This article starts with simple ideas and rapidly moves into concrete steps and concepts that are anything but simple. I’ll stop one short of calling this article a ‘business workflow’.
Don’t let the size of the article fool you into believing ‘this is all there is.’ Reserve that thought for your bank account.
Important Disclaimer:
The ideas, thoughts, suggestions, information and advice given in this article shouldn’t be interpreted as legal or business advice or be considered as a substitute for legal counsel from a qualified lawyer or attorney. These are just some of my experiences and ideas, and my video production business isn’t successful yet, so don’t assume I’m right. I’m never right, even on my best day.
Secondly, there’s no way most of what I’m about to say is purely original. It’s a mixture of common sense, educated guesses, bits and pieces I’ve picked up from books, ‘authorities’, ‘gurus’ and whoever else happened to come along my way. Who knows? I might come back to this very text a few years either having forgotten my own advice or shaking my head in disbelief at how wrong I was in writing it.
Please, only look for ideas here. If you want advice, find somebody successful.
Justice
Plato defined justice as ‘each person doing his duty and not meddling in anybody else’s affairs’ (it’s a bit more complicated than that, I’m over-simplifying it).
In a free society, each person is free to choose his or her duty. Actually, it is no longer a duty anymore if this is the case.
We all like to believe the world and its opportunities are equal to us all:
But in reality, it’s more like this:
Not only is sometimes life unfair, it is downright ridiculous. Not only is your place always insecure, you don’t know how to get from A to B.
Even if you happen to email a guy at B who claims to have got there from A, where you are, there is no way he or she can guarantee the same outcome for you.
A person’s job or business is anything that is legal and which will make money. If there’s no money, some might still call it a business, but that’s not the group this article is written for. So, what has this got to do with Plato?
Simply this: When you venture into a new business, you’re bound to step on someone’s toes. The more the competition, the greater the toes. Therefore, it is the height of stupidity to hope nobody will step on yours.
Expect it at every turn, and you will then have a measure of the kind of person you will need to become.
There are laws in any land, and the person who plays legally does not necessarily have to play fair, as in ‘school-playground’ fair. It is your responsibility to do everything within your means to further your business, as long as you stay legal. Other than that, anything goes.
If you don’t like that, no worries. We all have our principles. Just don’t expect everyone else to do the same. You’re not the only player.
If you like the mental image you have formed, if you like this idea of justice, and if you believe this can become your reality, step into shark-infested waters.
Stress
Imagine the most stressful moment of your life so far. Recall that moment. Could you have solved a math equation or played a game of chess or written a script during that crisis?
If you answered yes, you’re only kidding yourself. It takes a lifetime of wallowing in stress to do any of that. I believe, with my limited experience, that half of what you experienced at your most stressful moment is to be expected on a daily basis as a businessperson- on the good days. On the bad days, double that.
During these perpetual personal crises you are expected to perform the following tasks:
- Find business
- Sell your services
- Do what you claim to do
- Get paid
- Set your business in order
- Deal with idiots, including yourself
There are some techniques to help you deal with stress, but here’s the untold story: Nobody says you’ll be stress-free.
To know whether these techniques have worked, you’ll have to stress-test yourself. Never kid yourself that you’ll be free of stress. Such a luxury isn’t available to a living organism whose days are numbered and whose kind are forever killing each other.
Dealing in the concrete
There’s motivation, and then there’s wishful thinking.
“I’m going to become the world champion” is a useless platitude, that if repeated everyday isn’t doing anything tangible towards fulfilling your goal. It’s like a fool repeating “I’m going to live forever” till he or she keels over.
I’m going to break this down according to military theory. There’s always two modes of action:
- Strategy
- Tactics
Strategy is your overall plan. Like in:
- I’m going to pitch to Mr. ABCD today, and then he’s going to say yes and ask me to shoot his video next week.
- I’m going to get the script written, assemble man and machine on the said day, and shoot Mr. ABCD (I know that didn’t come out right but I’m going with it).
- Then, I’m going to edit it and add some jazzy music to blow Mr. ABCD away (didn’t come out right either).
- He’ll then rush eagerly to fetch his checkbook and sign over an amount far greater than what we agreed upon.
Tactics is what you do on the ground. Like in:
- I’m going to pitch to Mr. ABCD today…oops…Mr. ABCD is busy this week and can’t meet you. Would you care to leave your card, quote or brochure?
What you do next is tactics.
It’s the thing you can’t always predict, but must still do to stay in the game.
You need both strategy and tactics. You need the plan, and you need the concrete steps to accomplish that plan. Only indulging in strategy is wishful thinking. The road to getting something done is never that simple or straightforward.
I’m all for motivation. You must have hope, and a certain level of optimism. But not to the point of only being good with strategy and screwing up on tactics. Anybody can make grand plans, but few can accomplish them.
Even the seemingly simple task of frying an egg has been botched half the time over the ages.
The point of all this is: Try to bring ideas, thoughts and hopes down to actionable steps.
And when I mean step, I don’t mean: “I’m going to write the best script tomorrow.” That’s not an actionable step, it’s a questionable misstep. You would do better to just “get an acceptable script done and revise it a couple of times by the end of the day tomorrow.”
In business, concrete is your friend. Sand isn’t.
Remember Sherlock Holmes
Ever heard this before?
When you have eliminated the impossible, whatever remains, however improbable, must be the truth.
But there’s a corollary: You must first get everything lined up.
If you miss something, you might only be left with the impossible.
Let me give you an enlightening crappy example: Say you want to buy a car, and it costs $30,000. You tell yourself: I’ll save up $30,000, and then I’ll buy my car. The day comes when that money reflects in your account, and off you go to the dealer. By the end of the day, your account no longer reflects that amount.
Oh Mr. Sherlock, did you consider and budget for the following?
- Fuel
- Traffic violations
- Accidents
- Insurance
- Registration
- Servicing
- Oil and lubricants
- Batteries
- Spare parts
- Wheels
- Tools
- Interiors and upholstery
- Steering wheel wrap
- Mats
- Tinted windows
- Stereo system
- Air freshner and refills
- Baby seat
- Cushions
- Stickers
- Trinkets
- Mobile phone or tablet holder
- Parking charges
- Towing charges
- Maintenance
- Washing and cleaning
- Painting
- Theft
- Resale value and depreciation
Over a three year period, you have spent considerably more than you have budgeted. The worst ‘offender’ on this incomplete list (I’m pretty sure I’ve missed some items) is the actual price of the car, which has depreciated by roughly 30% the moment you buy it.
The point I’m trying to make is: There are always hidden variables.
We are human, and it is impossible to find all of them. Sure, if your sole purpose in life is to buy and justify the expense of a car, you might (might) make a good job of it. For those running a business (even if you’re not), every thing you buy comes with hidden expenses.
Even a movie goes with popcorn, and sometimes a theater makes more money on the popcorn than the movie. The video business runs the same way. You are offering a product (a video) that will be used in conjunction with other things. Your gear and your line of work comes with hidden expenses, all of which involves you losing money. Find them, and list them out so you’ll never forget them.
Don’t take any situation for granted where money leaves your hands. It’s all about the money. That’s why it’s called a business, and not a charity or a hobby or a sport. If the numbers aren’t all there, you can bet it’ll come out of your bottom line.
Which type of video business?
I’ve written this article for the video production business because that’s what I’m into. However, the ideas here are easily applicable to running a post production house, a VFX facility, a freelancing career or even a burger joint.
You still have to do everything any business does on a daily basis. It’s only those who have never been in business who think different businesses are…different. Why do you think businessmen hang out together, even when they’re not talking business? The realities of doing a business are somewhat similar to the realities of being in the army or being a doctor or a policeman, etc. All of these jobs are stressful, and more often than not these guys and gals hang out with the same kind.
Businesspersons also have a different definition of what constitutes ‘value’ than most lay people who just do jobs. The lay people just go out and buy a car, and don’t think too far ahead or too deeply. A businessman is forced to.
Every businessperson starts as a lay person, and their growth and development as a businessperson is rarely smooth or painless.
This is what I mean when I say all businesses are the same, and business people share the same kinds of pain.
To recap, here’s how you get started, transforming yourself from mere mortal to rich mortal:
- In business, anything that is legal and increases profits is fair, whether you like it or not.
- Regular stress is the first payment you’ll get for getting into business. It’ll change you as a human being.
- You’ll start dealing in concrete steps, and become calculating. Non-business folk will no longer completely understand you.
- You’ll always be thinking of money, even when you’re not.
Now let’s look at some tangibles that you can do to ensure a smooth take-off.
The 4 Ps of marketing
There are many variations to the Ps – 4 Ps, 7 Ps, 700 Ps…I like the smaller number. There’s enough problems as it is. The 4 Ps of marketing are also called the marketing mix. Don’t worry, you don’t have to remember any of this.
The 4 Ps of marketing are:
- Product
- Price
- Promotion
- Place
It doesn’t matter what business you’re in, these four are in some way linked inextricably to your future. It’s your job to find out how, and what you can do about it.
Product
The product is what you’re selling. It could be a service too, or it could be Jurassic Park. It is something so valuable that people are willing to shell out money for the privilege.
In the case of a video production business, what is your product? It’s video of course. Even if you’re in the post production business, you are still selling some video content on a hard drive.
Some people feel every second of their life is a product, but that’s just their ego talking. You might feel like your time is valuable, and you are right. But it is valuable to you, not to another person. In a video production business, there are many activities you have to perform before the finished video magically appears. Not all of these activities are justifiable as a product.
E.g., you might edit on an ABCD, which costs about $999, say, while another person edits on EFGH, which is about a third of the price. You might feel you are entitled for more, but whom are you kidding? The market doesn’t care what you’re editing on, as long as the job is done. Even if you do have clients who demand an ABCD, they are just sitting ducks to hunters who are one day going to convince them to change.
This is not a reflection on any software, mind you. That is the wrong way to think about this problem. Sometimes there are added benefits to a technology, and it’s not as cut and dried as comparing prices. Your evaluation of the tools you use is not as important as the market’s evaluation of the same tools. Do you care about a carpenter’s hammer? But I bet the carpenter does.
The generalized point I’m making is that the market decides what the product is, and no matter how much time you spend worrying about the wrapping, if the product isn’t what is wanted, you won’t sell (at least not as well as you could have).
Price
To a lay person, the price is the price. To a businessperson, the price is a complicated figure arrived at after considering expenses, loans, investments, liabilities, assets, income, future extrapolations, taxes, miscellaneous or unpredictable expenses, market demands, competition and profits.
What you earn at the end of the day better be in the black. The reason why many youngsters start out by undercutting the competition is because they don’t see the hidden expenses down the line. For today’s beer and gear you might lose tomorrows profits.Fixing the right price is critical.
Promotion
How are you going to tell your market that you exist? E.g., if you’re into making music videos, how will the bands and the artists find you? And when they do, how will they recognize you?
The traditional rule of thumb of marketing is: Be seen where your market hangs out.
Promotion includes:
- Advertising
- Press releases
- Business cards
- Emails
- Messages
- Word-of-mouth
- Exhibitions and trade shows
- Cold calling
- Networking
- Websites and publishing
- Charity
- Yellow pages, or its equivalent directories
- Seminars
- Agencies
- Referrals
All this sounds boring, and it is. That’s why it’s hard. You could fill books (or even libraries) with ideas, strategies and tactics on marketing your products and services.
This is one lesson that never ends, and there’s a test every day.
Place
Place is where your product will be visible. In the case of a video, you will obviously be putting your showreel and your shiny self in front of your prospects. In the video business, you go where your client is.
This includes having:
- A web presence
- Means of travel
- Business cards and brochures
- A showreel
If you are a post facility, you will need to find ways to get close to your client. This is one instance where they might (and probably will, from time to time) come to you. Think about this: Is your post facility always selling?
Even a regular client will need to be reassured every time he or she steps into your temple. It’s astonishing how quickly people lose faith. Oh wait, business is not about faith is it? Then you better get your post facility selling too.
The business plan and budgeting
Once you know what you’re going to sell and how you’re going to sell it, you will sit down and see if you should sell it. Sometimes, a great idea or product is exactly what people need, but not what they want.
Being good or great isn’t enough. It has to be in demand. If your video production business cannot churn out the videos your clients want, you are doomed. You might have an intransigent artistic mindset, but if you’re like that, you shouldn’t be surprised if your clients are like that too. Why should they change for you?
Sometimes, it isn’t clear if a business proposition or idea will float. For this reason, people make business plans and budgets. A business plan covers these basic points:
- Executive summary – think of this as your elevator pitch, to yourself.
- SWOT analysis – SWOT stands for Strengths, Weaknesses, Opportunities and Threats. You make a cross on a piece of paper, and each column contains one of the above. Write down what strengths you bring to the table, via man, location, price and machine. List your weaknesses. List how you can take advantage of your strengths, and how you can grow, under ‘opportunities’. Then take a good hard look at your competition, and write these down under ‘threats’.
- Marketing plan – which you’ll have made earlier.
- Financial plan – your budget, expenditure, break-even analysis, and earnings over a 3-5 year period. There are very few businesses that break even in the first year.
- Expected milestones – a timeline grounded in reality.
Some business plans are detailed, because they are looking for funding. Your business plan must be lean, and is for yourself. You could (and should) show it to close friends or relatives whom you trust.
Take as much time as you need, but you must be convinced your business will work over the long term. Don’t spend a dime until you’ve figured this out.
Finding your left and right hand
Your left and right hand are:
- Your lawyer, or law firm
- Your accountant
It is practically suicide to start a business without either of these two, unless you already are one of these two! In my case, I can’t be any more distant to either of these professions, and I find their contributions invaluable.
What about their costs? That’s part of doing business, a very sound investment if you ask me. Don’t hire the cheapest accountant or lawyer. If it helps any, think of them as video production folk, and you’re the client. Would you want the cheapest person to form the foundations of your business?
These two will advise you on the correct legal and financial structure for your business, how you can best protect your interests, and, possibly, intellectual property rights.
Interview as many people as you can. Don’t feel guilty that you’re wasting their time. You’re not. Here are some general rules of thumb I’ve used personally (not legal advice!):
- Find a person who you can talk to freely, who listens and understands your point of view.
- Find a person who gives you information even before you ask for it, who has your interests in mind.
- Find a person who is above board when it comes to pricing, and is very transparent. He or she should give you costing in writing, and expected estimates in case of hourly rates.
- They should have experience with clients in your field, and the laws particular to your case.
- They should be honest, and you should feel safe, comfortable and secure in their presence.
- They must be willing to put everything down in writing, in a contract, including maximum charges, scope of work and estimated turnaround times, etc.
- They should be friendly. Trust your instincts, but also do your due diligence.
You’re not trying to sign a one-off deal here. A good accountant and lawyer are lifelong partners that will hopefully safeguard your interests. If they are great people, they will also help create opportunities for you, and even find you business.
If you’re a good person, they might even end up being your customers! (Some countries frown upon these guys promoting themselves)
What about Gear?
At a certain point you’ll start thinking about gear.
Obviously, you’ll want to do this while you’re budgeting, but it shouldn’t cloud your judgement.
It might be easier to arrive at what you can afford to spend on gear first, and then work your way backwards to the camera you can use to justify your business. Sometimes it’s an Alexa, or sometimes it’s a DSLR. Doesn’t matter.
Every city and country is different. The costs of doing business are different. Don’t ever try to use a template or chart from someone else’s business as substitute for your own. That’s as good as copying someone else’s video because you’re too lazy to make your own.
I think I’ve highlighted enough to get you started on your path to a video production business. If I have to explain business in a nutshell, the way I understand it, I’d say it is a ‘Cold War’. Make no mistake, there is a war, but everybody’s smiling.
The ones that survive make money and thrive. Others perish, and go down complaining.
I hope this article has been useful in helping you understand the quagmire that is business. And in a volatile industry as video production it’s all the more important to really think hard before spending money, especially on gear.
