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Business Plan Critic

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Alan SmithBusiness Plan Critic
by on Feb 24, 2009 at 7:13:26 pm

I have been operating a video production business for the past three years as a "side business." I have been taking whatever jobs come my way from duplication work to web design to video production. I have been able to make enough money doing so to pay my bills and acquire all my equipment without having to take out loans.

Over this time I have been focusing in on what will become my niche. What will I do that will set me apart from the businesses in my market. I am developing my business plan to grow my "side business" to a profitable small business.

I would like to get some feedback from the professionals on the COW on my business plan. I am in a small market in the southeast (columbus, ga). My aim is to build relationships with non-profit and small businesses to become their, for lack of better description, ad agency. We will provide a one stop shop to help these organizations market their brand and their organization.

Ad agency provide this type of service for mid to large organizations. Most non-profit and small businesses are unable to tap into this resource because of basic economics, they tend to be cost prohibitive.

My services would be offered based on a contracted amount of hours per month at a set rate. The more hours contracted, the better the overall rate. We would take care of all their needs from graphic design, web design, commercials, etc.

I am curious as to what you think of the idea. I know its not original, but in my market there is no one targeting this specific audience with this kind of service.


Alan Smith

Check out my blog -

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Mark SuszkoRe: Business Plan Critic
by on Feb 24, 2009 at 10:42:18 pm

I like it so far.

But this is nothing they cannot do for themselves, if they want to or can afford to. I know lots of people that can make a cheap spot for local air or the web, some might even look good. Others may be brilliant even. But. They can't make a BUSINESS of it. They lack a key element.

What they and all their clients are generally missing is not production but distribution. They can make a spot or a PSA or a web video, but they have no notion of the next step, how to get it on the air, where to get it on the air, and for how much.

This is the thing real ad agencies and PR agencies do, and really, since a lot of those agencies hire the creative from outside, what it sometimes boils down to is ALL they are in some cases is the middlemen that facilitate that final step... for a percentage.

There are many beginners less experienced than you, who will make a local spot, but not make any money, because the client STILL has to go work with the same advertising sales manager at the station, on top of dealing with the spot maker. And in fact the usual case is, due to discounts, that guy is cheaper to deal with direct, than if the customer brings your work to him to air it. This is very well illustrated in local car dealer commercials, as well as spots for local non-franchise restaurants. The local cable company will beat you every time by giving away the "creative" production costs for free, when you make the airtime buy thru them. Note, I'm not saying their product is going to be BETTER than yours, necessarily. Just cheaper.

He can even go out of his way to make sure (if he's not scrupulous) that you ALWAYS cost your client more than if the client dealt direct with the station, and boom, he's stolen your client away. If you are really contrite and say pretty-please, he may even later "hire" you at less than break-even to keep working for him on the same customer account. And charge your client for it.

You have to have an answer to that. You have to have your own distribution contacts and methods, so that you are truly a "one stop solution". Only then are you completely "vertically integrated" and end-to-end. That's what an unschooled client wants out of service like yours: the whole magilla, make it and bake it, from the initial concept all the way onto a paid up server account or onto a paid placement in a good demographic with decent ratings point totals and a reasonable CPM.

This is the hard part of the business and least attractive to us "creative types". It is not what most of us sign up for, we want to make TV or films. But this is the point at which all the money is made. Not on the creative. On distribution.

Nail THAT aspect down, and everything else is cake.

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Richard HerdRe: Business Plan Critic
by on Feb 25, 2009 at 1:20:59 am

check out because there are some cool contracts and such.

Another niche you might want to consider is digital signage.

Mark stated it the way I've observed it also: the relationship between a producer > advertiser > client > media buyer is complex.

If you want to be a one stop shop, then you NEED these folks as direct, reliable contacts.

In small markets it's really difficult to beat the pricing of production offered by network affiliates, because they sell the media-buy package (and there's several packages) and throw in the production at no cost.

It's also the case that the local affiliate--like Charter Communications--has also purchased outdoor bill boards, as part of the overall advertising strategy: not too mention local zines, cabs, buses. They are everywhere!!

If you envision a scenario where the client writes one check and you take care of it all, then you are the "agency of record." Wow! If you can get such a contract on retainer, you'll be so busy, you'll want to quit!

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