Hi Karim,
I am a Producer/Director who owns an LLC without any other employees. I sub out all shooting and editing. Business is good, but like many of us, unpredictable for 2009-10. This year, I’ve already lost two $15,000 jobs that were canceled because of the recession. I’m preparing for the possible “crisis to come” three different ways.
#1) Personal Life
Over the past year, I’ve been paying off and eliminating personal debt. Also, I have been spending less “disposable income” for fine dining restaurants, toys, etc. This has created less need for a “larger salary” from my business. (Still doing a good job of staying away from Wal-Mart in order to help manufacturing friends from losing their jobs to China).
#2) Business Infrastructure Adjustments
I’m trying to emulate what all the corporations are doing. Because of the actions mentioned above, I cut my salary back to what it was in 2007 (if I end up making great money this year, I can always pay myself more as dividend payments). I was amazed to find out how much money I was “saving” from less payroll taxes.
I also cut operational costs like the fax service that I used only twice the last two years, less awards competition entry fees, etc. According to my accountant meeting last week, this is exactly how small businesses should be dealing with this recession.
#3) Vendors
I have vendors who are full fledged brick and mortar production companies with multiple employees and others that are younger professionals who live and work out of their parent’s houses. Having a diverse vendor base allows me to be flexible when bidding on projects that are all about price in these times of client budget cutting. I have the flexibility to at least compete with others in getting “low priced” jobs by hiring the vendor that “fits the budget” best. I don’t always go to the cheapest vendor for low cost jobs, but some times will discuss cheaper budgets with higher cost vendors and see what they can (or if they want) to do in order to compete for the job. I have very positive and honest relationships with all my vendors. If I tell them that there is no money, they know there is no money. Likewise, when I have a higher budget, I let them know that too.
My 2-cents for now (maybe more once that big stimulus package is implemented).
Good Luck,
Bruce
Bruce Bennett
Bennett Marketing & Media Production, LLC
