Dispersing Risk

Insurance is another method to reduce risk to a company. Record labels and acting agencies benefit from a type of insurance. Though diversifying investments, it is a method of raising money from a collection of people, so money is available to assist someone who is part of the group.

Not every record label or acting agency utilizes types of insuring their company will stay in business; however, it is a worthwhile idea. Believing in honesty, Business Owner's should represent themselves in a trustworthy mannerism. Advertisement for Talent Managers, though a Booking Agency, gets causes people to mistrust talent management companies.

For example, people with talent and interest in music audition for a record label. The record label wants to make money to stay in business and fulfill obligations to music purchasable in the market. There are only so many people who audition and the person hiring knows the Band has a chance of succeeding.

For Bands to succeed, they need promotional fliers and music. They will need access to a recording studio and other equipment to perform and make money. They make money by selling music, tickets to concerts and other miscellaneous items.

Knowing some people in local bands, Bands have to afford expenses. This includes fliers, music, booking a venue and travel expenses. They might schedule a vacation to surrounding states and decide it is a business trip.

They risk losing money when buying a hundred compact discs to sell at live gigs. They might not be able to schedule a live gig. Before performing live, they have to buy equipment. Equipment includes sound boards, guitars, microphones, drums and amplifiers. The club, bar or gazebo provides lighting. There are several expenses before auditioning for a Talent Manager.

Hypothetically, they decide to promote themselves. They need demo music to audition for local clubs. They must choose between paying for studio time or paying for space at a venue to make money as Musicians. They could try both. It is a few hundred for studio time or booking a venue stage. They will also need marketing fliers.

This is the job of the record company or Manager. They organize events. Managers should be able to make decisions and purchases in a concise mannerism after successfully promoting a Band. They know what music Club Owner's prefers and a reputation for hiring excellent Musicians assists in being able to knowing about more gigs.

Perhaps the Talent Manager knows performing live first is better for gaining a reputation. They might find that it is important to have music available before scheduling live gigs. They might know preliminary live shows do not sell compacts disks, so they will wait to buy compact disks.

It is a serious job and people want to work with excellent Talent Managers. It is a relief not having to worry about the financial side of music or acting; however, promoting Talent with their money or loans is expensive. They want to make money back quickly or only spend money on functional cost, such as: heating, cooling and office space.

There is a limit it how much money is spendable on each venture. This means collecting money from Potential Talent. Managers might say the act is not ready and recommend classes. They are really saying, "I am not sure your will generate income after paying for everything."

With this in mind, there is also a method to knowing if it is a good audition. Acting agencies are notorious for being superficially nice to people. They do not want to hurt anyone's feelings. There is also a additional layer of placing people into the category they feel is "best for them right now."

There are a few Actors that walk in for an audition and the Manager knows it will be worthwhile to pay for photos, composition cards, photography time and travel. They might pay for free training. Then there is another tier of Talent. The Agent knows they have potential, yet are only willing to pay for some things. The Talent will have to pay the Photographer, yet the Manager pays for copies. The Agent pays for Travel. The Talent pays for acting workshops. There is belief in their Talent. The Manager wants to reduce risk on the venture.

There is a Talent Manager who people question their validity. The Manager has the ability to book Talent, yet they will not pay for anything. They help everyone; however, they offer workshops and connections to Photographers. There is a requirement for everyone to take expensive classes and then they have another audition to decide if they will send Talent to auditions. It is equal treatment for everyone; except, the method for earning money to pay off classes is only available to anyone who is sent to auditions and books shows.

They are not actually dishonest, yet how much would a person pay for their classes. They give everyone an opportunity, yet only some will be sent on audition. This means Talent is not paying for classes to prepare them for an acting or modeling career. This is a dispersal of fund raising across several people, so someone in the group benefits when needing money.

Another method to reduce risk is to only work with Talent they believe will earn money through booking gigs. Everyone else is given a referral to an music or acting school. This an honest business approach and how many people believe businesses function. If the school is a subsidiary or franchise of their company then it is actually a method of insurance. The school might generate a profit.

Franchises use this method to stay in business. Someone buys a franchise. They no longer worry as much about success or failure. If one location is not earning a profit, another franchise is making enough money to balance gains and losses. They remove risk of going into debt for millions of dollars.

This is essentially Bands, Actors and Actresses in the other hypothetical model. Five Bands apply. One is fabulous at selling tickets to shows Three breakeven and one sells three tickets to friends. With five Marketable Bands, they might breakeven. The Band who does well on their own makes an additional amount of money. The Bands that breakeven are able to perform again to see if they make more money. The Unpopular Band may try again, yet they must breakeven to continue with the record label.

It seems harsh, yet Talent does not risk thousands of dollars debt, because risk is offset through the agency. Instead, they take personal risks of rejection and loss of some money. It is a good opportunity to assess how much money is being spent in relation to one person's opinion.

The dispersion of risk across a greater number of people in generating revenue makes it possible to stay in business. People complain about fees. They believe they will be successful if given an opportunity. Truthfully, they might make a lot of money. They could lose a lot of money. Even if becoming a Winner after finding a Manager, it is better to feel good about helping everyone. The idea of bankruptcy is prohibitive.

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