When I first started my adventure as a "professional speaker" I was schooled in the art of speaking. That was good, but what I really needed to know was the business of speaking. A friend shared an article with my by TJ Sullivan. I didn't understand that article back then, but I do now.
Here is the article my friend shared with me. It's titled, Why do Speakers Cost so Much?
Why do Speakers Cost so much!
By: T.J. Sullivan
I thought you might enjoy a simple answer to this FAQ.
Let's say you spend $3,000 on a speaker. Here's how that typically breaks down. About $800 off the top goes to the government in taxes. Speakers usually pay more because they have to pay both the employee and the employer's portion of the social security tax (all self employed people have to do this). About another $100 per gig is going to health insurance (more if the speaker has children or a spouse they pay health insurance for, like I do).
If affiliated with an agency, they are usually paying a MINIMUM of 20-percent of the total to the agency, so that's about $600. Figure that the average successful speaker pays about 10-percent of all the money they bring in on marketing costs, so that's another $300. It costs a lot to get the word out with mailers, websites, conference attendance, and so forth. All of that comes out of the speaker's pocket.
So, now, we're at about $1,800 spent. Then comes the cost of travel. Airfare usually averages about $400 per appearance (sometimes a little less or a little more, depending on where you live -- in Denver I'm averaging just under $400 per). Hotel is about $100 a night on the cheap end, and a rental car is almost always about $100 a day if you add in the cost of a half tank of gas. Our total cost is up to $2,400. Let's bump it up to $2,450 assuming that our speaker would like to buy a sandwich, pay a toll, tip a shuttle driver, park his/her car at the airport, and maybe buy a soft drink in the airport.
That leaves about $550. A speaker doing 40 appearances a year is doing really well, so that's about $22,000 for the year after expenses. Not what you thought a speaker makes, huh? Truth is – unless you can charge upwards of $4,000 an appearance and do at least 40-50 a year, speaking is really a great SECOND job.
Just thought you'd like to know. Obviously those speakers who can charge top dollar and book 80-100 programs a year are doing very well, but for most speakers you've seen, this just isn't the case.