November 10, 2016

How to Deal With Financial Success

One of the things I’ve often been asked is “what are we going to do with this year’s profits?”

Normally, I respond with, “Nothing,… why, did you have something you need the con to spend money on? We can talk about it.”

Smart businesses always hang on to their money as part of a “war chest” because good years, profitable years, can easily be followed by bad ones.  Industry conditions change all the time.  And make no mistake, if you are running a con, whether non-profit or for profit, you are running a business.

As an example, I was recently involved in a convention that made around a 20% profit in one year, but then lost about 10% the following year. The budget was not vastly different from year to year, we just had more competition in the latter year. But, because we didn’t overspend, we still had a decent war chest to work with for the coming year.

And that’s why smart businesses save their money.  Competition, local or national economic/ political issues, even just bad weather can impact your convention. In the example above, we had a reasonably local con move their dates from 3 months prior to us in the past, to our exact weekend. I’m sure they didn’t see us as direct competition, but their convention did impact our attendance.

Now, can you spend some of your profits? Sure. The idea is to not spend heavily. If you need a piece of equipment, or if there is something you’d like to try with the con, then spend some of it. Just don’t spend all of it. Hang on to enough to help offset a bad year, because bad years happen to everyone… well, maybe not DragonCon, but most cons.

My suggestion is that 3 years makes a trend. If you continually grow for 3 years, then maybe you can increase your budget and spend some of those profits. Just remember, a bad year will eventually catch up to you and “kick you in the teeth.” Make sure you have something saved to offset that day.

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