Video production is a very interesting sphere, full of creativity and ambition, but many newcomers are afraid to take their first steps in this industry, therefore today we will discuss the basics of video production. Before opening a studio and making videos, you need to learn the basic principles.
How does video production work?
We’ve studied all the basic facts from the video production business that you should keep in mind at the beginning. Each of them is important and reflects a certain aspect of video production.
- The first thing to do is to analyze and understand this market, focusing on your sphere;
- It is almost impossible to start a business alone. You need other like-minded people;
- Every company needs a business plan to figure out what to do next;
- Concentrate on a particular type of service, based on market goals, and get to work;
- Analyze your strengths and opportunities;
- If you fail, then admit it and move on.
Three Important Things Before You Start Your Own Video Production Company
Here’s everything you need to consider before you start a business. This makes it easier for you to focus on the important things.
1. Company name and its type
The logo is the face of your video production company, and the name is its character. These two details are the key things. We will talk about the type of company later, but its choice determines the direction in which you will develop in the future.
2. Creative Vector and Crucial Advantage
Determine what will distinguish your company from the competitors and find out what your creative vector is, what will make your videos memorable, what will you do to make your product always stand out.
3. Business plan
You can’t just meet with your friends, rent a room and call yourself a company. To set up a studio, you need a structure, a business plan. You need to understand how your business is going to make money.
Creating video content is more complicated than just making videos. When you open a studio, you create a company and a structure. You start working with people, large companies, which means you are responsible to your customers and employees. Running a video production business is difficult for many reasons.
7 tips on how open your own video production studio
1. Financial investments
Like any other business, video production requires an investment, and the higher the budget, the more doors will be opened for you during the first stage.
It is important to understand how much money you will need and how you will manage your finances: hire people, rent an office, or leave a small amount of money to develop your business.
If there is no opportunity to invest money, you will have to invest time. Consider how much time you will have to spend on additional work to raise the start-up capital.
2. What are your priorities?
The first couple of years in video production are the most difficult. During this time you will have to give up what you love in favor of your business development and transfer orders to your co-workers. At this stage there is no possibility and no sense to have a manager instead of you, if someone else is in charge of your business, wouldn’t it be easier to go and work in someone else’s company?
When you start a company, you are entering a big game with a challenging market. The whole urge to maintain your business lies only on your shoulders. If it seems too complicated, you can always limit yourself to a small group of two or three people and specialize in small orders. In such a way, you will avoid unnecessary problems. You can stay as a freelancer, and even though you won’t have your own studio, you can do the projects you love, do what you want, and not be responsible for your company.
Open a business only when you clearly understand that the market needs video production services. Then, once you have formed a company, you will be in demand. There are a few more questions you need to answer in advance: what is the size of the market, is it growing, and what are its prospects?
Before you open your own video production studio, you should solve all the issues with the registration of the company. After that, you can consider yourself a full-fledged entrepreneur. But you need to understand why you need it.
Identify yourself, who you are: a specialist in the market, to whom clients turn for a particular service. Or you are starting a company that provides a whole range of services. It is important to answer all these questions to know your place in the market.
3. The right way
Let’s talk about the best approach to starting a video production company. It’s a good idea to get a job at a production studio, work there for a year, gain experience and knowledge, move to another studio, and then to a third one. Then you will make new friends, gain experience and knowledge. And the fourth studio will hire you for a higher position, where you will improve your leadership skills.
This path of development will help you find a business partner who understands that you have knowledge, experience and talent. This is how companies rise from the ground up.
If you work in two or three companies, you will not only learn the structure of a video production studio, but you will also get a small base of contractors, especially if you are on good terms with your former colleagues.
You can even get a small stream of orders, which will allow you to forget about marketing and large investments for a short time. At this point, it’s important to learn how to communicate not only with potential and current clients, but also with your colleagues. The video production market is a service market, where communication is one of the most important skills.
4. Fears and risks
If you’re planning to start your own video production business, you need to think about the risks and have a plan in case you fail. There are several ways to avoid bankruptcy, for example, dissolving your team so that everyone works on their own. As long as you have the resources to handle small orders, the risk of going into bankruptcy is much less. But the bigger the company, the bigger the orders, and the less margin for error you have.
The video production industry is always about uncertainty. You will be often at a crossroad, whether a new idea will work or everything will fall apart.
5. Business and trust
Do you want to create a video production studio? Establish relations of trust between employees. That’s a big and important part of any business. The faster we can build relationships within the company, the faster we will develop and, for example, enter the foreign market.
Trying to do something without trust is very difficult. Each of us thinks about a whole range of issues. If there is no way to distract ourselves and focus on something else, it becomes almost impossible to move forward.
6. Equal contribution
Equal contribution to the project is a very crucial aspect to keep in mind if you plan to open a video production company together with your partners. When talking about legal regulation between co-founders, we should always follow one principle: you can set some boundaries and maintain what you have, or you can focus on how to expand your business and just not be afraid to lose everything. Not the most cautious approach, we know.
Of course, if during your early stage your business relationships begin with investments, what’s important is to make contracts to tie them together.
Explain to your employees you hire that they can realize any of their goals in the company if they follow a common direction. Create a space where everyone can realize them.
7. The hardest part
One last piece of advice. Don’t open a video production company by yourself, it’s going to be incredibly difficult to do it alone on this battlefield. If a partner isn’t right for you, it’s better to change them, but don’t be alone. It’s a matter of motivation. But when you give up, and this will happen more than once, there won’t be someone nearby who will continue working, who you can look at and understand that you shouldn’t lose heart. The chances of survival are greatly increased if you are not alone.
You are not moving forward by solving yesterday’s problems. You have to solve tomorrow’s problems.
Steps to Form an LLC
Finally, How to Start an LLC for a Video Content Creator
To do this, it is necessary to perform the basic steps in the LLC formation process in any state are as follows:
1. Choose an LLC name
Naming your company is an integral part of your business, and the right name will have a crucial impact.
Therefore, come up with a short and memorable name for your LLC. Check out on the Internet and the state website to make sure that nobody else is using it or a similar one. And if the name is free, you can move on to the next step.
2. Designate a registered agent
A registered agent will be responsible for incoming correspondence that is addressed to your LLC. In all states, it is mandatory to have a registered agent when registering a company. A registered agent can be an individual (the owner, an employee, or a person from outside the company) or a special company – online llc formation service, that is ready to take care of these duties.
3. File your articles of organization with the state
The Articles of Organization is a document that contains basic information about the company:
- Unique name of your LLC;
- Purpose and type of activity of the company;
- Physical address of the LLC;
- Registered agent’s information;
- Duration;
- Authorized signatures.
If you fill out the form, you should send its copy to the Secretary of State with all required registration and filing fees.
After approving the Articles of Organization , your LLC is considered to be registered.
4. Acquire an EIN
Employer Identification Number (EIN) is used to identify a business entity. The EIN is required if:
- You are planning to hire employees;
- You are starting a business that falls under a corporation or partnership;
- You have a Keogh plan (a tax-deferred pension plan available to self-employed individuals or unincorporated businesses for retirement purposes);
- You withhold taxes on income, other than wages, paid to a non-resident;
- You are involved with estates, trusts, real estate mortgage investment, plan administrators;
- You are to file any of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms;
- You have employees.
5. Create an LLC operating agreement
An LLC Operating Agreement is a legal document that outlines the ownership and member duties of your Limited Liability Company. This agreement allows you to set out the financial and working relations among business owners and between members and managers.
It is an internal document of the company, that is why you don’t have to file it with the state authorities.
6. Open a bank account for your LLC
If you run your business alone and want to separate your personal and company assets, you will need to open a bank account. It is also necessary to open a bank account when an LLC has 2 or more co-owners.
Having a bank account, through which all transactions will pass, allows you to protect the owners of the company in case of bankruptcy. Because the creditors or investors will be able to sue only the assets that belong to the company, but not the personal assets of the owners of the company.
7. Permit documents for doing business (license, franchise, permits)
Once you open a company, you need to obtain all the permits to operate your business. These requirements vary from state to state, and some cities have additional requirements. For information about all taxes and permits, contact your local state agency.
And finally, don’t forget to pay your taxes and file your reports regularly. Filing reports on time allows your company to avoid any suspicions or demands from the tax and state administration.