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.