Business Savvy: Applying Common Sense
Planning is the only shortcut to success in live sound

By John Stiernberg

I often get questions like “That planning stuff all sounds good, but where are the shortcuts? How can I get rich and retire young without having to do all that stuff?”

My answer is that there are no gimmicks or secrets in the world of business. Planning is the best “shortcut” and it’s a lot less costly than the trial and error alternatives.

Still, there are what I call “common sense lessons” from the big world of business that can be applied to the uncommon world of live sound. These lessons often represent the simple solution to a complex problem, or the secrets to success in our industry.

Lesson 1: “When in doubt, quantify.” This is probably the one you’ll use the most frequently. Ever wonder if your business goals or objectives are realistic? Have a knotty problem to solve? Wonder where the money is going to come from? You may have questions ranging from “How many gigs do I need to do to make my gear payments?” to “When should I buy the building that our offices are in?”

We’ve all felt uneasy about things like this. The first thing to do when you get those anxious feelings is to pinch yourself, remember this lesson, and take a look at the numbers. Here are examples of numbers-related danger signals that lead to business problems.

No budget or financial tracking. You’ll never know how you’re doing if you don’t keep track. For some live sound people this is obvious, for others a revelation.

Lack of understanding of how long things take or how much things cost. How many hours do you spend doing equipment maintenance or traveling to gigs? What’s your hourly rate when you factor everything in?

Decisions based on gut feel, intuition, or how others have done things. Intuition is very important, but it is helpful to apply reason to decisions involving money and time commitments.

Most audio problems are logical, systematic, and mathematical. It’s less of a stretch for an audio person to “do the numbers” than for other types of creative people. Use this to your advantage.

Start with a basic revenue and expense forecast for any project before going to work. Think of your budget like a system design or stage plot: something that you create and have control over. When thinking through your goals and objectives, see what expenses are feasible in the next year, regardless of where you want to be long-term. Do the math and let the numbers be the guide.

Some audio people ­ especially engineers ­ may say “I’m the creative force in my business. I have someone else to deal with the money.” While that may be true, there will be times when you are called upon to make decisions that involve time and money. In anticipation of that, remember this lesson. When in doubt, quantify.

Lesson 2: “The chain is only as strong as the weakest link.” Remember this age-old expression? We hear it all the time. If something is out of balance in your business, the chain can break, leaving you in trouble, or somewhere short of your potential. Here are examples.

Thinking that audio is all that matters or that a hot system can make up for weakness in other areas of your business. For example, a sound company can have the best rig in the world, but if no one knows about the company or if it’s being priced out of the market, nothing matters from a business perspective. Each link needs to be strong.

Thinking that marketing equals advertising. The marketing chain has seven links of its own:

1) Product strategy
2 ) Pricing strategy
3 ) Promotion strategy (this is where advertising fits in),
4) Workplace and trade area strategy
5) Sales force strategy
6) Target customer profiles
7) Competitive analysis

Likewise, each link depends on the others to create a strong, integrated business plan.

Focusing on one area of the business to the exclusion of the others. Your business ­ even a one-person company ­ has five functional areas that make up another “chain”:

1) Marketing and sales
2) Finance and accounting
3) Product development
4) Production and operations including information systems
5) General management

Weakness in any of these areas jeopardizes overall results. How to deal with it? Go for balanced strength in each of the key areas of the business.

The first step is one that you have already taken. Be aware of what it takes to run a business. You now know that a business has five functional areas and the marketing chain has seven links. If you pay attention to each of those elements, be confident that you’re covering the bases.

Lesson 3: “The business stuff ­ especially sales ­ is a full time job.” If you already operate a live sound business, you know how true the above statement is. When was the last time you worked a 40-hour week? Even if you work for someone else, you know that operating a business is demanding and time-consuming.

Many audio people work day jobs and pursue their live sound business interests on a part time basis. This is fine if your goals and objectives are consistent with practical realities. There’s a point at which you will need to quit your day job in order to focus full time on your sound business. Additionally, you’ll need to hire or contract with additional people as the business grows.

Focus, expertise, and image with customers all come into play here. While it’s tempting to let someone else handle the business, you need to understand the risks. Here are common mistakes made by small audio businesses.

Hiring friends or relatives on a part-time basis. There’s nothing inherently wrong with hiring friends or relatives, or with using part-time help. It’s all too common for audio technicians to have a spouse, relative, or friend do booking, bookkeeping, or other support functions, only to find out that the person lacks the skill or time to make a long-term difference.

Assuming that contract paperwork, marketing, and sales magically take care of themselves. I know I’m stating the obvious, but someone in the organization (even a one-person organization) needs to get the gigs, write up the paperwork, and keep the promotion machine going in between projects. It does not happen by itself.

What to do? Recognize immediately that no one person has all the skills and time needed to build a live sound business. If you try to do everything yourself, you may succeed to a point and then find that you can’t grow ­ creatively, financially, or personally ­ beyond a certain point.

Build your team consisting of people who are well qualified in their respective areas. Examples range from bookkeepers and accountants to equipment maintenance people and live sound engineers.

Lesson 4: “It all comes back to you.” Does someone else already handle your business for you? If yes, remember that it’s still important to understand what’s going on, especially if it’s your name on the company. If not, you need to handle all the business stuff for yourself.

Take heart, and remember that there are no gimmicks or tricks to making your live sound business successful. From my standpoint, the secret to success in live sound stems from common sense applied to our uncommon industry.

John Stiernberg is founder and principal consultant with Stiernberg Consulting, the Sherman Oaks (Los Angeles), California-based business development firm (www.stiernberg.com) He currently works with audio companies and others 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

November 2003 Live Sound International