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Looking for advice and perhaps a little inspiration

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Kris SimmonsLooking for advice and perhaps a little inspiration
by on Jul 2, 2009 at 3:46:08 pm

This is a long one but I REALLY need some perspective from geniuses here at the cow.

Okay, so I'm coming up on the end of a 5 year lease on my downtown studio location. I've been wrestling with the options regarding what to do when the lease expires. I'm hoping my fellow cows can review the options below and weigh in. Thanks in advance for your time and comments.

OPTION 1: Renew the existing lease for a year or two and negotiate additional build out? I've never had an actual shooting studio in my "studio" so I may want to knock a wall down so I can have a 11' x 20' space to work with. Most of what I shoot involves talking heads so this should give me plenty of space to shoot interviews against green screen or various backdrops. (All my projects are corporate in nature.)

When I moved to this space 4.5 years ago, I had 7 full time employees in-house and my largest client was literally next door. Now, all my employees work either on a contract basis or they are located out of state and in some cases, out of country so the only person hanging out in the studio these days is me. We do EVERYTHING virtually except for the shoots and unless I have a particular reason to be downtown, I manage all projects from the comforts of my home office. Running my production company in this fashion has been incredibly profitable as I have been able to squeeze out almost all unnecessary costs.

The major client I referred to above has built a new campus and although its still close, they don't have a need to visit my studio anymore since they have state of the art conference rooms, meeting areas, etc. Plus, its a pain for them to have to leave the campus in a car just to come downtown to find parking on the street or in a garage that charges. Even when they were next door, I can count on both hands the amount of times we actually met in my studio. Again, everything was taken care of virtually or by passing DVDs around with email and/or conference call feedback sessions.

Since moving into my current studio, I've been able to win several other large accounts with companies located close by and as far out as 30 miles from here. The issue here is that most of these large accounts have never even visited my studio even after two or more years of working together on dozens of projects. Some of these clients spend $50,000 to $150,000 a year with my company and THEY HAVE NEVER EVEN SEEN OUR STUDIO. It seems that they really don't care WHERE I'm located, just that the work is completed on time, within budget and that it represents the quality they expect for the money they are spending.

So, this leaves me with a few questions that I can't seem to wrap my head around. If they never even come to the studio and I handle everything virtually anyway, do I really need a commercial location? By not having a studio, I'd put roughly $2,000 back in my pocket every month that I currently pay in rent and downtown parking. That's $24,000! That's extra money that would buy a huge house with a wing dedicated just to my business. That's a monthly mortgage payment on a condo at the beach. That's a lot of things that would be more fun and beneficial to my wife and kids than making someone else richer with rent payments.

Oh yeah, and the drive from my house to the studio now is 20 minutes. Not a huge deal but in a town when you can get anywhere from anywhere in 15 minutes or less, its quite a commute.

My other downtown option would be to move to a much smaller space and save almost half of my rent. But the issue here is that if I don't have a reason to be downtown, I don't come downtown. All I really need is a quiet room, my cell phone, laptop and a high-speed internet connection to run my profitable video business.

OPTION 2: Move out of the downtown studio space and rent or purchase a nice studio location in the suburb I live in. The office space I'm looking at is right next door to a Super Target, Best Buy and a Super Walmart is about 2 blocks down the road. This space is a brand new office condo and the build out will include a 15'x22' shooting studio along with the other offices and conference room. The cost for this per month will be right at $2,000 as well.

PROS - 5 minute drive to/from my house, the kids school, office supplies, production supplies, etc. etc. This location is convenient as hell for my business, but i have ZERO clients in this particular area of town. So, the clients who already don't visit my downtown studio will have even less reason to visit me in the suburban studio. So, this again questions the point of do I really even need a commercial studio?

CONS - This space isn't a prestigious downtown Chattanooga location and there will be moving and start up costs associated with changing offices. Phones, internet, alarm system, etc. etc.

I also have the option to purchase this space but that's a whole other story.

OPTION 3: Rent a small office space that's literally big enough for an edit suite and a conference room. That way, I'll save a ton of money and on the slight chance that a client will actually want to come to the studio, I'll have a space designated for that. The great thing about this option is that I can get one for roughly $700 per month in rent. The down side is that I've built up a pretty good reputation as a high-end service provider and a space that small won't really impress anyone who enters for the first time. So, is it better to have a small space just in case or no space at all? The thought of event spending $700 per month with another $200 or so in utilities makes me a little irritated when I know I'll still do most of my work from home. I actually have a nice home office set up but its not something I'd want to bring clients to.

OPTION 4: Move out of the downtown studio, store the equipment in my garage, run the company 100% out of my home office and put $2,000 back in my pocket each month.

PROS: I save a ton of money in useless overhead which makes my company and personal finances much stronger and I no longer have to worry about taking care of an outside office. (cleaning, security, etc.)

CONS: My current home office space isn't quite large enough to run the business out of full time so I may have to consider using some of the extra money we'll save by not having a commercial office and purchase a larger house in a more convenient neighborhood.

WHAT SHOULD I DO? This is clearly one of those situations where I can't see the forest for the trees.

9 of my clients are Fortune 500 businesses so it seems like they wouldn't want to work with a "home based business" even though THEY NEVER COME TO MY STUDIO. EVER! Or, would they even really care as long as the quality, cost and delivery continues to meet/exceed their expectations.

Should I move out of the studio, in to the house and if/when someone asks where our studio is, I can say "We are in negotiations with a few properties trying to figure out the best place to land long-term so we are currently working in temporary offices." This is sort of true although not completely. My temporary office can be a meeting room in one of the downtown clubs I'm a member of so if they want to meet somewhere other than their office, I'd have a place to meet....just not necessarily a place to show them a Blu Ray DVD presentation. But, just like I'm doing later today, I can bring my Blu Ray player to their conference room and plug it in to their HDTV. Problem solved!

So, if I move out of a commercial studio, do I tarnish my reputation or do I get the same quantity of $20,000+ projects each month that I always get? My experience tells me it won't matter where I'm located but my gut is telling me that it DOES matter. A lot of large companies are letting their workforce work from home offices so they can cut back on overhead expenses so maybe they'll understand why it makes sense for a small company like ours to do the same.

I can go on for days debating this topic so I'll just shut up and wait to hear back from you guys and gals. Again, thanks for taking the time to read this and I look forward to your comments.

Kris Simmons
Executive Producer & CEO
Fire Eye Productions, Inc.

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Timothy J. AllenRe: Looking for advice and perhaps a little inspiration
by on Jul 2, 2009 at 4:45:25 pm

As long as the home office is separated from the rest of your house (no noise problems or disturbances while you are conducting business), run it out of your house.

You should still have a couple of options to rent "nice" space in a hurry for specific meetings, etc., but the expense of running an office downtown when you are the only person in the office isn't worth it, if clients aren't coming to the office on a regular basis. I'd put some of that money you save into your web presence, and some targeted marketing. (Or better yet, add to that nest egg so you'll have it when there's no question what you want to use it for!)

The stigma of working from a home office will continue to diminish in the next few years, as major corporations and even government agencies are more open to telecommuting.

I'm encouraged to work from home during times that I don't need access to certain facilities. It saves the company on energy bills, and I often actually end up starting "tangible work" earlier and working later - just because I don't have the commute time.

My wife was actually one of the first telecommuters for First Tennessee Bank about a decade ago. Since her work didn't involve outside customers, she was able to carry on business for years from home - and 95% of the people she worked with never knew she telecommuted from a home office that was halfway across the country. The business was handled professionally, so no one had any reason to complain.

One of the most successful music and TV producers I know runs his business out of a studio attached to his house. The space he has set up is nice and relaxing, with kind of a "zen" feel to it. He feels more creative there than he would in most studios - and so do I when I visit.

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Mark SuszkoRe: Looking for advice and perhaps a little inspiration
by on Jul 2, 2009 at 4:46:45 pm

My take on it is, rent the small office near home with room for the edit suite, a conference room, and a little gear storage.

It is nice to have some separation between the home and the office, on several levels; personal, business, and public. I remember a guy who told us here way back of incidents that happened with a physically violent client in his home office/studio. We all have stories of clients we never want to see again... and if stuff like that happens to you, where do you go to get away from it, if you only have a home setup? So while you can do most of it from a home office in terms of phones and internet, have the suite be off site, is my own opinion. It also makes it easier to deliniate what is home expense and what is business. You can have the biz phone chase you seamlessly wherever you happen to be, but thre ofice space gives you a better place to meet physically with clients.

As for the studio, seems like you don't need a full-time studio. Perhaps you can rent space by the day with the local cable access studio. Or go in with a bunch of other local producers on one shared warehouse/studio space, that's just a bare grid and power, so the monthly rent stays very low. Not perfect, since the AC, pwoer, and soundproofing may not be as good as a purpose-built studio. But maybe it's enough, until the boom times come back.

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Rich RubaschRe: Looking for advice and perhaps a little inspiration
by on Jul 2, 2009 at 9:58:56 pm

Hey Kris. With $20,000 per month in receivables and not much overhead, that's a pretty good take ant the end of the day. I also like the closer-to-home studio space. Mine is about 1.27 minutes from my house with no traffic. It's great. We are actually looking at renting just a simple warehouse space for a studio which would be separate from my editing space. Seems the two are so different it's hard to find space that meets both needs.

Working from home is appealing still to me, and I worked from my home for about 4 years before moving into these offices. Still don't think I could go back.

Finally, ask your clients. As we explored studio space I sent out an email to see what interest there was and got great input. These boards are a good place to start, but by asking clients you trust and have good relations with, it lets them know you value their opinion and want to keep them in the loop with your plans. We don't have as much context as they will have.

Best of luck and lets us know!

Rich Rubasch
Tilt Media

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Kris SimmonsRe: Looking for advice and perhaps a little inspiration
by on Jul 3, 2009 at 12:51:19 am

Thanks for the feedback guys. I knew you'd pull through with great advice.

I believe I've found the right solution. There is a nice, small office space a couple blocks from my existing office downtown in one of the nice towers on the 13th floor (no, I'm not superstitious). It actually looks out over our river and downtown area so its pretty amazing and its only $750 per month. It's only about 800 sq ft but I think it will work perfectly for an edit suite and a conference room. Plus at the top of this building is a club I'm a member of so if I need to wine and dine a client, all we have to do is go upstairs. Pretty convenient. I'll most likely keep my field gear in my garage at home and I'll just load up and leave from the house whenever I have a shoot.

I'll probably still do most of my work from home but I'll have a posh yet inexpensive space to call home if/when a client wants to come there for sales meetings or review sessions. I'll save $1,000 a month in rent and I'll have a place to work if/when I want or need to get out of the house for a while.

Seems like a good deal to me. I'll try to keep you posted.

Thanks again for your time and knowledge. I sincerely appreciate it.


Kris Simmons
Executive Producer & CEO
Fire Eye Productions, Inc.

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Steve WargoRe: Looking for advice and perhaps a little inspiration
by on Jul 3, 2009 at 8:35:54 am

We used to have a studio near downtown and we hardly ever had clients in. We asked our clients how they would feel about a home based studio that was separated from our home by a doorway. They all said no problem and we bought a house that allowed us to do just that, 11 years ago. We have an 18x18 office, a 14x17 edit room, a 20x20 edit/machine room, a 9x24 store room, a 7x24 store room and a 25x37 studio/storage space with a 12 foot ceiling, a grid and a 16x16 cyc. This much room in a rental space would have been about $60,000 a year. So, we saved $700,000 in rent, we own the property and I have employees that work all hours. My company insurance is low and I don't wake up at night wondering who is loading my gear into the back of a van in the middle of the night. We were burglarized several times downtown. We probably lost $75k in business because we had a boutique instead of a downtown location. I've also saved many thousands in auto expense.

I have agreements with a few companies around town for conference room space when I need it.

I can't begin to tell you how much we saved by eating at home.

Now, there have been a number of times when I've thought about buying a building in a decent area and moving into a smaller house because we can't help but believe that business will grow with a more professional workspace. However, in today's economic climate, I'm glad to be where I'm at. If you have that amount of income, guaranteed forever, you'll probably want to stay in a commercial area, but, if you lost that big client, how would it impact your financial picture? We lost several huge clients who just decided to take everything in house. If we had been paying big rent dollars, we would have been devastated.

One of the best ideas was to share a place with another company but of all the people I know who have done that, none of them have have had a successful endeavor with it.

Good like

Steve Wargo
Tempe, Arizona
It's a dry heat!

Sony HDCAM F-900 & HDW-2000/1 deck
5 Final Cut (not quite PRO) systems
Sony HVR-M25 HDV deck
2-Sony EX-1 HD .

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Richard HerdRe: Looking for advice and perhaps a little inspiration
by on Jul 3, 2009 at 9:55:20 pm

Great solution! Maintain your brand position. Nothing is more important.

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Mike CohenRe: Looking for advice and perhaps a little inspiration
by on Jul 6, 2009 at 1:04:42 am

You might look for office rentals in a virtual or shared office (Regus or others). You rent the office, but the conference room, kitchen area, and receptionist are shared. The receptionist answer your line with you company name, and either takes a message or routes your calls to you. When a client visits, it is very professional looking, but you save on overhead and staff.

Mike Cohen

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