Ten years ago starting your own post production business was a pretty big undertaking. Just the initial investment in equipment alone could set you back over $100K for a very modest setup. Add to that the cost of office space, the build out, office furniture and equipment and business insurance, and it was out of reach for all but the most well funded entrepreneurs.
But due to the progression in technology and the drastic drop in prices, nearly anybody can open a little boutique of their own. And in fact, more and more editors are opting to leave their full time job to pursue freelance editing, while also having their own system setup in an extra room or their basement. For many post houses, filling a senior editor job has become a difficult task, with so many of the talented editors deciding to make their own path.
Have you been tempted to go this route? Have you been tempted to start your own production or post production company? It’s not for everybody, that’s for sure. Chances are you know in your gut if it’s not for you already. While on the surface it sounds great and you have visions of building your own room and keeping all of that hourly rate for yourself, there’s so much more to running a good (and profitable) business. If you want to set something up in your house and just work the room yourself, maybe there’s not much more to it, but I’m talking about the editor that wants to get an office, have more then one room, maybe a VO booth, graphics work station and so on.
Here are just a few things to consider.
- You’ll need to secure office space. Location is key, but so is the monthly rent. Will you need to sign a lease (probably) and if so for how long?
- Will you need to build out the office at all to fit your needs? Painting? Will you have to pay for this or will the landlord?
- How much furniture and office equipment will you need? What will that cost, especially if you like those Herman Miller chairs.
- You’ll need at least one phone line, two or more is better.
- How much cash will you actually need to lay out for all of the necessary gear? Sure, you can get a mac and Final Cut Pro for around 6K, but add to that a capture card, tape deck(s), audio board, speakers, lots of cables, edit monitor, client monitor, machine room rack and some really fast hard drives and suddenly you’re more around 25-100K.
- Do you have that kind of cash, or will you need to buy on credit? If credit, where will you get it? Credit cards, bank loan? What type of interest will you need to pay?
- After you’ve spent all of this money, you had better have some business insurance.
- At this level, you probably will want to incorporate your business. That will cost anywhere from $500 to $1,200 depending on who does it and to what level that handle the details. On average expect to pay about $800.
Let’s say you get past all of the hurdles above (and this is just a partial list). You now have your small little company ready to go and generate some income. And let’s say you’re the worlds best editor and being booked is not a problem (this is usually not the case if you’re just starting, even if you do have some long time clients that you’ve edited with). What do you actually know about running a business? If you’re busy editing all the time, who is actually running the business? Who handles the accounting, finding new business, keeping the equipment running, doing research on new trends? Do you need to hire an assistant editor to help out with all of the extra duties associated with editing?
One of the main reasons that so many businesses fail in the first 3 years is that they were not well designed from the ground up. In many cases, small businesses are built around a single person doing everything. But no matter how passionate you are about what you do, you WILL burn out if you don’t have a better plan going into it.
And by now you’re probably asking yourself “where’s the book Tom, I thought this was about a book”?
A few years back around the time I was starting Edit Creations I read a great book called,
The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It.
The book is very good at breaking down how to design your business in a way that you will have control over the business, instead of the business having control over you. While the book does not cover post houses specifically, the lessons taught can easily be applied to any business. For me it answered the question of how I go from one man editing, to a business that can sustain itself without me (something I’m still working towards, one step at a time).