BUSINESS AND MARKETING: Business and Marketing Forum Business and Marketing Articles Business and Marketing Podcasts

How to handle the financial side of a video business

COW Forums : Business & Marketing

<< PREVIOUS   •   FAQ   •   VIEW ALL   •   PRINT   •   NEXT >>
dpettoHow to handle the financial side of a video business
by on Nov 24, 2007 at 4:52:16 pm

Hello All, hope your all having a great Thanksgiving weekend!

I am starting to get a lot of work at our local high school doing highlight videos for various sports teams. I film games throughout the season, do the editing then provide highlight DVD's at the time of the banquet which is usually about a month after the end of the season. My main question is how much money should I ask for up front, 10%, 25%, 50%? Since these projects can run for 2 to 4 months before completion, collecting some money up front seems like it would be the way to go. I am also planning on having a contract covering all the details at the start of each project. I do ok behind the camera and keyboard, but as far as running a business, I've got a lot to learn! Any help/suggestions would be much appreciated.

Have a great day.
Dave P.

Return to posts index

Rick WiseRe: How to handle the financial side of a video business
by on Nov 24, 2007 at 5:30:21 pm

When making commercials for advertising agencies, it used to be the standard to charge 1/3 on signing the contract, 1/3 on completion of photography, and 1/3 on delivery of the edited master. Actual payments often dragged on and on and on.

In your case, you have established a relationship of (I hope) mutual trust. But you can point out that for you to wait until the end of the season is bad business on your part. Therefore, how about 1/3 at the start, another 1/3 half-way through the season, and final payment when you deliver at the end?

Or some such formula. This is something to negotiate in a way that doesn't get everyone's panties in a bunch. In other words, be friendly but clear and simple about a "fair" solution. Maybe you will have to flex a bit more, but something along the above guidelines should be reasonable to all.


Rick Wise
director of photography
Oakland, CA

Return to posts index

Christopher SmithRe: How to handle the financial side of a video business
by on Nov 25, 2007 at 2:17:50 am

Mr. Wise is absolutely right in getting the facts agreed on up front. I just finished a long-term project for a large union and when it came time to pay, this huge union seemed to dry up fund-wise as well as all of a sudden didn't understand or comprehend what "rights" to a video were. It turned out that their regular videographer was jealous and actually wanted to cut up my project and put it in his work. I have since learned but my biggest advice is to absolutely understand between each other what rights they are buying or what you're willing to give them. Are you "work for hire" in which they own it all or are they buying a completed work with certain display rights only? Get that in writing. The prices are different also. Believe me, I've learned.

Return to posts index

MindYourVideoBusinessRe: How to handle the financial side of a video business
by on Nov 26, 2007 at 5:22:10 am

I recently proposed a project that will take place over the course of one year. I asked for a 10% deposit upon the execution of the agreement with 12 equal monthly payments due on the 1st of each month. Since so many of my resources will be allocated to this project, it's important that I keep cash coming in from this client on a regular basis.

In your case, the third/third/third billing model should work just fine since there is a definite completion date (the banquet). You may want to write the contract though so that it states the final 1/3 payment is due prior to the banquet. You don't want your invoice to get lost in the shuffle after the season is over. Also, make sure to specify exactly when the second payment is due and that failure to comply may result in you not being able to allocate your resources accordingly.

When producing consumer type videos (highlight reels, wedding videos, etc.) I have always tried to get full payment before I deliver the product. People paying out of their own checking accounts tend to flake out more than legitimate businesses. (based on my experiences)

Kristopher G. Simmons

Video Business Coach

Return to posts index

zrb123Re: How to handle the financial side of a video business
by on Nov 26, 2007 at 8:42:50 am

I would say X amount per game you shoot, payable before the shoot of each game.

Return to posts index

Timothy J. AllenRe: How to handle the financial side of a video business
by on Nov 26, 2007 at 9:44:34 pm

Start from your end goal and work back.

I also bill in three segments. The reason for that is because my first priority is to sustain my business. My second priority is profit.

1. The first payment from the client (due at project initiation) covers the cost of all immediate "out of pocket" expenses for the project. This includes equipment rental, permits, freelancers etc.

It especially includes the cost of any freelance help I may hire to help me complete the job. This way, even if I don't make a profit on the project, if something unfortunate should happen (e.g. if the client files for bankruptcy, or if there is a natural disaster) I at least can make sure that my crew is compensated for their time and effort. They are a key to my businesses success, and I make sure they can always get paid in a timely manner, even if I can't collect the rest of the bill until 30, 60 or 90 days out.

2. The second payment (due after production wraps and at the start of post production) usually covers the cost of other longer range expenses related to the project, and other expenses not directly related to that particular project. (Taxes on income, my own marketing budget etc.)

3. The third payment covers the cost of finalizing the project and archiving - This is also usually the portion that includes my actual profit from the project, although hopefully, a small portion of profit is also part of that second payment.

The actual amounts and percentages vary with each project, but it tends to go along the 1/3 rule. Just know that the payment plan isn't arbitrary - it's based on my overhead.

First expenses, then profit.


Return to posts index

dpettoRe: How to handle the financial side of a video business
by on Nov 27, 2007 at 1:42:32 am

Thanks for all the great information. I'm thinking the 1/3 payment plan will probably work for what I'm doing and who I'm dealing with.

Have a great week.

Dave P.

Return to posts index

P. J. in HollywoodRe: How to handle the financial side of a video business
by on Nov 27, 2007 at 7:34:37 am

You may already be locked in to an agreement with the school, but here are a few thoughts to consider when dealing with schools and student photos/videos:

1) You are essentially a "school photographer". This type of activity has been going on since Moses was a pup. Perhaps if you check out some sample contracts on the web (e.g. you might find something of use. There may be some that are suitable for your state. You may also contact other school photographers to see how they work out their contract with the school.

If you are not qualified in business law, you might wish to consult with an attorney about your contract. Trust me. The school has attorneys looking out for their best interests, too.

2) Make sure that your copyright notice is clearly contained in the contract. Your copyrighted art work (the edit) is yours and not usually owned by the school. Check with legal counsel for any legal advice, however, as your due diligence. You definitely want to seek legal advice to protect your art work from copyright infringement.

3) Your arrangement with the school may be different, but school/wedding/portrait/etc. photos or video sample clips of students are usually posted on a web site so that students can order their copies. The posted clips are water marked so that no one can download them. This is usual for wedding videographers as well. What ever is sold, you get paid for, prior to sending it out.

4) Other sources of income: a. Can you do highlights of each game for students, parents, etc. to order from your web site? b. Might the local TV or cable station wish to purchase your coverage? Fans can also purchase your DVD highlights from your web site for their favorite team?

5) The original negs/tapes are always retained by the photographer or videographer and the contract with the school states that your work is copyrighted and only copies of the work are sold. This is a source of income for you.

These are just a few thoughts. If they are of some use, feel free.

Return to posts index

<< PREVIOUS   •   VIEW ALL   •   PRINT   •   NEXT >>
© 2016 All Rights Reserved