Monetization Efforts

Growing Your Podcast

Boost Your Podcast Monetization With A Business Manager

Congrats! Your podcast is starting to earn real money. Or has the promise of doing so. Before you rush to hire for a sales or content position, consider picking up a business manager first.

September 29, 2020

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Pre-dating and parallel to the 16 years I’ve been in the business of podcasting are the 20+ years I’ve been in the business of business operations. Today I'm going to blend those two worlds of mine together and explain to you why your podcast (and my podcast) needs a business manager.

You probably can think of several successful podcasters who don’t have a business manager. And while those certainly exist, I posit to you that you may not have a complete understanding of the inner-workings of successful podcasts. Many of them, if not most, do have busy business managers behind the scenes.

In the simplest of terms, a business manager's job is to keep an eye on the business of the podcast, allowing the content creator to dedicate more time to making great content. In reality, a successful podcast often takes lots of people working in these roles and more. But let’s stay focused on this somewhat artificial division of labor to illustrate the need for and function of a podcast’s business manager.

We don’t often hear stories from the business managers of podcasts, because they don’t have the sexiest of jobs. But it’s not an exaggeration to say they have some of the most important jobs. For example: ensuring the podcast business itself grows. That means monetization, which likely has its fingers in lots of other pies that make the podcast go.

And not just the podcast. But the podcast as a business.

If You Treat Your Podcast Like A Business, Your Podcast Needs A Business Manager

Podcasters often speak of “monetization” as if it was the end goal. I assure you it is not. However, podcast business managers do care about money. Because without money, they don’t have a podcast business to manage.

The first thing a business manager needs to understand is the profit stream of the podcast. Of course, they don’t use that term either. Instead, business managers use the terms income and expenses. Profit (or loss) is the difference between income and expenses. And profits are what businesses often use to facilitate growth.

But it’s more complicated than simple addition. To really understand income and expenses, your podcast’s business manager will need to do two things you probably don’t want to do: categorize and forecast. Both have to be done in conjunction with one another. It’s not enough to know how much money the podcast makes from advertising and how much is spent on freelancers. Planning for growth requires some insight into how much money the podcast will make from advertising and how much the podcast will spend on freelancers over the next three months, by way of example.

Understanding the money flowing in and out by category over the next few months allows you and your podcast’s business manager to put together a plan for growing the business. While it’s true that some businesses (and podcasts) stumble onto success, most find even more success when they start looking at the underlying operations of the business. And that’s what I’m advocating you do for your podcast now.

Business Managers Can Uncover More Money For Your Podcast

Don’t think business managers are bean-counters only. Armed with solid financial projections, a good business manager for a podcast will seek out opportunities. Income opportunities, obviously. Podcast advertising income is one area where your podcast’s business manager should have a lot of input. The same goes for licensing, merchandising, paid gigs, direct listener support, sponsorship… the full gamut. Whatever your podcast’s income streams are, the business manager’s job is to point out ways teach stream ca be optimized or grown.

But the business manager will also seek out additional opportunities for income. Perhaps it makes sense to increase the number of episodes if they can project an increase in ad revenue. Perhaps elements of your production process would be in demand from other shows, opening up a nicely profitable income stream to fuel other activities. A good business manager is always looking for new income streams based on activities the company is already doing.

Business Managers Can Spend More Money More Wisely

Because they are tuned in to not only the income potential but also the corresponding expenses with a given income bucket, business managers can help the podcast stay focused on the most profitable activities. It’s easy to be tempted by a big paycheck, but it sucks with the bills associated with that fat check come due. If you haven’t adequately planned for them, that is.

Increasing expenses sound scary, but isn’t. You’ve probably heard the old adage “You gotta spend money to make money”, right? To truly take advantage of some of those uncovered opportunities, your podcast studio might need an upgrade. That costs money. To get more opportunities, you might need to spend money on a marketing campaign to raise the awareness of your podcast or your services. That also costs money.

Maybe your website needs a complete and total overhaul. Maybe there's an opportunity for you to travel (when we can travel once again) to events. All of those things cost money, and the business manager of your podcast can tell you not only if you can afford to do it, but help you project the income that needs to come out of the other end to make it worth the expense.

That's oftentimes not the kind of thinking most creative types enjoy. So again: you need a business manager for your podcast.

Paying For A Business Manager For Your Podcast

I don’t know of many pro bono business managers out there. This isn’t the kind of job you hop on Upwork to fill either. If you’re serious about treating your podcast as a business, you need to get someone on board who is a serious business manager. A job for which they will require compensation.

If your podcasting is doing well enough that it covers all expenses and allows you to pay yourself a handsome wage, then your best course of action might be simply hiring a business manager. Make it a paid position, complete with a salary. If that eats into your own compensation, so be it. You’re making a bet, but you’re stacking the deck by adding in someone with a solid business acumen who’ll help make a plan to significantly grow your podcast-based business in a relatively short time frame.

But if you're like most podcasters who aren’t rolling in stacks of sweet, sweet cash, you can’t afford to pay a business manager. In that case, your best course of action is bringing the business manager on as a partner. Yes, your partner is going to own a portion of your podcasting business. That's their compensation.

So how much ownership you should give up? I can’t tell you the right answer, but I can give you some “what if” scenarios to help.

I often see 10% ownership as initial offers. Is that a good deal? Well, go back to my “handsome wage” comment earlier, because that’s what a good business manager wants as well. Many podcasters would be quite happy to see $100,000 leftover in their bank account at the end of the year after all expenses were paid. 10% of that is $10K, which is a long way from a handsome wage, wouldn’t you say? Especially for your partner who’s responsible for running the business-side of your podcasting empire.

That’s why 40 - 50% ownership is not an uncommon deal. Make it 49% if you want to maintain majority control, that’s fine. Whatever number you choose, make sure it makes sense for both of you.

If the opportunity is really there to seriously boost your podcast’s monetization and make it a true going concern, it’s probably worth it.

Speaking things that are worth money, you can show me your support of the content I make for you every day by going to BuyMeACoffee.com/EvoTerra. Thanks in advance!

Have you discovered any new podcasts recently? If so, would you take a moment to send that podcaster a personalized note letting them know about Podcast Pontifications? Word of mouth is the only way this show reaches new people, so why not share it with someone brand new to podcasting? You want their podcast to be better, right? Me too.

I shall be back tomorrow with yet another Podcast Pontifications.

Cheers!

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Podcast Pontifications is written and narrated by Evo Terra. He’s on a mission to make podcasting better. Allie Press proofed the copy, corrected the transcript, and edited the video. Podcast Pontifications is a production of Simpler Media.

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PPS3E40 Boost Your Podcast Monetization With A Business Manager - Transcript

[00:00:00] Congrats, your podcast is starting to earn real money or at least has the promise of doing so before you rush to hire a sales or content position, consider picking up a business manager first.

Hello and welcome to another podcast. Pontifications with me, Evo, Tara. You know this because I have said it many times, but parallel to the 16 years I [00:00:30] have been working in podcasting. I've been in business operations actually a little longer than that. More than 20 years business operations. And today on the program, I'm going to blend those two worlds together.

As I talk about the need for your podcast, honestly, my podcast to have a business manager. And what do I mean by a business manager? And why would you actually, we want a business manager, there are several successful podcasters. You [00:01:00] might be saying right now to yourself who don't have business managers.

Why would I know? Well, yeah, business manager's job is to keep an eye on the business while the content creators job is to keep an eye on the content. I got to work hand in hand. With one another. And we'll talk about that a little bit more in a moment, but having a business manager allows you to stay focused on the things that got you into podcasting and the first place, making amazing content, whether you're the person behind the microphone or whether the person behind the [00:01:30] scenes, a podcast needs lots of people, as you know.

And one of the more often neglected positions is one of business managers, someone who is responsible for making sure that the. Show itself grows and more importantly, monetization happens. How does it get paid for really a business manager's primary goal for a podcast and really any business. But when you bring someone on who's [00:02:00] job, it is to manage the business.

They've a primary goal. Primary goal. First off, when they just get into a company that's never had a business manager before an organization, an entity that's never had a business manager before. The first thing a business or business manager needs to do is understand the profit stream. They need to understand what your income and expenses look like for the podcast, [00:02:30] wherever the money comes from doesn't really matter, but they need to look at where the money's coming in, how the money's coming in, how much money is coming in, and then where money is flowing out.

All the expenses that have to be paid that need to be paid. That really should be paid to grow. They need to look at that, but it's not just one static picture. The hardest part of this is coming up with projections, projections for both the income and the expenses every single month. So they can start to [00:03:00] put together a plan.

Look, your business podcast, your podcast business, isn't going to grow unless you understand the plan. Once you understand the income, the flow, you got to have a way to get it done. So again, their primary goal is to really understand the stream of profits and expenses. Income back and forth really has income expenses equals profits or losses.

First now, after that, once they have a handle on what the profit stream looks like, the next thing that they're going to do is look for [00:03:30] opportunities. Now. Yes, clearly that's opportunities to increase the income that is coming in. Now that could be a lot of ways. Income might come into a podcast. Maybe you do run advertising on a podcast.

Okay. A good business manager will look at ways to increase the income coming in from advertising. Maybe you're doing some licensing deals. I'm not really how that actually works. Maybe you're selling t-shirts. Maybe you go to different conferences and act as an MC, you find your business manager will [00:04:00] help.

Once they understand the profit flow, help find ways to boost that income stream sponsorship, who knows whatever the incomes are, looking at, whatever the income streams are. They will look at them to find ways to increase those. They will also find ways to increase opportunities. To make an account. So that's a little different than increasing income opportunities to increase income might come from the fact that maybe you need more episodes.

If you're [00:04:30] selling ads, more inventory is available to you. That's helpful. Maybe it's more services that your podcast produces. Maybe you're doing podcasting for other people. Maybe you have a side business that comes out of all the things that you've done. How could you increase that? If there's a revenue stream attached to it?

Look, it's all about what's profitable. The other thing that the business manager to look at with these dreams is which one of these areas is most profitable. Where's the right market fit for the new things [00:05:00] that we're doing, how to, how can all this work? So one, they want to look at the ways to increase income and opportunities for income, but then they also look at ways to increase expenses.

Now, wait a minute, you're saying, why would you want to increase expenses? Well, it's the old saying you gotta spend money to make money. You might need new equipment like software that makes you much more efficient. You might need to spend money on a marketing campaign to raise the awareness of your show or [00:05:30] your services so that you get more businesses, more business flowing in.

Maybe your website needs a complete and total overhaul who knows. Maybe there's opportunity for you to do some networking events, which means travel when we can travel once again to various conferences and getting on stage, that's an increased expense, but that increased expense, because this person's a business manager is going to track right back to the projections they have for income.

And that's harder for creative types [00:06:00] to do now. Yes. As a matter of fact, this is going to increase your overhead. You might be thinking, but I think it's really increasing overhead in a good way. And not just because at night it makes for a nice division of labor. Look, you're, you're the talent. If in fact you are the talent, you, you, you have the show, you still own the show.

You will talk about ownership and you have a second. It's all your vision. You're gonna execute against that. But you just get to make the show where you compartmentalize all those businessy pieces and put it on [00:06:30] someone else's plate. Now the real tricky thing about this is figuring out what, how I guess is a better way to say how you should compensate this business manager.

I think it works like this. If you're making enough money with your podcast or from your podcast to pay yourself a handsome wage, after all expenses have been covered, let's not do any funny accounting processes [00:07:00] here. If you're making enough money to pay yourself a very handsome wage, then you probably should just simply hire a business manager.

It's a paid position, give someone a salary, bring them in as an employee. But if you're not there, like a lot of podcasters, most podcasters aren't there. Then you might need actually a business partner not hiring for the position, but actually bringing on a partner. [00:07:30] And that partner is going to own a portion of your podcasting business.

That's their compensation, a part ownership. Now how much ownership do you, you want to give them? That's a difficult for me to tell you to do. You're probably thinking, well, I'll give somebody like 10%. Okay. Well, let's think about that. Going back to the handsome wage, let's say that you've got a hundred thousand dollars of leftover money at the end of the year.

From your podcast. That'd be great. After all expenses have been [00:08:00] paid, 10% of a hundred grant is only $10,000. Now I know I just said only $10,000, but for the year for a business partner, for someone who's going to run the operations of your, of your show while you're making great content, just not enough, 40% is not uncommon, 50% making it a true partnership or 49 51.

If you want to maintain control, not uncommon, but. If the opportunity is really [00:08:30] there to seriously grow your show and boost podcast monetization to make this a true going concern. You know, maybe it's worth it. Maybe it's worth it. Before I go check out, buy me a coffee.com/evo Terra. That'd be very helpful.

It shows me your support. And also, have you discovered any new podcasts recently? If so, do me a favor. For the new podcast, you've just discovered, would you take a moment and send that [00:09:00] podcaster or that podcast company, a note letting them know about podcast? Pontifications that's the only way the show grows is when podcasters share it with other podcasters.

So why not share it with someone brand new? You want their show, their podcast to be better, to write quite helpful. That's it enjoy the rest of your day? I shall be back tomorrow with yet another podcast. Pontifications cheers.

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