|February 26th, 2014|
Attendance at dances fluctuates for all sorts of reasons, which means there's a lot of variability in how much money comes in. Dances usually handle this variability somewhere between two extremes:
- fixed price: the performers (band and caller) are promised a fixed amount. When attendance is high the dance keeps the surplus and saves it to cover the shortfall with future dances with lower attendance.
- percentage: the performers are promised a fraction of the revenue before any expenses.
The model I like best is a hybrid of the "fixed price" and "percentage" approaches. Guarantee the performers a fixed amount and if there's money left over after paying guarantees and fixed expenses give them most of it. A good place to set the guarantee is one where you lose money maybe one in five dances, and then make sure the organization keeps a large enough share of profits that the books balance.
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