Thursday, June 11, 2015

What You Don't Know Can KILL Your Video Production Business!

If you were going to start a video business, what would you do first? What would you do second? What would your priorities be? How would you get the word out? How would you find customers? What equipment would you use to do your video jobs? What prices would you charge for your services? Who would build your website? Would you need brochures? How would you handle social media? How would you learn and hone your craft? How would you learn what you don’t know?

Yes, what you don’t know is the thing that will kill or mortally wound your new business regardless of what that business is. Every day people with the best of intentions start video businesses. Many of them start on a shoestring because either they don’t have the money to begin in the proper manner or they can’t see the wisdom of outfitting their new studio and themselves with the right equipment, training, techniques and tools that are needed in the video business.

Often times, video producers focus on the gear – 4K cameras, steady devices, rigs, sound gear, lighting, etc. and now drones – quad copters. Everyone loves gear! That’s a big reason why we got into this business, right? We love all the tech stuff and the cool things we can do with it! Besides gear, what are some other things we pour our money and time into? Our editing suites and software: Premiere Pro, Final Cut Pro X, Avid – you name it. Then there’s Photoshop, After Effects, Lightroom, Motion, Pluraleyes and more. The list goes on and on. Believe me, I know this because I did it too. My first editor was a set of Super 8mm rewinds and a clunky viewer. From there I graduated to a Moviola, then to $300.00 per hour edit suites, then back to clunky again (groan…) the primitive non-linear editing software of the 1990s. Then came the leap to glorious Final Cut Pro 7 (may you rest in peace), a jump to Premiere Pro and, of late, I am rediscovering a fondness for Final Cut in Final Cut X.

"Gear. It's what we pay attention first."
Gear. It’s what we pay attention to first, second and third. We do it because it’s familiar territory. Messing with and buying video equipment is a rush for video junkies like us! We like the kick we get from purchasing that new camera or that new lens and we can’t wait to see how it will perform in the field or studio.


While concentrating on the periphery most people fail to consider three questions (and the answers to them) which are vital to a successful video business: What exactly is the type of video I am going to produce? Where are my customers going to come from? And how much are they going to pay me? In other words: What is my product and who is going to buy it and for how much?

Most video people wait too long to ask these questions.  They pick a sexy business name, turn on the lights, buy a bunch of gear, put up some kind of website (throwing a sleek picture of an awesome camera rig up) and then… time passes. Then…more time passes, and little or no business comes through the door. Even if it does they may be ill equipped to handle even the most basic selling and pricing questions.  

How can I presume to describe this situation with such sureness? Because I’ve seen it happen so many times. How can you remedy this situation? Well, if you are brand new to the video production business, I suggest you put just as much preparation, time and effort into getting business as you do to procuring your equipment and learning your video production and editing techniques. Spend some time defining  your customer, what are you going to do for them, why should they come to you and how much are you going to charge. Of course a zillion other questions now arise… chief among them: marketing, advertising, sales and technical training. I call this MAST training. Now that I’ve brought it up you may agree you need this as well. Where do you get MAST training and how much does it cost? Can you learn it all on your own? The answer is yes but it will take a long time and a lot of effort (and heartache). Just like almost any other subject you can figure this out on your own but you don’t have to. The true solution is to find a proven mentor or mentors who will school you and train you. This usually costs money but that’s okay. Doesn’t everything that is worth doing well require an investment? Don’t be afraid to put some cold hard cash into this part of your video studio. Money well spent now will pay dividends later.

How much should you budget for your, marketing, advertising, sales and technical training? That depends on your situation – your resources, etc. A general rule of thumb that I suggest is this formula: for every dollar you spend up front on hardware, software, infrastructure, etc. spend at least two (and maybe three) times that in your upfront MAST training - Marketing, Advertising, Sales and Technical training. Let’s add things up and see how this might go. Is it worth it?

Equipment and hardware: video camera, tripod, grip, lighting, sound gear, editing computer and software – that should add up to about $18,000.00 to $28,000.00. You can easily become equipment poor and in fact you might be inclined to spend much more than that. I say be conservative. Watch your pennies. You can always buy more equipment later once you have money rolling in the door. The other item we tend to forget is that things change so quickly. Equipment becomes obsolete so rapidly these days.  

With our gear budget above we should be spending a minimum of $36,000 to a maximum of $84,000.00 on the part that will turn our video equipment room into a video business! Unfortunately $36,000.00 is probably about $35,000.00 more than most people spend on learning this knowledge. Quite frankly most people wing it. They feel like they can figure it out and do all the things that are necessary to become a successful production company “on the fly.” What I am saying is that your backend should be just as strong ad your frontend. Why not put some time, effort and money into learning MAST. My theory is this: It’s better to know how to get the business than to know how to do it. You can always figure out how to do it. Of course, let’s do both at the same time. That is what MAST is all about.

I would wager that most people reading this are already established at least to some degree in the business. Some of you are doing well and some you wish you had more business. Here are five suggestions for increasing and improving your video business. All of these are either low or no-cost resources.

Marketing - Learn tried and true marketing techniques and adapt them to your particular studio business. One really fantastic place both to market your business and to learn about marketing is BNI - Business Network International: http://www.bni.com.

Advertising - Establish an advertising budget if you haven’t already, and stick to it. Spend some of your MAST money on figuring out where to advertise. You don’t want to waste your money! Where to spend your advertising bucks is the million-dollar question. My best short and sweet advice is to establish a healthy advertising budget – 10% of what you want your gross income to be and no lower than $2000.00 per month if you are full time. Do the math and you’ll get $24,000.00 per year - which works out to a gross income of $240,000.00 per year. How much will you net? That’s’ up to you but you should make a bunch!

Sales - Nothing happens until someone makes a sale! I suggest you get really good at sales. Read sales books, blogs and listen to podcasts. One of my favorite books is “The Little Red Book of Selling” by Jeffrey Gitomer. Jeffery has a great blog: http://www.salesblog.com.

Technical – Did you just pick up a camera and start shooting (not a bad idea for practice) or is there a method to your madness? There is no substitute for on the job training in the video business but that is really not practical for most people. I split tech into two areas: production and post-production. Two great resources for post-production are www.lynda.com and my friend Larry Jordan’s website: http://www.digitalproductionbuzz.com. You’ll learn a lot from Larry.  For production… well that is a huge subject. You can’t go wrong by starting with and reading this book: “How to Shoot a Movie Story.”  It’s a paperback by Arthur L Englander and David A. Gaskill. Written eons ago, it was my film school textbook (or one of them). It’s packed with good basic important information on shooting and composition and it is only $4.95 on Amazon! If you search you can find a free PDF on the Internet.

Operations – This is how you run the back end of your business – your lead system, your tracking system, your accounting, your banking, your phone system, your website, customer service, etc. Operations are every bit as important as your final video product.  I post helpful hints on operations, pricing and the $$$ of the business on my blog from time to time: http://makingmoneywithvideo.blogspot.com (Your reading it now). You can also download my podcast: “How to Start and Run Your Own Video Studio.” Just click the link!

Suggestion number six (one more for good measure) is this. Put some serious time, effort and money into the MAST part of your video business. I always recommend beginning with a self-evaluation and a business evaluation. What are your strengths - your weaknesses? Where are you now and where do you want to be in the future? One year from now? Five Years from now? Take some time and think about where you’ve been and where you’re going. If you need help with this or any of the subjects above feel free to give me a call or drop me an email. My cell is 317-358-5932. My email is roberthanley@mac.com.  My website is: http://www.myhomevideostudio.com.

Thanks for reading. Good luck with your video business. May the Force be with You!

Robert Hanley
Producer/Director/Editor
CEO & Founder Home Video Studio & Digital Video Archive

Robert Hanley with his wife Denise
About the Author

Robert Hanley is an American Producer/Director/Editor/Inventor and Entrepreneur who has turned his love for film and video into a cottage industry of companies serving customers from all over America. Borrowing from a spectrum of life's experiences - from selling snow cones at the city park as a teen to owning a 50's style drive-in restaurant to making a feature film, to starting and managing the largest video post-production studio network in the world, Hanley has worked in every aspect of the industry; as a technician, cameraman, writer, gaffer, sound recorder, producer, director, cinematographer, DP and editor. A good deal of Robert’s time is spent in helping people make a career change into the video production and post-production world. He is the inventor of the DVA and the CEO of Digital Video Archive. Robert is currently working on his second feature: The Great American Home Movie.

Robert lives with wife, Denise, in Indianapolis Indiana. They have two grown children. He is a gourmet cook, a wine enthusiast and an avid collector of antique sheet music.


















1 comment:

Donna Davis said...

Robert,

Thank you for a well thought out article with some good insight and great resources. It's funny, when I started a video production company eight years ago, yes, I focused first on equipment and the talent to use the equipment. What I soon realized is that with enough sales, you can always find the talent to fulfill the sale. Fortunately for us in the business, there are some amazingly talented people with gear who are always looking for work.

I agree, where there is money, there's a way. The money should be the focus first. That said, finding your value in a world with so much competition and one with IPad video, you really have to give a lot of thought about what sets you apart from all that competition and the alternative of doing it yourself.

I, too, love the Little Red Book of Selling and would highly recommend it. If you ever find yourself needing some resources or just people to ask about issues, please consider joining my web video association on meetup.com.
It's www.meetup.com/ATIVMA. The free membership simply allows one place to network with videographers. It's a wonderful group of talented and interesting people all of whom simply love video production.

Thanks again for the insight.

Best regards,

Donna Davis