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Your Own Business, Part 2: Setting Up Shop

COW Blogs : walter biscardi's Blog : Your Own Business, Part 2: Setting Up Shop

This is Part 2 of a 4 Part series on Starting and Running your own business in the creative industry. In Part 1 of this series, I posed the question, "Are You Ready?" A link to Part 1 is at the end of this article in case you missed it. If you've thought long and hard on this and your answer is "Yes," then let's proceed with Part 2 of this 4-part trilogy. Here we'll explore a lot of questions on setting up your company and getting ready to open those doors!

(Only in Hollywood could we make a 4-part trilogy.)So now that you've decided that the time is right and the financial situation looks acceptable, the next stop on the magical mystery tour is Setting Up Shop. As critical as deciding to actually go into business, where you set up shop can literally make or break you. And I don't just mean location, location, location, though that's certainly a consideration. But how much is the overhead going to cost you to maintain and run your little creative masterpiece? How accessible is it to clients? Will clients ever see the place? How many parking spaces does it have? Do you actually like the space? I mean what's the point of renting some dump with cracked walls, lousy carpet in a lousy part of town if you're not happy going there? How creative can you be if you don't like your surroundings? Oh and I will be saying, "house" throughout this entry to mean your home. Substitute condo, apartment, houseboat, VW Van, or whatever it is that you live in and plan to use as your home office. Capice?Now please keep your hands inside the car at all times, as this ride is dark and bumpy.

 

Say Hello to My Little FriendHere is THE biggest decision you will make when starting your own business. Do you go it alone or do you get a partner? Think long and hard on this if you are considering a partnership or collaborative agreement.Going it alone offers the most obvious benefit of being in absolute control of your destiny. Nobody to tell you what to do, when to do it or how to do it. Every last decision from where to open up to what pens to order is yours and yours alone. On the flip side, you take on all the risks and financial obligations. Every last dime that it takes to start and maintain your business will come out of your pockets.A partnership or collaboration is very appealing, especially to someone starting their first business. From a financial standpoint, you don't have to put up all of your own money; you share the risks and the decision making with someone else. In some cases, you might not have the necessary collateral or credit rating to obtain financing on your own and a partner is the only way to get what you'll need. If you're a bit low on funds, but high on ideas, partnering up with a like-minded person can get your business off the ground sooner than later.If you are considering a partnership or any other sort of a collaborative effort to open your new business, I am going to ask you, how well do you know this person (or people)? I mean KNOW these people? You are placing your financial future, credit rating and reputation into their hands. Are you completely comfortable that you have known these people long enough to completely trust them no matter what happens to your business? When business is good, everybody is happy. When business slows down how will your partners handle it? What if the business fails, will your partners stand with you to make good on everything or will they try to stick the blame and payments on you? Nobody wants to consider a business failure, but honestly, you have to think about this if you are going into a partnership. If you fail on your own, you take it on the chin, satisfy your lenders, and move on. If you fail in a partnership lawyers can get involved, fingers get pointed and suddenly those great guys you started the company with are eating you alive and blaming you for the failure so they don't have to make any further financial payments. I speak from experience on this one, but more on that later.One thing I cannot stress enough no matter which route you go, meet with a licensed Certified Public Accountant BEFORE you formalize your business. Even if you are simply going in business for yourself as a freelancer, speak to a CPA. Explain to this person exactly what your business will be, how many people are involved and ask for their advice to get the best tax advantages for your situation. In my case, both in my original partnership and in Biscardi Creative Media, we've formed a Limited Liability Company (LLC) because this offers me the best tax advantages. In addition, I do spend the money to have my CPA prepare my taxes each year because the laws do change and if anything is wrong on my returns, I have the security of knowing that his office will stand behind what they've prepared.It may cost you $150 for one hour of the CPA's time, but that can come back to you tenfold if you set up the company correctly at the outset.

 

Make Yourself at HomeThe next decision is Home Office vs. Commercial space. Some folks agonize over this question even more so that deciding whether or not to actually go into business. I've been in both situations and there are certainly pros and cons to both.Let's talk about the Home Office first where the advantages are numerous beginning with overhead. You're already paying your mortgage or rent on the place so you're not taking on an additional monthly rental payment. Obviously you'll use a little bit more electricity, but that's nominal. Your commute to work each day will be incredible and you'll most likely save on gas and car usage. Now and then if you don't feel like putting on some nice clothes to work, who's going to notice? Yes, yes, you can even work in your underwear, but please, at least put on some pants. Ok, let's consider this option further.Now thinking about your clientele and those clients you want to attract…. Is your house in a good location? No, I don't mean the tree-lined street with the white picket fences and perfectly cut grass in every yard. I mean are you in a central or easy to get to location for you to visit your clients and / or clients to come visit with you? If your house is inconvenient for clients to get to you or you to get to clients, that is some cause for concern. With Internet, live chat, overnight shipping and the like, we can literally work with clients anywhere in the world in real-time. However, when you're starting out, more than likely you will have clients in your immediate area to build your business with and face-to-face communications always helps in building good relationships. In my case, my house was 20 minutes away from my largest client and essentially one turn off a main highway. In addition, that client's Producers lived even closer and they loved being able to work closer to their own homes, so it made good business sense at the time to work out of my house.Is your house even conducive to a home business? Look around. Do you want clients and colleagues visiting this space? A home in disarray generally does not present a professional appearance for you. Remember, people are paying you to do a professional job no matter where you are doing it. Does your home reflect this, at least the area your clients and colleagues will see? You must have a presentable space inside and out for clients to come and visit you. Now I don't mean you need a housekeeper and all new landscaping outside, just keep it clean and neat. This is especially true if the client has to enter through your main living quarters to get to your office. The best situation is a separate entrance for your home office to truly keep your office separate from your living quarters. If that's not possible and your clients are going to walk through your house, how does that impact the rest of the people living in your home? When I started my company, I did convert a spare bedroom into an edit suite and my wife would get uncomfortable sometimes when I had clients in the house. She would literally hide in the upstairs master suite because client would use the kitchen for coffee and snacks and of course the guest bathroom. I felt bad about this at the time, but we were committed to starting the company so we dealt with it for the first year and a half of the business. So will your clients and colleagues cause any issues with your living arrangements? Better yet, will your living arrangements cause any issues for your clients and colleagues? Dogs, children, noisy neighbors, noisy traffic outside and so on are all considerations.Do you have the proper space in your house for your work? Think about the type of work you're going to be doing and how much noise you'll generate. Do you have a room or rooms suitable to hold whatever equipment and furniture you need to get your job done? A graphic designer might just need a nice desk with a single computer workstation whereas a video editor, animator and sound designer would have to think about audio / video and computer equipment along with the noise generated by their audio monitors. Don't want to be editing that latest music video or corporate meeting opener right next to your master bedroom or the bedroom of your next-door neighbor. One problem I had initially was editing late at night, as our master bedroom was right above my suite. So I either edited with the volume down low or with headphones. Is there enough room in your selected space for a client to comfortably sit in with you for an all-day session? Sure you may not be planning to ever have a client come by the office to work with you, but what if it happens? Better to be prepared in advance than grab a chair out of the dining room and have them peeking in from the hallway because the room is too small. Remember that thing about clients paying you for a professional job? Making them squeeze into the corner of a room or sitting out in the hallway is not the way to treat someone who is writing your checks. Make sure you have space for at least one other person to sit comfortably in the room with you. How much work does this space require for you to move in? A basement or bonus room are favorite locations for home offices because often they're just extra space that's not being fully utilized. Whatever the location in your house, consider how ready it is. Maybe you need something as simple as painting the walls in a single room, to adding some more electrical circuits, to completely finishing out a basement or bonus room. Whatever it is that you need, plan out your budget and make sure you have the money, and the time, you need to finish the job. Especially if you're doing something as major as finishing out a basement. What you think might cost less than $500 to complete could come much higher than you ever imagined. Price it all out first, including the time commitment before you start any project. Nothing worse than announcing your new business is going to open and then having it delayed for three months because the construction project is taking much longer than you ever imagined. You could have kept working at your current job paying the bills while that space is being finished.Consider the air conditioning capabilities of the room(s) you have in mind. Computer gear and especially audio / video gear generate heat, sometimes a lot of heat. Is there adequate cooling in the space you have in mind? If not, how easy is it to add more cooling, say with something as simple as a window A/C unit? Nothing kills computer equipment and hard drives faster than heat so if your room gets over 80 degrees, think about how hot your computer will be running.After considering all of this, can you work in your own home and not be distracted by the fact that you're working in your own home? It's incredibly easy to get distracted and go off to play with the kids for a bit, play with the dog, go grab some lunch, read the paper, check out some TV, play a few rounds on that video game, chat with friends on the phone, and do just about everything else BUT your work. Before you know it, 8 hours have come and gone and you've barely started what you were supposed to be doing. Once more, you're getting paid to produce professional work. Is your client going to get what they are paying for or will you be scrambling to complete your projects at the last minute because you don't have the discipline to work a full day in your home?Finally, if you do open up in your house, talk to your home insurance agent! Almost all home insurance policies will not cover a home-based business, especially if you require high-end computers and specialized equipment like video editing gear. You will either need to add additional insurance to cover your equipment or take out a completely separate business insurance policy.I've asked a lot of questions here for sure. Working at home can be incredibly rewarding, but it can also be a disaster if not completely thought through.

 

 

Mrs. Wiggins on Line TwoOk, so option number two is a commercial office space where the obvious first advantage is, it's not in your house. It's an actual office space where you can hang out a shingle, put your name on the door, tell the entire world "I am a legitimate business, I have a commercial office." A commercial space shows an investment in your company because you made the effort to get a "real office" for your company. If you're opening with staff on board, you might like the idea of commercial so you don't have folks working out of your house. Ok, let's explore this a bit further.Be VERY realistic about what you can afford. There are incredibly cool places to have an office no matter where you are in the world. Hey some brick walls, slick industrial lofts and retro renovated warehouses just scream 'cool creative offices.' The more 'chic,' 'in,' and 'cool' a place is, the more you're probably going to want it and of course, the higher the monthly payments will be. When you visit any property, ask yourself if YOU like it. Do you like the appearance of the outside, the inside, the parking lot, the surrounding areas and everything else about the space? You don't have to love it, but you should like it because you're going to be spending a lot of time here. If you don't like the look of it or the surrounding area, do you think your clients will like it? There's going to be compromises when getting a commercial space because unless you're independently wealthy, you can't just go out and get any space you want. You're going to have to compromise based on what you can afford. But you should never settle for a space just because it's the first place you found that you could afford. Keep looking around and eventually you should be able find an office that you like and in your price range.You are most likely going to be required to sign a 12 – 36 month lease that you are going to have to PERSONALLY guarantee. Got that? If you go out of business in 6 months of 36-month lease, you are still going to have to pay the rest of that lease personally. Remember what I said in Part 1 of this series? Be prepared to make no income for up to the first 12 months of your company. Be sure you are comfortable enough with your projected company income to afford that office lease before you sign on the dotted line. If possible, try to get a 12-month lease with an option for 24 more months at the same rate. These are very difficult to get, especially when you're a brand new business, but it doesn't hurt to ask. Your upfront costs for an office can be rather significant. First off, first and last month's payment are due when you sign the lease. You'll need to hook up and establish electricity, phone service and all other utilities that are going to be priced at the "commercial" rates. You might be shocked at how much higher these costs are over residential rates. Do not take advice from anyone else, even the property manager, on how much all of this will cost. Call all of the companies yourself and get the exact amount for hook-up, monthly fees, whether a long-term contract is required, etc…. Property Managers especially just want to rent the space to you and will promise you just about anything to get you sign on the dotted line. It's your responsibility to make the payments, so take the time to make some phone calls and run the monthly payment numbers BEFORE you sign a lease.Is there easy access to your space for clients, colleagues and deliveries? Some buildings have a central entrance and then the clients find your office inside. Others are set up more like condos with a separate exterior entrance for each office. Be sure there is plenty of room for the clients to get in, the space is well lit and that the exterior entrance is protected from the elements. Nothing worse than a client waiting for you to open the door in the pouring rain with no overhang. Be sure to ask the property management how many parking spaces you're allowed or guaranteed. Sometimes this doesn't matter because it's a huge parking lot, but in some smaller office parks, parking can be a premium. You want to have at least one spot guaranteed for your clients. One big question to ask any property manager is how much leeway will they allow you in painting and / or decorating? Remember, you're just renting the space, someone else owns it and they are usually a bit fussy about how you represent yourself because you're also representing the property owner. They're always renting units to new people and maintaining a sense of "decorum" is paramount so you will have to conform to their rules. Just about every commercial location has a specific "palette" all renters must follow. Sometimes it's certain shades of paint; sometimes it's how you can decorate your offices and lobby, etc… In our case, we were fortunate enough that the property allowed any color from one particular brand of paint. There were probably 250 colors to choose from so that gave us a lot of choices, more on this later.In my own experience I opened a company with a partner and I want to say the office we rented was 2,400 square feet. It was a pretty non-descript office park with a group of single story buildings with probably 8 suites per building and each suite had an outdoor entrance. Small lobby in the entrance, three offices along the right wall that we turned into edit suites, large office on the left that we used for a tape library and huge warehouse type of room in the back that we set up as a game room / kitchen. We had to sign a 36-month lease and one of the driving factors for us was the relatively low cost of the lease and the location was very convenient to several Atlanta highways. We were also just 1/2 mile from a very nice "historic downtown" area with nice shops and restaurants for client lunches. We originally considered being right in that downtown because it was just beautiful, but the lease would have been almost double for a smaller space.So just like the home office, a lot of questions to consider before you make the plunge to go into a commercial space.

 

 

So Home or Away?So after all those questions, what do I recommend? I recommend whatever you are most comfortable with both in terms of being able to create the best work for your clients and your financial ability to pay for your office. Ultimately you have to create the best possible work to please your clients and grow your business. You can do this working in either a home office or a commercial space. Consider all my questions and take your time coming to a decision. You'll be living with it for a while.Oh and you guys starting up a field based company, like videographers, sound recordists and cinematographers who will simply need a place to store your gear in between gigs. Consider whether you really want all of that equipment sitting in your house. Would you feel better with all of that in a commercial space than in your garage or back room?And last but not least, be careful what you advertise whether you're at home or in a commercial space. "Walter's Video Production Company" on the door says "Really Expensive Equipment Inside, Come and Get It!" Obviously whether you're at home or in an office, get a security system installed. But one of the real tricks to keeping your equipment and yourself safe is keeping your business "on a need to know basis." Don't hang a sign outside your house or on your commercial office door that says "Video Production / Audio Production / Film Production" etc… I use BCM for a lot of my signage because Post Production is not a "drop in" business. You need to call and make an appointment to come in the office so there's no reason to advertise "Media Productions" on my door.

 

 

Haulin' the MailRegardless of where you decide to open shop may I suggest you get a company mailbox away from your office. They're those independent mailbox / shipping companies who receive your mail and deliveries for you. Even if you get a commercial office, I can't recommend one of these enough.You're most likely going to be a small company, either just yourself or a few other people. Chances are that office (home or commercial) is going to empty at times. You have deliveries that are going to be left at your door. Yeah I know those expensive deliveries have a "Signature Required" sticker on them, but trust me, those will be left at your door if you're not there.True story. I ordered a $12,000 multi-format Sony Beta player from a very well known on-line broadcast supply company. I was still working out of my converted bedroom in my house at the time. I was on an all day shoot, arriving back home at 5pm. Sitting on my front porch for all the world to see was a huge box with "Sony J3" in big black letters. My porch is open to the very busy street in front of my house and I could see the box from several houses down the street as I was driving up. On top of that box was a very large "Signature Required" sticker. Nobody was home to sign, but the delivery company left it on my porch anyway. The very next day I went down to my local UPS Store and got a mailbox. I didn't want to trust any more deliveries to chance on my doorstep.Since that time I've moved out of my converted bedroom, but kept the mailbox. It allows me to maintain the exact same mailing address no matter where I decide to move my office. This is huge with corporate clients as getting through to Accounts Payable departments to change an address can sometimes be a challenge. Also I'm still a small company and I have the security of knowing someone is always in that mailbox location to sign for my packages and keep them in a secure location. They email me whenever a package shows up so I don't even have to keep track of anything. Just something I would strongly suggest for anyone with a smaller business.

 

 

Build It and They Will ComeNow it's time to outfit your office with the gear and furniture you need to be successful. The "build it and they will come" mentality can get you in a lot of trouble in a hurry. You read all the trade magazines; you see the posts on the Creative COW about all this gear and equipment everyone is using. You think to yourself, "I'll just put one of everything in my shop and that will attract clients because I can handle anything they bring to me." Have you priced "one of everything" lately? There's a whole bunch of zeroes on that price tag. People are still going to hire you more because of the artist operating the equipment and not just because you have all the latest gear. Sure you want to be up-to-date with your equipment, but gear alone does not draw in clients. So let's get realistic here.What equipment do you absolutely need to open your business? There's a balance here between going completely cheap and going overboard. Who are your clients going to be initially and whom are you going to target? That will give you some direction on what you need to be looking at. There's a real pattern I have seen on the Creative COW lately with people trying to do the maximum amount of work with the least amount of money. This works to a point but you still need to be able to perform your work efficiently. If you don't want to invest a reasonable amount of money into your company, why should clients invest money in you?I'm always looking at expandability. What can I purchase today that can be expanded upon tomorrow? Almost all of you will need a computer to run your business. Laptops, iMacs and the like are very tempting because they are relatively inexpensive. But 6 months from now, you can't really expand that computer any further; you'll require something completely different. A PC or Mac desktop computer is fully expandable with additional storage, RAM, monitors, graphics cards, video capture cards, and so on. So instead of purchasing a whole new computer, you simply add on to what you purchased to begin with. So if your business is going to run off a computer, my advice is to get the beefiest computer you can get in terms of processor speed, RAM and graphics card. Now what else do you need beyond a computer? I mean REALLY need? If you can start up your business comfortably with just a computer and a couple of monitors, then do it. If you need a DVCAM deck with a broadcast TV monitor, then do it. But stay away from decisions like "well if I purchase this $5,000 package of plug-ins then I'll be able to offer so much more to my clients." Plug-ins, additional equipment and computer hardware are all things that can be added, usually overnight or even via immediate download, as a project demands. If your business will require you to be in front of the computer all day, do not skimp on your monitors. Your eyes will be staring at these all day and while LCD screens have dropped in price, many of the low cost ones simply do not display a sharp image or do not display colors accurately. If you run a dual display set-up, purchase at least one high-end monitor that you will use as your primary monitor. Your eyes will thank you later.So I suggest you make up a list of everything you would absolutely love to have start your business. Then you start whittling it down to a bare minimum. If you open your doors tomorrow, what is the equipment you absolutely have to have to finish a project for a current client? That should drive your equipment purchase. Sure it's nice to put an HDCAM Deck into your shop, but do you really need the payments on a $100,000 piece of equipment?When I started my current company in 2001, my clients were all corporate, but high-end corporate with everything done to broadcast standards. We used a lot of motion graphics, animations, titles and special effects in their projects. So I started with top of the line Apple Mac computer with maximum RAM, External hard drive array to hold 3 hours of footage, Apple Final Cut Pro, Adobe After Effects and Photoshop, Boris Plug-ins for After Effects, Two computer monitors, Pinnacle CinéWave card to allow uncompressed capture / output of video, Mackie 1202 audio board, Roland studio audio monitors, Philips 26" TV with S-Video input and a Sony UVW-1800 BetaSP Player / Recorder. I decided to hold off on a broadcast monitor at the outset because I trusted my eyes and experience in broadcast production to be able to read the FCP Scopes and Philips TV for the projects I was doing. So for me, this was the bare minimum to meet my current clients' needs and I could pursue new clients with the uncompressed capabilities of my system. Once I started true broadcast production, I added a Sony PVM broadcast monitor. If I recall correctly, this all set me back about $26,000.Along with the gear comes the furniture. Once again, it's a very easy to over purchase here. You want your office to look cool and hip and you visit those furniture stores or go online and get lured into making some very expensive purchases. At the end of the day, your client is still paying for your services, not necessarily where you got your furniture. It should be comfortable, functional and clean. Most of all, it should fit within your budget.When I first opened up, we had a nice oversized chair in our living room that really didn't fit in the room, so I simply moved it into that converted bedroom for the clients to relax. They loved it and it didn't cost me a thing. For office chairs, I still shop at member warehouses as often as possible because the prices are great and the chairs are comfortable. Be sure they have plenty of padding if you're going to be sitting 8 hours a day and check that they are solid. Some of those really cheap office chairs sound and feel like they're about to fall apart at any second. If your business involves video editing, graphic design, animation or sound design, you probably need a fairly good-sized desk to hold all your equipment and still give you room for paperwork and such. A cheap, put-it-together-yourself desk probably won't give you enough room for everything and getting a larger desk can be a very expensive proposition. If you can swing it, go ahead and invest in a quality multimedia desk like those available from Anthro. They are worth every penny and will last a long time.If the money is a bit tight, but you need a solid oversized desk, grab some tools and some lumber and build yourself something. At my first company with the partner I built three desks that were about 12' across and 4' deep using plywood, 2x4's and 1x4's. Probably $350 total for all three desks. When I started my current company, I built a new 8' x 3' desk, again with plywood for about $75. I moved that to the new office and built a 2nd desk for about $100. The real trick is to be sure to use high quality plywood for the top of the desk so you get a smooth finish. This is usually about $45 for an 8-foot sheet and will probably be the most expensive part of the desk. Just measure out your needs, sketch something on paper and away you go. If you're not all that good with woodworking, well just ask a family member or friend who is.

One last must for furniture is something for the clients to put their stuff on. Scripts, tapes, paperwork, their drinks, you name it. It can be an end table, the end of your desk, a bench, just someplace where your client can have a place to spread their stuff around.Beyond these basic components, the rest is up to you, but again, purchase only what you need to get the business started. Furniture is easy to add as you grow your business. Open a bit light on furniture and after a few months you'll see what you need to add. Definitely don't clutter up your space with too much stuff!

Here's my original desk after it was moved to the new offices. Plywood top, plywood legs and some 2x4's to stabilize the front. Client sat right next to me on the left and notice all the room for them to lay out scripts and tapes.

Here's the second desk we built for the JungleLand suite. Those are wall cabinets on the floor that I used as front legs and a 'furniture grade' sheet of plywood for the tops. The "rack" unit is a display case from a company that was going out of business and we just dressed it up with wood sides.

Will That Be Cash or Charge? So now you've got all your purchases laid out, how are you going to pay for all of it? Just like with personal purchases, you've got some options out thereCash is always a good thing if you have some money available. You purchase something, you own it, you can sell it if you want to, there's no interest or payment worries. But remember that your income could be very limited for the first 6 to 12 months of your business. So spend any cash reserves carefully being sure to keep enough money set aside to pay your monthly bills until your income can catch up.A Business Loan is exactly like getting a car loan or a mortgage except that they are much more difficult to get when you are a start-up company. Unlike those personal loans, banks are generally very cautious about giving a loan to a start-up company because the failure rate for any new business is rather high. And even if they do offer you a loan, generally it's an 80% value loan, meaning that the loan will cover 80% of the value of the equipment you are purchasing. So if you are trying to purchase $10,000 worth of equipment, the bank will loan you $8,000 and you still have to come up with the other $2,000 out of pocket.A Lease is a very popular option because oftentimes there is little or no money up-front and you can lease 100% the value of your equipment, sometimes even more. A lease is very similar to a Loan in that you pay it monthly with interest, but Leasing companies are much more lenient in their criteria so just about anybody with a bank account can get a business lease. There are two primary types of leases. A One-Dollar Buyout Lease (the name varies based on the leasing company), as the name implies, means that after you have paid off the term of the lease, usually 3 – 5 years, you can purchase all of the equipment outright for just $1. This is a great option if you're purchasing something like a very expensive VTR that will still have a shelf life after your lease has run its course. When I did Leasing, this was my preferred way of working as even with a computer, a three year old machine was still handy for graphics or I could sell it and use those funds towards an outright purchase of another machine.A regular Term Lease (the name varies depending on the leasing company) is exactly the same, except if you want to keep the equipment at the end of the term; you must pay the current fair market value. A leasing company will try to sell you on this option as a way to maximize your tax benefits because "it's a true lease." Only go with this option if you do not intend to keep your equipment at the end of your lease. If you intend to keep anything, or even thing you might keep something, go with the $1 Buyout option. In my case, I fell for the "tax advantage" sales pitch when we opened this company and ended up having to pay almost half the price of a Sony UVW-1800 to keep it even though I had made three years of payments on it and everything else in my office which included a LOT of interest. My CPA cleared up the issue right away and told me the tax advantage was minimal. (Remember I said to meet with a CPA first? I met with him AFTER I signed the term lease.)Be wary of the "over-value" leases that the companies will pitch you. Some companies offer up to 125% of the value of your equipment meaning that they give you $10,000 + $2,500 extra to make that $10,000 purchase of equipment. "It's spending money to ensure you can pay yourself while you get started" they'll tell you. What you're really doing is just giving them some easy interest on money that was just lifted out of your wallet for no particular reason. Keep that extra 25% in your pocket instead of giving it to the leasing company + 12% interest.Finally good old-fashioned Credit Cards are an option if you can get enough of a credit line to purchase what you need with terms that are acceptable. If your credit rating is good, you can probably get a better interest rate and a higher line of credit that you could with a business loan or even a lease. Certainly worth investigating, but again, be careful with the monthly payments. Don't stretch yourself too thin when it comes to your finances.Personally, we use a combination of the above except for Leases. We started out the company with that three-year term lease and have never used one since. I honestly avoid all leasing companies now after that first experience. Keep good records of all of your purchases, as most of them will be tax-deductible to one extent or another.

 

Clean Up on Aisle FiveYou only get one chance to make a good first impression. That's as true today as it was the first time it was uttered. You've got your gear, you've got your furniture, and you've got your monthly payments, now it's time to put it all together to wow anyone who walks in the door.Number one rule for any office is to keep it neat. If nothing else, just having neat office creates a very good first impression. Nobody likes to walk into a cluttered office with stuff strewn about, dirty dishes in the sink, scripts and tapes lying about, dirty floor underfoot and such. I'm not saying you have to have a perfectly spic and span office to make Felix Unger proud. Just keep up with it so it's presentable at all times if possible. (If you don't know who Felix Unger is, ask your parents).The first part of keeping your office neat is figuring out the most efficient layout. All of your equipment needs to be laid out so you can use it efficiently while also allowing your client maximum comfort and ease of reviewing your work. Once you have your space, look around and start to visualize how everything will be laid out. Sketch the floor plan out on paper and lay everything out before you start moving everything in. The worst thing you can do is start moving all of your stuff in with no plan on where everything goes. That leads to frustration and a non-memorable moving in day.What's the first thing the clients should see when they enter the door? Where's the best place to put the desk and which way should it face? Where will you sit? Where will the client sit? Can they your work or hear the audio correctly from there? Where will you store your work, tapes, archive materials? Where can you and/or your client set down a drink? Where can I put my printer / fax / scanner? Where will the issues of Creative COW magazine go? Try to sketch out and visualize as many details as you can before you start moving equipment and furniture into a room or an office space. Remember to try and keep the clutter down as much as possible. If something like an end table is just too big for the room, return or sell it for something smaller.Once you've got a rough plan for your furniture, make a statement with your walls. I mean you're a creative person in a creative field, right? So the office should reflect something about you and your company, even if it's just a converted bedroom. Anyone who knows me knows that I'm a big kid at heart and I just love a certain space ranger from Disney. So we created a space themed paint job in my converted bedroom and used the color palette from that character to paint my desk. It made for a very fun and lighthearted room, especially with the addition of stuffed characters and other toys both current and from my youth. I created a very comfortable and creative atmosphere in a single room that was instantly picked up by the clients. By the way, the theme was so popular; we recreated the look when I moved into my new offices.So get rid of the white walls if you have them, spackle the holes, have some fun with color or go completely sophisticated. Whatever you do, make it a reflection of you and your company, not just what you think the client will like. Remember earlier I said the management company at that commercial office allowed us a choice of 250 paint colors for our office. Well they never said we had to use just one color. We painted murals in all of the edit suites from an amazing Humphrey Bogart themed wall in the Game Room to an interpretation of Starry Starry Night. Needless to say the management was stunned, but also impressed because we stayed within the letter of the law, but were able to be creative at the same time. The murals and overall paint scheme did exactly what they were supposed to, made a hell of a first impression when clients walked in.I can't stress that enough. That first impression is just so valuable in creating a 'buzz' for your business. Word of mouth is so valuable in this field and if a client enjoyed their visit to your office, they will spread that around to everyone they know. I know this from first hand experience.My current offices have distinct themes for each room. You enter into a 50's movie theater that includes both an edit workstation and gaming; JungleLand is one of the edit suites with an Indiana Jones inspiration; Wally World is my toy box themed suite while Rebecca's Diner is the 50's kitchen and bathroom. We are definitely a bit short on storage space, but we're going to be incorporating some very nice looking storage cabinets in the suites in the near future. If the storage cabinets need to be seen by the clients, I at least want them to look really nice.So take some time to really think about what you want the office to look like and at the very least, go get a few gallons of paint and spruce up the place. And keep your office clean!

 

Extra! Extra! I Got Extras Here!Finally we near the end of our current journey with extras. This is especially true if your business, such as our Post house, involves clients spending a lot of time in your office. What extras can you provide that makes you more desirable for a client to not only continue to work with you, but also pass your name along? Your work gets them in the door, it's the little things that keep them coming back.Coffee, snacks, games, Internet access, whatever you have the space for and can comfortably afford. They're just small things, but they make the client experience that much better and again, more positive word of mouth advertising. Right from day one in my converted bedroom, I made sure I had fresh coffee, flavored creamers and sodas available at all times. I even sent a questionnaire to clients asking what they liked for me to keep in stock during sessions. Now with our new offices, we have a full wireless Internet access, full kitchen with coffee and espresso machine, snacks, sodas, Xbox 360, Nintendo Wii and DVD player. I still keep track of what each client likes and try to make sure it's in the shop when they come in for sessions. With member warehouses like Costco it's pretty inexpensive to keep an office stocked with "extras." I have to say, the Nintendo Wii has been a huge hit since we installed that and if the clients are having fun, that's a good thing!One big extra I've always done from day one is to pay for all meals during sessions. Whether we order in or go out for a meal, the client never pays no matter how small or large the job. I know that immediately set me apart from other single room operations because my clients told me so. They appreciated the fact that I was willing to do something so simple as buy them lunch, but I just feel it's the right thing to do. They are spending money on me; the least I can do is buy them some lunch or dinner.So as you plan out your business, consider some extras that make your client experience a little bit better and hopefully set you apart from your competition. Along with keeping a place clean, it's the little things that can really make your business stand out.

 

Well I believe I've said about all I can say about Setting Up Shop. If you take nothing else from this lesson, just know that the more time you take planning, the better your shop will come out. Kind of like a production, no? The more Pre-Production time you take, the better the shoot will come out. Once again, don't take my thoughts as "absolute law." These are my thoughts so take what you need and certainly do more research on your own before fully setting up your shop.

 

In Part 3 of this series, "Run and Build Your Business," I'll look at some ideas on running your business more efficiently, marketing and treating your clients right to spread your good name around. Part 4 will cover Expansion Decisions.Walter Biscardi, Jr. is a 17 year veteran of broadcast and corporate video production who owns Biscardi Creative Media in the Atlanta, Georgia area. Walter counts multiple Emmys, Tellys and Aurora Awards among his many credits and awards. You can find Walter in the Apple Final Cut Pro, AJA Kona, Apple Motion, Apple Color and the Business & Marketing forums.

 

Part 1 - Are You Ready?:http://blogs.creativecow.net/node/273

Part 3 - Running and Building your Business: http://blogs.creativecow.net/node/300



Posted by: walter biscardi on Jan 10, 2008 at 7:40:20 amComments (6) business

Comments

Re: Your Own Business, Part 2: Setting Up Shop
by Phillip van der Merwe
Hi Walter,

We are a GFX/Design Studio is SA. I am looking for some advise. Currently I charge per hour. Isn't it better to charge per second of finished product?

Regards,

Phillip van der Merwe
Managing Director
Merz & Matters
phillip@merzandmatters.com
Thank YOu
by Mary Anne Benner
Thank you so much for taking the time to put this article together and for taking the time to help others just getting started. For me, my biggest concern has been for safetly. I prefer to have my busniness out of my apartment since I'm just starting out, however, I wonder about safetly issues. Is it safe to bring clients into my apartment. Just a question I've been pondering as a woman.
If you do not have a bad
by jenero fisher
If you do not have a bad credit getting business loans are easy. It is generally seen that bad credit acts as an obstacle in the smooth running of a business.

I have one loan and pay in a little extra every time so my repayments are ahead. This reduces interest due, but also means if I am sick or take a holiday, the payments are prepaid, so I don't have to worry.
Still in awe
by Nick Griffin

Walter -

Where do you find the time to prepare such comprehensive articles? As I said on the first one, brilliant!

I will offer one middle option to the home office vs. commercial office. I started out in commercial space years ago and moved into a home office at the point where I parted ways with partners and cut way back on the need for a large staff. Having a home office made me extremely happy -- especially at the begeinning of the month when I wasn't signing a large rent check.

After several successful years my wife and I were ready to move up and a major part of what we were looking for was the ability for me to have a truly dedicated and business-like home office. We finally found it in a 115 year old, 27 room "historic mansion" in less than great repair. Long story short, a few hundred thousand later and months of living with contactors under foot, we had what both of us wanted. The wife wanted a home with some size and character and I wanted nice office and studio space for which I never had to apologize. "Yea, it's a home office -- the rear wing of our 10,000 sq ft home. You got a problem with that?" So far, no one has.

By combining the two, living space AND office space, we have something bigger and nicer than either would be seperately. Probably not for everyone, but certainly works for me.

 

I will also point out that my CPA's advice has been to not take any home office deductions as that just causes a whole series of other tax complications. But then that's my CPA and my state. Your mileage may vary.

Internet access is a definite plus
by walter biscardi
Good point Bruce.  We have an FTP site that we use reguarlay not only for uploading client approvals but also for collaborators like our audio designers to upload the audio mixes.  Here in Atlanta traffic is so attrocious that we the FTP site is used even for local clients in addition to those scattered around the country.
Kudos from Bruce Bennett
by Bruce Bennett

Walter,

Very good article. Lots of truth and great advice. I really enjoy reading your blog, listening to you on the Podcasts and reading your posts.

I have several successful colleagues that have followed your same path to their success. Others went overboard in purchases during their startups and went belly-up in less than two years.

One thing... As a Producer (when I worked for Corporate America and also now as a business owner) I must have Internet access at all of my vendor locations (audio houses, post houses, etc.). I consider it a "must have" for what I do for a living. No easy Internet access = no business/money from Bennett Marketing & Media Production. It's that simple. I'm even considering switching accounting firms because mine doesn't have a way for me to get online during our tax meetings.

Thanks again for sharing your experiences. You are a great asset to the COW. I look forward to more. Keep on truckin'.

Bruce

----------------------------------------------------
Bruce Bennett
Bennett Marketing & Media Production, LLC
Madison, Wisconsin
Website: http://www.bmmp.com



Professional Video Editor, Producer, Creative Director, Director since 1990.

Credits include multiple Emmys, Tellys, Aurora and CableAce Awards.

Creative Director for Georgia-Pacific and GP Studios, Atlanta. Former Owner / Operator of Biscardi Creative Media. The show you knew us best for was "Good Eats" on the Food Network. I developed the HD Post workflow and we also created all the animations for the series.

Favorite pastime is cooking with pizza on the grill one of my specialties. Each Christmas Eve we serve the Feast of the Seven Fishes, a traditional Italian seafood meal with approx. 30 items on the menu.

If I wasn't in video production I would either own a restaurant or a movie theater.

 




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