Sunday, February 2, 2014

Failure Coach XX

Dollars and Cents

Alan was looking forward to a ten days in St. Louis without any pressure to prepare for media interviews, speeches or book signings. He did feel compelled, however to sit down with Laurie Ripp, his accountant and Bob Caster, his lawyer. Laurie always helped him look at the practical side of everything. Bob was good at putting things in a kind of perspective. Bob was happy to reserve his conference room for a convenient downtown meeting. Alan called the meeting because he was getting nervous about the direction of his overall enterprise. He felt Ambrosia, even with the steady hand of Tony Blank managing the account, was not really seeing a bigger picture. He tried to share this concern with Tony but it always seemed like his agenda was about growing the business, not looking out for the best interests of Alan Edgewater. So Alan was going to spend an afternoon sorting some things out from a dollars and cents perspective with a touch of soul searching. He knew Laurie would provide the left brain thinking and Bob would be pragmatic without taking the afternoon into a creative exploration of the tactical.

“I’m thinking the Ambrosia relationship is probably good for promoting the books but my income from advances and royalties from both books aren’t going to keep pace with the steady stream of expenses they recommend. I’m working with these guys because they are familiar with the publishing industry but they are also a new agency in the Omnicom family. I get it. They need to deliver profits and cover overhead/personnel. They are making stuff happen but I don’t really have a way to measure value beyond an investment in a lot of wishful thinking. Right now, and Laurie recognized this early on, we are operating in the red. I was afraid to pull the trigger on the kind of spending of which Jan Abbeshire and Dan Bluestone were trying to get me to commit, and here I am spending more and working with generally less accountability. The big events pay best for me, but I’m not getting the bookings like I did that first year after the first book. Now book two is doing okay, but I don’t know.”

Laurie waited until Alan was ready and, as is her style, had a deck that showed how Alan Edgewater’s year was shaping up, with some estimates through the first three quarters of the calendar. “Of course, you had some meaningful revenue coming in early in the year from your keynote conferences and sales meetings and we’ve seen a fair amount of outflow of cash in the second half as the second book launched. It still looks okay, but as your accountant I would encourage you to pull back on the reigns a bit. Unless you have a half a dozen keynotes generating something on the order of $200,000-$300,000 you are going to have to cut somewhere.”

“Exactly, and for whatever reason, it doesn’t look like those gigs are going to be realized until next Spring and I’m looking at maybe two big ones that might get me $50,000. It will take a lot of scrambling to fill in a schedule of 12-15 dates of modest revenue around $5,000-$10,000 over the course of the next six months to fill out that target revenue. I was the flavor of the month last year. I guess I shouldn’t be surprised if things have an ebb and flow. And I’m not ready to do the global travel thing yet.”

“Alan, you are a great keynote speaker but…If you look at trade shows and conventions in places like Las Vegas, Orlando, Chicago, Dallas and New York you can see there are only a limited number of spots. Right now you have limited representation through your publisher and half-hearted efforts from Ambrosia. The bigger events are booked more than a year in advance. We’ve talked about trying to take your branded show on the road but right now you don’t have the horses to manage 45-50 dates a year with average attendance of 1,500 or better. You have to pony-up money in advance for production, room rentals, food/beverage etc. You would be gambling big time if you started putting deposits down. The audio/visual roadie stuff is an up-front investment too. You are already seeing how hard it is to manage the advertising, public relations and basic event management.”     

“Alright Bob-O, you’re right. I’ve been fortunate to have done a dozen or so big keynote deals with rooms of more than 1,500.  Now, I’m starting to see those gigs are not as easy to come by as it seemed.         

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