Running A Convention: Stage 2: Financing Your Adventure

“How do I fund my convention?” This is definitely the most common question I receive from potential con directors. Typically, they are hoping I will give them an easy answer–go get a loan from such and such bank. Make it 15,000, and mortgage your house to get it. If you talk to this particular book vendor they will give you loads of money. Here’s the magic.

Unfortunately for all of you, there isn’t actually an easy button. But there are some very straightforward principles that will keep you out of trouble and out of debt. If you can’t follow these, you might want to reconsider running a convention before it ruins your personal financial life.

First of all, let’s clarify. AnomalyCon was started on $147. That broke down to $50 for an LLC, $25 to start a bank account, and the rest was for web domains (and I think we had to pay a couple bucks for some modules for our website). $147 out of pocket. The rest paid for itself.

To do that, you’re going to need some integrity, a website, a business bank account, a paypal account, a business plan (see previous chapters), and a ticket pricing schedule.

And a return policy. This is the most important. Since this is your first year event, you need the website to have information about your plans, and a way to take money. Have a cart with tickets, but make sure that the disclaimer says the tickets will be refunded in case of event cancellation. This is where your integrity comes in.

Now, notice I did NOT say you need a hotel. I didn’t mention location at all, actually. Since this is your first year event, I’m going to advise that your nearest college and cozy up with a member of a student organization. Make friends, then negotiate the use of rooms for the student rate. It might be a weird space, but it will be close to free. In most cases you don’t even have to pay until it’s almost time for the event. AnomalyCon didn’t nail down our space until we’d been taking vendor registrations for a couple of months. Thank goodness, because we needed a bigger space than we had initially scoped.

Now, here’s the key. Go steal vendors from other events.
What I mean by that is–attend other conventions. Find out who’s local. Meet the vendors and talk to them about how they are doing at the show they are at, and whether they’d be interested in a startup show. Charge them maybe $50 for a table, and explain what you’re doing to get attendees. They get the same refund policy in case of cancellation.

If you do it right, the vendors pay for your event space. Your job is to make sure there are enough attendees to make it worth it for them.

Do NOT promise guests that you’ll “pay them if the show does well.” Bad BAD precedent to set, and also without integrity. It’s better to find locals willing to perform/appear for the sake of a first year event than to lie to guests.

Most importantly, budget as though almost no one is going to attend, but plan as though you’ll have great attendance.

Running a Convention: Stage 1: The Business Plan Cheat Sheet

Some of you may remember from last Wednesday’s post that I am releasing mini-notes from my book project on running conventions.

I frequently get asked lots of questions about this process. In part it’s  because there are lots of people looking to start conventions, and in part it’s because AnomalyCon is one of the most successful startup conventions to ever occur in the Denver-Metro area. But more about that later.

Chapter 3 of this book will be entitled “Stage 1: The Business Plan Cheat Sheet.” It has that title because I like nerdy titles, but the truth is that there isn’t a true short cut to planning out your business. However, in this abridged introduction to the chapter I will summarize some key points I would like to drive home.

First of all–and this is vital to your success–you have to treat the convention like a business. There are some key ground rules. You can’t accept personal gain in exchange for convention property. For example, you shouldn’t be exchanging a table in the vendor’s room for a product that vendor carries if you’re keeping that product (prize exchanges might be OK if you want to build your model that way. I don’t).

The very first step you should take is to get out some scratch paper and figure out a few things, like what you’re going to call it. I advise you google any cool names that come to mind and MAKE SURE that they aren’t already in use. If there’s another convention with the same name, find something else. It doesn’t matter if that convention no longer exists (bad juju there) or if it’s in another country (bad SEO for you). Name it something unique. And then think about that name and make sure it doesn’t have an easily-negative connotation. I have a friend who I tease about her con name because it’s easily misconstrued.

Granted, no one can spell AnomalyCon apparently, so we have to put “anomoly” in our metatags too. But these are important things to watch out for.

While you’re at it, figure out about what date you’d like to be on–and make sure it doesn’t conflict with any major events in your area. Don’t just look at other conventions–geeks like to go to renaissance festivals, outdoor rock concerts, etc. Don’t kill your own audience by scheduling the same weekend as an established event.

Now that you’ve named your business (which will be the name of the convention unless you are planning to do other products as well), you need to nail it down. So go get an EIN (so that you have a legal registration with the federal government) and apply for an LLC in your state. It doesn’t matter if you are planning to apply for a not-for-profit status, an LLC will protect you until that paperwork goes through. It’s usually about $50 to get an LLC. So these are the things you can do online, and before you even present your convention ideas to someone else. The other thing you need to do (as soon as you have an LLC and EIN) is go open a business bank account. I advise finding a bank with no minimums, free checking etc. Avoid banks that charge fees just to have an account. A credit union may be a good choice. More on this in the chapter on financing your convention.

So you have an EIN, a bank account and an LLC. Congratulations, the government considers you a business.

Now, your business plan is the next vital step. This is only a sneak peak so I won’t give you the full cheat sheet, but here are some starters.

To succeed, you need to have low expectations but big plans. What I mean is that you need to budget to have little-to-no-income, but plan to have the kind of entertainment and growth that occurs with an influx of attendees. This will keep you out of trouble financially, if you’re careful.

Your business plan needs to cover a minimum five year plan. The first part of this plan should contain your WHY statement, your mission statement in a paragraph or so. This is your driving force. Your next paragraph or so should cover what you want to do differently to set you apart from other conventions.

Now you need to write out how you will make that happen. Your business plan needs to contain your growth goals per year–be realistic. Don’t expect 3,000 people the first year. Don’t expect your entire Facebook friends list to show up either. *Most* first year cons are happy to hit 150-300 people (unless they are backed by major sponsorship, IE a major comic convention). AnomalyCon hit 600, but we were the first Steampunk-related event in a huge radius, and one of the first Steampunk conventions in the U.S.

So let’s say you want to have 150 people year 1 and 600 year 2. If that’s your plan you will need to find a space that will fit the 600, but won’t seem too large with 150. Colleges, student unions, and other event centers are good choices to examine. More on that later.

Write down how you’re going to get an audience. Are you going to hand out fliers? Attend other conventions to garner interest? Hit the forums? How will you pull in new audience? This is the place to brainstorm about things that cost time but not money (or minimal money, such as printing lots of fliers personally).

A lot of this business plan will be about the finances. How much out of pocket will you spend? What is the payback schedule for the convention paying those expenses? The answer to the former should be a small number and the payback schedule should be “after the first event.” Many conventions die the first few years by virtue of bankrupting their proprietors.

Now move from the financing segment to programming. What kinds of programming do you hope to have? Who do you need to talk to to make that happen? Schools? Authors? Artists? Bands? Write out a five-step where each year you are increasing your guest impact.

Now move on to staffing. You’re on your own right now maybe. What does your staff need to look like? Answer: You need at least two leftenants and a number of volunteers that is about 1:10 ratio volunteers to attendees for the first 200 attendees and then about 1:20 after that point. That may seem like a lot of volunteers, but it gives you flexibility if someone is sick for example. As you expand beyond that ~1000 attendee mark you need to expand your leftenants, or you will go crazy. This is where you will write down your plan for recruiting.

Finally, you need to address income intake. Namely, vendors (how many, what kind, what growth rate), and merchandising (what kind and when).

Ultimately, your business plan is a road map to your next five years. It’s important not just for you, but so that you can show people this plan to gain support before you have an event under your belt. If you’re not already notoriously awesome, this is your key to getting that interest.

Next week I’ll touch on the most popular question–financing your adventure.

 

So You Want to Run A (Convention? Business?)…

I’m working on a book project that will likely release as an ebook. I intend to title it something like “Business Principles for Geeks: So You Want to Run a Convention?”

Yeah, snazzy. Obviously I need to come up with a better title. I’ll get on that after I name my bard. Snarflord Flarghlehopper maybe?

In the process, I’ll post updates and snippets of the idea of where it’s going here. Probably on Wednesdays because today is Wednesday and that just makes sense.

First of all, let’s say you do want to run a business. Let’s say, for the sake of argument, that its a convention you desire to run. You should be able to answer all of these questions.

What will the convention be about? Will it be a Pony con, a Whovian adventure? A generic Science-Fiction/Fantasy convention? Who is your audience? How old are they? Where do they live? What do they like to do?

What is your motivation? What’s driving you to make this happen? Why do you care?

Who will help you? Why will they help you? More importantly, why will they help you?

There are those who say that if the WHY is big enough, the HOW won’t matter. I prefer to think of it this way. If your WHY is powerful enough, the HOW HARD won’t stop you.

The facts always count. Success is in the details.

Before you start counting your thousands of planned attendees, picking your venue, rolling out your red carpet, and especially before you quit your regular job, you need to know what you want from this venture. You have to understand why you want to venture outside of your comfort zone.

And remember, this WHY has to be really, really big. Otherwise it won’t survive the five years it will take before you’re established enough to even consider escaping the huge workload you’re about to take on.

Brace yourself.

To understand your end goal, you need to decide what it should be first.

Do you plan to run a successful science fiction convention on an annual basis with positive increase in attendance every year? What does that look like? 500 attendees? 5,000?

Do you desire to have interesting and thought-provoking entertainment content and a well-rounded vendor’s room? Does that mean people are making their own content and programming, or are you controlling the whole schedule yourself?

Now why do you want these things? Is it to become well known in the community? To fill a gap that exists? Are you starting the first convention in your town or joining the ranks of many?

Write your final destination out in positive present tense, and make sure it’s something you can grasp onto. Make sure it really lights a fire in you to think about it happening.

For example, mine for AnomalyCon is this:
“I lead a highly successful convention that grows every year. We provide diverse content that supports authors and artists in their personal growth and chosen career paths while entertaining our attendees. We offer a safe, friendly and diverse environment where everyone can enjoy music, art and literature without fear of harassment.”

Ask yourself why you want to take on this project, or any major project. Until you have the why deep in your gut, your foundation will be shaky at best. This is like the very beginning of your business plan. It’s your mission statement. It’s what defines you. And if you can’t reach inside yourself, Simba, your volunteers won’t know how to find direction either.

So find your Why.

In Defense of Consumerism – It’s not what you think.

This post is written from the perspective of someone who worked in retail for 6 years, joined the entrepreneurial market at a young age, has studied micro and macro economics, and social behavior. I own a number of small (very small, in some cases) businesses, run a company with over 50 active volunteers, and still work a corporate job with a company whose name usually strikes envy (or sympathy) into the hearts of the educated.

I have a variety of great friends out there, many of whom are small business owners who make their own jewelry/clothes/whatever. Some of them are photographers, some are massage therapists, and so on. But by and large, most of my small business owner friends have come out this year in vitriolic wrath at the entire concept of Black Friday. In my heyday I also laughed at the jokes that “only in America” could we be thankful for everything we have one day and then kill each other for greed the next. This post is NOT to tell you about the best deals on Black Friday, because a combination of Ad Sites and Blogs can do that (links provided for reference only).

And now, Black Friday has finally encroached right up into Thanksgiving, a holiday probably more secular and certainly less controversial than those to follow. In my day (which wasn’t that long ago, since my last Black Friday worked was in 2008) opening at 6am was a Big Deal. People camping out overnight was a Big Deal. I think that was the same year that someone got trampled to death at a Walmart… (Someone got stabbed in the parking lot of my Circuit City too, but I don’t know where the article is for that one).

When I first left Circuit City in its downward death spiral, only a few days before they closed their doors for the last time, I swore I would never shop a Black Friday OR work another Black Friday again. The experience was exhausting, and a terrifying examination of human nature. My understanding of it all coalesced when, in the middle of the day on Friday, a poor retired couple asked me why the line was 63 people long when all they needed was an HDMI cable. They had no idea about Black Friday.

The word is that Black stands for the books of most retail stores going from in the red to in the black–but those who work retail know it really means that Black Friday is a dark and unholy day, filled with screaming soccer moms and insane cheapskate dads.

So that’s the bad side. Black Friday is encroaching on one of our few remaining feast days (wait, what? We eat and drink like maniacs whenever we are given the chance!) and besides, family.

Here’s the thing. Our economy is very much consumer driven. And that sucks for those who can’t crank out enough of whatever they make to have a crazy pseudo-cheap sale where millions of people flock to buy, buy, buy. It can be argued that this buying mentality is a direct cause of the people seeking holiday jobs. But a lot of the people who work in retail stores are students, both high school and college students. In the grand scheme of social stigma, people would rather work retail than be fast food employees, and they have some shred of a chance of improving their lot in life (look at my experience–from $8/hr to $42/hr in 6 years without my degree having an impact). And more retailers are hiring which means more jobs.

Are they great jobs? No, probably not. Most starting wages for the big hitting retailers like Walmart are barely above minimum wage. I remember my first year at Circuit City, I was hired on at $8.25 and all the holiday employees came in at $7.25. Our boss gave a speech then–they were basically there for Black Friday. Failing to show up that day was the same as handing in their resignations.

Now, let’s back up from retail and look at all of the other components involved. Shipping. Advertising. Planning. Product placement. Manufacturing is mostly overseas, but that’s true even on normal days of the year. The manufacturing side of the coin is being handled by places where business is still stuck in the industrial age.

Buying a bunch of stuff online means a whole bunch of peoples’ jobs are less necessary. Now, I’m an avid proponent of Amazon, Barnes and Noble online, etc. But one of the reasons their prices are lower a lot of times is because they have fewer employees to worry about. Lower rent. Lower overhead. It’s simple business.

The sales surrounding Black Friday have become a mad tradition–but sometimes they are the only time that some people can afford things that appear nicer–like TVs, computers, etc. Others, little known to the world, are buying up those electronics to hawk on Ebay/Craigslist later. I expect this will especially be the case with the tablets and Ipads on sale this year (For the record, that $300 ipad is only $312 right now on Amazon with no wait).

If you are worried about family, you could always be like these people.

All of this being said, I finally came around and decided to start checking out Black Friday deals. I price compare, of course, like any smart shopper. I would never camp out for anything, cheap or otherwise. But for me, it’s not about saving a few dollars–it’s about the myriad of emotions, the crazy whirlwind of people, the invigorating experience of seeing humanity in its most base form–when thrown together like primal man, all hunting for the same things.

I would advise, for those of you out there, that you shop smart if you shop Black Friday. Many electronics deals that are doorbusters are actually exclusively manufactured for the sale–which means they are built in a hurry and frequently cut corners. This is most true for TVs and computers. Be wary of cheaper-than-they-should-be laptops and TVs, because they are utilizing lower than standard parts even if they are name brand. Clothing is a good bet, and if you are buying electronics verify that the model is one available all the time.

I am not defending the manic obsession with objects that people are all on the bandwagon decrying this year. But understand that with that focus of buying dollars comes something more–human interaction, jobs for starving college students, and a continuation of the brick-and-mortar store. Our economy was built on the backs of small business owners, but that was prior to the concept of mass engineering. In this day and age, small business owners must learn to market themselves and dig a niche in the consumerist market–or be buried under a cascade of barbie dolls and strangle-me-Elmos (Now THIS is a toy that pawns off the affection you should be showing your kids. Seriously).