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
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?