Knowing how much you need to make is large topic and I will need to break it down into several different posts. This first one is simply a story to reflect how it matters.
One of our clients, fairly new at the time of this occurrence, was considering traveling overseas for a gig to a market where they were worth approximately 1000 hard tickets. This particular gig was a soft ticket performance. The offer came in at $15k. The manager approached me and asked whether the band could do this gig, a one-off, and still come out profitable. I ran the numbers quickly and found that break even, with a small percentage for contingency built in, would have been $17k. I came back and gave the manager this news. He informed me that he thought the $15k was the high end and that the offer wouldn't get any better. I gave my best advice: "The fact is that the band will not be able to pay themselves at $15k but all other expenses would be covered, at $18k they make a modest payment for themselves, and $20k all is good. I would go back to the agent and ask for $20k and explain why and then see what happens." 3 hours later I got a text from the manager that they were able to secure the gig for $20k. They got this because they weren't negotiating just for the hell of it (which is fine too) but because they understood their needs and were confidently able to convey those to all parties involved. Though I was just one small part of the machine, I was able to help manifest an additional $5000 for the band in 20 minutes of budgeting.
Moral of the story: Know how much you need to make to have your needs met.
For future discussion: But HOW do I know how much I need to make?!