

With that said, then still comes the issue of - Do you really have (and are seeking) a business, or are you just a self-employed performer?

Here is an post from a thread on this topic a couple of years ago, which poses this question...

Posted: Mar 23, 2016 08:12 am Mindpro is on-line Reply with Quote Report this post to forum moderator

I was recently asked to speak at an entrepreneur's summit conference and this was the topic of my presentation. It is amazing to me how many performers may think they are operating an entertainment business when in reality they may just have a self-employeed job. Now for some this is all they want and of course, that is great, good for them. But in the greater picture of true business worth and value, there is more that many never get to or have not even explored.

Many performers are just thrilled to not have to work for someone else and that they can work for themselves, doing something they love - performing. But in reality, all they truly are doing is having their own self-employed job. In contrast, there are others that view, approach and execute their business as more than just a self-employed job, but as an actual, valued business.

Most performers book themselves, do the gigs and hopefully make a living. But others have other offerings, more dimensions in place beyond themselves, other income sources, divisions or aspects to their business that may not require you or your performing to execute. The business has a value beyond yourself. If or when you pass on, it is something that can be counted on by your spouse, kids or survivors, is it something that can be sold, if you have an exit strategy it is something that can be used strategically when dealt with life's unseen or unexpected situations?

So the question is, which are you?

The year idea in my view is a lack of commitment. You can't see valuable results in only a year.

There are some generalities in Walter’s initial post that I think do not take into account the many various lifestyles people have at the time the make the decision to become an entertainer. The lower standard of living one has and the fewer people depending on them will greatly impact the timetables, financials and need for savings.

Some simply choose to have multiple streams of income, with a business of performing being one of them, so I don’t think that they should be necessarily categorized as a hobbiest. Often these professionals lack the deeper interest in the art that hobbyists poses and focus more on monetizing a narrow skill set.

I do agree that the likelyhood of success will be greatly impacted by the planning and commitments being made initially.

I agree, and no offense to Walter or other standard business professionals, but this is one of the problems of trying to approach or adapt entertainment business to conventional business approaches, wisdom, and mentalities. Because many start and approach performing much differently than those approaching or starting conventional businesses, this creates many differences from the very beginning. Foundations are also likely very different. Again, Walter's way is great ideally, but far from the reality of most performers. I wish more entertainers approached it that way.