Tips For New Companies
Navigating the early stages of a production company’s lifespan can be daunting. Once you have your company officially formed, your key team put together and your goals set, what then?
Let’s look at a few pitfalls a lot of companies fall into:
1. Wasting Money on Expensive Gear
This is one of the most common mistakes young companies make. They focus on acquiring a ton of gear before they have the clientele to justify the purchases. Don’t waste your money on gear before you have a steady revenue stream! What good is that fancy camera and lens package if nobody is paying you to use it?
Unless your goal is to specifically produce high quality content using in-house resources for public consumption (not as a services company), put your money towards building clientele first.
A clear company identity is important, but creating it shouldn’t come at a huge expense right out of the gate. I’ve seen new companies spend a lot of resources branding everything under the sun.
Your company does not need branded coffee coasters when you only have two employees and a single client.
A logo, business cards and a website… sure, the basics are a good idea. But, a custom mural painted on the wall of your office… maybe wait until you’ve got consistent revenue and clients coming by for meetings before you go that far.
3. Under-Selling & Complacency
You’ve got your first repeat client. Great! Don’t stop there!
It’s easy to become complacent once you’re busy producing content for a repeat client. After-all, it’s hard work and you’re earning money. But, don’t let that stop your sales push. You should be selling your services with the same vigor no matter how many repeat clients you have. If the workload is too much to handle and you can’t seem to find time in the day to push sales, scale up! That’s why you have employees.
If you don’t continue to expand your clientele, you’ll find yourself in a sticky situation once your repeat client decides they don’t want to have you do whatever it is you’ve been doing for them anymore. You want your eggs in as many baskets as possible, so if one basket drops, you can still make breakfast!
4. Undefined Business Model
Do you offer production services? Do you offer equipment rentals? Are you a content producer? What do you do exactly?
These are questions you need to answer for yourself. You can always expand and move down many roads later on, but starting out, you need to streamline and focus. Find a niche and nail it, then worry about what else you can do to generate revenue.
I’ve seen a lot of companies fail simply because they don’t commit to one thing over another. Think of it from the client’s perspective. As a client, why trust a company to produce a great commercial for you if the company also seems to spend a lot of time developing long-form drama feature films? Why not just go with the other company that says they do commercials and only commercials? Won’t that other company do a better job since it is their wheelhouse?
Pick a lane. Commit.
5. Dead Weight
Every single person at the top of a company needs to be pulling their weight. Period.
Sometimes, a company forms out of a group of friends who have a mutual interest in building something meaningful with one another. That’s great, so long as each person has ambition, drive, business acumen and endurance. If someone is lacking dedication, has a bad work-ethic or otherwise detracts from the group, it becomes laborious to sustain that person’s involvement in the company.
Time spent waiting on a partner to perform their assigned tasks or time spent giving pep-talks to keep them engaged is time wasted. Make sure your partners are properly vetted and they have what it takes to stick it out through thick and thin.
I’ve seen businesses fail because a partner’s enthusiasm waivers. To illustrate the point, imagine you and your business partners are all leaning on one another for support. Each person needs the other person to remain standing. You’re each standing firmly on cement, except for one partner, who is standing on ice. What happens to the group if that one person slips on the ice? You all fall down.
The cement represents dedication, enthusiasm, endurance, work-ethic and entrepreneurial passion, while the ice represents distraction, career malaise, a bad work-ethic and disinterest in achieving the long term goals set by the company.
Personality traits aside, ask yourself what each person brings to the table. Maybe one person brings editing skills and software, another person brings a camera package and tech savvy, while another person brings strong creative instincts. Make sure each person holds unique value that feeds into and supports the company. It may sound harsh, but if one person doesn’t hold unique value, they inevitably become a burden on the company’s balance sheet.
6. Lack of Innovation
The best way to gain a competitive advantage is to innovate. Pure. Simple.
If you don’t innovate and do something new in the field, you end up competing with all the other companies out there doing the exact same thing you’re doing. You end up fighting over scraps left behind by the companies who’ve innovated.
The beauty of starting a production company is that creativity can be innovative. You can establish a competitive advantage with good ideas. You don’t need to invent a new kind of camera system (although that may help), you can just invent a new way to tell a story or a new way to showcase the strengths of a product.
Good ideas are valuable currency in the entertainment business. Spend them well and you’ll innovate by creating unique content.
There you have it. Those aren’t all the problems a new production company might encounter, but they’re some. Hope it helps! Leave a comment if you can think of others!
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