Overhead Costs
June 20th, 2013Sometimes, I feel that other balloon twisters and face painters are too concerned about what the other entertainers are charging for their services. Some fear they will never become good enough to charge as much as the best entertainers while others complain that there are too many new entertainers giving away their services and lowering the amount of money their customers are willing to pay.
I have come to the conclusion that the only person that I really need to worry about is myself. Am I making enough money to cover my costs? Since I have a day job, I don’t need to earn as much as those who are trying to live off of their income as an entertainer. But, I think that both full time and part time entertainers should understand their costs.
When doing an event, there are two costs. There are the physical costs of the goods used during the event. For a balloon twister, that may be $10 worth of balloons that were used. There are also the overhead costs associated with running a business. These are more hidden and aren’t tied to any one event.
What are the overhead costs? Since I am running a business, I have a website, business cards, liability insurance, and attend conventions (training). I also have to have various supplies related to being able to setup at a variety of events. I have a tent, tables, chairs, banners, and other such items. Let’s assume that in a given year, I am spending $1000 on overhead items. Thoses expenses need to be covered by what I am paid for the events that I work.
If my overhead costs are $1000/year and I am doing only 50 events (about one per week) each year, that means that each event must contribute $20 towards paying off my overhead costs. Add in the $10 worth of balloons, it costs me $30 every time I do an event.
If I get busy and start doing 100 events per year (about two events per week) my overhead costs don’t increase, so I still only need to cover the same $1000/year in overhead or $10/event. Now, every time I go out, it only costs me $20. Following this trend, the more events I do, the less the overhead costs are per event. Sure, at some point, I may decide that I am going to enough events that I can justify going to a second convention or buying a more expensive tool.
Someone who is working full time as an entertainer and doing 4-5 parties on the weekend along with a few kids nights on weekeday evenings along with a few events at nursing homes, day care centers, farmer’s markets, or libraries during the work week, their overhead costs may be just a few dollars per event because they are spread out between more events. Being able to lower overhead costs from $20/event to just $5/event is like giving yourself a $15/event raise without having to adjust rates.