Strategy – How To Keep Your Service Business Focused On The Most Productive Business Activities

One of the prevalent problems most service business owners experience is difficulty with focus, loss of focus, and having no focus for their business. Instead, they conduct business from the “putting out fires” position. They aren’t staying focused at all times on the most productive business activities (bringing in clients, increasing revenue, increasing profit). They’re letting other demands pull them away. Often, these demands are not important or even relevant. If you’re having trouble keeping your focus on the right business activities, here are a few ideas for you.

1. Keep it simple.

You don’t have to do four million things at once. Eliminate 95% of the stuff you’re currently doing, and get it down to just a handful of activities. Put everything else “on the back burner” – at least temporarily. You can still do these activities. You don’t have to do them now.

2. Create a written strategy.

Know exactly what you want to accomplish with your business, the tactics to do that, and all the action steps that each tactic requires. Work from this strategy. Put a time-line to this strategy. Follow the time-line, and keep your focus on the top priority activity (as identified by your time-line).

3. Ask yourself at all times, “Is this the most productive business activity I could be doing?”

If not, make some changes. Make this reminder habitual and you’ll discover how much of your business activity is not focused on your most productive activities.

4. Execute your strategy consistently.

Use your written strategy as your business roadmap, making it clear what is next, and where your focus should be. Resist all the sales spiels and time demands, or delay them into future strategic behavior. You can add new things into your strategy at any time. Just make sure that they really are valuable and not distractions to your strategic objectives. It is challenging to stay focused and to resist distractions, but try using as a “filter” the primary objective of your strategy. Ask yourself if any new activities Will truly advance that objective.

5. Be clear in your strategic planning about any information or training you need, and work on getting it before you need it.

One sure way to stop your business momentum is to neglect to educate yourself in advance of the need to know. Figure out what you do not know and where to learn it. Stay ahead of your need to know and you will maintain the momentum of your business.

6. Recognize and reject distractions.

When new ideas or time demands arise, see if they fit the context of your current strategy. Explore whether or not they fit somewhere into your longer-term strategy. Are they simply distractions? Stay clear on this, and be willing to place these new potential activities where they belong in relation to your strategy.

7. Keep your focus on the concept of focus.

Modern life has unlimited potential to distract us with “important” activities that are essentially time wasters. It’s way too easy to get sucked into following the crowd with the “latest greatest” technologies, methods, and ideas. They are so seductive and play on our fear of being “left behind” in a rush to the new. We don’t question whether or not they are effective, fit our personality, or advance our strategy. Instead, we just jump in and follow the herd. Decide you will behave differently, and it will really pay off for your business.

These ideas will help you keep your service business focused on the most productive activities. Stay focused on attracting more clients, and increasing your revenue and profit. Don’t get distracted by off-track activities.

Video Production Business Tips – Starting a Video Production Business

A good friend of mine called some time ago to pick my brain about starting a video production business. He and I graduated from the same college with the same degree but his life and career took him down a much different path than mine. He has done well for his wife and 3 kids but has always had the itch for getting back into video production.

During our phone conversation, I was reminded of how hard it is to start a new business, especially a new video production business when you have a family that depends on your income. The truth of the matter is that you have to be in a position to lose for a while before you will start to win. You have to spend money for a while before you will start to earn enough money to make a living.

Here’s the condensed version of the advice I gave my friend:

1. Research your market. Find the need. Fill the need.

What are the other video production companies in your area? What type of clients do they serve? If there are 10 wedding videographers and 0 corporate video production companies, then you should seriously consider being the first and only corporate production company in your area. If there are 10 corporate video companies and only a few wedding videographers, you should lean more towards wedding videography. If it’s about the same in both categories, consider serving both markets or simply choose the type of work you prefer to do.

I researched online while I was on the phone with my friend. After looking at the competitor’s website, I learned that this company wasn’t producing good work. The quality of their website was poor and their wedding demo was even worse.

With that in mind, I suggested to my friend that all he’d have to do to get out of the gate in a hurry is make sure his site looked better than theirs and that his wedding demo did the same. He is a talented shooter/editor so creating a better demo won’t be a problem.

The other side of the equation is that this competitor doesn’t do any corporate video work so my friend could be the one and only corporate video production company in his town. At this time, the corporate clients get all their production projects done out of a larger city about an hour from there.

2. Plan to Lose Money.

After the research proved that there is plenty of opportunity for another production company in his area, we discussed how he’d handle the cash needs for both his new business and personal obligations. The reality is that it could take as long as two years to generate a large enough client base to reach the salary he makes in his current line of work. Knowing this up front, he has to figure out how he’s going to pay all the business and personal bills until his company can support both.

He can work full-time or part-time for someone else in order to support his income and spend the remaining time to build his video production business. He can also loan from a bank or find an investor to finance his business.

3. Pull The Trigger!

Let’s face it. Starting a video business is probably the hardest thing you’ll ever do. Keeping your head above water is equally as challenging. However, you can’t be successful as a video business owner until you take the first step. If you have decided that this is something you definitely want to do, THEN DO IT!

Don’t waste any more time. Every day that passes is a day that you can either be working towards building your own asset (your business) or working to build someone else’s asset (someone else’s business). I’ll tell you from experience that you will make mistakes – a lot of mistakes. But the only way you can learn from those mistakes is to hurry up and make them.

The advice I gave above isn’t anywhere near the information you need to start and run a successful video production business but it should give you a few things to think about. Find the easiest entry point in your market (wedding, corporate, etc.), figure out how you are going to pay the bills while you are building the business in the first year (full-time job, part-time job, bank loans, investor) and finally, pull the trigger!

Video Production Business Tips – Reasons NOT to Upgrade Video Production Gear

We can all find reasons to upgrade our video production equipment and software. Industry magazines tell us we should and equipment/software manufacturers advocate we do so we’ll have access to the new features available in the upgrade. There are thousands of people in production forums throughout the world who believe that staying up to date with current upgrades and technology is crucial to being competitive in the video production industry.

To an extent, they are correct. But what people don’t share with you are some of the reasons why you should not upgrade your equipment and software. Or at least not at the speed in which the industry says we should.

The underlying theme here is that upgrading your gear takes money out of your pocket which impacts the overall cash flow of your video production business. If you choose to finance upgrades with debt (loans, credit cards, etc.), then you are also impacting your cash flow because you will add payments to your monthly expenses. I know that upgrading is a necessary component of running a video production business. However, you should think hard about the following reasons NOT to upgrade before you spend the money.

1. If you haven’t mastered the video production equipment and software you have now, you shouldn’t upgrade.

When you start to get the itch for something new, take out the manual and start reading. You’ll be surprised at all the things you didn’t know about the equipment/software and this will re-energize you. Until you can push your gear to its absolute boundary every time you use it, save your money.

2. Rarely will an upgrade result in more profit for your video production business.

Think about it. Did the last piece of gear you purchased improve your bottom line? It probably didn’t. My employees are constantly advocating that I purchase new cameras or software. I respond by telling them that if they can justify on paper how the new gear will result in additional profits for the company, I’ll consider it. Needless to say, most of the new gear doesn’t get purchased.

3. When you finally pay off your car, you want to do your best to drive it as long as you can.

Not having to make payments is a wonderful thing. The same goes for equipment and software in your video business. If you have a camera that is paid for and is still generating revenue for you, think hard before buying another camera. Making money with gear/software that isn’t costing you money substantially increases your profit margins. A couple hundred dollars every quarter or year in maintenance will help that piece of gear be a profit maker for as long as 3 to 5 years, depending on what it is of course.

4. If you had a choice to invest $5,000 into equipment for your video business or invest $5,000 into something that will improve the quality of life for your family, which one would you choose?

If you chose the equipment, you have your priorities all screwed up. If you chose your family, your head is on straight. In my situation, $5,000 will cover several mortgage payments on my house and on my rental properties if/when they are vacant. Instead of sinking the extra cash into a business asset, I use that cash to build personal assets which will directly benefit my family.

5. Upgrades take time away from your revenue generating activities.

If sales are down, upgrades won’t improve that. You have to improve that. If you are in the middle of several projects, upgrades won’t help the situation. They will simply slow you down which will cause you to be less profitable. Purchasing new equipment won’t make a prospect want to do business with you. The quality of your work and reputation is what gets the phone to ring. Ninety-nine percent of the time, your clients won’t give a flip about what kind of cameras or software you use. They’ll only be interested in the formats you can provide them after the project is complete.

Obviously, you can’t run a video production company without upgrading your equipment and software when absolutely necessary. I just hope that this article has given you a reason to only upgrade when you are 100% sure you can no longer squeeze a reasonable profit margin out of the gear you have now. Training yourself to hold off on spending large sums of money for as long as possible will help to increase the financial strength of your video business as well as improve your skills as an entrepreneur. Both of which will accelerate your success!

Video Production Business Tip – Restructure Video Production Debt, Improve Monthly Cash

To work on my video production business expenditures, I have already tried to reduce my fixed expenses by negotiating with monthly vendors such as your landlord, Internet service provider, Telephone Company, etc. That’s a lot of money you’ll be able to save just by picking up the phone and asking questions regarding how you can bring your costs down.

After I went through this exercise some time ago, I started to think about how I could bring my monthly expenses down as it relates to my overall business debt. Right now, I pay almost $10,000 dollars a month in business debt that I took on some time ago in order to grow my business with equipment, real-estate and personnel. No, that’s not a typo.

Even though I have since “right-sized” my video business and it is profitable in its current state, I still owe the debt. Currently, the payment plans I’m on will have me out of debt in 3 years. That’s great but I’m no longer happy about having to pay so much money each month and I believe I can get a better interest rate.

My plan: To get a single bank to roll ALL my business debt into one large loan for a term of 5 years at a 6% interest rate. If I’m successful in doing this, I will reduce my overall monthly debt payments by $6,000.

Yes, you read that correctly! Once the loan is finalized, my video business will immediately increase its monthly profit by $6,000. That’s $72,000 extra a year that will be in my pocket instead of the pockets of my lenders. Plus, it will be a single check written each month instead of multiple.

Some of you may be wondering why I’d prefer to stretch my payments over 5 years instead of staying on course to pay it all off in three years. It’s really easy. If I pay $6,000 more per month for another 3 years, I’m losing $72,000 in cash flow each year for 3 years. Sure, I’d be completely out of debt in 3 years, but at the expense of $216,000 that I won’t be able to use to increase my personal net worth.

Plus, as soon as the refinance is complete and my monthly cash flow (or profit) increases by $6,000, the value of my video business will increase by roughly $500,000. And, if the economy continues to make it hard on the video production industry, I’ll have $6,000 less I’ll need to generate in sales each month just to keep our heads above water.

I spent a couple days last week approaching several banks with my offer and I should hear back from them in a few days. Overall, my financials are strong. I have 15 years in the industry and 9+ years running this particular video production business so I don’t think I’ll have any issues getting one of the banks to do the deal. But in today’s economy, nothing is guaranteed so I’ll keep my fingers crossed.

So, what does all this mean for you? I suggest that you look at your debt (if you have any) and start crunching some numbers to see if you can refinance the debt with a better interest rate resulting in a lower payment each month. You’ll need the extra cash flow in this down economy and as it starts to turn around, you’ll have extra money to either invest back in your video business or to start building your personal net worth.

One word of caution though. Don’t make any major financial decisions without first consulting your accountant. If you don’t have an accountant, GET ONE! They will save you A LOT of money and headache in the long run.

If and when you decide to approach the banks to refinance your debt, you’ll need to make sure you take the following with you:

  • 2 years business tax returns
  • 2 years personal tax returns
  • Year-to-date profit/loss statements for your business
  • Year-to-date balance sheet
  • List of debts you want to refinance
  • If your video business is an LLC or corporation, Articles of Incorporation or some type of document that proves you have the authority to borrow that much money for your business.

By having all these documents ready on the first visit, they can actually submit your loan while you are sitting in the bank instead of you having to go back to your studio to gather all the paperwork first. Also, you don’t have to take copies of everything for each bank. They’ll make copies of the above documents for you and give your originals back to you.

Good luck out there! The waters are rough right now but if you stay focused, you will find success in your video production business.