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$7000 investment in new production company. I Need advice.
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Zvi,
Since you’re posting this in the Event discussion group, I’m going to assume that you’re planning to focus on wedding and event videography. If that’s not the case, tell us…because the requirements for doing, say, corporate video are very different from weddings and events.
The first thing you need isn’t equipment, or even investors…what you need is a business plan. There are software programs to help you create one, but all you really need is a pencil and paper, and some serious thinking. Your plan should address things like:
– what’s my competition? Don’t guess. Do some research in the phone book, in bridal magazines, at trade shows, on the Web.
– what makes me better than the competition? Lower prices? Better product? Faster delivery?
– how will I structure my product? hourly rate? package prices? Will I offer any discounts? What payment schedule will I ask for?
– will I offer additional products? Film to video transfer, still photography, video scrapbooks, funeral videos…there are lots of possibilities, but don’t spread yourself too thin.
– how will I tell customers about my business? Ads? Website? Word of mouth? Bridal shows? Networking with other service providers?
– how will I show customers what I can do? You’ll need to have a demo, and sample clips for your website. That may mean doing a few jobs for free, or at a very low price, to get the material. Above all, don’t steal somebody else’s clips for your website; folks who do this are quickly found out. If other videographers don’t catch you, your customers will notice that your product doesn’t look like your demo, and they’ll be pi$$ed.
– how much income can I realistically expect the first year? How much in each of the next four years?
– what will be my expenses? Here is where you have to do some trading off between options like buying equipment outright, renting it, or leasing it. But you have to consider more than equipment. There’s also insurance, and advertising costs, health care costs, travel costs, taxes, continuing education, maintenance, software upgrades… Don’t forget to include a “salary” for yourself. Whatever’s left over is the business’ profit, the money that can be reinvested to grow the business. I built an Excel spreadsheet that lets you play with income and expense numbers. You can find it at https://videouniversity.com/weddingpricing.htm
– how will I get the money to start my business? Savings? Cash in my retirement account? Sell my car? Credit cards? Small business loan from a bank? Investments from friends or relatives? I think that, first off, your estimate of $7,000 is too low to set up a full time business and hit the ground running. Most full-time event video businesses have about $20,000 to $50,000 worth of equipment and software. You also need enough of a cash cushion to live on until your business is established and profitable…and most event video businesses take about three years to really get rolling. However, you may be able to operate a part-time startup business (one good camera and accessories, computer, software, and miscellaneous stuff) and pull yourself up “by your own bootstraps”. By working at a “day job”, you can reinvest most of what you make into additional equipment. But it does take a big toll on your time. Second, any method that does NOT include the word “investors” is preferable to any financing method that does. Investors are a chain around your neck. They have this habit of insisting on getting paid a good return for their investment, and you could put that money to better use.
Your business plan is a living document. Take it out several times a year and compare how you are doing against what you THOUGHT you’d be doing, and update the plan as needed.
Good luck!
Regards,
Doug Graham -
Hi Zvi
I was reading the posts and thought i would tell you how i started out.
As i was working a full time job the first thing i did was ask around and see which editing software was good didnt know anthing back then. I spent 6months learning when i came home from work anything from 6 to 8 hours a night studying techniques you see something on tv and you go and try to work it out best way to learn i say.
I then began to work as an assistant for zero dollars for six months. Working full time allowed me to upgrade my pc with a captured card everything i did was trial & error. Saved and purchased a dsr 250 tridod dolly lights and a dsr11. now i new i had to get some jobs under my belt for my show reel and i wanted to build a website had some mates getting married so i did there weddings for less then cost i still gave them a present for there weddings.
From there i made my demos built a website started to advertise heavily kept working full time and studying programs. From here the business started to take off very slowing the one most important thing you must be able to do is SELL your product if you cant do that you wont last.
Mate i was a hawk watching my competitors seeing what they do where they advertise ,when someone has been in the business for 20yrs you want to find out how he does it.From there i re-invested back into the business buying my first Mac which i couldnt afford in the beginning updating my equipment and my hours had to decrease from full-time to part time and now 4yrs later i am working full-time as an events videographer and still studying .I have spent in that time on equipment close to $40,000.
One other thing dont be disapointed when people dont book. I found it very very hard at times where i wanted to pack up and wish i never started but i kept a positive outlook.Rob.
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Robertbeck, thanks for sharing your story, and Doug, thank you too for your reply. I agree with both of you, actually, ALL of the replies here gave me a lot to think about (except the $1,000,000 one 🙂 ) I would like to further reply:
What it comes down to, is not that I CAN’T succeed… but if you don’t come up with a business plan you WON’T succeed. I know MANY people that are very successful in the video production business. Seems that the “secret” is starting smart. Not only (but also very important) doing a good job.
So I’ve read all you had to say. I researched how to start a small business and even applied to a 15 hour course on how to run a small business. I also am making a professional business using “Business Plan Pro 2007” https://www.nolo.com/product.cfm/ObjectID/E…4910EAD1E1/111/ that’s I think is worth every penny.
There were two issues that were brought up a couple of times:
1. Working for someone for a while first.
2. Renting equipment at first when needed.Here is my own personal 2 cents on this. Of course, this may be the way to go for some people.
I have spent the last 2 months “working” for someone. I did it for training purposes and not for money, even though he did pay me something. He let me do some of his editing (and liked my work very much) and I went to some of his events where he would show me and explain his shooting techniques. I myself am not a complete amateur when coming to shooting techniques, though I know I will learn something new with every event, which is what I hope to do.
I don’t think (personally) that if I work for someone for a year to get experience, and THEN start my whole business… that anything will move any faster. I think I can pick up my own techniques and learn along the way if I start now on my own. (shooting wise… since I HAD been editing for a few years now as a hobby and have also shot some family occasions. Ok, so I used a $500 camera, but the shooting techniques were pretty good for a starter with no learning experience at the time).
So yes, I understand that I don’t need to buy ALL the equipment at once. Understood. But now to the second thing… renting equipment….
I’m not talking about the general idea to rent equipment, which I personally think is a good idea when able. My problem is that the closet rental place is an hour drive away and just a camera costs $80 a day. Now my own thought is that I will want to go over the whole manual… TWICE! I will need at LEAST 2 weeks that I will want to practice and get a “feel” of this new, powerful machine. To rent a camera for 2 weeks will cost almost half the price of the camera!
Someone told me that I can use the camera at the store and that these places even WANT you to use it so that you will rent it. Maybe this can work, but again, there’s the 4 hours of travailing every time I need the camera (back and forth). It’s just not worth it I think.
Maybe other things can be rented. Things that you might not need at EVERY occasion, like lights (at an already well lit hall or a day time occasion). But all the lights I inquired about were $1000. Just renting them 10 times would be about the price or buying them (travel and time).
Furthermore, in some article that was posted: https://www.fastforwardclub.com/Articles/Business/Fallacy-Market-Pricing.htm (very good article) and also in other forums, for some reason everyone only talks about weddings. There are SO many more projects that need shooting! Does everyone start off with weddings?? There are schools, organizations, Bar\Bat Mitzvahs, Parties, corporate, charity events, SO many things that need video productions.
Also, the only reason people use for “you will not succeed” is if you don’t make a business plan. Well… if you DO make a professional business plan and STICK to the plan… why shouldn’t you succeed? There are thousands (if not more) of successful videographers and I assume that all they did to be successful is to start off with a realistic business plan and run the production as a business and not a hobby! (like in the article).
But like robertbec said, getting a full time or part time job and working to build your business on the side, could work better. I have tried getting a job in the past and it wasn’t easy. I will consider this again.
So once again, thank you all for your replies. I am going to get my “business education” (and maybe a job first) and will ask you for more advice as I go along.
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As of march 31st 2007 I am in a similiar, hopefully better prepared, situation as Zvi. I just started my own event recording company and was suprised at the attitude of Zvi towards what was needed to start a business. I then realized that it’s a location and culture issue. The way we promote success in the US is through planning, preperation, and working for other people. Zvi worked “all night” on his business plan. I worked 6 weeks and make revisions and additions on a monthly basis. He also pointed out that the market is very open there and then later stated he knows several videographers. Big or small market? I can’t tell. My company, ICVideo, has reached into my pockets by about $40,000 and I am always left wondering if I have everything I need as far as equipment and software. Without knowledge of the market he is in, maybe a old Canon GL1 is a nice camera for the area. Maybe customers have no desire for 12″, Digital Juice, or Digial Hotcakes being added to their recordings. Zvi, if you need advice on equipment and software this is the place for you. If it’s business advice I would use local resources that understand where your coming from better. Case in point I charge $1600 US for 5hrs coverage of a wedding. Other events, for 3 Hi-Def Canon XH-A1 camcorders, go for $175hr plus editing. What are the comparable prices in your market?
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Yes, there are differences in culture. But first, we don’t need to be sarcastic here… I made a first draft of a business plan on paper over night, but this was of course after weeks of jotting things down on paper and talking to people and researching the market. Tonight I’m going over with the 35 page plan to show it to someone to review and go over more issues. I’m taking things step by step.
About the pricing, I know that there are people that charge in the thousands, I even read about someone that chaged $7000 for a wedding. It’s quite different here. Weddings range between $850 – $1500 and most companies will do a wedding (2 cameras) for $1000. People here don’t spend that much on weddings here. But before you start saying then there’s no way I can make a living, remember another thing that here, everything costs less. Average annual sallery here is $15,000 – $20,000. I know that in the States that’s peanuts but just for example, health insurance for a family with 5 kids can be almost $10,000 a year there, can’t it? Here it’s just $100! School for 5 kids here is about $300 where if I’m not mistaken, is in the thousands there… So it’s a quite different picture here.
Anywho, thanks for the reply.
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I apologize if I sounded sarcastic. I actually tried to point out that do to cultural differences, which is a safe assumption if your based in Israel just like if I tried to base my business on California market conditions. Thats a matter of states not countries. The only thing you also said about a business plan was “all night”. Nothing about having developed your plan to include direction, marketing, or sales approach. If you would have stated that you had a 35 page plan, well thought out, researched your competition, and evaluated your market and your own abilities your entire thread would have read different. Stating you simply can’t fail because your a 35 year old male with 5 children is laughable. A business with wit and heart is a great start and I commend you.
One question is if you have found other videograpers or editors to work with you. I do not believe a one man show can create a truly successful business. It’s not a question of intent, but rather how thin can you spread yourself and who doesn’t need a helping hand when filming, lighting, setting up, monitoring audio and video levels, post-production, and the other components of a video business. I’d love for you to succeed. Having adequate, no more than adequate, capital, equipment, and man power resources is necessary to start a business.
Also, what is the model of the $400 sony hi-def camera? The prices between here and Israel are 2-10 fold depending on if your referrencing an inexpensive consumer model (HC1) or a prosumer model (Z1U). The three cameras I purchased where $4k each and while better than most of my competitors are still of lower quality than some of the competitions. Software and effects suites cost me upwards of $15k with additions being made every 2-4 weeks. Computers are an entirely different story from a PC to even a minimal editing station. You need dual monitors, tons of harddrive storage (I have almsot 2TB), 2-4GB of Ram, and the newer the processor the better. It just adds up to a great deal more than the $7k. I respect that you only want help with the deal and that is one of the reasons I still strongly believe that you should get your advice from local sources. That’s my biggest point plain and simple. Like I said “Zvi, if you need advice on equipment and software this is the place for you.” Good luck to you and your business.
Oh yeah, what is the name of your business? Don’t forget to cover the bases with logo design, marketing, brochures, website (if needed), and trade shows. Good Luck. -
Zvi some how I get the impression that you feel that we are telling you that you will not make it if you start a business, or that you cant do it. NOBODY here has said that all we want to do is give a little advice so as to help you NOT to fail. We would hate to see you jump head first into the business pool while chained to a rock, all that we have said is to point out rocks that wee see potentially chained to you that you may not have noticed.
You have said that you will succeed, and while that is a good attitude to have, the hard reality is that there is a chance that you might not succeeded as you think you might. Having a I cant loose attitude often makes one look vary cocky, and nobody likes a someone who is vary cocky.
Starting any business is a risk, but because there is risk involved, the reward is that much sweeter. Your original post gave the impression that you were walking into the pool without knowing that you had a rock chained to your leg. When we sagested renting to didn’t say in your initial response that the closest rental place was so far away, you just seemed to blow off the idea.
Again all we want to do is to help you NOT to fail, so please don’t take what I have said or what others have said to mean that you cant, because I believe that you can. All the things that we have shared are things what we believe can help you succeed.
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Thanks you guys! I’m also sorry if I came off as “blowing you off”, I didn’t only read every one of your posts… twice, but printed out a few for use on further research. You really helped me a lot and I appreciate the time you are all taking to respond to someone you don’t even know.
Of course age and kids don’t make a business, maybe I just got the impression that I was taken to be a young, irresponsible person who woke up one morning and decided to start a business over night… well, reading my original post… I can see why you might have thought that! 🙂
Anywho, I went over the business plan tonight with someone who’s been in bussiness for a long time and of course it will need changes, which he will do for me over the next few days and I hope to make something that will be both reasonable and go for it.
ICVideo, yes, I have two video producers that have both been in business for almost 20 years that will help me. I made contact with them through “contacts”. One of them I had been hanging out with him for the past 2 months and learning from him and the other one left his door open for me, I just didn’t get the chance to go to him yet, but we have met once and talked.
Then there’s this guy who is the friend of a friend of the cousin of my step mother… 🙂 He’s something called “The Natural Networker”. Has a business card and all (lol – I love people with cards! 🙂 ) Supposed to be a brilliant business man and just so happens that he worked in video production for 10 years, many years ago. He is close to my family and said he’ll take me under his wing and help me. So I don’t feel alone.
About the Sony camera you asked about, did I say it was hi-def? lol… hardly… I guess I just got that term stuck in my head. It’s a plain Digital8 Cam – DCR-TRV140E . Actually, it has the same compression and editing protocol as DV and has some pretty neat features, but it’s old and I have no idea how much it’s worth today… probably $100. 🙂
About computers and elecronics, the prices are about the same and sometimes more here because they are all imported and heavily taxed, but overall it’s not that bad. So a Panasonic AG-DVX100B that I saw going for $2,600 on the net, is $3,000 here. a Western Digital 500GB HD is roughly $170 here. I already have a decent computer with 1GB of ram and to upgrade to 2GB would be $150. Flat screen monitor is $170 new and you can pick up used ones in great condition for $100. I’m just saying that I can upgrade over time. I can’t bealive that every videographer started with a $40,000 kit. I also bealive that what you all said about the business side of things are absolutely true, and that if you handle a business right, even if you start out with little equipment and man-power, if you succeed and build a reputation, you can grow.
zrb123, sorry if I sounded cocky. Didn’t mean too. I know I might fail and might not make it. I know that I have a lot of work ahaid of me and bealive it or not, I might even decide to work for someone before I open my own business like you guys said. Nothing is final. It’s all in the drawing board.
Oh, and ICVideo, I forgot to mention, Last year I just got out of a 5 year school where I learned computer engineer programming so I build my own website and having worked in computer graphics, designing ads for a local weekly for a couple of years, I already bulid a logo and will make a brochure when I make enough money to print it! 🙂 (you might ask why I don’t work in programming… well, I did for a while but the pay here is surprizingly low unless you have 3 – 5 years of expirience, so maybe I’ll get back to that one day or combine it in the business. Who knows.
Once again, I thank you guys and please feel free to criticize when needed! I won’t take it personaly, but try to learn from it.
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The man that wrote the last post “Zvi” is now heading in a much better direction than on the original post. Now that you have explained yourself you seem to be much more competent and capable than previously noted. The last post should have been your first. I’ll leave it to that and hope that future we can help you as a fellow videograper/editor/director of photography/stage hand/camera operator/manager/owner/CEO/CFO/Assistant Director/Scenic Artist/Sound Mixer/Purchasing Agent/ Inventory Specialist/Field Producer/and artistic visionary I welcome you. You did say you were starting your own video business, right 😉
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Thanks!
by the way, is this an April fools prank by google? Getting free Internet by flushing a cable down your toilet???
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