Starting a New Business - Need Assistance
by Will Tragert
on
Apr 1, 2008 at 5:00:59 pm
Hello!
I'm starting a small video production business and have begun to search for used equipment to purchase. Its not the most profitable business when you have to rent equipment every time!!!
I've tried places like cragslist and ebay but was wondering if you could suggest any other options for finding cheap used equipment.
Re: Starting a New Business - Need Assistance by Brendan Coots on Apr 2, 2008 at 2:40:13 am
I don't know that buying gear, used or otherwise, is better for someone in your position than renting would be. It depends on various factors like how much you pay to rent the gear, how many annual billable hours you will get from the gear etc. but I would encourage you to run the numbers and make your decision based on that, or you might regret it.
If you're renting a computer, you should probably buy. But let's say you buy camera/lights/tripod for $5,000 and, if business is good, you'll use it 20 times this year. This means that, in your first year, you will pay $250 out of pocket per shoot for using your own gear. Over several years you might turn a profit on the purchase, but when you're just starting out you should be thinking about surviving the next three months, NOT making long-term investments. Maybe this $250 is less than the cost of renting the gear. But when you factor in depreciation on your equipment, insurance costs and opportunity cost (meaning, that $5k could have been used for other things) it probably ends up costing you about the same. In short, buying gear cuts into your profit just as much as renting would, it's just an upfront cost rather than a "cost of goods sold" type of expense.
If it were me, I would put your "seed" money into marketing, sales materials etc. You will land many more jobs than you otherwise would have, benefiting you in the short AND long term.
Re: Starting a New Business - Need Assistance by David Edwards on Apr 20, 2008 at 12:18:33 pm
Hey Will,
I was in the same position earlier this year. I'm also trying to build a Business and my budget was a big concern. 2nd hand gear was not an option though as there is no support and the risk of it breaking down was high, just an economic minefield, well worth considering new gear.
For each job I did I had to rent the gear (Sony HVR-Z1) for the shoot however I did already own a G5. This cost me $280 AUD each time. I eventually booked enough jobs to consider buying a camera which was awesome. I now pay less to own on repayments for new gear than I would have paid to rent old gear.
I always try to re-invest into my marketing to attract new customers therefore paying off the gear sooner, since Feb Im almost half way to paying it off. And whats even better My Wife approves of me buying gear, unheard of..
I'm very much new at this and do not have huge credits to my name, I read a lot and try to do as much for the Business myself without having to outsource, website included.
So my tips would be.
Don't Buy 2nd Hand, Buy New.
Advertise your Business to ensure you can pay it off.
Hope this helps.
Cheers Dave.
Cheers,
David Edwards
Drumroll Productions
Sydney, Australia
www.drumroll.com.au
