fix your finances
TRANSCRIPT
FIX YOUR FINANCESMIKE FARROW
PRESENTER
Chief Financial Officer, Vendini
MIKE FARROW
• As CFO and Head of Finance at Vendini,
Mike has over 20 years of executive
leadership experience
• Prior to Vendini, worked for several
media companies including Time
Warner and Viacom
• Holds a BS in Finance from the
University of Arizona and an MBA from
the Marshall School of Business at USC VENDINI STAFF
OVERVIEW
BUDGET BASICS
MANAGING COSTS
MANAGING REVENUE
PUTTING IT ALL TOGETHER
Q & A
AGENDA
OVERVIEW
“Always earn your money before you spend it”
- Thomas Jefferson
OVERVIEW
• Passion-fueled
business
• Money is always
poured back in
• Community
involvement is key
• Building a legacy
BUDGET BASICS
WHAT IS A BUDGET?• A plan to meet your goals
• A forecast of income and expenses
• A tool for decision making
• A tool for tracking business
performance
• A safety net with reserves
for unexpected needs,
desires, expenses
MANAGING COSTS
EXPENSES• Recurring costs
• People
• Full time, Part time, Seasonal
• Contract employees
• Operations
• Rent, Insurance, Banking,
Maintenance, Administrative
• Capital expenses
• Facility upgrades
• Event costs
• Production
• New initiatives
CONTROLLING EXPENSES• Paying by the year
• Partnering and sharing expenses
• Using volunteer resources
• Lease vs. buy
• Deferred maintenance
MANAGING REVENUE
INCOME• Ticket sales
• Memberships
• Donations
• Legacy giving
• Concessions
• Grants
• Campaigns
WHY IS IT IMPORTANT?• Poorly managed finances ruined
a New Hampshire theatre doing
$10M a year in business
• They didn’t go out of business
due to poor programming or
poor revenue
• Net cash flow is different than
ticket revenue
• Accrual accounting systems are
the way to go
FORECASTING
FORECASTING• Sales forecast
• Using what information you have
• Best guess
• Tracking key metrics
• Expense forecasting
• Market forecast• Competition
FORECASTING• Revenue from sales
and donations
• Using what information
you have
• Best guess
• Be conservative!
• Tracking key metrics
• Expense forecasting
• Market forecast
EVERYTHING ELSE• Proper filings (tax and local)
• Cash management
• Insurance maintenance
• Construction/City Maintenance
• Maintaining 501c3 status
• Depreciation
• Negotiating fees
PUTTING IT ALL TOGETHER
QUICKBOOKS VS. SPREADSHEETS• Two different tools for
different purposes
SAMPLE SPREADSHEET• Interactive look at
building a budget
RISKS AND CHALLENGES• Shifting patron tastes
• Watching trends
• Aging base
• Rising costs
• Liability Insurance
• Health Insurance
• Labor
RISKS AND CHALLENGES• Accidents & Disasters
• Investments & Market Downturns
• Expanding patron and donor pool
VENDINI TOOLS• Reports to use
when budgeting
• Gross Receipts
• Event Settlement
• Patron Reports
SUMMARY• Don’t be an ostrich!
• Run it like a business
(because it is a business)
• Successful budgeting =
successful business
• Accrual accounting provides
a better picture
• Pay yourself first!
THANK YOU
MIKE FARROW | [email protected]