99 percent of all statistics only tell 49 percent of the story
Recently, a certain well-known Pay 2 Play website made some changes to their dashboard that now allows you to see your statistics for their site. This includes how many auditions you have submitted, shortlisted auditions, hired jobs, booking ratios and total money earned. This is essential information for you to work out if the site is working for you. I used to do this manually (and still do for other sites) and allows you to work out your earnings on a per hour basis. Have you worked this out lately? Do you know if you are making money or working for proverbial peanuts!
Let’s say that you average 5 minutes on each audition for this site. The site says you have recorded 3,000 auditions in total. That is a total of 3,000 x 5 = 15,000 minutes. 15,000/60 minutes = 250 hours of work. Now how many jobs have been booked over that period? We’ll use 50 as a good number. On average, let’s say you spend 1 hour per job recording and editing. 250 hours + 50 hours = 300 total work. Now, assume the total earnings for this period was $12,000. We can now work out the average hourly wage by dividing earnings $12,000 by hours 300 hours worked to get a rate of $40 per hour. Phew! Sorry about the math. If you read my previous blog “Big Bird was right! Numbers are important.” You would know that I LOVE numbers! And spreadsheets, and business analysis! Sad, I know.
It is ESSENTIAL that you know these types of calculations for all parts of your business. If your calculations show that you only earn $5 per hour, then that is less than minimum wage! What are you doing? Why would anybody work for a rate like that? Most people start their own business so they can have financial and personal independence. $5 an hour aint gonna bank roll that I’m sorry to say.
Knowing your return on investment (ROI) for everything you do is very important. It can be applied to most things. You spent $2,400 on a coach this year and your booking went up by $7,200 over the same period last year. That was a 200% ROI on your coaching. It proves coaching was worth it. You spend $100 per month on Facebook ads. That’s $1,200 over the year. The Facebook ads took you to a stand-alone landing page on your website that you can track. You work out that you earned $600 from the ads. Your ROI was -50%. Not good. This showed you that Facebook ads weren’t worth it.
Numbers show you what works and what doesn’t work. They don’t lie. They have no emotion and shouldn’t trick you in to doing things that you shouldn’t. If you keep on top of them they can make your business more profitable and that allows you to spend more time on your passion. That is the end game. To make this a career that you can do for the rest of your life that can sustain a standard of living that you have chosen. Or you can choose to hang around the Texas Roadhouse dumpster and eat as many proverbial peanuts as you like!