Video Production Business Tips – 3 Key Lessons Learned From Mistakes Made By A Seasoned Videographer

Making mistakes is a necessary component to finding success in your video production business. Applying what you learn from those mistakes is required to sustain that success.

Throughout the course of my career, I’ve made thousands of mistakes. The key to my success, I believe, is that I’m not afraid to make a mistake and I when I do, I recover from it quickly. Then, I apply the knowledge gained from the mistake so that I don’t go down that path again.

Because I’ve made so many mistakes, it has become easier and easier to instinctively make the right choice when important decisions need to be made.

I had a football coach once that said “I don’t care if you make mistakes as long as you make them at full speed. I can correct your mistakes. I can’t correct your intensity.”

I’ve taken that message from the football field and have applied it to growing and managing my own video production business.

Below are three lessons I’ve learned over the years that were derived from some pretty serious and not so serious mistakes.

1. Get a Business Line of Credit

Sales have never really been a challenge for my video production business. We’ve grown at a reasonable rate since day one but what has been a problem is receiving payments from clients in a timely manner.

Early in my career, I severely damaged my credit because these late payments from clients caused me to be late on my payments to vendors, banks, etc. Finally, after a few years of heartache and overwhelming stress, one of my mentors helped me realize that all I needed to handle the stretch between when I had to pay a bill and when I received payment from a client is a revolving business line of credit.

So I talked to my banker about setting up a line that would cover 3 months of expenses that I’d pay off as the checks came in. This is a must have for your video business to keep cash flow in balance so that you will never be late again on payments.

Every business, no matter how large or small, has a line of credit for the very same reasons you and I should have one. Call your banker today to ask them about setting up a line of credit for your business. It can make the difference between keeping your head above water or going down with a sinking ship.

2. Always Get It In Writing

This lesson isn’t just referring to contractual agreements with your clients. It’s referring to the need to have a written record of every agreement you make in your business. If you tell a client you will do something in exchange for something, you need to write it in an email or in the form of a production agreement and send it to them.

Also, be sure to close the loop by asking them to return a signed copy of the agreement or a simple email reply stating that they understand the terms.

The same goes for deals you make with vendors, employees, etc. As a video production business owner, you manage thousands of details on a regular basis and the only way to know for sure what the terms were of any agreement is to have a paper or electronic trail.

If you ever have a question about an agreement, I highly suggest you consult your attorney. A few hundred dollars is worth getting it right. Plus, you can depend on that knowledge and apply it to future agreements.

3. Keep Your Fixed Expenses Low and Your Variables High

When you experience your first taste of success, you’ll be tempted to purchase video production equipment and software you’ve always wanted but couldn’t afford and perhaps even to hire full-time employees to carry most of the workload for you.

Tread carefully! By now I’m sure you’ve realized that the video production business is very cyclical in nature. Just because the gettin’ is good right now doesn’t mean your sales will continue to be as strong a month or several months from now.

If you take out loans on equipment and hire employees when times are good, you’ll have the cash flow needed to make the loan payments and to cover payroll. However, when sales are down, you’ll still have the same payments and payroll to make.

This will put you in a bad spot because you don’t want to make payments on equipment or pay employees when there isn’t any work to cover the costs.

Obviously, we must invest in gear and personnel at some point if we hope to grow. All I’m asking is that you be very conservative when doing so. I’ve had as many as 7 people on my payroll and over $200,000 in equipment loans at one point in my video production business.

This was fine when revenues were high. When the market shifted and people were no longer buying videos faster than I had to write checks, things got pretty tough.

I eventually had to lay off my employees and sell some of the gear so that my fixed monthly expenses could be reduced to a comfortable amount. By having such high expenses, I was forcing myself to sell, sell, sell just to make ends meet. After reducing my fixed expenses, our profit margins soared….without having to sell any more than what naturally flowed into my video production company each month.

Always remember that there are two ways to increase your profits

1) Sell more.

2) Spend Less.

If you are a talented marketing and salesperson, selling more might not be a problem. If you are a better videographer than you are a marketing genius, focus hard on protecting the revenue you already get from existing clients and word of mouth.

Ultimately, It’s how much money you get to keep that counts.

———-

For more tips on how to be more successful as a video business owner or freelance videographer, visit http://www.mindyourvideobusiness.com

About the Author

Kris Simmons is an award-winning video producer and successful entrepreneur whose purpose is to help videographers around the world learn how to grow, manage and sustain highly profitable video production companies. Visit http://www.VideoBusinessSuccessTips.com to get a free copy of his popular eBook “How to Grow Your Video Business.”

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