Go Ahead and Start Your New Company. But.

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One of the earliest flyers from my company. This was 1997. We did a series of 10 minute plays called “Impact Briefs” for 9 seasons. Pictured are Charlie Marenghi, Alex Pearlstein, Tonya Sutherland, and Christopher Morrison, all of whom were acting, writing, and/or directing.

So you want to start a theatre company. My first bit of advice: don’t. It’s insanely difficult. Undeterred? OK. Here are some things you need to know.

1. Vision and Mission. I know this sounds like the title of an insufferable U2 album, but actually, they’re the two most important things to have in place when starting a company. Why are you starting your own company? What do you want to say, and to whom do you want to say it? What kind of art do you want to make? What’s your aesthetic? These are the questions that will, I promise you, make or break your company. Companies without a clear vision and a clear mission are doomed to fail. I’ve been joking for over a decade that every new company destined to fail begins with either Danny and the Deep Blue Sea or The Marriage of Bette and Boo. For some reason I’ve never entirely figured out, I’ve seen dozens of companies begin with one of these two. Literally dozens. If you’re starting your company with such a well-worn play, it says to me that you have nothing interesting to say, let alone any idea to whom you want to say it. If you have an interesting new take on one of these plays, commenting on its position in the canon or using the play to make a larger point, that changes everything. If you’re just doing the play because it’s cheap (small cast, small set) and you want to act in it, then you need to have a long chat with yourself and all your stakeholders about what your company is all about, because I guarantee you, you don’t know. If you figure it out, clarify your mission, your vision, and your voice, you can succeed. If you don’t, you’re not going to make it. It’s tough enough to make it with a clear vision; it’s impossible to make it without.

One of the most successful plays we've ever done, both artistically and financially, 2005. Our lesbian Othello. Pictured is Desdemona, played by Marissa Keltie, and Othello, played by Skyler Cooper.

One of the most successful plays we’ve ever done, both artistically and financially. Our 2005 lesbian Othello. I was blindsided by how popular this production was. I never expected it to be such a runaway hit. Pictured is Desdemona, played by Marissa Keltie, and Othello, played by Skyler Cooper. Picture by Cheshire Isaacs.

2. Money. You have two choices: incorporate as a for-profit, which means you cannot qualify for grants and donations you receive aren’t tax-deductible, or go nonprofit, which means you will eventually qualify for grants and all donations you receive are tax-deductible. For-profit companies pay income taxes on their income; nonprofit companies do not. For-profit companies exist for one reason: to return profits to owners and investors. A successful for-profit company puts moneymaking at the center of most decisions. A nonprofit company exists as a public entity, governed by a board of directors, owned by no one, with profits going directly back into the business, ostensibly putting the public good at the center of most decisions. A for-profit company exists to make money. A nonprofit company exists to make art. A for-profit company makes money with their art, which dramatically impacts the art they choose to do– they’re only going to choose the kinds of shows they are reasonably sure will be popular and profitable. A nonprofit company, in theory, is supposed to be wholly divorced from the need to make a profit through their ability to receive grants and donations, making productions that may not be popular but further the art form, foster new voices, create a space for experimentation, and serve as a space for exploration of new ideas both in the art form and in the culture. In theory. In practice, the larger a company gets, the more money it needs, and the more blurred those lines become. Not legally, of course– legally, they are entirely separate entities– but in practice, particularly in season planning, the lines can get blurry.

A few years ago, Rebecca Novick wrote a fantastic article called “Please, Don’t Start a Theatre Company.” Provocatively (and somewhat misleadingly) titled, the article is a brilliant examination of the instability of the nonprofit model. I recommend that you read it, no matter where you are in your process, as it contains a great deal of hard, necessary truths. But if you’re feeling tl;dr today: There’s not enough funding to go around, so let’s think up different models than the traditional nonprofit one. The big theatres have sucked up all the grant money so fund your company differently, and worry less about structure and more about supporting the artists.

Of course it begs the question– how do you support your artists without structure? Your only two choices are selling stuff (show tickets, classes, merchandise) or getting stuff (grants and donations), both of which require structure in practice and by law. She advises new companies to make a “new model.” Her examples include a company that funds their personnel through a hit late night show (as if one could plan for that); a company that got money from somewhere unstated (but certainly traditional– grants, sales, donations) and uses it to pay artists, then uses those artists as admin staff as needed (which of course is the model most small theatres already use); and companies that fund their work through selling non-production-related things such as classes and CDs. While many companies offer classes, selling merchandise is a commercial enterprise that requires a great deal of support, both legal and practical (not to mention the fact that no one on earth is going to buy your CD). Here’s my point: When such a brilliant and experienced theatremaker elucidates the problems perfectly but presents solutions that are so deeply flawed, it exemplifies the difficulty of the situation we’re in. Whether or not her solutions are flawed, her analysis of the funding problems we all face are absolutely, undeniably true, and something you should take into serious consideration.

The takeaway here for someone starting a new company is that the nonprofit funding model is broken because there are too many companies competing for funding already, and your new company will only survive if you can produce on a shoestring, if you’re lucky enough to have a long-running hit show (and a place to house it), and/or if you have an extraordinary amount of free time to manage whatever non-production-related thing you’re selling to support your theatre, plus the enormous good luck to capture enough market share to make that profitable in an economy where small businesses go under every day.

Personally, I’d love to see funders stop giving almost all their money to a handful of behemoths and start peeling off a more meaningful percentage to smaller companies. Novick does chastise funders for requiring a minimum budget– the most common is 100K minimum annual budget for grants for “small companies”– and she goes on to say, “requiring a minimum budget size prioritizes growth over caliber of the work.” I could not agree more. But at present, that’s the reality we’re facing. (Novick also advises artists who are thinking of starting a company to consider forgoing permanent status and band together temporarily to produce shows here and there, as desired. This is possible if you have a funding source with which to pay production costs and no absolute need to make a profit on that money, as most shows, especially one-off shows, lose money. You could also run into some problems with finances, insurance, and taxes as an unincorporated non-company unless you’re working under the umbrella of a larger producing org. While one-offs aren’t what we’re discussing here, I would be remiss in not at least mentioning it. If you have access to an umbrella company and/or money to burn, you might want to consider a temporary, limited production run to see if you’re interested in continuing as a permanent, producing company.)

So choose which devil you sell your soul to, for-profit or nonprofit, as they both suck at present. I think nonprofit sucks slightly less vigorously, and if you agree with me, get the Nolo Press handbook for becoming nonprofit in your area and follow the steps. Make sure to check the law in your area about incorporating as a business (such as getting a business license), and take your paperwork down to a bank and create a business bank account. DO NOT– and I cannot stress this enough– commingle your company’s funds in your personal bank account. For one reason, you become personally liable for income tax on that money, and for another, it’s technically embezzlement.

The Year of the Rooster, 2014. This show was a hit off-Broadway. We got excellent reviews, but the play never found its audience in the Bay Area.  Did I overestimate how turned off audiences would be by the idea of a play about cockfighting? Was I blinded by the excellence of the script and the fact that the heart of the play is the rooster himself to the way potential audiences here would be turned off by the stigma? Who knows. All I know is we lost a ton of money on this show, and you can never predict what will sell and what won't. Pictured: Caleb Cabrera as the rooster, Odysseus Rex, and Sango Tajima as Lucky Lady, his mate. Photo by Cheshire Isaacs.

The Year of the Rooster, 2014. This show was a hit off-Broadway. Even though our Berkeley production got excellent reviews, the play never found its audience. Did I overestimate how turned off Bay Area audiences would be by the idea of a play about cockfighting? Was I blinded by the excellence of the script and the fact that the heart of the play is the rooster himself to the potential consequences of the stigma? Who knows. All I know is that even though press was great and the audiences who did come raved about it, we didn’t come close to meeting sales goals and lost a ton of money on this show. You can never predict what will sell and what won’t. Pictured: Caleb Cabrera as the rooster, Odysseus Rex, and Sango Tajima as Lucky Lady, his mate. Photo by Cheshire Isaacs.

3. Board of Directors. If you’re a nonprofit company, you are legally obligated to have a Board of Directors. Most small companies have an “artist-driven board,” meaning the people in the company are on the board. Eventually you’ll want to decide what kind of board you want. My recommendation is to get a board focused on fundraising, and put a lawyer on it. This is much easier said than done. Whoever you put on the board, they need to truly believe in your mission and vision, because the board has the power to fire the Artistic Director. If you’re a for-profit company, investors are going to want to see some experience on your team. Surround yourself with people who have already created success elsewhere. Call them an “advisory board” if you can’t afford to put them on staff. Get big names on there if you can. And then listen to them.

4. Ethics. I know you’re new and tiny, but the world is watching you. The internet makes everything public. If your company does nothing but plays by white guys, if all your casts are all white, if you hire directors who scream at actors and designers, if you violate contracts, if you do not immediately fire people who sexually harass your personnel, then A. you WILL get called out for it eventually and B-Z. What the hell are you doing? If you fuck up, own it, and genuinely strive to be better. When someone in your company comes to you and says she’s being harassed by someone working for you, take that seriously. If you’re not taking those issues as seriously as you would discovering that someone is stealing from the till, you probably shouldn’t be the head of anything, let alone an arts org. There are about eleventy kajillion ethical considerations to running an arts org, and they can all be summed up in: Treat your people like gold, create a culture where people are valued, and make sure everyone you hire is on board with that.

5. Don’t reinvent the wheel. No matter what you’re trying to do, someone has already tried it and fucked it up, and someone else has tried it and succeeded. The advice of the person who fucked it up is going to be golden– listen to people when they tell you what they did wrong. It’s relatively easy to avoid many types of failures– “We forgot to buy insurance,” “We didn’t have a written contract,” “I kept my mouth shut when the director violated contract by rewriting the play,” “I didn’t check his references,” etc. The advice of people who succeeded is going to be valuable as well, but success can be much harder to replicate, especially if the market has changed significantly, your circumstances are different, or if (and this is incredibly common) luck played an enormous role in that success. Often you’ll hear Boomers talk about how much better they were than the rising generation at (fill in the blank), and how much more successful they are in comparison, completely ignoring that the cost of living and producing was miniscule by comparison in real dollars, donations and grants were free-flowing, and competition was minimal. Don’t look at a company started in 1980 and wonder why you can’t replicate their success– they had it so, so, so much easier than you do, in every possible way. But you can look at a company’s failures and avoid them. If someone is willing to tell you the mistakes they made along the way, take notes. Decide what you can replicate and what you need to adjust (or abandon outright) when looking at other companies’ successes.

If you’re wondering how to X, or where to get Y, or why so many companies do Z, just ask. Email someone at a longer-standing company and ask. Chances are they will be happy to help. If they don’t have the time, they’ll let you know. Don’t be offended if they don’t answer you– they’re just as busy as you are. Ask several people until you get the answer you need. Then remember, when your company is the longer-standing one, to pay it forward. If there’s a theatre service org in your area, JOIN IT. Here in the Bay Area, we have Theatre Bay Area. Whatever your equivalent is, it’s well worth joining. If you ever get big enough to join TCG, or if they make their membership less dependent on financials, it’s worth joining as well.

The show we closed in December, The Dragon Play by Jenny Connell Davis. I knew I wanted to produce this play by the time I was 15 pages into the script. It was so satisfying to see audiences fall in love with the show night after night. This was a deeply satisfying artistic experience for me personally and, I hope, our artists. Lindsey Schmeltzer as Dragon Girl and Jed Parsario as Boy, photo by Cheshire Isaacs.

The Dragon Play by Jenny Connell Davis, 2014. I knew I wanted to produce this play by the time I was 15 pages into the script. It was so satisfying to see audiences fall in love with the show night after night. Lindsey Schmeltzer as Dragon Girl and Jed Parsario as Boy, photo by Cheshire Isaacs.

I could write a book about starting your own theatre company. There are so many issues to consider– legal, ethical, artistic, practical. So many skills to acquire. So many decisions to make with enormous consequences down the road. So many things I’ve left out of this one short article. Maybe one day I will, since clearly publishers are scrambling to come out with books about us, right? A TED talk? Web series? ::crickets tumbleweed lonely gust of wind::

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Anyway. These are some of the most important points to consider when you’re thinking about starting your own company. Think long and hard about them, choose wisely, and make the art you need to make in the way you need to make it.

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2 thoughts on “Go Ahead and Start Your New Company. But.

  1. Just curious: What was (is) the vision and mission of your theater company?
    Has it changed over time?

  2. CC Duvale says:

    Great advice. I started a theatre company in London in 2005 exclusively doing improv comedy. We ran for 4 wonderful, stressful, bank breaking years. Difficult but extremely rewarding!

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