Developing Your Tour Budgets
At the same time that you are booking your tour and drafting your tour calendar, you should also be developing your tour budget. Tour budgets help you to judge the financial status of your tour. For each tour you book, you'll have to create a separate tour budget. Oftentimes you'll need to create one or two alternative budgets to test out different ways a tour might look if you add or subtract gigs. Surprisingly, sometimes you will find that it is more profitable not take a certain gig because the salaries, transportation, and housing costs involved with that gig lower your tour's net income.
When I first started booking my tours, I created my tour budgets using a computer spreadsheet program with linked totals and subtotals that automatically changed as I updated the entries. A spreadsheet is only as good as the person creating it. Incorrect entries and cell links can be entered into any accounting program, no matter how sophisticated it is. It took me quite a few tours to hone my computer skills so that these spreadsheets were completely accurate. One wrong number or entry title can be disastrous, so check, double-check, and triple-check your data.
I recommend the inexpensive software program Quicken Basic by Intuit. You can find out more about this program at http://www.intuit.com. Although primarily used for home accounting, Quicken Basic has a checkbook feature that can be easily customized for use with tour budgets. I prefer this program rather than a spreadsheet program because budget entries can be more detailed and calculations are done automatically. Detailed entry titles keep track of various income sources and expenditures. Quicken Basic's handy report feature also allows you to create an accurate picture of your tour's financial status. This is helpful for checking the profitability of a tour at any point during the booking process.
Both expenses and income will come your way unexpectedly during every tour, so you'll need to bring an accounting program with you on the road to update your budget. You can then adjust those entries in your Quicken Basic program when you return. I don't carry a laptop with me when I'm on tour. Instead I use a digital diary with a spreadsheet program. Although a budget spreadsheet is time-consuming to create, it's well worth the effort and it's a good way to double-check your figures and entries.
Whether you use a spreadsheet at home and/or on the road, you can save time by creating a generic budget spreadsheet that has cell links for the income, salaries, and tour expenses and that tallies the totals for each of these categories automatically. This automatic-tally function is especially helpful, because when you add or change an entry, the program changes all of the corresponding figures. (See pages 161, 163, 165, 168, and 172 for examples of a sample tour budget spreadsheet.)
To keep track of how much you are over or under your budget, set up your spreadsheet so that it creates totals for each category as well as a subtotal for the tour balance after the salaries and expenses have been deducted. To get a long-term picture of how your band is doing, you can, at the end of each year, create another spreadsheet to analyze the band's average daily income and expenses, the average income per type of venue, and your personal and band average yearly income.
This is the information you need to enter into your tour budget spreadsheet:
Dates and City Locations of Gigs: When starting a new budget, key in your first and last dates of a tour, and all the other dates between - regardless of whether they are booked or not. If the tour becomes longer or shorter than originally estimated, it's easy to adjust your spreadsheet later.
Income from Each Gig: Enter these figures as each gig confirms. If a venue is paying your hotel and/or airfares as part of your total fee, enter the figure as income on the appropriate day and then enter a zero in the appropriate cell in the expenses column. For example, if you're getting paid $3,000 for a two-day gig and the venue is paying your hotels and transportation, you'll enter $3,000 in the income column and zeros in the hotel expense column in the cells that correspond with those two days and zeros in the dates of your round-trip airfares.
Grants: Enter any income that the band will receive from support grants in the income column.
Individual Salaries: Enter these figures as soon as each gig confirms. Pay particular attention to your pay schedule to ensure that each person is being paid the correct amount for each type of service (concert, clinic, rehearsal, radio broadcast, etc.). If you want to see how a tour looks if all the gigs you've contacted confirm, make a tentative budget by adding in the income and salaries of the unconfirmed gigs. These can be updated as new information comes in.
Total Income: This figure is the total amount of the tour income, plus grants.
Individual Salaries: This figure is the total of each individual's salary for that tour.
Total Salaries: This figure is the total of all of the individuals' salaries. This is the figure that is deducted from the total-income figure to get the travel margin.
Agents' Fees: To make sure you haven't neglected to enter and deduct these fees from your budget, enter the agent's name and fee as well as the date of each gig for which the fee is owed in the expense column. Add a final cell for total agents' fees underneath that section of your expenses.
Advance Deposits: As mentioned above, the full amount of the fee for each gig should be entered in the income column. However, if you accept an advance deposit, you will need to develop a system for notating that a portion of the income for a gig has already been received. This system should be very clear, otherwise, you may forget about the deposit and, while on tour, expect to receive the full fee as it is listed in the income column. One way to notate the receipt of an advance deposit is to deduct the advance deposit from your total income. This second total will reflect the total amount of income that you will receive when you are on the road. You can call this second total something like "road income" to distinguish it from total income. You may also want to highlight the fee for the gig (which will be in the expense column under the appropriate date) in bold - so that you have a visual reminder that this entry involved an advance deposit. Personally, I find the extra level of bookkeeping involved with advance deposits cumbersome and so I make a point of not accepting them.
Travel Margin: This category is optional. This is the figure you get when you subtract the total salaries, and agents' fees (if applicable) from the total income. This figure lets you know how much of a balance is available for transportation and hotel expenses. If your tour is in good financial shape, this figure will be between 20 and 30 percent of your total income.
Airfares: These figures need to be entered in their own column within the expenses portion of your budget. When the band is traveling together, use city and state abbreviations to notate all flights. This system also works well when personnel that live in differing cities fly to and from the first and last gigs of a tour by themselves. To keep track of how your expenses are going, use any of the many Internet airfare services to get estimates on flight costs. Microsoft's Expedia Travel Service at http://expedia.msn.com/ daily/home/default.hts and Preview Travel at http://www.previewtravel.com allow you to get figures for open-jaw tickets. Using these estimates eliminates the need to bother a busy travel agent for tickets you may or may not buy. Actual costs can be reentered at the time the tickets are purchased. Don't forget - as with all of the expense subcategories - to add a total airfares cell underneath the airfares category.
Baggage Fees: These figures should include the charges for the bass and drums as well as oversize or overweight luggage. Add these costs on the line after each airfare listing. These figures vary unpredictably, and cannot be determined in advance. Some airlines will charge you baggage fees and some will not. It's always safer to estimate unknown expenses on the high end and enter the inflated fees in your tour budget. Then, while you're on tour, you can change the figure on your personal organizer and, once you get home, you can reenter the correct figures into your computer spreadsheet program. Once you've done a few tours, you'll have a pretty good idea of what your average baggage fees will be.
Van Rentals: Enter the to and from dates as well as the abbreviations for the areas where you'll be driving. You can get estimates from the Internet or by calling a rental-car agency's 1-800 number.
Gas and Tolls: Enter these costs below your van-rental costs column. Map software programs such as Route 66, Delorme, or AAA, which are available on CD-ROM and on the Maps On Us Web site at http://www.mapsonus.com, can give you reasonable estimates as to how much gas you might use on a driving tour. These resources can be especially handy to check if you're within your mileage limit allowed by the car-rental agency and how much it could cost you if you go over it.
Trains: These expenses, for the most part, will only occur in Europe. (For more information about European train schedules and Eurailpasses, see pages 208&endash;213.)
Ferries: Call the ferry company to get an estimate of its fees.
Taxis: There may be some situations (as in foreign countries) where the venue will supply most of your local, in-town transportation. In these cases, you'll only need to use taxis for limited excursions - like getting from the airport to the hotel. Since these expenses are relatively limited, you can usually ballpark these estimates yourself. However, if the band will need to take a longish taxi ride from the airport to the gig, you might ask your gig contact to give you an estimate as to how much the ride might cost.
Transportation Total: This figure is the total of airfares, baggage fees, and all other forms of tour transportation.
Hotels: Add every date where you think you'll have to pay for your own hotels. Use your collection of hotel rate books, check on the Internet, or call any of the hotel chain 1-800 numbers to estimate your hotel expenses. If you plan on staying in a hotel that is not part of a chain, call your client for the hotel info and then call the hotel to check on its cost. Be sure to include any room taxes in the figure.
Total Hotels: This figure is the sum total of all of the individual hotel expenses. This will change as you work to lower this expense.
Miscellaneous Expenses: You never know what expenses might arise during a tour. It is a good idea to plan for some unexpected expenses. For example, you might need to rent a drum set or bass amp or fix a dent in a rental van.
Tips: These costs will include airport and train station baggage handlers and hotel bellhops. This category is optional and should appear after the miscellaneous expenses category on your spreadsheet.
Total Travel Expenses: The figure is the sum of all your travel and hotel expenses.
Tour Balance: This is the most important figure in a budget. It tells you whether your tour budget is in the red or in the black. If it is in the red, you're going to have to go back over your figures to see where you can shave any tour expenses. For instance, as previously mentioned, you may find that you have to reduce your own salary, which may mean that you will make less than the other members in your band. As a last resort, you may find that you need to reduce the other band members' salaries as well in order to bring the budget back into the black. Alternatively, if you're in the black by a moderate amount, you'll be able to take a leader's fee. If this is the case, don't forget that you have other expenses, such as those incurred running your office and booking your band (telephone bills, computer software purchases, press kits, etc.) that you'll hope to defray somewhat from a tour that runs into the black.
March West Coast Tour/Budget #5
Date & Venue
Income
Sal:You
Sal:Joe
Sal:John
Sal:Jane
February
28
March
1 Seattle
700
200
200
200
200
2 Seattle
700
200
200
200
200
3 Bellingham
800
150
150
150
150
4 Vancouver
2,500
200
200
200
200
5 Vancouver
6 Victoria
1,750
150
150
150
150
7 & 8 Club Gig
1,500
400
400
400
400
8 Clinic, Portland
1,000
200
200
200
200
9 San Francisco
600
200
200
200
200
10 Day Off
11 Hayward
1,000
12 Berkeley
1,500
200
200
200
200
13 Day Off
14 Napa
800
200
200
200
200
15 San Jose
1,500
200
200
200
200
16 Santa Barbara
400
200
200
200
200
17 Redondo Beach
850
200
200
200
200
18 Day Off
19 Los Angeles
3,500
200
200
200
200
20 Los Angeles
21 San Diego
600
200
200
200
200
22 San Diego
600
200
200
200
200
23 Day Off
24 Las Vegas
1,600
300
300
300
300
25 Day Off
26 Day Off
27 Phoenix
2,000
200
200
200
200
28 Albuquerque
1,000
200
200
200
200
29 Santa Fe
1,200
200
200
200
200
30 Day Off
31 Houston
800
200
200
200
200
April
1 Day Off
2 Fort Worth
800
200
200
200
200
3 Oklahoma City
2,500
300
300
300
300
4 Dallas
1,200
150
150
150
150
5 Dallas
800
200
200
200
200
Total Income
32,200
Individual Salaries
5,550
5,550
5,550
5,550
Total Salaries
22,200
Expenses
Airfares
NY&endash;WA, TX&endash;NY
2,000
Bass
100
Portland&endash;Bay Area
500
Bass
50
San Jose&endash;L.A.
240
Bass
50
San Diego&endash;Las Vegas
240
Bass
50
Las Vegas&endash;Phoenix
1,000
Bass
50
Phoenix&endash;Albuquerque
800
Bass
50
Santa Fe&endash;Houston
300
Bass
50
Albuquerque&endash;OK City
1,000
Bass
50
Total Airfares
6,530
Van Rentals
WA
275
Bay Area
300
L.A.
350
TX&endash;OK&endash;TX
350
Gas & Tolls
125
Total Van Rentals
1,400
Misc. Expenses
Taxis
30
Ferrys
105
Total Misc. Expenses
135
TOTAL TRANSPORT
8,065
Hotels
3/13
200
3/14
300
3/25
140
3/28
240
4/1
240
4/4
260
Total Hotels
1360
TOTAL TRAVEL COSTS
9425
TOUR BALANCE
575
While booking a tour, you are probably going to make at least three tentative budgets - and maybe more if you have to refigure your tour because of cost overruns. If you know that you're going to have to draft multiple budgets, when you start to enter your budget information, enter the hard or known figures first. For instance, the amounts for income and salaries generally don't change, unless you need to lower the salaries on some gigs to bring your tour balance into the black. Use this partially drafted tour budget as the starting point for your various tentative budgets. Then, as time progresses, the softer, estimated expenses that you are experimenting with in these tentative budgets, will become harder or actual and you can make the necessary adjustments to your master budget. If a venue agrees to pay for some of your travel or hotel expenses, list those figures both in their proper expense categories as well as in the income category (next to the respective gig). Enter actual airfares as soon as you have the information. It's the only way to keep track of a tour's financial status.
Until you have your pay schedule memorized, keep it handy while entering your salary amounts into the tour budget. Pay attention to those days when you're doing clinics and performances, because when done on the same day the rate is generally slightly less than if the two events were spread out over two days. With a quartet, an extra $50 per musician mistakenly overpaid could cost you $200. Occasionally, when you're negotiating a college engagement, you may have to throw in a solo clinic to clinch a deal. It is up to you whether you want to pay yourself for these. You can always add the fees to the spreadsheet and, if a tour looks like it's going into the red, knock a couple of them off to bring a tour's balance into the black.
Figuring salaries for college residencies of two days or more is more complicated. The band could be working anywhere from two to eight hours a day, as in the case where you're adjudicating a big-band festival. You'll have to decide if you are going to pay your musicians for rehearsals with a college band. These situations will be handled on a case-by-case basis, depending on the status of the budget.
For gigs where you've negotiated a guarantee and a percentage of the admission fees, enter only the guarantee (in the income column) and the full salaries (in each individual band member's income column). If you make some money on the percentage, you can add it into your portable spreadsheet later and watch your tour balance increase. However, you don't want to assume that you're going to make money and then be caught shortchanged if the gig doesn't go as well as you had hoped it would.
Keep track of your days off by including each day off in your date and venue column. These should be visual reminders for you that you'll be incurring accommodation expenses that won't be paid for by a venue or be deflected by income from a gig. Eliminate them as the days fill in with confirmed gigs. Don't forget to enter your days off into the hotel expense column, as well. Make separate checklists for the dates and destinations of all the flights to be booked, hotels to be reserved, and vans to be rented, including the driving days per rental segment and the drive time for each trip. Pay attention to those gigs that do and don't pay for hotels, for gig days as well as for days off. Forgetting three of those days could make as much as a $1,000 difference in the tour balance. Hotels and airport car-rental agencies will add a tax and an airport surcharge to your bill. Ask about the additional charges before entering your transportation figures into the budget spreadsheet. You'd be surprised at how much they can add up at the end of a tour.
You'll also want to keep tabs on some of the expenses that can vary between the time that you make your tour budget and the time that you actually go on tour. Unless you've reserved them in advance, airfares and van-rental rates can vary between the time of your original estimates and the purchase of the tickets or rentals. Hotel rates usually stay the same. The most variable expenses will be gas and other travel expenses - for instance, the extra charges for the bass case and drum set as well as oversize or overweight luggage - and miscellaneous expenses. You won't have the actual costs for these miscellaneous expenses until you're on the road. Enter those figures as you go along.
Even though you may have solidified, to the best of your ability, all of the details of a particular tour, once you're on the road things rarely follow a planned itinerary or budget exactly. For the most part, trouble can be avoided by foreseeing potential problems before they occur. However, no matter how experienced you are, there are always variations in transportation, accommodations, and budgeting.
Don't be fooled by a tour balance figure that suggests that you're going to come home with $1,500 more than the other guys. All tour budgets, even the final one that you leave for the road with, are fantasies until the tour is over. Everything costs more than you think it will because stuff happens.
I learned this lesson the hard way. I had a tour balance of $1,500 and was looking forward to having the extra bread to offset my phone bills. We were on a tour of Europe and were doing a week in Italy (starting in Bologna), then on to Cologne, Germany, and London, England. To avoid taking the train around Europe with the damned bass case, our Italian agent sent it from Bologna to our hotel in Rome, the location of our last gig in Italy. Because our rooms were under the name of the club (it was paying for them), the hotel didn't know the names of the band members and when the bass case arrived the hotel refused responsibility for it and had it sent back to Bologna.
We arrived at the hotel and the case wasn't there. Also, the person who had refused to accept it was off for a couple of days. We had no idea what had happened to it. Even a trip to the train station gave us no information of its whereabouts. When it came time for us to leave for Cologne, our bassist couldn't fly without his bass case. So we had to send our bassist, with his bass, by a brutal, twenty-hour train ride (thankfully we had a day off between gigs) in coach class (because it was too late to get any first-class seating), while the drummer and I flew to Cologne with his suitcase.
The agent went back to Bologna to find out what had happened to the case. While we were in Cologne, the agent called to say he found the case and was going to ship it to us by airfreight. However, the airline couldn't guarantee that the case would get to Cologne in time for our departure to London. Because I was scheduled to do a solo clinic, I sent the bass player down to the airline ticket office and he managed to actually buy a seat on our flight to put his (unprotected) bass in the cabin. This is unheard of these days. Most airlines will not allow a bass in the cabin, but the flight was not full and they probably just wanted to fill another seat. We lucked out. Then I called the agent again. This time the agent told me that, for security reasons, the airline wouldn't allow the case to go in baggage without someone traveling with it. The upshot of all this was that we had to fly the agent and bass case from Bologna to London.
After paying for shipping the case from Bologna to Rome and back, the bassist's train ticket from Rome to Cologne, the extra ticket for the bass on the plane from Cologne, the agent's plane ticket from Bologna to London, and the shipping charge for the case, an airport pickup fee in London for the agent and the case, and the agent's hotel room in London, that $1,500 disappeared!