Understanding Your Revenue Story
Every performing arts center has a unique revenue profile that reflects its mission, market, and operating model. While the numbers themselves are important, the real value comes from understanding the story they tell about your organization's financial health and sustainability.
Before diving into specific metrics, take time to understand your organization's overall revenue context. Are you heavily dependent on earned income? Do you rely significantly on contributions? Understanding your starting point is crucial for meaningful analysis.
Key Analysis Areas
Revenue Mix Analysis
The balance between earned and contributed revenue is one of the most telling indicators of your organization's financial model. Start by looking at your earned/contributed ratio in the Executive Metrics Report. This ratio isn't about "good" or "bad" numbers - it's about understanding your organization's unique position and whether it aligns with your strategic goals.
Begin your analysis by asking:
How has your earned/contributed ratio changed over time?
How does your mix compare to peers of similar size?
Do seasonal patterns affect your revenue mix?
Look for significant changes in this ratio over time. A shifting balance might indicate changing market conditions, evolving donor patterns, or the impact of programming changes. The key is not just to note these changes but to understand what's driving them.
Programming Revenue Performance
Once you understand your overall revenue mix, dive deeper into your programming performance. The Dashboard report provides trend lines for various revenue metrics, allowing you to see patterns that might not be obvious in year-over-year comparisons.
Start with these steps:
Pull up the Revenue section of your Dashboard.
Look at the trend lines for Total Revenue and Earned Revenue.
Note any significant changes or patterns.
Compare these patterns with your Programming Mix data.
This analysis helps you understand which types of programming are driving your revenue performance. Don't just look for the highest revenue generators - look for programming that shows consistent growth or stability over time.
For example, if you notice your Broadway revenue trend line showing steady growth while other programming revenues are flat, dig deeper:
Is this growth sustainable?
What resources are required to maintain it?
How does it affect your overall mission balance?
Revenue Efficiency Metrics
Understanding your revenue isn't just about how much you're earning - it's about how efficiently you're generating that revenue. The Executive Metrics Report provides several key efficiency indicators that deserve careful attention.
Start with Marketing Cost as a Percentage of Programming Revenue. This metric helps you understand how much you're spending to generate your earned revenue. A rising percentage isn't automatically bad - it might reflect investment in new audiences or programs - but it should prompt further investigation.
Look for these patterns:
Sudden changes in marketing cost percentages
Seasonal variations in efficiency
Differences between program types
Then analyze Revenue per Patron trends. This metric helps you understand if you're maximizing revenue from your existing audience. A declining trend might indicate pricing issues or changes in patron behavior that need attention.
Retail & Ancillary Revenue
While often smaller than main programming revenue, ancillary revenue streams can significantly impact your bottom line. These revenue sources often have different patterns and drivers than your main programming revenue.
To analyze these streams effectively:
Review your retail revenue trends in the Operating Results Reports
Look for correlations with main programming activity
Analyze peak periods and slow periods
Consider whether your current mix of offerings aligns with patron needs
Taking Action
After completing your analysis, it's time to turn insights into action. Here's a structured approach:
Document Your Findings
Write down the key patterns and insights you've discovered. Include both positive trends you want to reinforce and concerning patterns that need attention.
Prioritize Areas for Action
Not everything can be addressed at once.
Consider:Which issues are most urgent?
Where can you make the biggest impact?
What aligns with your current strategic priorities?
Develop Specific Plans
For each priority area, create an action plan that includes:Specific changes to implement
Resources required
Timeline for implementation
Methods for measuring success
Monitor and Adjust
Plan regular check-ins to monitor the impact of your changes. Use the same metrics and reports to track progress, but don't expect immediate results - many changes take time to show their full impact.
Remember: Revenue analysis is an ongoing process, not a one-time event. Schedule regular reviews of these metrics and make them part of your standard operating procedures.
Getting Help
If you need assistance interpreting your revenue data or developing action plans, our support team is here to help.
Contact our support team to schedule a discussion or training session for help accessing your data.