We all know that a high percentage of small businesses fail within the first five years. Now imagine trying to start a business in a highly competitive industry with low barriers to entry, where your only product is your comedic skills and the ability to quickly read and respond to your audience before they boo […]
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We all know that a high percentage of small businesses fail within the first five years. Now imagine trying to start a business in a highly competitive industry with low barriers to entry, where your only product is your comedic skills and the ability to quickly read and respond to your audience before they boo you off the stage.
That is what Dan Nainan told me about starting a career as a comedian in New York City. After enrolling in a comedy class for $400, Nainan started hitting open mic nights. After a year of performing for free, he finally earned his first paycheck — a whopping $5. Now a career comedian, Nainan shares his thoughts on how business owners can succeed by understanding their personal and business finances.
Don’t immediately quit your day job
Test the waters while you still have a full-time job and a full-time income. Nainan worked days at his corporate job and spent evenings and weekends experimenting with his comedy routine. He did this for a year until a job change caused him to pursue comedy full time. That year of transition allowed him to perfect his comedy routines while still bringing in a regular paycheck.
Be prepared to devote all free time to your business
How do you find time to start a business when you are working 40-plus hours a week at the job that pays your bills? Give up watching TV and going out on the weekends. According to Nainan, you could find 32-plus hours a week by giving up these two activities and, instead, use that time to start your business venture while you still have a regular paycheck.
Plan ahead for the lean months (or years)
Nainan left a high-paying job with a salary in the low six figures, stock options and full benefits to pursue his passion. Sound familiar? Many small business owners leave successful careers to follow their entrepreneurial dreams. Having a financial nest egg (in Nainan's case, from cashing in his stock options) is imperative to buy the time needed to develop your business, customers and start getting some cash flow. Nainan has been making a living at comedy for four years, but it took an entire year before he made any significant money.
Use low cost, innovative promotion
How do you promote yourself when 1) no one has ever heard of you; and 2) there is a comedian at every club? Nainan was an early adopter of YouTube and used it as a way to show people what he could do. With 1.3 million viewers of one clip alone, YouTube is now responsible for a significant percentage of his bookings.
Find a niche market and embrace it
There might be thousands of comedians in the world, but only a handful have a Japanese mother and an Indian father. Bullied as a child for his mixed background, Nainan never imagined that his heritage would give him an advantage as a comedian. Fortunately for him, Nainan was breaking into the industry at the same time Southern Asia was starting to embrace stand-up comedy. Because of Nainan's ability to find and serve this niche market, he is able to earn more money than more popular, mainstream comedians.
You are never too big to ask for referrals
When was the last time you saw a presenter personally hand out business cards to every single person in the audience? Since referrals are a major source of bookings, Nainan makes sure he thanks each member of the audience as they leave one of his shows. In addition to thanking the person for attending his show, Nainan gives each person his business card and suggests they give him a call if they are looking for an entertainer for other events. Asking for referrals and handing out business cards are easy and inexpensive ways to advertise, especially when you have a captive audience.
Know the standard compensation in your industry
Nainan once received a call from a fellow comedian who had just received his first corporate booking. He told the booking agent that he would accept $500 for the event, which was significantly more than the $75 he received as the headliner at a comedy club. The problem? Corporate events typically pay $5,000 per performance, 10 times more than the comedian quoted the booker. He could have earned significantly more by understanding the different price structures of the industry.
Communicate your value
Emcee, comedian, auctioneer and fundraiser are four skills that Nainan can bring to any event. He promotes that he can handle multiple tasks as a way to get booked and justify his asking price. For a fee of $4,000, Nainan helped raise almost $300,000 during a live fundraising event. He asked for and received an increased rate of $5,000 the next year by reminding the organizers of his success in raising money. The end result? Nainan took home $1,000 more for performing the same tasks and the charity raised almost $700,000, which was a good return on its additional $1,000 expenditure.