Starting a Video Production Business (page 3)

If there are no organizations in your area specific to the video business, you can still learn more about business in general through groups like the Chamber of Commerce or the Small Business Administration.

Your local Chamber of Commerce supports all business and works hard to connect people or companies that need a product or service with those who create these products or services. The Chamber will often sponsor events (where I live, they call them Wednesday Friendsday or Monday Funday) where lots of business people get together to shmooze and exchange business cards. This is an example of networking--simple one-on-one conversations with folks who might want to do business with you.

Another good source of information is the Small Business Administration (SBA). If there is an office in your area, you could get help from the SBA management assistance staff. These people can give you guidance on opening a business, marketing, advertising, profit goals, borrowing, accounting, bookkeeping, personnel, customer analysis, forecasting and insurance.

The SBA also provides help through the Service Corps of Retired Executives (SCORE) and the Active Corps of Executives (ACE), groups of volunteers that can help you with advice based on experience in the trenches.

If you prefer to get your information from written material, the SBA offers a wide variety of publications on starting and running a business. They don't cost much and you can get an order form by writing to: Small Business Administration, Washington DC 20417.

If you do talk to any of these experts, they're likely to ask, "Do you have a business plan?" Bank loan officers, investors, potential partners and others who might have an interest in your success will ask to see this document.

A business plan is a blueprint. In it you answer many of the questions we have explored in this column, but in more concrete terms. After writing a business plan, you'll have a better idea of whether your video business has a real chance for success or is merely a pipe dream. Again, it's better to know this before you sink the family fortune into it.

A business-plan outline has the following 10 sections: Title Page, Table of Contents, Executive Summary, Business Description, Product or Service Description, Organizational Data, Marketing Strategy, Competitive Analysis, Operations Plan and Financial Information.

The Title Page includes the information that bankers or investors need to reach you if they want to throw money at you--your name, address, phone number and so forth.

The Table of Contents helps the reader jump directly to the page where you describe how you will make money. That's what they really want to know.

In the Executive Summary you describe your business quickly, but clearly. This is the grabber. If you can convince the reader that your idea has merit, he might read the rest of your plan.

The next section, Business Description, explains exactly what your business is. You can describe the legal structure (sole proprietor, partnership, corporation) and show how your company is similar to or different from existing business ventures. And you can point out how this similarity or difference will make you successful.

If your primary business is to be wedding videography, you don't have to go into a lot of detail in your Service Description, because most people have an understanding of this type of business. If you want to create videos of dogs and cats, however, you might need some explanation.

If you are the only owner and employee of your company, then you can put your resume into the Organization Data section. If you'll have partners, you describe their duties--mom will be keeping the books, dad is an excellent salesman, Little Joe will be acting as a grip during shoots, and you'll produce the videos.

What's your Marketing Strategy? This section will prove that you have given some thought to your target market, the market size, market share and so forth. Potential investors like to know that you've done your homework.

Who is already doing what you want to do? Nobody? Great. Otherwise you need to show a Competitive Analysis. Can you go up against the established video companies and win? What makes you think so? Luck? Remember that hard facts are more impressive (and essential) than statements like, "I feel that I will do well because I have excellent potential." Pardon me?

You may now go into detail about how you'll produce your videos. The Operations Plan explains how you'll actually deliver a product after a client asks for it. You have thought this through carefully, haven't you? Prove it.

And of course, after doing this much work you should know that a lot of places (banks, for example) don't like to loan you money unless you can prove you don't need it. The Financial Information section is where you list your assets and liabilities, with special emphasis on possessions that the bank can sell later if you miss a few payments. Reality is a harsh place.

Books on creating a business plan are available, and there are even computer programs that will let you fill in the blanks. However, these tools can't think for you or do your homework.

What if you don't need money from a bank or venture capitalist to get your business started? It's still a good idea to write a business plan. Why? Because if you can't write a plan that would convince someone else to risk money in your business, then why should you risk your own money in it? Don't be foolish about starting a company--it's not fun and games--it's serious business.

Should you make the jump from hobbyist to pro? If your research and planning say you shouldn't, then think about it very carefully. If you still believe you can do it, then do it. As long as you understand the consequences. There is nothing more satisfying than making a business run. Just make sure that you really do mean business.

• Digg This!
• del.icio.us
• Technorati
• StumbleUpon
• Reddit