How Long does it Take to Make a new Music Festival Financially Viable.

Investors and entrepreneurs keen to create a new music festival will want a return on their investment as quickly as possible. Festivals are generally regarded as high-risk investments but how long realistically does it take to make a new event financially viable and what are the key factors that influence this journey.

Whilst most new business investments look to turn a profit by their third year investors may need more patience when it comes to building a new music festival from scratch. The speed of growth can depend on multiple factors like location, event dates, target audience plus financial and personnel resources available. What are the key phases involved in building a new music festival successfully? 

First Steps and Formation. 
It is essential to carefully define key objectives of the new festival along with a comprehensive business plan that includes accurate financial forecasts. A mixed genre event will probably have the best chance of growing large while genre specific events will be limited by the potential audience size. In the early stages of formation, it will help to test any concepts which may include different locations, varying artist line-ups, themes and operational logistics. Trying a variety of scenarios out on a small scale can help to refine the direction of the new festival without the need for large financial investment. Once a formula is agreed the key to successful launch will be having in place a great artist curation process, smooth operational logistics and well supported marketing activity to drive interest, engagement and ticket sales. 

Expansion. 
After several years the new festival may have established itself with a stable brand and reputation with a loyal fan base and good financial management. In order to get to the next level of expansion organisers will need to continually assess factors that allow for growth. This may include considerations for location, capacity limits and infrastructure support. Additional funding may be required to improve the line-up curation, going for bigger and more well-known headliners. Developing the festival logistics and utilising technology for efficiency are key to building the capability for increased size. Organisers should focus on consistent growth year on year facilitated by having a clear vision with innovation and adaptability. Growth also relies on solidifying the event’s brand to build partnerships with sponsors and vendors whilst consistently evolving the line-up. 

Maturity and Stability. 
It is probably realistic to assume that a new music festival will get to financial stability between 3 and 5 years from launch after which organisers and investors need to consolidate their success. With financial stability and maturity will come pressure from original investors to see regular returns on their investments. With good financial management an allowance for dividends will be required, however, in some instances investors may decide to put any profits back into the festival to continue its growth. If the festival has built a good brand with a loyal customer base and committed sponsors the value of the festival entity can be high. There may be a temptation to sell the festival to one of the large corporate players like Live Nation or AEG. 

There are no quick routes to launching and building a financially successful music festival, it can take up to 5 years, maybe longer and the risks are high. Alternative less risky strategies may be to purchase an existing festival that already has a long-standing reputation and brand, but investors should conduct due diligence on any potential candidates. 

For festival organisers planning their next events using a software management platform like Festival Pro gives them all the functionality they need manage every aspect of their event logistics. The guys who are responsible for this software have been in the front line of event management for many years and the features are built from that experience and are performance artists themselves. The Festival Pro platform is easy to use and has comprehensive features with specific modules for managing artists, contractors, venues/stages, vendors, volunteers, sponsors, guestlists, ticketing, cashless payments and contactless ordering.

Image by geralt via Pixabay

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