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My for-profit three screen theater launched a pledge drive three days ago, and we've already reached our goal of 10% of the down payment for the equipment loan ($23,000). I'm still in shock!

We've always done well enough to cover operating costs, but have little extra cash left over to finance the investment we all are being forced to make. After many months of hoping the down payment would appear out of thin air, we decided to go public with the challenge we were facing. We are the only movie theater in our town, and we felt our community deserved to know that we were at risk of closing our doors, and that they should have a chance to help. This was a difficult leap of faith for us to make, as we've always been private about our business and personal finances.

We launched a new website (separate from our showtimes website) where we described digital conversion and the equipment, how much we were looking to raise and why, and why we needed help. Most important, the pledges were not simply donations-the value of the rewards were worth more than the pledges themselves. The different pledge categories started as low as $8 and as high as $2000.

We wrote a letter to our local paper, posted on facebook, and sent an email newsletter. We expected the campaign to take 30 days to reach its goal-we never imagined it would take only three days. The support our community showed for our theater is truly inspiring.

Thought I would share this success story, because I'm sure there are other independent owners on this forum facing a similar situation as ours. Please feel free to ask any specific questions about the campaign.

I forgot to mention an important detail-the rewards for pledging have a delivery date of Jun 1, 2012.

www.savethemajestic.com/

rufusjack wrote:
Good idea.
Are you reporting as income on your financial statement?
Will you pay film rental on all the free tickets you are giving away?

Elin

Awesome. Congratulations!

Elin TW wrote:
Yes, I consider all money earned by my business to be income and will therefore be accounted for appropriately in my books. The movie passes are no different than gift certificates-when they are redeemed by customers the rental payment goes to directly to the distributor for the movie they are seeing.

Ongratulations

Mind if some of us steal your idea?

I think something like this might work for my theatre!

tratcliff wrote:
Please do! I used Intuit Website Services to design the site myself (super easy), and their merchant credit card services to collect payments directly from the website (I removed the "Buy Now" buttons from each pledge option after we closed the drive). I also had a days to go counter (also removed), which I think is a good idea as a deadline will add a subtle sense of urgency.

As with any type of "crowd" funding, the key is to spread the word quickly to as many people as possible. Ask people who care to help by forwarding information to their friends.

Good Luck!

After average film cost, sales tax, and any income tax what kind of a percentage do you anticipate having left over for the digital equipment?
AllenD

AllenD wrote:
One of the good things they did was to put a date of June 2012 for the free passes. That by itself will probably make many of them not being picked up or used. I would not be surprised if 50% do not get used. As far as income taxes go, probably will be zero since they are spending a great deal of money on FF&E to go digital. I would be surprised if it cost more than 20% to collect that amount.

AllenD wrote:
There will be very little sales tax due, because the State of Colorado does not collect sales tax on ticket sales. In addition to the rewards not being available until June, it will take a good deal of time for people to redeem their passes. And as Rujasjack stated - many will never be redeemed. In essence, the liability will be spread out over a fairly long period of time and should have a negligible negative affect on cash flow.

Finally, a lot of the value in the rewards are from intangible items that cost us very little, such as invitations to the grand re-opening party, private party rental (not during normal business hours) and on-screen advertising.

That being said, we were definitely concerned about what impact the pledge drive might have on future sales. After we reached our goal in only two and a half days, we briefly discussed whether we should keep it going or not. We stopped it for ethical reasons (it seemed greedy to raise more when we no longer needed "saving") and concern about the extra liability we would incur.

Well, it seems as if this was well thought out and well executed.
AllenD