Planning Your Operations and Infrastructure: What Support Do I Need to Build My Business?

November 1, 2014

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by John Stiernberg, member Local 47 (Los Angeles, CA)

There’s a difference between your strategic plan and your operating plan. The strategic plan describes the foundation of your business over the next three to five years. Your operating plan answers the question, “How am I going to hit the numbers this year and next?” What are the key elements of the operating plan beyond my gig schedule and expense budget? What pitfalls can I avoid through careful operational planning? What are the functional plan elements that most musicians fail to reckon with? This article addresses these issues and recommends three action tips for success.

Going Beyond the Basics

In many businesses (music and otherwise), the operating plan is simply a budget that shows what revenue is expected and how the money will be spent. Of course, that is essential. If you don’t do a revenue plan and forecast, you’ll never know how much you can afford to spend or how much money you might need to borrow to cover seasonal shortfalls. Those are the basics.

What about those “nice to haves” that are becoming increasingly essential, especially in a competitive music and entertainment market? What are the critical success factors from an operational standpoint? Here are a few examples of the kinds of things I am talking about.

• Equipment maintenance including vehicles, sound and lights, and office gear
• New instruments, gear, and supplies
• Outsourcing fees for your accountant, publicist, or office assistant
• Capital purchases like a new van or additional stage rig
• Stage clothes and props
• Computer hardware and software
• Insurance
• Rent for office, studio, or storage space
• Travel and registration fees for industry events, such as conferences and showcases
• Promotional expenses like mailing list rentals, interactive websites, or video production

Your operating plan addresses these issues and puts them in perspective with your performing and ongoing sales activities.

Common Problems Caused by Lack of Planning

Too many creative businesses (including musicians, producers, and engineers) fail to allow the time and money needed to stay current and build long-term business. Do these comments sound familiar?

“I’m too busy to do my contract paperwork let alone plan for next year.”

“Crunching the numbers is just frustrating. I know I’ll never have enough money to hire people or buy new gear, so I just keep doing whatever gigs I can get.”

“Planning is for the big guys. I just need to get through the holiday season and take a few days off, then hit it hard again next year.”

These excuses lead to trouble, short-term and long-term. The wise expression goes, “Fail to plan, plan to fail.” Here are examples of the consequences of not having an operating plan.

Coming up short financially. Spending money you don’t have and getting behind on bills (including taxes).

Losing gigs to competitors with better gear and promotion (not necessarily better music chops).

Burning yourself out by trying to do everything and wondering where it is all headed.

Don’t want that? Here are some alternatives.

How to Avoid (or Minimize) Pitfalls

What if I really am too busy to plan? How do I get started? Who can help? Your operating plan is an essential element in your long-term success. Here are three suggestions for how to avoid or minimize the consequences of lack of planning.

Action Tip 1: Consider the alternatives. Get motivated to change. Do you want to be only as good as your worst competitor, or would you rather be better than your best competitor? The great musicians do the planning and build a team. The others limp along from gig to gig. The choice is yours.

Action Tip 2: Budget time like you budget money. Allow a certain amount per week or month devoted to the operational elements of your business, including the planning part. Make an appointment with yourself to do what needs to be done.

Action Tip 3: Get professional help. No, I’m not necessarily talking about a shrink. I mean a business manager, accountant, business advisor, marketing specialist, computer maven, or some combination of all of the above. As any business grows and prospers, it builds a team of specialists rather than just bolting on more people who “wear many hats.”

Here’s the Point

Yes, it is important to have a long-term strategic plan. But to get through next year and succeed, you need an operating plan too. Musicians are often good at the creative vision but weak at the implementation. That’s where the budget, operational details, and support team come in—get whatever outsourced help you need on the implementation side. Be sure to implement the action tips in sequence.

About the Author: A member of AFM Local 47 (Los Angeles, CA) and the Recording Academy, John Stiernberg is founder and principal consultant with Stiernberg Consulting, a Sherman Oaks, California, based business development firm (www.stiernberg.com). Stiernberg has more than 25 years experience in the music and entertainment technology field. He currently works with audio and music companies and others on strategic planning and market development. His book, Succeeding In Music: Business Chops for Performers and Songwriters, is published by Hal Leonard Corporation. Contact him via e-mail at john@stiernberg.com or find him on LinkedIn, Facebook, Twitter, and Grammy365.

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