[00:00:00] Welcome to episode 129 of the Bandhive podcast. It is time for another episode of the Bandhive podcast. My name is James Cross and I help independent artists tour smart today in touring, we are going to talk about tour budgeting.

And let me just say, there are several reasons why it's important and you should not underestimate any single one of these reasons. I see so many artists go into a tour without creating a budget, and then they end up hundreds or even thousands of dollars in the hole paying out of pocket because they overspent or they just don't realize how much they're spending and have no clue.

I remember one time I worked with an artist and I was tour managing just a weekend tour for them. And at the end of the tour, I crunched all the numbers and told them, Hey, we made a profit and they were floored. And. Is this the first time you made a profit.

And they said something that really shook me to my core, which was, we don't know, we've never tracked our expenses and [00:01:00] income before. Now. Those might not be their exact words. This was almost a decade ago, but point being a lot of artists don't keep track of their finances, which is really unfortunate because a lot of times you can use this as a tax.

Write off. Now don't take this as tax or legal advice, ask a CPA to be. But in many cases, this is a business expense and you can use that as a write-off. So when you're going out on the road, make sure to keep your seats, track your expenses. And even if it's not possible to write it off, guess what? At least, you know, if you broke even on that tour or if you lost.

So it's really important to create a budget in advance of your tour this lets you see how much you can reasonably expect to spend on that tour. So if you determine, Hey, we're going to be spending about $300 a day and it's a five day tour, okay. We need $1,500 to make sure we can get through this tour.

By putting this budget into place before you hit the road, [00:02:00] you make sure first that you have enough money to cover the tourist. So you don't have to go home halfway through because you ran out of money and it also makes sure that you don't overspend beyond your means.

And this happens to artists at any level, you know, about a decade ago, there was this huge thing that lady Gaga had spent more money on her tour than she had earned, which I'm sure her tour manager had a budget in there, but she was overspending. And I guess the tour manager didn't put their foot down and say, no, we can't do this.

You're going to lose it. The next thing that having a budget does is it shows people who are interested in working with you, that you take the band seriously and you're worth investing in. So for example, in this case, if there's a potential management situation coming in, well, they might ask what do you earn on your tours?

And if you can, within five minutes, say here's the spreadsheet from our last tour that shows our expenses in our. They're gonna say, great, you understand what you're doing? But if you say, oh, we have no idea. They might look at that as a red flag and say they don't take their business seriously. [00:03:00] Let's maybe reconsider working with them.

so you want to be sure that you track everything as closely as possible and be analytical about it. Anything to do with your business. And as I always say, a band is a business. You have to look at it with the analytical mindset that a business owner would look at it.

music is all about emotion, but the business side of things is all about numbers. And if you're constantly losing money, that's not a business. That's a hobby. That's like the legal definition of, I think it's three years. The IRS says, if you lose money three years in a row, then it's not a business.

It's a. this means that you need to be sure that you are earning money in some way. you want to look at all the numbers for your band, track, those expenses, track the income and see where you're at. So you have a snapshot of how you're doing. now let's discuss what goes into a DIY budget.

This is for a DIY tour. Now a lot of you will probably disagree with me here because I do like to budget on the high end and [00:04:00] ideally the budget comes in lower, but if it doesn't, we have a bit of a surplus. The other thing is that these numbers are for an artist who's just barely starting out. If you are a more established artist, these numbers, some of them will go up.

I'm also basing this on a four piece band. So if your band is a different size, you might need to adjust a little bit. There are eight basic categories that I put into a DIY budget, promotions, vehicle, tolls, parking meals, hotels, and miscellaneous. Now there's one other one that we'll discuss at the end that might go in there. But for the most part, those eight are the main ones that I see a DIY band spending on. Now, miscellaneous is kind of all encompassing for anything that doesn't fit into another category, but we'll get to that MPA.

The first thing is promotions. I budget $25 per show. This includes anything from digital marketing to printing up flyers and mailing them to the venue for them to put up in there. Now [00:05:00] $25, depending on who you are is not a lot of money for promotion. If you're expecting to sell 50 to a hundred tickets, $25 is nothing $25 to just the absolute minimum I would spend on promotion.

If you're expecting, you know, zero to five people to show up. Because if you think about it, $25, doesn't go very far. If you're printing and mailing posters, that's 10 to $15 easily, right? They're leaving you maybe $10 for digital marketing.

That's not to say $25 is nothing, but it is the bare minimum. And if you are playing to larger audiences, you will want to up this budget to 50 or even a hundred dollars per. The next thing is your vehicle. If you own it, that's easy. I just tend to put aside $20 a day for any incidental expenses, things like windshield wipers or adding oil, windshield washer fluid.

Maybe you want to get the van washed and detailed, that kind of stuff. Just put aside $20 a day when you're on the road. However, if you rent the van, then [00:06:00] you're going to look at the actual rent cost plus $20 per day for those same incidental expenses in case the rental company, doesn't cover them. Now, keep in mind that the actual rental cost, depending on who you rent from might include a mileage fee.

So be sure to find out if that rental has a mileage cap per day, or if you're. in any way based on your mileage. Cause you don't want that to be a nasty surprise when you take the van back and they say, oh yeah, it's going to be an extra $700 for the mileage you drove.

That is never fun. You always need to find out about that in advance. After vehicle, the next thing is fuel. I do not count fuel in the vehicle expenses because it's quite a bit different and there is a mathematical formula involved. How you do that is you take the number of miles you have planned for your tour and divide that by the vans miles per gallon.

And this equals the number of gallons. Then I multiply that by the current gas price. That's average for the areas I'm going to be playing in. Now, one thing that I do is I add 50 cents per gallon as a [00:07:00] margin to that gas price, which most of the time means I have a good surplus. However, if I had been planning a tour in January of 2022, and then going on that tour in April, That kind of time of 20, 22.

I would not have had enough surplus because gas prices went up probably about a dollar to a dollar 50 on average in the U S so that would have not been great. Now, if you're listening from the same part of the world, where they use leaders, instead of gallons, you can do the same formula. You're just going to take your kilometers planned and divide that by the kilometers per liter. And this is going to tell you how many liters you need, and then you can multiply that by the gas price, same basic formula.

You just swap out the units that you're using. next up is toll is which I budget flat rate at $10 per day. A lot of places you aren't going to have tolls. And then some places you're going to have really expensive tools, especially if your van has commercial plates, or if you're [00:08:00] telling a trailer, you might be looking at ridiculously steep tolls in certain areas.

For example, if you're crossing bridges or going through tunnels in the New York area that gets ridiculously expensive. So, if you are going through a major city with tools like that, maybe look up in advance, what it's going to cost you. And for that day budget, the actual amount, and then for any other day, just budget $10 in general.

And if you don't spend money on tools that day, great. If you do, oh, well you had $10 budgeted for it. And the other days can also help kind of balance that out If you don't have tolls on one day, but then the next day you have $20 and tolls.

Well, guess what? You had $20 in your budget from those two days. It all kind of evens out After toll is closely related, comes parking. Similarly here, I just do $10 a day. Some places you'll have to pay for parking. Some places you won't, it will all even out. Although if you are playing mainly larger cities, you're going to have to pay for parking more often than not.

So in that case, I would recommend upping this to 20 or maybe even $30 depending on the cities you're playing. And what area of those [00:09:00] cities you're playing. After that comes meals, everybody's got to eat a lot of independent artists just don't pay for food, which I think is not the right way to go. You want to make sure your people are well fed because then they'll play a better show. So if they're not worrying about money, that's great. I generally start with $20 per person per day. So if you have a four piece. $80 per day on meals.

And you're not going to actually like use the band card to pay for this. You're going to give what's called a per diem. So you get cash. If it's $20, it's $140 a week. And at the start of the first day of tour, you say, here's your first weeks per diem. And you get them to sign a little slip that says you paid them this, because that way you have it for your accountant and they can decide if it's right off.

You do this for every person. And if you're touring longer than a week, you do this again on the same day, each week until the end of the tour. Whereas, you know, if the last week is not quite a full week, then you just deduct the amount and calculate it based on the number of days. But in general, you just say, [00:10:00] here's the cash.

Thanks for signing. Cool. We're done. That's your food money for the week. Don't spend it all in one place. After meals comes hotels, you can go dirt cheap at a $60 motel room for two people per night, or you can get something nicer. So let's say you do go dirt cheap. You'd need two rooms, cause you're a four piece. So that would bring you up to one 20. And you know, it really depends. Like if you're in a sketchy area, you're not going to sleep while you're going to be worried about the gear and the van or the trailer getting broken into all that kind of stuff.

Sometimes it pays to. Not be standing. And if you can afford it, spend a little more, or you can also get Airbnbs or crash with people who you may or may not know. It all depends on your touring style and what you want to do. Although, one thing I would suggest is if you're going to crash with people, make sure that they are being a little COVID safe because the last thing you want to have happen is catch COVID on tour and have to scrap the whole tour.

That's never a good thing Last, but not least miscellaneous. I budget $25 a day for anything unexpected that comes up, this can really be anything that's not in the other [00:11:00] seven categories. For example, one tour, I did, we bought some two-way radios because we were driving a really old van that didn't have a backup camera.

So we got those radios and it made backing up into parking spaces and venues so much easier.

Plus we always had two way communications. If somebody was loading the van, we could radio and I'd say, okay, bring this out next. And the rest of the crew, or w really the band would bring it out. And that way we had the van loaded in the exact order we want. And we didn't forget anything either because there was always one person on the checklist and another person with a radio. So the coordination, there was a lot easier than it would have been if we didn't have that.

One last expense is if needed, you could have crew members or additional touring band mates. Now it really depends on your needs as an artist. If you're a solo artist and you want a band. Yeah. You're probably going to have to pay your band mates because what are they getting from playing those shows for you?

Nothing really like you're the solo artists. They're just playing there. So you probably need to pay them, but that all depends on what you actually pay [00:12:00] them. It can really vary. Generally. I wouldn't pay anyone less than $50 per show, which is far below minimum wage, but unfortunately that's the reality of the music business.

A lot of people will play a show for $50. Ideally you're probably looking at more like a hundred to 200 or more per day for your crew and bandmates, especially if it's a safety critical crew member, like a driver, you want to make sure they are well paid and that they also get plenty of rest, which means getting day rooms in a hotel for them so they can sleep while you're loading in and playing the show and all that.

And then they come pick you up at the end of the night

That's the basic basic budget I would put together for an independent tour playing venues anywhere from, you know, 30 to 50 cap to up to two 50 or 300, probably once you get to that two 50 or 300 cap, you're probably going to be looking at crew in which case you're going to have to factor in more hotel rooms, extra meal expenses. And of course, the payment for the crew themselves. Once you've put together your budget. These numbers can [00:13:00] tell you a lot. Basically you can see your average daily budget. You can see what those costs are going to be, and then you can see how much it's going to cost you for a five day tour, a 10 day tour or a 15 day.

Or just, you know, whatever number of days you're doing and that way you can estimate how long you can actually go on the road for, because you know, this is the amount of money we can spend. This is what it's going to cost us per day. So you put those two together and this is how long we can hit the road.

that way, you know, you're going to be able to cover all of your expenses. now, one thing to note is that this is the worst case scenario where you don't earn anything from the shows you're playing. Ideally your earnings from each show, whether it's ticket sales or Merck or guarantees or whatever, will help you to get close to breaking even with your daily expenses or maybe even earn a profit.

It really depends on how you manage your. no matter what you do, look at your average daily expenses as an income goal. Realistically, you probably [00:14:00] won't hit that goal unless you're selling a good amount of tickets or emerge each night, but it is something to look into because if you can hit that goal, that means that you're breaking.

Even now, there are a few apps that I recommend for budgeting and accounting One of them is free. The other two are not, but either way, if you take your band seriously, you should look into these apps. The first one is called, why NAB? It stands for you need a budget. It's an amazing app that has, I've been using it for like two years now.

And I'm so much less stressed about money. It's absolutely amazing. And it has also really helped me grow my savings, which a band should also have savings. If you're a business, you should have some businesses. That aside, why not? I can help you set money into different categories for your spending. So you could have a recording budget.

You could have a touring budget, you could have a marketing budget. All of these things, it's split up and you can use it for business. I use why NAB on one side for the business and one side for my personal finances. And it works really well. However, [00:15:00] why that is not an accounting app. It is purely a budgeting app for an accounting app.

You're going to want something like wave apps, wave apps, you know, I'll be honest. It is not the best accounting app out there, but it is free. So if you're just starting out, wave apps is the way to go because it beats the hell out of paying $45 a month or whatever it is for QuickBooks. And you just, you don't need that.

If you're just starting out that complexity is too much, you can just go with the wave apps and that will be totally fine. The last tool is the Bandhive tour sheet, which is the sheet that I use for tour management myself. It lets you budget out and plan a 15 day DIY tour and it crunches most of the numbers for you.

Basically all of them, really, all you have to do is put in your raw data and it will calculate your gas costs. You put in the numbers you want to budget each day. The other categories and it does all the work for you. It's really amazing. And it helps you keep track of where you are. There's also a gear manifest.

So if worst comes to worst and your stuff gets stolen or [00:16:00] destroyed in some way, you have that information to pass on to the authorities or your insurance company. it makes it really easy to go on tour as an independent artist and understand where you are each step of the way.

So you can get an accurate picture of your finances and your tour, that tour sheet is available as part of my new course called road ready, which is designed to help you book more shows, get paid and to love your next tour. So if that sounds like something you want to do feel free to head on over to Bandhive.rocks/roadready to learn more again, that's Bandhive.rocks/roadready.

that does it for this episode of the Bandhive podcast. Thank you so much for tuning in and listening.

I really appreciate it. I hope that this episode it gave you some insights into tour budgeting. If you have any questions, please head on over to our Facebook group. You can find it by searching for Bandhive on Facebook, or by going to Bandhive.rocks/group, where you will find a thread for this episode.

And you can ask any questions. There also do keep in [00:17:00] mind that road ready is available now. So like I mentioned in the episode, if you want to learn how to book more shows, get paid and love your next tour. Head on over to . Bandhive.rocks/roadready. we'll be back with another new episode next Tuesday at 6:00 AM Eastern right here in your favorite podcast app until then. I hope you have a great week stay safe. And of course, as always, keep rockin'.