Make It Pay: Turn Your Next Gig Into A Cash Cow

cash cow

Being in a band is expensive. Really expensive. There’s the gear, the van, the rehearsal space, the recording time, the CD duplication, the Web site, the lead singer’s hair products, the T-shirt manufacturing, etc. Things add up quickly, and rarely does a band make enough money to cover it all. Some bands resolve the issue by sharing the rehearsal space, touring in mom’s minivan, or recording the album at an audio-engineering school, but eventually somebody’s got to pay for something. So why not revamp the live act into a DIY profit machine?

In this current state of the music industry, the major label practically doesn’t exist for the working band. That elusive record contract, that fantasy we’ve all dreamt about, for the most part is a pipe dream. There’s still some money to be made in this business and there are many streams of revenue to tap, but it’s pretty much entirely up to the musician to figure out how to stay afloat. The live show offers a great situation to make money, and if you’re smart about it, your band might one day earn enough for you to purchase your very own panini maker!

Of course there are the usual methods of making money: playing gigs, album sales, raffling off dates with the bashful bassist — but there’s more to maximizing potential profits than just showing up and playing. The basic sources can always use a tune-up, and a new vein of potential gold dust is just a few good whacks of the pick away. If you haven’t already, it’s time to get smart about the band, treat it like a business (and no, that’s not selling out), make some money, and pay your uncle back for that loan on the band van. While the following strategies won’t spontaneously yield any cushy retirement funds, their combined efforts can greatly impact any band’s financial infrastructure in a positive way.

As mentioned, perhaps the most common method of making a little dough is to play out live. For the sake of this article, let’s assume there are two types of shows: club dates and private events, and they are fundamentally different in both their pay structure and their supply-and-demand assembly.

The Live Show: Private Event

The payout from private events like weddings and corporate parties is almost entirely based on contracts, and because they change little with any other variables (a call-back for the next gig, however, is another story), it’s all about the haggle. When negotiating with someone looking to hire the band, assess the situation. Have they booked any bands before? What’s the expected attendance of the shindig? Do they or their company have a lot of money to spend? Are they specifically looking to hire your band because it’s a unique original act and they are diehard fans or is it because they’ve been delegated the task of finding a top-40 band that will get their despised boss on the dance floor? How much money is being pumped into the event? Is it a Lamborghini convention or a breast cancer awareness summit? Where is it — a snazzy country club or somebody’s backyard BBQ in the burbs?

In order to adapt effectively, the details of the gig and the people behind it are essential in determining what price to quote. Although they won’t always reveal the true budget of an event, they can shepherd that initial estimate to a higher figure with less chance of overshooting. For instance, if a successful tech firm is looking to book a band at a venue they had to spend $15,000 to reserve, they’ll probably sport more than $600 for the entertainment. Contrastingly, if coal-miner Jack and fry-cook Jill want to have some live music for their bowling alley wedding where they reserved four lanes, they probably won’t appreciate a $4,000 price quote. Of course, there’s always the option of having a fixed price and being done with it, but every gig is different and the flexibility of on-the-fly price quoting allows bands to adapt to more budgets, play out more often, and theoretically make more money.

Amidst all the clues that might suggest a big payout, there will always be those private events that don’t pay. In online forums the infamous freebie is the drop of blood in the piranha tank, and many musicians can’t help but feel polarized about it. Maybe it’s the billionaire tech firm, or the number-one ad agency in the country, but regardless of their monetary abilities, the gig doesn’t pay. Instead, they offer exposure, and eventually some band always takes the bait. Pick them wisely, don’t expect any direct returns, and remember that if you play for exposure, you are indeed exposing yourself.

The Live Show: Club Date

In the nightclub scene, everything’s different, especially for unknown original bands. There are various types of clubs out there and some have differing preferences for payment, but the most common method is the door deal. At the most basic level, the club will give a percentage of the ticket sales to the bands — usually around 65 percent — but again, that changes with each venue. Some venues offer a small percentage of whatever the bar makes, either in addition to the ticket sales or instead of ticket sales if there’s no cover charge. Since the majority of original-act nightclubs have little built-in foot traffic, it’s up to the entertainment to bring the people, and the more tickets sold means more money for the band.

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Sadly, the ugly trend right now is that venues do next to nothing to promote an evening at their establishment. Maybe they’ll go so far as to buy a tiny ad in the weekly rag that lists their calendar of events, or maybe they won’t do anything. Maybe they won’t even bother putting up the posters that were sent to them. Such heartbreaking times are these when a venue can’t spend five minutes posting in-house fliers for a gig the band just travelled eight hours to play.

While this paradigm may or may not shift, for the time being, it’s up to bands and promoters to supply the audience. As important as it is to be an effective promoter, that subject deserves its own article. Simply keep in mind promoting is just as much a part of a band’s job as is playing.

As a band becomes more popular, gains more buzz, and tours with more success, other deals become available to it. Especially with the help of a legitimate booking agent, bands can secure guarantees, an essential element to touring in a new market. In fact, plenty of clubs will take a little risk on an out-of-town band and offer a guarantee they may very well not make back from the door. These guarantees for first timers usually range from $200 to $600; enough for gas and a hotel. Aside from the obvious benefit of having a guaranteed pay for the night, the other gigantic benefit is that the club is more inclined to help promote because now they’re more invested in the evening.

In many cases, the more generous clubs will offer a guarantee with points. The points, similar to grade school, are the reward for good attendance. The term refers to a percentage of ticket sales and is offered as a “whichever is greater” situation. For instance, if Johnny & The Shoeshines has a points-based deal with a club, the club might guarantee them $500 with the option of making 75 percent of the sales after expenses. If 20 tickets are sold at $10 each, the band will be paid their $500 guarantee and probably never asked to come back. If 300 tickets are sold, the band will be paid $2,250, which is 75 percent of sales.

This is all assuming a perfect environment in which all tickets are sold at the same price and the club has no expenses, which is about as unrealistic as a free lunch. Every club has expenses, whether it’s security, sound, janitorial, or hospitality. Occasionally clubs will even list incredibly high, completely unfounded fees to prevent ever having to pay out points. Although rare, these establishments are usually found in musically oversaturated areas like New York, Los Angeles, or Portland. Additionally, most higher-capacity venues are greatly affected by advance ticket sales and late-night door discounts, so rarely is the math as straightforward and plain as the example above.

“Don’t Call Me ‘Merch Girl’”

Thankfully, ticket sales aren’t the only way to make money at the live show, and the next big piggy to bank on is the merchandise. Most bands tend to treat their merch table like the standard one-dimensional point of sale (POS) with the album, T-shirt, sticker, and mailing list. While that works, there’s always room for improvement.

To start, the merch table needs to be viewed as more than just a means of getting albums sold. It’s both a POS and a chance to engage fans and talk face to face. It is a traveling storefront and for the band’s sake it deserves to be outfitted in a visual manner that draws in customers.

Clubs are dark, so let there be light. Lots of light! Clip-on lamps, light ropes, miniature disco balls, industrial-strength menorahs, whatever. Construct a visual presentation that just screams, “buy something!” Especially if the albums and T-shirts are a dark black, a good lighting rig will both illuminate what is actually for sale and will act as a beacon to potential customers. Don’t make the mistake of relying on club lights as, like many so-called “sound engineers,” they are frequently too dull to work with.

In addition to the lighting, there’s the physical display to consider; preferably something tall, compact, self-contained, and indestructible. The old standard is to buy a vintage hard-shell suitcase from a thrift store and pimp it out with band paraphernalia. This method works, though it’s small and hard to see over a crowd. Another option is to travel with a few tall metal rack panels that act as clothing displays and light mounts. The major benefit to these is the additional height and visibility they add to the storefront.

More important than the lighting or the presentation is the actual merchandise. Albums are essential, and the more releases available, the more units will sell at the show. It is fairly common for people to buy all three of a band’s albums at the merch table, so keep them all in stock. T-shirts and hoodies are also great, though hoodies don’t tend to fly off the shelves and they also take up a lot of precious cargo space.

But these bits of swag are only part of what can be sold, and why is it that bands only sell band stuff? Is there a reason not to sell other things? Of course not! Big-name artists take sponsorship deals and “sell” other products all the time, so why not the little guy? One band in particular, the March Fourth Marching Band, from Portland, has bulldozed its way on tour with a plethora of band-made merchandise that puts all other band’s merch setups to shame. Since they tour with 24 people, they’ve got a lot of creative minds that do more than just play music, so they have a slight advantage over the average-sized band. That said, they make and sell all sorts of goods including albums, DVDs, hoodies, T-shirts of various colors and models, leather hats, denim hats, earrings, medallions, wrist warmers, and even lamps made from recycled instruments. And yes, people actually buy $35 earrings and $200 lamps at shows. Keep in mind, though, that in M4’s case they aren’t just selling merch; they’re propagating a style. They’re selling the same stuff that makes them look cool to people that want to look cool like them. Smart, eh?

Another secret to M4’s merchandising success is their full-time merch girl, though the title really doesn’t do justice to a salesperson that can both make multiple transactions at once, design a product display, and keep inventory of everything sold. Aside from the obvious necessity of superb selling skills and being a people-person, the sheer constant presence of anybody manning the table, even while the band is performing, can make a big difference to sales. This human element, especially when dressed up in band garb or uniform, can be enough to just get audience members to walk over and check it out. It also never hurts if they’re easy on the eyes. Furthermore, having bandmembers run over to the table immediately after the show can greatly affect sales because everybody wants to meet the band, so get the Sharpies and grab your guitar player before he sneaks off to cupcake with his girlfriend; it’s time to sell some merch and sign some body parts!

TransAction

The final element to a high-volume merch booth is plastic. Every successful merch booth does it, and now with smartphones it’s never been easier to process credit cards. With the exception of playing at youth centers, most every show will inevitably have a fan who doesn’t have enough cash for the T-shirt, and there’s nothing worse than losing a sale because you can’t process a Visa.

The two main routes for credit card processing are either to buy a stand-alone credit card reader, or to get a smartphone add-on. For the cheaper, instant gratification, there’s no beating the Square smartphone device. The company ships out free readers from its Web site (squareup.com), the app is free, and the company takes only 2.75 percent of every sale. That’s under $3 for every ten CDs sold (assuming they cost $10 each)! There are, however, a few downsides, like the fact that the phone needs to have Internet access to process transactions and that whoever is working the merch booth will either need to install it on their phone and link it to your band’s bank account, or a band member will have to leave his phone at the merch booth all night long. Additionally, there’s a privacy issue: Think of how much fun it would be getting interrupted by your mom’s paranoid text messages as a fan simultaneously tries to verify a transaction on your phone.

There are also plenty of standalone card readers out there, and although they tend to have a high buy-in price that doesn’t jibe with a small-business model, they also carry a few benefits like the fact that they don’t require a phone or Internet access to process transactions. These tend to make more sense with higher-volume transactions, but why not try out the phone freebie first?

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Bake Sale Beaucoup

The latest DIY trend in staying financially afloat is to jump on the fundraising bandwagon. Essentially replacing the financial backing of a record label, fundraising has become a very successful means of building the capital necessary to record full-length albums and purchase touring vehicles. The two most common tools used to set up fundraising campaigns are the donation-based Web sites indiegogo.com and kickstarter.com. Although Kickstarter may be more popular, Indiegogo has a much better system that works more for the musician. The most integral difference is that unlike Kickstarter, Indiegogo lets bands keep whatever money they raise, even if they don’t make their goal (in Kickstarter, artists get nothing if their goal isn’t met). Furthermore, Indiegogo offers additional incentive by dropping its slice of the pie from 9 percent to 4 percent after the goal is met.

These campaigns have been remarkably successful, due in great part to a host of factors including digital trust, ease of use, promotion, and the sheep factor — the more people donate, the more legitimacy it gives a campaign, and thus the more inclined others are to donate. There’s plenty of information out there on how to create a successful campaign, but the most important elements to add are a clear and entertaining video pitch describing the intentions of the fundraiser, some awesome perks for contributors, and a heavy promotional push both online and at the shows. When creating the tier of perks and donations, do not underestimate fans’ wallets or generosity, and get creative with the big gifts. While most donations are typically in the $10–$20 range, there are always the high-roller surprises. As an example, out of the blue my own band recently received a $4,000 check after a show from a generous couple we’d never met before. This helped us raise our goal of $12,000 for a new van and trailer. From little victories of $1,000 campaigns to ├╝bergoals like March Fourth’s campaign of $46,000 for a new tour bus, the system works, so let the fans take part and make a difference.

Conclusion

Again, remember that none of these suggestions will generate an instant bump in income, but they can certainly nourish an emaciated financial foundation. Don’t quit the day job, but do try implementing these strategies. Try viewing the band as a cold hard business. It will only help things at the bargaining table, and who knows, maybe in a few months the band will graduate from the per weekum to per diem and you can all eat like kings at every gas station stop.