Video Production Business Tips – Surviving Economic Downturns and Thriving in the Upswings

When business is slow, people often blame it on “the economy.” When I was younger, I used to think this was a load of crap. How can “the economy” be directly responsible for why my clients aren’t hiring us for more video projects?

How can “the economy” be responsible for ME losing contract opportunities? Well, after years of fighting tooth and nail to have a successful video production business, I can tell you that even though I still don’t understand exactly how it works, the state of “the economy” definitely impacts my business.

In this article, I’ll attempt to give you a quick lesson on how, why, and what you can do to weather the storms.

I had an interesting conversation with a client about how the high price of oil impacts his business. He owns a multi-million dollar plastics manufacturing company (I mean MULTI-MILLION dollar business!)

This guy is big time and I’m doing everything I can to quickly learn how to replicate his success. The odds are good that I won’t reach that level with my video production business, but perhaps the collective efforts of all my business endeavors will resemble an inkling of what he has accomplished some day.

In a moment of ignorance, I asked him why the price of oil was making such a difference to his profit margins and he proceeded to instruct me in Business Economics 101. He mass produces products like medical waste trash bags, bags designed to keep frozen foods fresh for so many weeks/months, the liners of helium balloons, etc. which are made from plastic raw materials. These plastic raw materials are derived from oil.

Since oil is a lot more expensive these days, his raw materials cost a lot more which means that in order to maintain profit margins, he has to raise prices. Well, this isn’t fairing well because he has been successful due to his reputation of being the best quality at the lowest price.

Now that he is having to raise his prices, he is merely the best quality at an average price. Part of his frustration is that his competitors aren’t raising their prices to protect their margins. Instead, they are consciously losing money by keeping their prices the same.

So, as of right now, he can either join his competitors by not raising his prices and lose money or he can raise his prices to protect his profit margins but get less volume.

At this point in the conversation, I realized that I was running late for another meeting so we broke it off and I hauled tail out of there. Regardless of what he decides, I’m sure it will be a decision that continues to make him wealthier down the road. He didn’t get where he is by not understanding how to maneuver through good and bad economies.

So, how does the example I gave above regarding economic downturn impact us as videographers?

It’s pretty simple. Let’s say that this plastics manufacturer was a client of yours. If the high price of oil is leading him to raise prices which results in less sales volume, then it’s safe to assume that he will tighten up the purse strings when it comes to the “nice to have” services (videos, websites, breakfast in the middle of the Serengeti with 50 armed guards to keep the animals away… true story) and will only spend money on the “must have” services (raw materials, paper, pens, maintenance on his machines, etc.)

If he is a customer that does repeat business with you but hasn’t called in a while, this is most likely the reason. Or, if you submitted a proposal a few weeks/months ago and he hasn’t responded, this again could be the problem.

You have to keep in mind that when a business owner (or decision maker) is in survival mode, they aren’t thinking about anything else but how to get through this economic downturn. They know that if they can just get through the storm, great things will be on the other side when the economy bounces back.

As a service provider, YOU MUST RESPECT THIS! To not will result in extreme frustration for both you and the client/prospect. Plus, your client/prospect is giving you signs that the economic downturn is coming your way as well. If high oil prices impacts your clients’ profit, they won’t have extra money to spend on your services, which, you guessed it, means that you too will soon face a crisis.

So now that you’ve “seen on the news that the hurricane is coming,” what do you do?

You start boarding up your house and potentially think about leaving town.

I’m not suggesting you leave town but you should definitely start thinking about how you will weather the economic storm that will soon hit you like a ton of bricks.

What are your options?

My experience has been that when a client/prospect is facing a cash shortage due to an economic downturn, there isn’t any type of incentive that will result in them signing a video production contract.

They “freeze” their spending on anything that isn’t directly related to the operations of their business. So, you will feel like a hamster spinning the wheel without getting anywhere if you attempt to find a way to get your client/prospect to move forward with a project during this time. Embrace this fact and start collecting nuts… it’s going to be a long winter!

When your clients/prospects stop purchasing the “nice to haves” and only focus on the “must haves,” YOU MUST FOLLOW SUIT IMMEDIATELY! Put off the software upgrade or the expensive trip to the big industry conference you love to attend each year.

This is also the time to put off personal vacations and the kitchen renovation. If you don’t preserve your cash, you will be caught in the worst part of the storm without a lot of options for survival.

When the economy is bad, banks don’t like to lend money to people who actually need it and since you will be going to them because you are out of cash, they won’t consider you a good risk. It’s a messed up system but learning to embrace it will result in a healthier life and a more successful video production business.

It will be difficult to do this in the middle of a bad economy but a few ways you can help to off-set some of the impact include:

1. Focus your marketing efforts on industries that aren’t impacted as heavily when the economy is experiencing a downturn.

Some of these industries include health care (people are going to be sick no matter what the economy is doing), higher education (people go to college no matter what the economy is doing), local/state/federal government (the only entities that seem to not be impacted at all by the economy), and church ministries (the larger churches I work with seem to always have cash tucked away no matter what’s going on the business world).

These industries won’t necessarily thrive in a bad economy but they fare better than most which means you won’t be bone dry when the usual corporate clients close their checkbooks.

2. Find ways to improve your cash flow when the economy is good.

This is when banks will loan money or refinance loans for ANYONE! Use this to your advantage to reduce your monthly payments on equipment, vehicles, etc. And remember not to take on any unnecessary expenses that will either eat a large portion of your cash or will tie you in to monthly payments. You’ll need the cash when the economy gets bad and you won’t want extra monthly payments when your revenue drops.

3. Make hay while the sun is shining!

I know this is a cliche and one I’ve used in other articles, but, it’s true in this case as well. When the economy is great and people are buying things left and right, you MUST SELL LIKE THERE IS NO TOMORROW!

I’m serious. Spend all day marketing/selling and produce the videos at night or on weekends. Or, relax your client’s delivery expectations when possible so you can spend more time selling when everyone is buying.

Profit From New Economic Data

The new economic report is good news for small business.

The National Association for Business Economics released a new report indicating that America’s economic is continuing to recover. This is great news, especially considering recent uncertainties.

Here are the basic numbers.

– 31% of businesses increased their number of workers in the past quarter.
– 39% of businesses plan to increase workers over the next 2 quarters.
– 50% fewer companies reported layoffs during the past quarter compared with the same period a year ago.
– 52% of companies reported increased demand for goods and services resulting in improved sales.

But not all the news is good.

– The stock market continues to be unstable as it absorbs and interprets new regulations.
– The housing market and real estate in general continue to be sluggish.

This information is not just academic. There are clues here indicating how to best invest you time and money to take advantage of changes in the economic climate.

First, the stock market is a poor place for your money. This is no surprise to anyone who has lost half of their retirement investment in stocks or mutual funds. Unless you are a very adept trader who can capitalize on market volatility, the stock market should be avoided. But don’t confuse the ups and downs of the market as an indicator of how the economy is doing. The stock market is largely driven by emotion and speculation. Economic data may fuel the emotion, but the market will almost always over react, then over correct. So if the market falls 2000 points, it is not an indicator that the economy has collapsed any more than its 2000 point climb late last year indicated that the economy was completely healed.

Second, real estate is not where you should invest – yet. Some apparent relief earlier this year was largely due to government programs that have expired. Now, foreclosures are continuing to climb, and there are fewer new home starts. Real estate will likely bottom out in a year or two, but recovery is likely to be slow as the huge foreclosure inventory is absorbed by the marketplace.

So where is the right place to invest? Consider new business investment. As the economy strengthens, companies will be hiring employees and contracting new service agreements. The technology and business services sectors are likely to recover at a faster rate than the overall economy.

Top 5 Reasons Millionaires Need to Be Economically Intelligent

Becoming a millionaire is a secret or overt dream for many youngsters. As we know, some people are born with the silver spoon while some others are born to become millionaires. It is a reality that over the past few decades there has been an increase in the number of people who have become millionaires at an early age. Moreover, if you get a chance to look into their life, most of these self-made millionaires are college or school dropouts and came from an average family background. Now, the question is how these people are upholding their status in terms of money?

Apart from strong determination, commitment, hard work, and management skill; there needs to be few special characteristics to become the most consistent millionaire. The so-called special characteristics are, Love and passion for money, being well informed of investment opportunities, ready to take risk, and most importantly to learn and update their knowledge over the economy. Having gained all the attributes of a perfect millionaire, it is important to know the market, this is where statistics over the economy also remain.

Who are millionaires in the first place? Well, millionaires are just people who took the career path as entrepreneurs. To be precise, as the population grew, entrepreneurs noticed a need for food and other life-sustaining products in the cities and towns that were being established. Most of the entrepreneurs were middlemen, meaning, they bought products from producers and sold them to consumers. Other entrepreneurs set up small manufacturing facilities at their homes and created products for sale. As the market grew bigger amongst people around the world, these entrepreneurs were supported vastly which helped them to become the wealthiest people in the world. In this process, studying every link of economical chain was pivotal.

It is important for all the millionaires to have a motivating factor to be consistent in what they are doing. So, ‘Economy’ is the key factor. There are five top reasons why millionaires need to be economically intelligent.

To know where you stand: You could possibly be one among many millionaires in the country, but there is no way you could hit the ‘red carpet’ without recognizing your power and beyond. Knowing all about the country’s economy is very pivotal. It simply helps you to thrive more in your field or even in a new industry.

To Hold Highly-Profitable Sectors: It is highly crucial to develop a quality list of the most profitable industries, strategize on ways to develop a competitive edge, and fill a need within these industries.Doing some refined research over a specific market and its economy will help millionaires get a hold of the right stratagem to achieve success and more wealth over that industry. Without a pinch of knowledge over the so-called economy, there is nothing to gain.

To Develop Innovative Business Models: Upon deciding the best industry, it is important to move ahead and make necessary plans to launch the business. For a millionaire, he or she certainly does not want to mislay their reputation, in that case, it is significant that they study the market thoroughly and develop a business model that fits today’s economy. As you understand, without having the right skill over studying the current economy, you will not be able to achieve goals as desired, even if you are the richest person on the planet.

To identify New Trends: A growing number of Americans are achieving millionaire status simply by identifying trends and then waiting for the right time.Of course, this is not a task that can be achieved overnight. It is something that takes time and various studies about the market. Time and again, the economy plays a vital role in changing the trends in the market. So, all the millionaires need to be cautious over the market trends as and when the economy swings.

To Reserve a Place in the Top Ten List in Forbes: You can be a millionaire or even a billionaire like Mr. Bill Gates, but do you think you are acknowledged of all your hard work? It is important that you work straight-forward and get the glimpse over the status of the economy. You will never know that by doing the right job in the right way would definitely fetch you the reward. Probably even a name amongst top ten richest people in the country. But remember, you should be economically intelligent to accomplish your aspiration as a millionaire.

Thus, keep reading and studying more about business, economics and finance, but more importantly, practice your business, financial skills and develop a millionaire’s mentality!