Fix Your Finances

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]