How much do things cost? What do you do about the costs you don’t have numbers for? How do you find out what is industry standard?
Here is a good place to start! Download our Expenses Infographic (preview below):
Things you may have on your expenses list:
- Rehearsal Expenses (tape, scripts, pencils, hospitality, etc.)
- Running Costs; the items that are used in every show (food onstage, ripped envelopes, newspapers, etc.)
- Admin Expenses (portion of phone bill, postage, website, fees for ticketing platforms etc.)
- Publicity (paying a publicist)
- Marketing (ads, Facebook ads, website, posters, postcards, distribution costs)
- Contracting Personnel; the people you hire and pay for your production
- Production rentals (sound, lighting, projection equipment, transportation)
- Fundraising Expenses (venue rental for a fundraising event, cookies, pop, beer if you expect to make money on bar sales)
- Accessibility costs (ASL Interpreters, support workers, audio description services, signage, etc.)
It is important to cost these things out and include a number into your expense sheet within your budget. If you don't know what things cost, do your research. If you have never paid for a publicist before, call a few publicists, or companies that do publicity and get free quotes. That way, you have an idea of what the cost is and can better assess if it is something that you can include in your project or if you cannot afford it at this time.
How to Reduce your Expenses
Sometimes, the reality of not receiving the money you need for your Dream Budget sets in and you need to start thinking about how to reduce your expenses. Once you’ve built your budget, begin to think about the ways in which you can reduce the lines on the expense list. What material items can you purchase for a cheaper rate? Are there items that you can get donated? Do you need a large team or can you work with a smaller one? Can you assemble some volunteers for the set painting? The key is to make the most of less, so definitely settle on the top things that your show cannot do without and work from there.
In-Kind Contributions
In-Kind Contributions are non-monetary contributions, or goods and services that are offered free-of-charge. Asking for in-kind donations may help you reduce costs, like printing or using a rehearsal space at an office after hours. Larger arts organizations will often help if asked nicely so don't be afraid to reach out - most of their mandates involve helping artists in the community.
Even though these things may not cost you money, it is still important to keep track of the value of all in-kind contributions and make sure they are reflected on the revenues side of your budget as well. This way at the end of your project you'll have a clearer picture of all the resources actually required to make it happen.
Expense Reports
An expense report is used to keep track of all the expenses a person, organization, or company incurs throughout their project, or fiscal year. The producer should provide an expense report to each person on their team who is spending money for the production (doing the shopping).
There are two ways producers typically distribute funds to those who are spending money on the production:
- Petty Cash - the producer gives the spender some money in advance and the spender signs a document confirming that they've received that amount. The person who receives the money is responsible for bringing back change and receipts to the producer.
- Upfront Payments - this means that the producer gives the spender a set budget and the spender uses their own money up to that budget limit. The spender keeps all their receipts and attaches them to an expenses report that the producer reimburses them for.
NOTE: Keep receipts for everything that you spend for your production in order to track accurate cash flow and expenses.
It is important to understand that you should not give out more cash than you can afford and never exceed what is in the production budget or cash flow. Be upfront with others in your team about what the budget is. Work with your designers to make sure that what they think they will need to spend matches what you have allocated for design in your budget. You can even include the budget in someone’s contract, along with the expectations that they won’t go over and spend more than allocated.
Excel has a few templates for expense reports and you can find templates for other softwares by doing a quick Google search.