Contract your director, performers and stage crew. Without skilled, committed talent, a theater company does not exist. If you are the sole proprietor of your theater company, you should at least have a list of interested company participants with a memorandum of agreement to show investors and lenders when the time comes.
Make a list of potential audiences and locations. With a for-profit theater, you will need to tailor your performances to specific audience interests. Nontraditional venues such as private schools and colleges, retirement communities and the USO often have entertainment budgets that may include performance space and travel and a flat guaranteed pay rate. Engaging shows for these audiences will reduce overhead, providing a subsidy for more expensive, ticket-based local performances.
Develop a roster of specific-interest shows. Using the most lucrative options on your audience list, create a schedule of shows or show types that will suit each venue. The more flexible your company is about the types of shows it can produce, the more sales you will generate.
Calculate your "turnkey" costs. With a projected list of shows, known talent and rehearsal needs in mind, add up all the expenses you will accumulate prior to your first show. This should include business registration, insurance, rehearsal and performance space costs, payroll and unemployment taxes, set materials, costumes and makeup, marketing, printing and postage, travel and all other administrative costs.
Calculate your "break-even" point. Based on income projections from your venue priority list, determine how many shows you will need to produce to break even on your start-up and ongoing overhead costs.
Write a formal business plan. It will help you decide how much money you will need to start your theater company successfully. The plan will also project when and how the venture will begin to turn a profit. Your plan should outline rehearsal expectations, employee contracts, marketing plans and venue priorities so investors and lenders can easily see the potential gain for their participation.
Register your business. When you are confident that you have a solid plan for making a profit with your theater company, register your business name with the Internal Revenue Service. You do not have to be operating to register, and having an employee identification number will assure your investors and lenders that you are serious about starting.
Approach investors and lenders to acquire start-up costs. You should not start your theater company with less than your turnkey costs available in the bank, and in a best-case scenario, lending commitments should be kept at a minimum up to the break-even point. A well-written business plan will help you define these deadlines in advance.
Hire your talent, start rehearsals and schedule your first shows. With start-up funding secured, you are ready for business.