I’ve recently started doing shows and am curious about measuring
success. Do you look for total sales, specific profit amount, some
formula based on fee/cost/expense/investment, or something entirely
different. In this particular show, the fee was $100 and I made
$405 profit (above my computed total cost of items e.g.
labor/material/overhead). I did not count my time at show and it
was local with no motel/travel expense. That is 4 times the fee and
’sounds’ to me like a fair measure. If I would have had moderate
travel expenses of $200, the profit would still be 2 times the fee.
With upcoming fees of $250 and $800, I’m curious about how people
evaluate returns to same show next year. Must fees live up to an
expected ROI? Do you expect ‘proportionately’ more when you lay out
higher fees? Is, perhaps, a profit of $x per day/week important
regardless of fee/travel expense. Or is consistent profit of 'any’
amount the most important thing. I certainly know what to do next
year if I incur a loss at a show! I’d appreciate your insight. Regis
Regis, I have been doing shows for a couple of years now and have had
various “formulas” for gauging success recommended to me. One
measure I heard is 8 times the booth fee. The problem I have with
this type of formula is that I can go to a show in Chicago and be
charged $1,250 for a booth at the ACC show or $350 for a street
show. The other costs of doing the show; travel, housing, food are
essentially the same, yet I should feel the same success level
having made $10,000 at one and $2,800 at the other? If the overhead
was the same for all but the booth fee, I would say that the $2,800
show would be far less successful no matter the booth fee
multiplier.
My “formula” for calculating initial success is whether I was able
to make as much, having been away from the bench, as I would if I
had stayed home and done custom orders. But still, that is only
part of the story. I also work for sales after shows to those who
expressed interest in my work. Sometimes post show sales are 100%
of show sales! And, you have to take a long term approach. For
example, maybe this year you only made $400 but perhaps next year
people will be willing to buy because they are more familiar with
you. It is a little like advertising; you can’t always judge
success based on a one-time experience. There really is something
to be said for consistency.
Larry Seiger
Or is consistent profit of 'any' amount the most important thing. I certainly know what to do next year if I incur a loss at a show! I'd appreciate your insight
Regis, the answer to your question depends on how deep your pockets
are. In other words, for how long can you absorb a loss before you
have to show a profit? I don’t know how long you have been in “the
business”, but you probably know that your schedule C is the real
measure of how you are doing. Every day is not going to be a
profitable day, likewise neither are they all going to be a loss.
If you are successful, you are going to have more than enough
profitable days to offset the loss days and still give you enough to
live on. The IRS believes that you should show a profit in at least
two of five years, otherwise you are running a hobby, not a
business. So, how does this all add up in how to gage a show, or
series of shows?
First of all, the booth space cost is just one of the “expense”
items you need to figure. Other items are the cost to get to the
show, a motel, meals, the cost of the sales receipts book, the bags
you put your sales in. the cost of your display cases, bank charges
for your accounts, merchant fees if you take credit cards, phone
calls, mailings to advertise your show, Etc.
Some of these will be specific to a single show, and others are
overhead for doing business. You need to understand if at the end
of the year, taking all of the above items into the equation, did
you make a profit?. Now If you did, where did the profit come from?
What were your revenue sources, where were your expense turkeys?
If you find that a show is more of an expense turkey than a revenue
source, you need to dump that show. BUT, did you see some potential
for better sales at the next show? Do you think that with some
advertising and some different presentation that you could do
better? Did you think that you cultivated some potential customers
for the next show? Did you generate some between show sales that
should be considered?
These are hard questions and the answer will be different depending
on how other shows are doing and how deep your pockets are. If your
schedule C is OK, you might want to give a show one or two more
chances before you write it off. If the old Schedule C shows that
you are on thin ice, you may want to dump the show. Bottom line is
that the decision is a gamble. You can tilt the odds in your favor
by really understanding the variables and the current economy of the
area of the show. If you are betting on luck bringing you to
profit, you loose.
I have done shows for the last seven years. But, I did my LAST show
in June this year. It is a tough business. You have to be able to
cultivate a following. You have to have a product line that will
sell at the location you are doing the show at. It will be
different for different shows. If you are not successful in doing
these things, you need to find another way to market your product.
Shows are profitable for some vendors. They prosper. However for
some, the shows can be a severe drain on the checking account. This
is the way of business in general, even for the store fronts. And
each year brings new challenges and opportunities. It is your job
as a business person to make the opportunities out weigh the
challenges.
There is no easy formula for determining if you should pay the booth
space fees for the next show, but knowledge and experience will
help. The question is how much experience can you afford?
Don