How much investment do i need to get started ?
I've been a freelance FCP editor for the last 4 years - most of my projects are corporate & mostly end up for web or dvd.
I'm planning to join up with another editor & build 2 edit suites for commercial hire as well as produce corporate films.
This maybe a vague 'Q' but I have an investor interested, who is willing to invest & help me get started. I just have to give him a rundown on costs & what I will need in terms of investment.
Obviously I don't want to waste any money here but I also want to compete & offer professional services. I'm based in the UK & I was thinking of getting a server by EDITSHARE or XSAN & 2 FCS edit systems. This seems to be running in at just under £60k ( $119K )
That seems alot but I didn't realize how much the server would cost along with monthly rent etc.
Anyway my point is , if you wanted to progress from a pro freelancer to having your own facility for commercial hire , how much investment would you realistically need for 2 offline edit suites to get started ?
You might want to read the first two parts of my Starting Your Own Business series in my Blog. Part 3 should be up this weekend.
1 - I've never used an investor and never will. I answer to myself and nobody else.
2 - I've had a very VERY bad experience with a partner and will never do that again.
I ask a LOT of questions in my articles and while I don't know exactly how much money it will take for you to start up your business, after reading through my questions, you should be able to start tallying up a number on your own.
Part 1: http://blogs.creativecow.net/node/273
Part 2: http://blogs.creativecow.net/node/277
Walter Biscardi, Jr.
HD Editorial & Animation for Broadcast and independent productions.
All Things Apple Podcast! http://cowcast.creativecow.net/all_things_apple/index.html
Read my blog! http://blogs.creativecow.net/WalterBiscardi
[walter biscardi] "I've had a very VERY bad experience with a partner and will never do that again."
Ditto. (Although a junior partner may be in my future. The closer you get to equal the bigger the headaches.)
[walter biscardi] "I've never used an investor and never will. I answer to myself and nobody else."
Double ditto. I would much rather build something up than being put in the position of immediately having to start paying off a fully equipped facility.
The simple answer to how much is probably more than you think. Add a healthy amount of contingency funds to your plan.
I also authored an article on going into business for yourself which ran in the last issue of the COW Magazine. Not as detailed as Walter's four part tome, but might be helpful with some additional insights.
One big question you have to ask first of yourself and then of the investor is What's in it for him?? Post production is about as far from a rock solid investment as one can get. Some make it, many fail, many just get by. Almost all of us do it for love of the art and craft. OK, the gadgets, too.
And the biggest of the big questions are: How solid is your source of business? Do you enjoy selling? If not you better have someone who does -- a LOT. Could your investor direct a lot of business your way? The very last thing you want is a partner, an investor and you sitting around arguing about who is responsible for bringing in the business which will keep you in operation.
I'd also be a little concerned about how the clients/fees will be divided...
Equal sounds great until your clients bury you one month and you only sleep every other day and it's been two months since your partner had 3 days in a week sold in his (or her) suite...does the revenue get split evenly?
What if your partner's clients really come through in the first year and you end up paying everything off in 18 months...but your clients, through whatever circumstances, only account for 10% of the revenue? Who owns the stuff? If there is a 50/50 contract, whichever one worked their butt off will feel cheated by the other and hard feelings will erupt, and you can't operate a business with someone you think is lazy or untrustworthy...
Partnerships are a slippery slope. I'd set up in two independent offices next door to each other and call on each other as subcontractors when necessary, but that way you have a chance to each succeed on your own merits instead of inevitably failing together.
Sorry for the lack of optimism, but I've lived and witnessed this sort of thing in 22 years at this...
Better to stay separate and friends than to become enemies chained to each other.
Have a nice day :-)
Creative Cow Host,
A fundamental question is, do you even have a business case to do this?
Seems to me this is a horrible time to start up a boutique, the tech changes faster than you can amortize the capital costs, kids working out of their mom's basement with academic half price versions of FCP and Premiere are undercutting you on price, (talent or lack of it notwithstanding,) the big ones are constantly merging or consolidating on the high end, and on the low end the tools are cheap enough now most anybody can buy their own complete suite on a whim to edit cheezy intra-corporate stuff and the like.
What's left for you in the middle ground? What's your business plan, your market?
[Tim Kolb] "Partnerships are a slippery slope. I'd set up in two independent offices next door to each other and call on each other as subcontractors when necessary, but that way you have a chance to each succeed on your own merits instead of inevitably failing together.
This is an excellent post. I once had a collegue who like myself ran a business in a commercial office. We were both young, single guys and began to hang out a various coffee bars after late nite stints at the office. We would discuss buisiness, problems and share ideas. He was always suggesting we amelgamate our buisinesses but I always resisted. After about 2 years I was able to pin point that a large number of complications I had had in life and business all stemed from him. I now believe he was practising the age old adage "keep your friends close and your enemies closer" and he was merely attempting to "eliminate the competion" a slogan I've heard him utter many times. He also used to brag about what he called "Hong Kong Gorilla Business Practices". One I recall is when a compeditor disguised as a new client would appear and start giving you a lot of work until you really liked them. They would then tell you they were looking for someone with said equipment who could handle 50 times this work flow. After the $$$$$ signs cleared from your eyes and you took the bait they waited till you geared up with large expenditures on equipment so you could handle the type of work and then they would stop all the business they had been giving you. They would show up at your bankruptcy sale and buy everything at 10
Well, some good points here but.
Most of you say , do not incur debt until you have the contracts to pay off the equipment but, isn't this a chicken and the egg scenario , for example how can you put yourself on the market until you have the means to offer the services ?
If I want to setup a post house , the first thing you need is a minimum tech pro setup to offer good offline/online services. How do other post houses setup without being in debt ?
[cane] "Most of you say , do not incur debt until you have the contracts to pay off the equipment but, isn't this a chicken and the egg scenario , for example how can you put yourself on the market until you have the means to offer the services ?"
No doubt, this is a legitimate point. As they say in Field of Dreams, "if you build it, they will come." No one ever suggested to Kevin Costner they would come if he did't build that ball field, did they?
As you already know, nobody will come if you don't build yourself some sort of post-production facility. But, more importantly, will they come if you do build and why should they come to you?
The guys here are simply warning you that a facility alone does not guaranty business, because they know that this can be a brutally difficult business in which to turn a profit or a living wage. Many who have managed to make it in this business in the past are finding it even more difficult today than ever before, and thats why there's often so much discouragement here. Everyone here just wants to make sure your eyes are wide open.
On the other hand, there is no better investment in this world than an investment in yourself. And, the only debt that is good debt is that which is used to grow capital. So, since a fully functional HD studio can be cobbled together for peanuts today, as long as you're prepared and you go in with your eyes open, go ahead and take the plunge. I wish you the best of luck...
David Roth Weiss
David Weiss Productions, Inc.
POST-PRODUCTION WITHOUT THE USUAL INSANITY™
A forum host of Creative COW's Business & Marketing, and Indie Film & Documentary forums.
You want to start your own editing co-op or boutique or whatever the trendy name is these days, with just you and one other guy.
Well, I often tell folks the only real piece of equipment you need to own to become a film maker is a telephone. What I'm getting at is, regarding the chicken and egg situation, who says you have to own the chicken from the start?
Everybody concentrates on the gear, the tools. But anybody can get or borrow the identical tools, the job always comes down to the guy or gal that wields the tool, who gets the unique RESULTS with the tool. When you are selling people on the idea of booking you, the emphasis has to be on YOU. Not the space. Not the delicous snack tray by the client's couch. Not the trendy art in the reception area. And not even the high-powered gear itself. Gear is transitory. Gear is just a means, not the goal.
All those things are commodities. The true product, the true capital, is your human capital, your skills and talent and creativity. Lead with that. Sell that. Make them understand that they are hiring an Editor, a service, not a commodity. Let the hardware issue fall by the wayside. You could edit their stuff at somebody else's existing facility, on someone else's equipment. Nobody watching the results you get could tell the difference. BECAUSE THAT'S NOT THE IMPORTANT PART.
Do you have a list of clients you've already lined up from previous gigs that would be interested in working with you directly? That seems a prerequisite. You need a client who understands what you are selling: you. If they shop for their editing by looking at brochure pictures of facilites or a list of hardware, you never were going to win that job. You can't win the commoditization race, ever. If they instead ask: "who was the guy that did the xyz spot, how did he come up with THAT?" This is the client you want to try for.
When I was just a kid out of school doing freelance corporate producing, shooting, and editing, I didn't own anything but a crummy little car to get me to gigs and one suit. Roger Corman would have thought he'd seen his mirror image. Everything was rented, the editing time was rented too, and all the costs passed on with an appropriate markup. The customer never knew nor cared where or how the work got done, they never attended my editing sessions and for all they knew my work was done in a Gold Coast loft; what mattered was the result he saw on his TV set when he put the final tape in his VCR. A difference that makes no difference, IS no difference.
My advice, Start small: use other existing facilites while you build a nest egg, edit without the client in attendance at first, bring all the work to them at their offices. Start with just one setup, and split-shift the work if you have to. Lease the editing gear for a single seat and house it in as cheap but practical a space as possible. Base the lease on having lined up a few initial jobs to start some cash flow, and don't start until that's been done.
Even better: skip leasing a space altogether and offer to set up your leased gear in flypack mode in a spare office at the client's place to start with. Be virtual, reduce conventional business expenses, leverage off the close communication with the client in their own space, while leeching off their utilities and space rental. Put every dollar, er, pound, on the screen that's not going into retiring debt or investing in things that grow the business.
And never forget that what they are really paying for is what's between your ears, not what's in the rack.
YOU are the egg.