Having a production company in a VERY small market
 

I've done video work off & on for a few years, nothing really of professional status until the last few months when a business group I'm a part of asked me to do some video production for them. I then produced/filmed/edited a documentary reality show for an acquaintance of mine that featured his business which is pretty well known in my area (of about 40,000 people) I bartered with both of these groups and mainly did the documentary show for networking purposes. Well, it worked....Things are getting over my head pretty fast. The show, which was only featured on YouTube, received very positive attention in the area and I have several meetings with other businesses in the area who want to do a similar concept or have me produce their make their TV commercials.

I haven't really had a "paying" job yet, so I'm completely clueless on what to charge. The only other production companies in my area are those that belong to TV network stations, however I have heard they charge $500-$1,000 (not including airtime). The criticism I've received is that the network station commercials are usually boring, include corny graphics, and don't have any type of direction.

My basic question is, where should I start my prices at and where should I go from here? I'm working with some "decent" beginner professional equipment (Canon XH-A1, Rode NTG2 mic, Final Cut Pro, etc) and have some people to help me along the way, one of which is a former manager of mine familiar with TV format and some people who can do music/VOs for fair rates.

To make it worth your time it's hard to imagine anything less than $500 day.

In a small market, if you low ball yourself, you'll have a hard time ever getting your prices to a level that's worthwhile for you.

Tell them just the gear alone, were they to rent it, would cost them $300 or whatever.

Make no mistake, using your gear 12 hours a day will cause wear and tear. Lens caps go missing, tripod plates. Your transportation.

Also get them to sign off on the concept/storyboard/script in writing. Otherwise it'll be "Can you change this? Can you change that?" They'll happily turn you in to a minimum wage worker.

In a big market you can get burned a few times and not worry about branding yourself as the video who works for peanuts.

btw, one reason local TV ads are so crummy is that they're often done by the cable company themselves for zero budget. You've seen it, half the time they just use still photos and cr*p graphics.

I'm also in a very small market (only 100,000 people within a 50 mile drive of my city.) What I did was to set a reasonable hourly rate ($65 per hour) and a bit additional based on the value of the equipment used. I break this down on a spreadsheet I've made and can give a potential client a quote pretty quick. I've since started increasing my rates because my portfolio of work can now support it. For example, I charge $750 for a full day of shooting.

I do think as a beginner you need to start at lower rate than a seasoned professional, but not too low. Like Brian mentioned, you wouldn't want to start any lower than $500 per day.

Also in a small market, you need to diversify. Most of my clients want their videos on the web - so I've hired a designer and a web developer and we've kind of positioned ourselves as the "web video" experts in the area. Quite often when we shoot a video for a client, we'll end up getting the job to completely redesign their website. When you're creating websites, many clients will ask for e-commerce capabilities, or the ability to integrate with the back office accounting system or any of an unlimited number of integration possibilities, so I've hired a software developer. I'll probably only do 6 "major" (over $5k) video-only projects a year which is not enough for even one person to live on. By diversifying, not only can I support myself, but three full-time (and one part-time) employees as well.

Adam if you do get into making low budget commercials try to get into the media buying/ad agency side of it as well. Alot of stations will give a discount (usually 13%) to a buyer. That way, you continue making money on the project throughout it's run. If your client gives you $1000 to air time, the cable company might then only charge you $870, and you retain the $130. It can add up, especially if after it's run the client says he's willing to do it again and again. And is a nice way to supplement the production charges. Just call their local sales office & state you are bringing a client on board. Just try to know a little bit about the client & their demo (male/female, age group etc) and some stations they'd be interested in being on (Lifetime, BET, MTV etc). Most sales reps should have a rate card pricing out cost per spots per net & time. Tip: try to bid a little low, most stations prices are negotiable. Especially recently.

If you have any questions about it, let me know. Good luck.

Oh we're here Adam, and we've been watching you.....seriously though, there are several production companies in the area, they just don't advertise or do a lot of work in the area...and for good reason. Salisbury is a great place to jump off to the metro areas but a lousy place to make your living in production with local clients. I get 75% of my production work from the metro areas including Baltimore, DC, Philly, Richmond, VA Beach etc. The rest is through networking on the Shore. I also do Photography and Sound Production which accounts for a significant portion of my income. If you want to make some coin and get experience, try the wedding market. There is a significant lack of GOOD wedding videographers on the Shore. You're young and edgy which will appeal to younger brides. It may not be what you want to do but it can be a great way to start out.

I'm following this thread with interest from Polk County Florida. I jumped into this particular market August 1st. As for "young and edgy", what about guys like me who are getting "older and riper."

It's an adventure just starting out. All the guys I know over in Orlando say figure investing three years to get the business really rolling. So far, their advice seems pretty accurate. I've had a handful of paying customers these first few months. It's a tough time to start, but starting can be tough anytime. You've got to be tough and flexible. It seems a lot of the local competition has given up and packed it in.

Personally, it's a lot like when I winged it through college. No money, not much encouragement, but still made it through. Not boring at all. Remember "delayed gratification." Keep working at it. Why do you think the story of the tortoise and the hair has stuck around all these eons? Because it illustrates the way things really tend to work.