Planning a Profitable Business as You Build Your Organization and Team

Chapter 7 of our text was about building your organization and team; whereas Chapter 8 was about planning for a profitable business. Both topics were covered this week.  As you plan your business, these two topics can be seen as inseparable.  The text discussed forming an appropriate organizational structure and a management team.  We decided to be an LLC because of the tax and liability implications.  If we were to ever be sued, our personal assets will be protected under this business structure.  There is also the advantage of having a "pass through" tax treatment and management flexibility of its members. In putting together our management team, we are currently relying primarily on ourselves as Owners, and will hire people on a contract basis.  This include working with consultants, producers, directors, writers, actors, and crew.  We will work with them on a project basis, and they will not be considered employees; thereby, we are not responsible for benefits, only their wages.  We will also gain the services of a bookkeeper and lawyer. Having such a team in place can lead us towards profitability because it protects and shields us from ignorance. We need people on our team that knows more than us. We're also willing to work with people new to the industry that is learning right along with us, as long as they are looking beyond themselves, and serving the greater good by seeing the big picture. The big picture involves having not only high work ethic, but also flexibility within the TV/Film industry. Shoot dates gets pushed back; funding falters; and Actors get sick. But by seeing the big picture, the project will see the light. If we decide not to have someone on our team, it is often because they are not able to align themselves with the big picture. We're always willing to give people a chance to be part of our team if they can buy into the vision. And this works vice versa. If we are not able to see the big picture, it means the project is not for us. It doesn't mean we'll never work with that Director or Producer again, but we are not able to align ourselves with their well-intention vision. Time constraints, family issues, or the right project at the wrong time, are often reasons. This ties all again into profitability because having the right people in the right place at the right time can help increase visibility and sales as #3 implies of the 6 Business Planning Rules noted below .

Our speaker for the night was Blair Hatcher, VP of Trulite.  He shared 3 rules of business- never run out of cash, never run out of cash, and never run out of cash.  At least 3-6 months of cash reserves. It is best not to be stingy at the start and ask for more money than you need if requesting a loan. You never know what can go wrong or additional fees that may be imposed.  He also offered 6 planning rules- #1 Know who you are;  #2 Know your competitors; #3 Know who can help you; #4 Identify your market; #5 Set goals; and #6 Do the numbers.

Two other pieces of advice he shared- 1) Never underestimate your time- phone, email, in person, on the web, etc...price your time and then double it. 2) Never let other people use your money. 2) Ask for 100% up front or a substantial amount (50-75%) before you get started working on a project. And collect the final payments immediately upon delivery or within 30 days of completion.