Advice for a Young Entrepreneur.
I am beginning this thread to gain any and all wisdom you may have on the subject of starting one's own business. My interest to read your comments is in first and foremost to find real guidance and mentoring. I am here on this forum in search for sincerity and good will and I hope you may share your vision with me. Below is a short introduction:
I'm in my mid-twenties, living in a small but wealthy town. I used to work at a production company as a video editor and finally I struck out on my own to get ahead. I soon realized prospective clients couldn't hire me with there being a company so now I'm on to create that.
What I would very much appreciate would be advice on strategy, price politics, and dealing with clients.
I thank you all in advance for your input in educating me,
Sergio, where do you live? The answer bears on what advice is apropriate, since the rules for incorporation and such vary all over the world and in the US, from state to state.
If you think you're not getting work only because you don't have a formal company, that's probably wrong. You get work by seeking it out, by networking, by marketing, salesmanship and referrals and repeat business from happy clients. None of that strictly *requires* a formal company setup, as long as you have easy mechanisms for billing and paying bills, and tracking any tax obligations. You don't actually work for companies, you work for people *in* companies. Concentrate on reaching the people first.
As a freelancer, you can get started with some minimal paperwork. Forming a corporation adds layers of expense, obligations, and other details that may or may not be in your best interest when just getting established. An accountant could make a better judgement about that and tell you what sequence to take those steps in and when.
Eventually you probably WILL form an LLC or some other variation of that, for the protections it brings you. But don't feel you have to wait for that to start doing billable work, is all I'm saying.
Sergio, there are a ton of great business articles here on the COW about starting, running, and growing a business.
The advice I'd suggest for you, in broad strokes, is that simply being an editor is not enough. You must also now be a business owner, which requires an entirely separate skill set. You will have to wear many hats at the same time.
On pricing, you can't just make these numbers up or try to charge what your competition is charging. You should figure out your expenses -- how much money you need to live, how much overhead the business will require, and how much money it costs you to do the work you commit to -- and charge enough to cover these expenses, some unforeseen expenses you didn't think of, and then some profit margin.
Cash is king. When you run out, it's game over. Learn the difference between cash flow and profit. Keep a cushion of cash to get you through lean times. Be smart about capital expenses (big purchases) and operating expenses (rentals and leases). Understand that "if you build it, they will come" is a recipe for ruin.
On sales, you must remember that you are not just a video editor -- you are a problem solver. You must first identify your potential clients, then find their needs (which is not always as easy as it sounds), then satisfy them. You must build relationships, not just focus on individual projects.
You cannot be all things to all people. Find what you are good at, and become the best at it.
Don't try to take shortcuts. Starting and running a business requires some legal work. Do your homework and do it right the first time to avoid big penalties later. Get an accountant who can help you set up your bookkeeping. Keep clean books and pay attention to what taxes must be paid.
Finally, your most valuable asset will be your reputation. Build it carefully and guard it jealously.
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