It seems appropriate to begin my tenure at a startup with a little advice to others embarking on a startup.
Employment in the video industry has always been a little more fluid than in the economy at large. Many of us have been freelancers, solopreneurs, permalancers, or whatever you like to call it for so long that we forget what it was like to take the leap (or get pushed). For very few has the journey gone as planned. For most of us that’s exactly what makes it impossible to imagine going back to the 9 to 5, or, more accurately, the 9 to 9 grind.
This blog will focus on the business of video. Since I’ve spent most of my career in post production there will be a lot emphasis on editing, motion graphics, delivery, and distribution. I am an entrepreneur at heart, and that bias will show. Sometimes the horizon will be more distant – pondering things like mobile video, IPTV, and participatory media. Most of the time, though, I’ll be writing in the present tense.
For those just starting out on their own, the first few months can be an emotional rollercoaster spanning the peaks of exhilaration over unbounded opportunities to the troughs of concerns over the bottom line.
To ease the period of transition I give you these bits of advice.
1. Have a business plan. Don’t even think of starting a business without one. Business Plan Pro is a great piece of software that will walk you through the process. Treat your business plan as a living document. The media industry moves fast. Even the best business plans can be outdated in a few months.
2. Don’t entertain the fantasy that you work for yourself. You work for your clients, and with luck you will have a lot of them. When you punched the clock for the man, you had one boss. Now you have many, and they don’t care about each other’s needs. Learn to manage your time and client expectations. In the long run it’s worse to overbook your business than to underbook it.
3. Control costs. You’ve heard the adage: A dollar saved is a dollar earned. It’s not. Income is taxed. In the US, a dollar saved is roughly equivalent to a $1.35 earned.
4. Cash flow is king. Until you absolutely know your equipment needs, you’re better off renting. It also frees you from the responsibility of maintenance. It’s the rare videopreneur who has a stable of clients all needing the acquisition and delivery formats. If you do need to buy, finance your purchase. Interest rates are creeping down again, and I’m starting to see business credit cards with 12 months/no interest offers again. If you can’t pay for it in 12 months, as a startup you probably have no business buying it.
5. You don’t need a fancy website. You need a simple, clean website. No splash screens. If a client wants to see your creativity, he or she will go to the portfolio page or request a reel. Everyone hates splash screens. You hate them. So why will anyone like yours? The most important thing is to have your phone number on the homepage.
6. Don’t spend a lot of time on a reel. Spend time on many reels. Get all your best work together. Compress it for the web and DVD. Create template web pages and DVD menus. When a client requests a reel, grab the three or four clips most pertinent to their needs, and build a custom web page or DVD.
7. Don’t spend a lot on fancy business structures. Sure, LLC looks really cool on a business card, but in most cases a simple subchapter-S corporation will meet your needs � shielding you from liability while passing profits and, more importantly, losses through to your taxes.
8. The first thing you’ll miss about punching the clock (aside from punching out at 5 PM) is that steady paycheck. It’s getting harder to collect net 30 invoices. Most large companies are paying invoices net 45 these days. Gauge your cash flow needs. When you need cash sooner, offer discounts to clients who pay early. A 2% discount for paying within 10 days often works.
9. Never, ever stop selling. Set aside time each week for sales calls. Existing customers are your best leads. Stay in contact. Earlier in the week is better for sales calls. Never sell on Fridays. Do you want to be called by a vendor as you’re trying to wrap up your week?
10. Stay fresh. Set aside a couple of hours of creative playtime every week. Learn new tricks. Research new technologies. We work in the coolest industry in the planet. Enjoy it. You’ll be surprised how much of what you tinker with during your mandated downtime ends up in client work.
And of course – hang out here at PVC. Chris and Trish Meyer, Adam Wilt, Mark Christiansen – all under one umbrella. How much more do you need to keep abreast and amused?