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It’s the final chapter everyone. We hope we’ve managed to give you a new perspective. If you’ve decided to implement Rafe’s sage words, let us know, we’d love to know how you get on. And now for the finale: 

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On Sharing Profits Fairly

When I was little and sweets or cakes were left out (you know, like at a birthday party or something), claiming your share was very simple. You picked up anything you wanted, were likely to want, or didn’t want anyone else to have, and you licked it. In front of everyone, in order to remove any trace of doubt.

Now, I’m not suggesting that this was a good system, and nor am I suggesting that anyone reinstate it, especially now that we all have grown up taste buds. I’m not sure I can imagine something more upsetting to the middle class mind than someone licking the garlic dough balls in Pizza Express in order to claim them as their own. Especially if it was my slightly musty Uncle Terry doing the licking.

However, the system had certain usefulness, simply by nature of it existing in the first place. We might not like the rules, but at least we knew them. There is, of course a different and less palatable status quo, and that is having no system at all. Can you imagine the carnage? Some children licking items to claim their prize, some planting bogey based Flags of Empire in desired chocolate treats; where would it end? Sneezing on a whole bowlful of Maltesers?

Profit Share productions must never risk turning into a seven-year-olds’ free for all at the sweeties buffet. It’s not okay for someone putting on a show to tell everyone they’ll share any Maltesers that are left over at the end of the party and then sneeze all over them at the last minute because they want to give them to their mate Alan down the road (Note: other brands of chocolate based nibbles are available).

So, we need a system for dealing with profit. For the sake of ease, I shall use money to demonstrate, rather than confectionery.

When we first start to get a team of creative individuals together, and all sign contracts, let’s also include in those contracts the mechanism whereby any profits generated will be split in a fair and equitable fashion.

We don’t yet know what profit (if any) there will be, but we’re definitely aiming for one. It might even be more than we budgeted, because we got such fine reviews. But we can work out what proportion of any profits that may show up shall go to each person involved in the production by allocating ‘Profit Points’ for each person involved, and writing them into the contract.

How many profit points each person gets will be decided on a production by production basis by someone who is, in all probability, you (you are reading this, after all). So you have to think about how much work (or what specialist skill sets) each person brings to the party. You then allocate a number of points commensurate with your assessment of their likely contribution to the project.

Example: You have three fabulous actors working with you, but one of them has half the rehearsal commitment of the other two, so can earn other money doing other things during rehearsals. You might, therefore take the view that the two who are rehearsing all the time might merit two Profit Points, while the one who has significantly less rehearsal time receive only one. Alternatively, you might decide that in performance all are equal, and give them all two points each.

You need to go through everyone involved in this manner, making sure that their points allocation is commensurate with their contribution to the project, and equitable when compared with others involved in the project.

When you’ve done this, you’ll be able to add up all the points allocated, to get a total for the number of points in the pot. Let’s say, for the sake of argument, that there was a total of twelve points in the pot. At the end of your run, any profit made is divided by the total amount of points in the pot, in order to work out the value of one point. Any profit is then paid out in the appropriate ratio.

In the example above, if there was a profit of £240, and there were 12 points in the pot, each point would be worth £20 (£240 divided by 12). If your director had an allocation of two profit points, you’d be due to hand them £40. Repeat this process until all points had been paid.

Don’t forget two important things. Firstly, it’s a good idea to retain some profit points for the company. This will allow you to start building a cash reserve to make more and better funded productions (and therefore more work for professionals that pays better) in the future. Secondly, it means (in combination with running open books and budgets) that you will begin to develop your reputation as a theatre company. As people begin to see that you can be trusted to look out for everyone you work with, and treat them fairly, you’ll get ever more interesting people wanting to work with you.

And that, surely, has got to be better than licking the pink French fancies.

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That’s it folks. Post us your questions below and if you like to have things in hardcopy where there’s loads more info – take  a look at this:

 

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