December 24, 2011
by Kris Simmons
Dear Video Professional,
At the end of each year, I try to reflect on the lessons learned that both helped and hurt my success as a video business owner. I then share these thoughts with everyone in the MindYourVideoBusiness.com family in hopes that there will be something you can take and apply to your business strategy that can help you be more successful in the new year.
THE GOOD
Overall, business was quite good in 2011. Sales were up 50% and profits were up quite a bit as well. This resulted in excellent cash flow most of the year which made things a lot less stressful on the home front. My wife is much more comfortable when I get a steady pay check each month and when she’s happy, I’m happy 🙂
The additional cash flow also made is possible to invest in some equipment as well as to get more help from freelancers when I was double or even triple booked.
I decided to make the leap into HDSLR technology and purchased a Canon 60D. After wrestling with it for several months and cussing it on several occasions on my Facebook page, I decided to start hiring DPs who already had experience with the new technology so I could get “on the job training” before flying solo.
I must say that what ended up being the best solution for me was to hire a recent college grad who understood HDSLR cameras and workflow but who didn’t know much else about production in general. It was a real win/win because I was able to secure cheap, knowledgeable labor and he was able to get an opportunity to work with an experienced producer/director.
He taught me a lot about using my new camera and I taught him a ton about lighting, audio, editing, etc. I’m happy to say that with the exception of long format videos like seminars, meetings, etc., I use my Canon 60D exclusively in my productions.
The key, I found, is to experiment and get comfortable with the post work flow as it relates to backing up, transcoding, syncing and archiving all the media. Once I developed a process that works for me, the rest was smooth sailing.
Another business decision I made was to rent a small space next to my existing office so I could set up a green screen studio. So far, it’s been a great addition to my portfolio of services as I’ve been able to sell a lot of faster, less expensive but highly profitable video projects. Without a studio, I’d have to charge quite a bit more for setting up on location versus just having clients come to our studio.
Occasionally, we’ll have issues related to sound coming in from the other businesses in the building but it hasn’t been anything that couldn’t be worked through either during the shoot or in the post production process.
What I’ve found is that by having a low cost solution for quick but quality web videos, it allows you to generate revenue from companies that wouldn’t ordinarily purchase video services but it also helps these companies realize the value of video and hire additional services with larger budgets down the road.
Even if they never hire us to produce another video after the first series of web videos, we make a good profit and it’s one more client out there in the marketplace telling others about 6 STRONG MEDIA.
Now that I’m used to having a studio as an option for video productions, I’m seriously considering moving into a larger studio space in 2012 or 2013 that I can set up and soundproof exactly the way I want it. We’ll see if that works out.
THE BAD
A down side to business growth are the issues that relate to work flow. I found myself on several occasions wishing that I had employees to help with a project but not wanting to commit the money required to have them on board full time.
Even though working with freelancers was both affordable and effective, I found myself constantly stressed out regarding whether or not they’d deliver on time, having to work with them late at night via phone or video chat and just the issues related to preparing a project completely so that a freelance editor or designer would know exactly what I needed.
More often than not, I’d decide to just handle the project myself so I could guarantee the results but that would just lead me to being more stressed out and wishing I would have hired it out in the first place. Rinse and repeat…a vicious cycle that never ends.
The other bad thing (if you can consider it bad) is that I often didn’t have as much control over my schedule as I’d like. A lot of clients wanted to shoot at awkward times or in locations that required a lot of travel. It was great to have the business but getting used to living out of a suitcase again has been a bit of a pain.
I’m the type of guy who forgets things if I’m on the road a lot. If I remember all the gear, I’ll forget extra underwear. If I remember the extra pair of socks, I’ll forget the SD cards. I know I should work from checklists but can’t seem to find time to develop them.
THE UGLY
For the first time in my career, I ran into several situations where I wasn’t able to deliver a project on the agreed upon date. That killed me! I’ve built my reputation on never being late so this has been a huge eye opener.
The issue was that there simply weren’t enough hours in the day to get all the work done on time. I wouldn’t realize that I needed help until it was too late but instead of making a knee jerk reaction to hire freelancers in the middle of the night to help bail me out, I prioritized based on who had to show their videos first and told the rest of the clients that their project would be a bit late.
Most were okay with this but a few said that the reason they hired me is because of my reputation for delivering on-time. It wasn’t until my largest customer recommended that I bring on additional staff that I started to listen. Bringing on more people made sense…but how could I do it in a way that wouldn’t drain my additional cash flow and profit? I’ll talk more about this later.
I’m labeling 2011 as “The Year of Apology” mainly because I think I’ve said sorry more times this year than I have in my entire life. Once I get my new staff members up and running in 2012, I believe we’ll get back to delivering finished projects at break neck speed.
MOVING FORWARD
2012 is already shaping up to be a great year. I have several projects in the pipeline with January start dates and most of the work for my large contract is set to be completed by the end of April.
Based on the issues I discussed above, I have decided to bring on two full-time employees. One, an experienced editor and After Effects wizard. The other, a recent college graduate who has shown a lot of promise as a DP, editor and production manager.
I developed a “net revenue share” compensation system that guarantees that I’ll get all the help I need without any of the cash flow issues. In a nut shell, instead of paying them a salary each week, they will get a percentage of our net revenue for each project. So, if a project nets $4,000, they’ll get their percentage cut out of that with all the appropriate taxes, etc. pulled out so they don’t have to worry about that.
If we have a decent year, they make great money compared to what they’d get if they were getting a salary. If we have a great year, they make a lot of money…way more than they could ever pull in as a salaried employee.
I’m excited to see how this model works out and they are eager to get started.
I have also hired a part-time marketing director who will represent me at networking events all over the city and surrounding areas. The goal is for her to generate new leads and to build our email database so there will be more people interested in receiving my newsletters.
In just a month of working the marketing program, she’s generated a dozen new contacts and two hot leads for new video production business. I hope this momentum continues into the new year.
All in all, I’m shooting for another great year with at least 50% growth. I think with me being out of most of the production process, I’ll be freed up to spend a lot more time marketing and selling.
This should result in a lot more revenue for the company and a much better quality of life for me!
What will you do differently in 2012 to grow your video production business?
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