Sunday, February 06, 2011
Practical Business Aspects of Video Production
In the previous article we covered the general business concepts as they apply to videography. You may well ask, why should I bother with all these business concepts, can I not just do video? Of course you can. But by becoming a formal business, it will bring in money and will save you money. That alone should make being serious about your business worthwhile. In this article we will focus on the practical aspects of a video production business.
Your business, whether incorporated or sole proprietor, must have a name! It is how the world will identify you. The name you chose for your business will depend on the image you want to portray and also your target market. If you want to specialize in legal videography, your approach will be more formal, but if you plan to specialize in training videos for kids your approach will be less formal.
You can make your name reflect the type of services you provide, e.g. ABC Wedding Videography, or J&J Legal Video Services. Another option is to build your location into the name, e.g. Vancouver Video. All the above examples have “video” included in the name so there is no doubt about your kind of business. It is not always easy to find a unique, unambiguous name, so you could opt for something like Penelope Productions, if Penelope is the name of your cat.
While you are considering names, it helps to consider if the name will work for your future website and e-mail address. “Northern California Video Documentary Productions” is really too long to be a domain name or to fit on a standard business card.
If your preferred name is on the long side, you might consider an acronym. For example, International Business Machines became IBM and the website is www.ibm.com
Along with your business name, it pays to also think of a tagline that describes your business further. Say your company name is Denver Docs and then a tagline of “Your Day in the Life Video Specialists” will clarify, assuming that you’re doing legal videos. The tagline will be an important part of your business presence and will feature on your business cards, website and promotional materials.
Getting the Essentials
What are the essentials? Once you've selected a business name, and it has been approved by the appropriate authority in your state or province, the next steps are to get:
1.) a business card
3.) e-mail address
And start using them! That will go a long way to getting your business known in the community.
Before you can get the essentials, you need to come up with a logo and a color scheme. This is a rather specialized endeavor and unless you have strong graphic design skills, it would be worth spending some money to get a professional graphics designer to help you. Often you can get a graphic design student at your local college at a reasonable rate. This is not something you want to skimp on! Get your graphic designer to give you the artwork both in high resolution eps format, and in jpeg format for general use.
Once you have your logo and color scheme sorted out, you should now turn your attention to your website! The starting point for getting your website and e-mail is to register a domain name and set up a web hosting account. If this is Greek to you, as it is to most of us, then you should hire the services of a web designer. We do provide a training course that will take you through the steps of designing your own business website — it requires quite a bit of learning new concepts, but will be worth the investment in the long run.
In the introduction we mentioned that formalizing your business will save you money. How so? Well, as a business, you will be entitled to write off business expenses as a tax deduction. So paying for a graphic designer and a web designer = tax write-off; meeting a new client for lunch = tax write-off; having your work vehicle serviced = tax write-off; buying a new HD video camera = tax write-off! You get the message ...
Talk to an accountant in your area about what possible tax write-offs are available and what records you need to keep so that you don’t have problems at tax time.
You are now part of the business community. One of the first things you need to learn is that you do not save money by trying to do everything yourself. It is a trap many beginning IVSP’s (Independent Video Service Providers) fall into. Indeed, you save money by spending it — buying services from other businesses in your community. Remember, in the long run it is a tax write-off! For example, don’t try and design your own business cards. The local printer in your community can do it faster and better than you can. How can you expect people to use your services if you’re not prepared to use theirs?
But there is another advantage in using the services of other businesses. You become known as a real, serious business. Don’t be surprised if the local printer, who has just printed your XYZ Video business cards, does not refer one of his other clients, who happens to need video work, to you!
Another big advantage is that it frees you up to focus on your business. Use the time to do marketing of your business. If you market, you will succeed. We have a very practical course on marketing.
Contracts and Costing
Just how much should you charge for your work? How do you make sure you get paid? Valid questions for sure!
Here’s a simplified explanation of how to cost a project. Assume that you need to earn, after expenses, $3,000 per month. Then assume that you only work 50 percent of the time on video work — the rest of your time is taken on administration things such as marketing, learning new skills, etc. That means you need to bring in $6,000 per month. Add that to your expenses of, say $1,000 per month. While a month has about 160 working hours, you will be doing 50 percent productively i.e. 80 hours. That means you need to charge $80 per billable hour.
That might sound like a lot, but realistically, you will pay about $100 per hour at the hairdresser, and even more to have your car serviced. That means when you are costing a job for a client, you need to estimate the number of hours the task will take and multiply that by the hourly rate. There are several other factors to consider, but that’s the overall concept. We go into more detail in our course on the contractual aspects of videography.
At the end of the previous article we advised against investing in more professional equipment at that point. Part of the reason was that you should only do that once you have formally established your business. That way you could benefit from the tax credits when you buy your equipment.
You are now at the stage where, funds permitting, you could consider investing in professional equipment. There are many factors to consider. For example should you buy, lease or rent your equipment? Always get the best equipment you can afford, the pleasure of using reliable professional equipment will last long after you have forgotten the pain of the cost. Besides, much of it is, yes you guessed it, a tax write-off! We are in the process of putting a training course together on how to go about getting the right equipment.
A great place to check for equipment, information and pricing, if you’re not already familiar with it, is B&H Photo Video. Start here, or check with the many advertisers who support Videomaker Magazine.
It is impossible to cover in a short article like this, everything you need to know about the business of video production. Hopefully we’ve highlighted the important concepts that we’ve learned after many years experience in the field. We wish you all the success and do let us know how you make out.
Heidi Mueller, New Westminster, BC, Canada, is an accomplished video producer, web site developer/designer, writer and course developer for adult classes on a variety of subjects. She is a frequent contributor to E.C. Come, E.C. Go and was recently the featured contributor of a four-part series on WordPress for web site creation.
Future articles will continue focus on the business aspects, and business concepts, plus proven business ventures for developing successful marketing niches in the wide world of video production. NOTE: a number of products and programs to teach and enhance your video production experience were mentioned in this article. Become an “EC Reader” today by clicking the link and you will receive information regarding their release as they become available.
For more great information about the world of video production be sure to visit J. Michael Long’s blog at In the Viewfinder. There’s a bounty of good input at the following forums as well: Videomaker and DV Professionals.
Remember: If you market, you will make it! © 2000-2011 Earl Chessher
Posted by Earl Chessher at 12:12 AM