Author: Eric Hunt, CPA
Jennifer Lopez, Beyoncè, P. Diddy, Ellen DeGeneres, Jessica Alba, Ashton Kutcher George Clooney, Nas…what do all of these folks have in common?
In addition to being world-renowned entertainers, they are also incredibly savvy with their finances. While the media may focus on entertainers who have squandered their riches, there are plenty of examples of entertainers who have played their cards right and created immense wealth.
Whether you’re a dancer, choreographer, musician or other type of performing artist, learning how to manage and grow your money is a skill you will need to master in order to do what you love for the long term and do it at your highest potential.
To get some insights on the money habits of successful entertainers, Money & Mimosas caught up with Eric Hunt.
Hunt is a Los Angeles-based CPA who is also a business manager for some of the top musicians and entertainers in the world. Here are the top seven money habits he sees entertainers develop in order to transition from artist to mogul.
1.Engaged with their finances
Entertainers who are aware of where they stand financially can make informed decisions on what will be their next best move. These include knowing how much they owe on their credit cards, if they have any outstanding invoices, and how much it costs each month to run their business.
2. Organized finances
The first step in mastering your money as an artist is to get everything in one place – that way, it’s a lot easier to know where your stand with your finances. There are a lot of systems out there to help you get organized, and an accountant can help you choose the best one that fits your lifestyle. An organized system will save you a ton of time and allow you to focus more on your craft.
3. Understanding cash flow
As an artist, your business will ebb and flow. Sometimes you’ll be 100 percent booked, but there will also be downtime. It’s important to plan for these downtimes so that you don’t find yourself in stressed out and strapped for cash.
4. Sending professional invoices
Clients want to know that you will take their business seriously. Your invoice is a representation of your professionalism. Artists who send a formal invoice shows the client that you’re serious about your work and it also helps you get paid faster. A win-win!
5. They plan for their future
If your goals include investing, growing your brand, or hiring a team, then you will need to start creating a long-term financial plan for your business. Focusing on the present moment is great too, but carve out some time in your schedule to calculate what you need to do financially in order to take your art to the next level.
6. Hiring a professional to manage your finances
Now, if your friend or cousin is a financial professional then by all means, hire them; however, if they don’t have a financial background then they’re probably not the best fit for the role. Even though they may have your best interest at heart, you will want to work with an expert. Successful entertainers understand that they need to surround themselves with the best. Even if it requires a little up-front investment before the payoff.
7. Develop a brand around your core skill
All successful entertainers create a lifestyle brand and products so that they can monetize their craft outside of the 1:1 work or performances. Whether it is digital programs, events, products, spend some time brainstorming ways you can do this for your brand.
Eric M Hunt, CPA, MST, Founder & CEO of E HUNT CPA, works with Artists and Creative Business Owners. Eric helps his clients grow their businesses beyond their wildest dreams by giving them exactly what they need most: more time to create and do what they do best. Eric has over 20 years of experience in accounting and finance for large firms dealing with mid-size corporations on complex tax and accounting matters. Eric's vast experience and years of training coupled with boutique specialization provide his clients peace of mind and practical wisdom. Practical wisdom is in his blood and he recognized this very early in life. He uses his gift to benefit his clients allowing them to stay in the flow longer, worry-free and inspired to create. When he's not crunching numbers and strategizing, you can find Eric spending time with his family, golfing, or watching a movie.
About Money & Mimosas: Money & Mimosas was started as passion project by Danetha after a brunch with girlfriends. A former NFL Cheerleader and CFO, Danetha and her girlfriends, wanted a resource to learn how to enjoy life while being smart with their money.