Reviewing this month’s emails from Alexandrites, I’ve noticed some of you branching out, developing simple shows from the magic I’ve taught you and going out and performing locally for family, Halloween parties and church events.  This is thrilling!  Some of you feel you’re still not ready to take to the stage and that’s okay too.  Be where you are.  In what I believe is a gesture of modesty, some of you are doing events for free.  If you’re just having fun at family events and such, this is understandable.  However, if you’re entering the magic market and your price is zero, we need to talk!  You may be doing more harm than good to yourself.  I wish I could draft an all-encompassing table with all the prices for all the different types of shows you’re all doing.  However, it’s not that simple.  There are just too many variables.  Even regions within the same county can see a wild fluctuation in prices.  Although there’s no easy answer, I can equip you with a way you can find out what to charge and guide you to the right decisions in what to charge.

Hopefully, I can assume that you’ve agreed to charge something above zero.  Congratulations, you’ve just crossed over from amateur to professional.  It still may come as a big shock to learn that many entertainers, including magicians, who think they are earning a living from shows, are not!  They simply haven’t worked out their actual costs, and subsequently don’t charge enough for their shows.  I too was guilty of this when I was starting out.  I used to do local events for free to get good, until one of my fellow magicians from the Magic Castle explained to me how I was driving down the market.  I want you to all to charge more so that you help raise the value of our art.  This helps all of us.

Unfortunately, most professional entertainers are not good businessmen.  This is not a criticism, but rather a candid observation I’ve made over the last 30-plus years in this business.  The result is that when these people work out the cost of doing their show, they don’t take into account even a fraction of their actual costs.  The typical magician will reason that there is a cost of the outlay of the actual props, the traveling, a few phone calls and the hourly rate for his time.  Sadly this reasoning is flawed.  The actual costs of putting a show on are far more extensive, and need to include much more unless you want to go broke.

Take a moment to consider the real cost of doing a show.  Listed below are the items that should be included to get an accurate expense figure for my magic business:

Phone Calls                    Clothes

Phone Rentals                  Shoes

Printer Consumables            Direct Mail

Fax Consumables                Advertising

Business Cards                 Cost Of Office Equipment

Brochures                      Cost Of Vehicle

Stationery                     Cost Of Stage Props

Stamps                         Sound System

Envelopes                      Tax

Internet                       Accounting

Pens                           Office Furniture

Gas                            Equipment Depreciation

Car Maintenance      

Now, I can already hear some of you saying this list is excessive, but is it really?  The truth is, I may have even left off some items that you should be counting.  For example, I didn’t include the time spent researching and developing your magic, time spent working on your show, time spent responding to inquiries and so on.  So, let me ask you, where does the money come from to pay for all this?  Is there a magic fund somewhere?  The reality is that all of the items listed above are used in the process of booking and presenting your show and mine.  The thing to remember is that these things need to be replaced if they’re going to be used.  Are you starting to see why magicians don’t make money?  Sure, there might be money coming in, but it all just seems to disappear.  Now we know where.

I use Quicken to get a clear picture of all of my expenses.  The best part of Quicken is that you can draft a report of exactly where you are at any time.  Start by adding all of your costs, including a percentage of large equipment outlays.  It might take awhile to do this, and you might need to get some help.  So here’s a form you can use. You might want to spend a few nights filling it out.  It will present you with your annual expenditure.  Also, realize that you need to add on your living expenses.  Once you are over the shock, use that figure as a basis for working out a realistic price for your show.  Does this depress you a little?  Well, I assure you this feeling is temporary.

If you’ve not done so already, determine your market.  I covered this in my blog Markets Of Magic.  Next, do a little research.  It’s important to get someone to call a few magicians in the same field as you from your local Yellow Pages.  Posing as a potential customer, have your partner ask the magicians a few questions about what they offer and how much they charge.  You’ll probably be surprised by the range of fees that you are quoted.  Here’s why this is important: Your next customer will go through the exact same process before they hire you!  You’re probably going to see things from the buyer’s side of the desk for the very first time.  As a side benefit, take careful note of how each of your competitors sound over the phone.  What is the good, bad and ugly?  Learn from it.

Now you have the range of prices charged for your market right at your fingertips.  Where should you fit in?  Do you think it’s best to be cheapest, somewhere in the middle or most expensive?  If you have an act and you’re ready, I would recommend you set your prices at the high end of the spectrum.  Why?  In the magic market, a cheap price generally means poor quality in the mind of the customer.  On the other hand, high quality means high quality.  Notice I said “mind of the customer.”  While there will always be a market for cheapest, there will also be a market for highest quality.  Don’t try to be Wal-Mart.  Someone will always come along who can offer a better price.

There are many other benefits to charging a high fee.  For example, do you realize that the fee you charge has a direct relationship to the number of shows you need to do in order to earn a certain amount?  Dan Kennedy asks marketers to “reverse engineer” it.  In other words, figure out the number you want at the end of the year and work backwards from there.  How many shows do you need to do at your price to reach that amount?  Think of how many hamburgers McDonald’s has to sell at $4 each to make $70 million as opposed to how many cars Mercedes has to manufacture to reach that same revenue.  It stands to reason doesn’t it?  If you are earning twice as much per show, you need only do half the number of shows you would have to do if you charged the lower price.  Put another way, would you prefer to work for more or for less?  These are the considerations you should take into account in pricing your show.  It is my hope that you all can become the Mercedes of your market, not the Wal-Mart.

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