Video Production Business Tips – How Much Does It Cost to Run Your Video Business?
How Much Does It Cost to Run Your Video Production Business? Knowing the answer to this question is crucial to your success. It is almost impossible to know what strategy to pursue until you fully understand what it takes for you to break- even each and every day.
Here’s a basic formula.
1. List all fixed (including your salary) and variable expenses that you incur on average each month. Leave out what you pay freelancers or other project related costs such as voiceovers, music licenses, etc. What is that number? Let’s say that your cost per month is $5000.
2. Divide this number by the average number of workdays per month. Let’s assume you have 20 workdays that would cost you $250 per day to run your video business. This is your break- even point.
Knowing this information allows you to focus your efforts on a daily basis. What video production services can you offer that will help you meet or exceed the $250 per day cost? Can you think of something that would give you consistent work each week that will contribute heavily to covering your costs?
Here’s what I used to do back then to help guarantee that I would meet or beat my daily cost.
• Looked and secured freelance camera operator gigs with sports networks. I worked for several companies in this fashion but what ended up really helping was a contract to videotape approximately 90 sporting events for $350 per day. On average, I worked 3-4 days a week on this gig, which gave me 3 days to capitalize on other opportunities.
• I searched and found a weekly television show that needed an editor. The show was a local access show produced in Atlanta and I called a “help wanted” ad posted on an industry forum. This deal ended up bringing me between $500 to $800 each week.
• Lastly, I was able to fill the rest of my open time by editing weddings for several videographers across the country. Needless to say, I worked my tail off to keep all of this going but I hardly ever had problems meeting or beating my costs. The key was in diversifying the types of projects and to hunt for something that would last longer than just one project.
I searched for and found residual project opportunities. I would now argue that I wasn’t paid nearly enough for any of the work I did back then but at least I had the volume of work needed to cover my expenses and to make a nice profit.
What does it cost you per day to run your video production business? Are you selling enough to cover this expense? Are you charging enough per hour? Do you need to look for residual opportunities that will bring in money on a regular basis?
Make a list of all the possible opportunities you’d like to pursue and go for it. If you aren’t charging enough, adjust your rates accordingly. If your rates are too high which are resulting in less bookings, consider lowering them so that you can sell more. If your projects are typically one offs, seek out jobs that you can contribute to for a long period of time, even if the per hour rate is a bit less than your normal projects.