[Nick Griffin]

[David Ghast] “a certain amount of money? Any idea where i can get the specifics on that amount?”

I believe (I’m not an accountant or attorney, blah, blah, blah, but) the threshold for the Internal Revenue Service (US) is $600 per year. I understand that to mean $599.99 doesn’t require a 1099, but $600.00 does.

1099’s are due at both the IRS and in the hands of the contractor at the end of the year. I believe the deadline is end of February but we always try to get ours out in January.

[Nick Griffin]

I had a similar situation with a Fortune 50 company in a nearby state a few years ago. Can’t say the name but it rhymes with Screw-Pont.

They presented me with a 35 page letter of agreement which specified everything from how much auto insurance we had to carry to us agreeing that they could pop in anytime they wanted, without notice, to audit our books.

Even if I was willing to allow such ridiculous requirements to stay in the agreement the real problem came down to them dictating our hourly rates. “This is the standard agreement we have with everyone supplying us this service and we never pay anymore than this hourly rate,” stated their purchasing manager.

To which I said, “But the other people you’ve been using typically have ten people doing what we can do with two and ten times the rate is far more money than the two of us charge.”

“Doesn’t matter,” she said, “We never pay anymore than this hourly rate.”

The manager who had brought me into the project pulled me aside and said, “Agree to the rate and just say that everything took twice as long.” I refused his suggestion.

There’s an old statement to the effect that it’s easier to be honest with people and make a habit of telling the truth because you have a whole lot less to remember.

The last conversation I had with them was to say that we would not be able to agree to their terms and that I wished them luck. In the long run I believe I saved myself a few gaskets.

The humor came a year later when I learned that one member of the creative team they had hired was a cultural anthropologist — brought in to make sure that the materials they were producing were relevant to the audience. The Schadenfreude (German for taking pleasure in someone else’s discomfort — wouldn’t you know that it would take the Germans to have a word for this?) came a year later when the group who had won the account went out of business.

[Nick Griffin]

[Tim Kolb] “What? D2 machines are no longer current?”

And just what am I supposed to do with the Sony BVH-2500 1″ VTR sitting in the corner of my office?? (Oh, that’s right. It’s a prop so the more naive of our clients will see it sitting there and think we must really DO television. Without it our offices would only have computers just like all of their offices do.)

[Nick Griffin]

We work almost exclusively in the technical/industrial segment and that is being affected by the slowing of business activity. The big companies still have some things going on, just fewer than we’d like. Some of the smaller companies we work with are going ahead with business as usual while a couple of others have put a virtual hold on any form of external spending.

With most companies we are seeing increasing evidence of a “delay” mentality. It goes something like,“We’re still going to do Project XYZ, but we have to put it off for a little while.” (And a while, and a while, etc.) In some ways that can be worse than getting a flat out no.

One variant of the delay which we experienced with one of our larger clients last fall was mid-level engineers and product managers rushing to get a project shot quickly before it could be put on hold by the higher ups. Unfortunately that only lasted a short while.

I don’t spend a lot of time thinking about competition and what overhead they may have. My focus is almost always on the clients’ businesses and my personal belief is that in this economy many people will still buy from the larger, solid companies because they know they’ll be around to support them. The little guys and the obviously sick ones are who industrial customers fear doing business with. Many of them clearly won’t make it and nobody wants to be left hanging on post-sale service or support issues.

[Nick Griffin]

Can you get away with just using a computer screen to monitor video which will just be viewed ON a computer screen? IMHO, yeah, you can but… that works as long as that’s ALL you’re going to do and YouTube quality is deemed “good enough” by the powers that be.

Then again, in my experience working around corporations, once the budget for something has been beaten to its lowest point the next request is along the lines of “Oh, and can you give me a version that we can show on the Jumbotron when we hold our sales meeting in Yankee Stadium?”

Moral of the story – equip for what’s next, not just what’s needed at the moment. (Any wonder I’m self-employed?)

[Nick Griffin]

Bob & Baz –
Thanks, guys! Truly comprehensive answers. You’re the best!

[Nick Griffin]

Ryan-

I’ve re-started this thread above so it doesn’t get lost this far down. Please see “Advertising for new business,” posted 2/14/09.

[Nick Griffin]

Typically in small, closely held, creative businesses (the kind where the company’s true assets go home at night and return in the morning, ie. – people) there is an “earn-out” period for the seller. Simply put, if you, as the seller, say that the business earns $X00,000 per year, the buyer says “prove it” with the seller staying to run the company for the 2-3-4-5-etc years after the sale in order to “earn out” the purchase price.

(But what do I know? I’ve been self-employed for 35 years.)

[Nick Griffin]

At the risk of being overly business & marketing-like in the business & marketing forum, this is a SALES issue. Everything that’s been said here has merit, BUT should be looked at from a bigger perspective.

Gentlemen (and the occasional lady), we are NOT in the COMMODITY BUSINESS. As Mark points out so well… (tell me again, Mark, why you don’t think you should be on the Biz & Mkt masthead?)… “Every job I do is a custom job.” We can estimate a job based on a fixed set of factors, we can bend or hold to that estimate when factors change, but it all comes down to what the customer/client is willing to PAY and, if after having paid it, they come back for more.

If you work in New York or LA (or Chicago, Atlanta, London, Paris, etc, etc), have dedicated studio space and a large following of agency people clamoring to fill your every open hour, then you can charge top dollar, especially if you are able to produce a unique “look” that not everyone can provide. However, if you’re in a medium-sized market where there are a limited number of prospects, you’re working from a spare bedroom and you have a lot of competition all pitching work very similar to yours in look and quality, then the cost structure you present has to be somewhat more reasonable.

It starts with having basic of knowledge of your market — what do OTHERS charge — what are their capabilities, specialties — what options do your prospective clients have and, importantly, how familiar are THEY with the options they have? How satisfied are they with past projects from other production companies, OR does a group of potentially lucrative clients have little experience with video and does getting them in as first timers offer an opportunity to make serious money.

Then market knowledge is used to drive SALES strategies and tactics. Not to say that many of us don’t work from a pre-set rate, or set of rates, but the success of any sale comes from:

A) You not leaving enough of their money on the table that you find yourself later smacking the middle of your forehead for being such an idiot, and

B) Not having the client feel after the fact that they’ve been taken to the cleaner and received anything less than stellar value from you.

All of this requires asking a lot of questions — both in the marketplace and of specific client/customers — and using what you learn to hone what you offer into what the prospect wants to buy at a price he or she is comfortable paying. It’s important to note that this is not a one-time or static process. It’s an on-going process of ready-aim-fire, aim-fire, aim-fire, and so on.

All of that said, Walt Biscardi’s post provides a good overview of market costs in general and also shows that the range from the lowest levels of production up to Hollywood full tilt is tremendous. Your job is to make sure there’s a good match between what they’re paying and what they’re expecting. Therein lies professionalism.

[Nick Griffin]

[Michael Hancock] “There was a long thread a while ago in one of these forums (the business forum”

The thread is at
https://forums.creativecow.net/readpost/17/858547

Using Media Batch constantly and LOVING it.