Music Funding 101
Avoiding Number Predictions
Here is a situation that is going to surface relatively soon in the band-sponsor negotiations: The sponsor is experienced in working in some other industry that requires exact numbers, for example: construction (number of square feet), restaurants (number of tables), hotels (number of rooms), transportation (number of miles), shipping (number of pounds), or the worst, accounting. While meaning well, these folks will try to apply their exact-number strategy to the band's situation, and many difficulties will arise which will probably cause the sponsorship to end before it should. So the TalentFunding.com recommendation is to completely avoid any "hard" number predictions in certain areas of the negotiation, in particular:
The number of people at shows: Getting people to go to the shows is the main beginning goal that sponsors and bands will have in most sponsorships. The sponsor's instinct will be to say "can you guarantee me 10 people in each coffee shop performance, or 50 people at each night club?" And the band's instinct will be to say, "Well, we'll do the best we can." So already you have a situation that must bend if it's going to be finalized. In that case, the sponsor will feel that the band is worried about results, and so he will not move ahead until the band guarantees it. Then it's usually the band that gives in.
What happens next is that the band does not meet the guarantee on one or more of the shows and thus has to give up something to the sponsor. This makes the band feel like they are failing and the rest of the sponsorship (if there still is one) caves in easily. Bands are just not good at numerical predictions that are based on (and somewhat controlled by) other entities (i.e., club promoters).
Here are some other areas where number predictions might be tempting, but should be avoided: The number of tickets sold for a show; the number of posters put up; the number of CDs sold at shows (or in stores if there is a distribution agreement). In all cases, the band wants to be able to guarantee a large number so as to appear serious to the potential sponsor. And the sponsor wants a big number too, so as to feel good about spending the money.
All this is wrong. There should be NO number predictions at all. These sponsorships are supposed to be the result of two parties working together as best as possible; if you place a hard guarantee on them then you are trying to use a general-sector business technique which works elsewhere (for the sponsors) in an area that very much resists hard rules (music) and does not necessarily even care how the general sector thinks. It's kind of like asking a surgeon to guarantee that you will live, or else you won't use him.
Now of course, many of the hired-portions of the sponsorship can indeed be guaranteed, because they are part of general business practices (and that's why you use them); the number of t-shirts printed; the number of issues of a newspaper that your ad runs in; the number of hours that an assistant works; and here's the biggie: the number of shows that the band performs.
These are all numbers that a band can work on and improve if necessary. Everybody does their best, and in the end (and after the proper amount of time) the sponsor looks to see if he feels he is getting the proper exposure. If not, he simply does not renew his sponsorship.
Keep in mind that even with the guarantees that a sponsor might be used to in his normal line of work, he is still not really being guaranteed any results. The newspaper ad might be guaranteed to be in 100,000 copies, but that's not how many people are actually going to see the ad; the radio ad might be guaranteed to run 25 times per week, but how many people are actually hearing it? The t-shirt printer might guarantee you 500 shirts, but how many people are going to wear it? (And a surgeon might even guarantee you that 5 doctors will assist in the operation...).
You see, there are not really any guarantees at all, ever. You just have to pick the best people from those that you are speaking to, and then negotiate with them. That way you'll have the best effort going into the project and you won't make them feel small by asking them to answer to a guarantee.
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