Theatre Growth: Measure, Measure, Measure

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on Tuesday, 08 April 2014 in Blog Posts

blogThis blog exerpt is taken from an interview with Craig Chamberlain regarding challenging issues Theatre owners might facing during growth and expansion.

Moderator: We're very excited to speak about growth in the theatre industry.  Discuss if you will how, as the reputation and the business grows, some ways that theater companies can either control growth, manage growth, or measure the results of the growth?

Craig: Well, you've hit the nail on the head when you say--when you use the word "measure." That's really the most important thing, I think, for not only theaters, but all creative businesses to embrace, is measurement. And by measurement, I mean objective measurement. Theater companies are so used
to measuring things subjectively. You know, "Am I going to sing this in a major key, am I going sing in a minor key?" Or "Is this a blue wash, or is this a yellow wash?"

Taking that left brain, right brain approach, and then looking at the management of your theater company objectively can sometimes be a hard step.
So as you grow, and as your theater company is being managed through this growth process, it's important to identify metrics by which you measure your company. And basically, to answer the question over and over again of "how we do it."

Every company's different, but you learn basic accounting skills, or get somebody in that can be your business manager, and measure. Measure, measure, measure. Know what your margins are. Know what the cost of doing business is. If you have capital expenditures, plan for that and measure that. Create a simple operational budget, and measure your business against that. That way, you'll be able to know how you're doing; whether you're doing better than planned, or not meeting the requirements of your business. This way you don't end up with surprises.

This is particularly important if you're financing productions. If you've gone to the bank, or an investor ahead of time to finance a production, and this is something new for your company, it's very, very important to keep on top of where you are and how you're doing, and keep your investors informed. Happy investors are productive investors, so it's very important to keep them up to speed.

Moderator:  What about measurement as far as financial forecasting? It sounds like that would tie a lot into the long-term growth of the management. If you're measuring results, the financial forecasting going forward would be easier.

Craig: Oh, absolutely. Forecasting is so much easier with a little back information. Forecasting based on wild guesses and just true subjective feelings really doesn't do much good. Having some information in your back pocket about how your company has done in the past really makes forecasting so much easier going forward. If you have information about how much it costs to pay performers, pay composers, what your typical attendance rate is, marketing
expenditures; the more information you have from the past, it's so much easier to forecast how you'll do in the future.

So it's important to keep good records... And this goes without saying, but keep good and honest records, and you'll be able to realistically manage your company. And by realistically, I mean no "pie in the sky" dreams really have place in future forecasting. Realism is where you want to be when you're forecasting financially.

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