Business Savvy: Doing the Numbers
The importance of having goals and objectives in your business

By John Stiernberg

Entertainment technology professionals - including sound contractors, recording engineers, and live event technicians - are often driven by creative or artistic goals and dreams, and frequently downplay their financial and personal aspirations. They assume that someone else is going to handle the business, so they can focus on making the show go on. From my standpoint, that is too risky. You’re in a better position than anyone else to determine what your goals and objectives should be.

How much do I want to earn? How hard to I want to work? What am I willing to risk to get what I want? Many technical people have never really addressed these questions.

Having realistic written goals and objectives is your best tool for managing the inherent challenges in balancing your technical work, business, family, and other interests.

ESSENTIALS OF PLANNING

There’s an old expression that goes “What gets measured, gets done.” This is an important business truism. Having written business goals and objectives are essential for planning, for creative and personal development, and for congruity with your personal values.

You may be thinking, “I have goals in my head. I don’t need to write them down.” It’s good that you have goals. It’s better to write them down and turn them into a set of actionable objectives with milestones. Goals and objectives are different from one another, but they work together. Here are the definitions.

Goal: A desired result; often long term. Something good that you aspire to over a long period of time.

Objective: An aspect or subset of a goal that is specific, measurable, and achievable.

For example, many people have a goal to get rich and retire young. That’s a desirable result and likely to be a long-term proposition. Now let’s turn this goal into a set objective.

Objective: Own a $2 million investment portfolio by age 60 and be able to live on the interest or dividends.

This is a clear statement of objective. It is specific ($2 million in investments by age 60), measurable (can be tracked over time) and - for the sake of discussion - achievable.

GOALS IN THREE CATEGORIES

Goals and objectives relate to all aspects of your technical and personal life, not just finances. For most audio professionals, goals fall neatly into three categories: creative, financial, and personal. Let’s look at a few examples of each.

Creative Goals: Creative or artistic goals are the long-term results that you desire from your audio work, whether you make money from them or not. Goals in the creative category define the business playing field before adding the financial elements. Here are examples of creative goals:

• Live show dates produced: provide technical support for successful live events.
• Sound systems designed and installed: be a successful systems integrator.
• Records recorded, produced, and released: be a successful recording engineer.
• Products or techniques invented: earn a patent for audio technology.
• Award nominations and wins: get nominated and perhaps win a prestigious industry award.

Financial Goals: Even if you are working as an audio technician part time or on a not-for-profit basis, you need financial goals. Your financial goals need to tie to your creative goals. Once you “do the numbers” you will be better grounded in reality. Your financial goals may include:

• Revenue from live show production: earn a living (or part thereof) as a live event technician.
• Revenue from systems design, installation, and integration work: earn a living as a systems contractor or integrator.
• Revenue from recording sessions: earn a living as a recording engineer.
• Revenue for inventions and patents: earn a living as a product designer.
• Profit (revenue minus expenses): be profitable; have something left over to save or invest.

Personal Goals: Your creative and financial goals need to be consistent or in harmony with your personal goals. By identifying those goals up front, you can optimize all results and prevent problems down the road. Personal goals may include:

• How much you work in the course of a year: work enough to make a living and get ahead while preventing burnout.
• Family time, projects, and relationships: have plenty of time for family and personal life.
• Spiritual growth and activities: have time to develop my spiritual beliefs” or “be active in my church.
• Educational development: have time to learn new things, business and otherwise.
• Health and fitness: stay youthful and live long.

WHEN IN DOUBT, QUANTIFY

When you feel those uneasy feelings coming on (like wondering if your goals are realistic), it’s time to do the numbers. Quantifying your goals is the first step in designing a set of objectives that are specific, measurable, and achievable.

Everything, including non-financial goals, can be quantified in terms of number of units, pricing or revenue, and timing or date the results are achieved. As they become quantified, your creative, financial, and personal goals turn into objectives. Here are a few examples of solid, trackable objectives in each of the three categories.

Creative Objectives

• Produce “X” live shows each month.
• Design and install “X” systems each year.
• Create “X” patent-able products or processes each year.

Financial Objectives

• Earn “X” from pro audio work each year.
• Increase average per-project fee earned from “X” to “X” by “X” (date).
• Earn “X” from non-traditional sources (patent royalties, consulting etc.) by “X” (date).

Personal Objectives

• Work “X” days per year (the rest is free time).
• Contribute “X” ($) or “X” (time) to my local charity, church, school, or community.
• Get my weight to “X” pounds and cholesterol level to “X.”

ARE MY GOALS REALISTIC?

If your entertainment business information comes primarily from the general media - television, radio, newspapers, and magazines - you would conclude that all music industry people are either rich or dead. That’s a bit of an exaggeration. Still, think about it. Working technical people are rarely talked about in the media.

Some people are lured to the entertainment field by the promise of “sex, drugs, and rock ‘n’ roll” along with the “American Dream” scenario of getting rich doing something glamorous. I trust that most Live Sound International readers understand that the chances of getting rich quick in audio production are about the same as in any other line of business: pretty low.

Is there a middle ground between celebrity and oblivion? You bet. In fact, that’s where most of the thousands of professional audio people and live event technicians in North America are: somewhere in between. Here’s the point. You don’t need to be a technical superstar to make a good living in pro audio. Portrayals of music business celebrities - including their roadies and record producers - in the media (my favorite is VH1’s “Behind the Music”) can be illustrative and entertaining, but seldom serve as a real business model.

WHAT’S REALISTIC FOR ME?

How much can I possibly earn in pro audio? Do I need to aspire to technical stardom to make it all worthwhile? Many audio people just want to be able to “pay for their habits” (like buying more gear) and be near the action in the entertainment business. Others want to make a modest living doing audio work full time. Others want to “get rich and retire young.”

Theoretically, all the above are possible. Your business plan, including detailed goals and objectives, is an important tool for achieving what you want and staying in control throughout the process.

Goals and objectives are essential for financial success, creative development, and personal growth. Writing down your goals and objectives is a powerful exercise that provides clarity and the ability to communicate the information with others. Along with developing technical chops, the time you spend on developing business chops is your best investment in your career as an entertainment technology professional. And remember, “What gets measured, gets done.”

John Stiernberg is founder and principal consultant with Stiernberg Consulting, a Sherman Oaks, California-based business development firm www.stiernberg.com. He currently works with manufacturers, publishers, and trade associations on strategic planning and market development. His book Succeeding In Music: A Business Handbook for Performers, Songwriters, Agents, Managers, and Promoters is published by Backbeat Books. Visit www.succeedinginmusic.net for complete details or contact John via e-mail at askjohn@succeedininginmusic.net

March 2003 Live Sound International