Micro, Macro, or Macross?
Posted on January 7, 2009
Daniel Craig said in Layercake, “Have a plan. Stick to it.”
I know a lot of people in this industry who just show up.
The guy in the box office or concession stand will say ambiguously, “Yeah, but what I really want to do is direct.”
That’s a bigger goal, a better business plan than most I work with. Like I said, they just show up. It’s clear that their business has no vision, direction, target. They just wait for opportunities. But, true opportunities are the ones you make. “See a need, fill a need,” to quote Mel Brooks. There’s a market or demographic not being provided a product or service. It’s right in front of you. You’re the only person in position to see it. You have it within you to create a new product or service by which a new market demand will be created and an entire new support industry will depend.
So, business plan: do you have a product or service that there is a demand for? Your resources, will you structure a vertical or lateral trust, owner-operator, single service or full-service. Target market: local, state, national, or international? What’s the demand for the quality level of the product in your market? Will the market afford you to be a quality boutique or a mass production factory? (One of my favorite market stories involves the comedy troop Four Day Weekend. They had just graduated from Second City in Chicago. They had two choices: join the tour circuit and be a slave to The Man, or start their own venture. They saw Fort Worth as a virgin market: large, diverse demographic, growing urban renewal, expanding downtown entertainment district, no competition. So they proceeded to corner the market. Fish in a barrel.)
How independant do you want to be? Such freedom requires resources. Facilities, offices, staff, transportation, communication; these capitol infrastructure overhead costs need addressing in your business plan, how much liability can you afford? How much will you assume in house or subcontract out.
It all need to be determined by your business plan.
What exactly is your product or service? I’ve seen companies provide combinations of the following: Post house, graphics house, production studio, print, web, creative, sales, promotion public relations. I’ve seen some ambitious groups try to tackle all.
Downtime, does your income stream generate a capital reserve large enough to float through seasonal doldrums? Is the current economic climate conducive to your model? Do you have a plan for the impending and inevitable economic climate change? In a downturn, you’re forced to contract: expendable in-house dpeartments are closed, and contractors are sought. Conversely, in the upswing, you need to expand: invest in new infrastructure (capitol expenditures: facilities, equipment, or service providers: employees) to modernize and meet new demand.
By the way, computers and software are practically expendable purchases, not capitol expenditures, since they devalue so quickly. If you’re not completely replacing your electronics every five years, you might as well be shooting with a Knipkow disk and editing on a Steenbeck.
What’s your management philosophy? You can catalyze or castrate your enterprise just through your attitude and interpersonal connections. Will you you be a shouter, loot the coffers, be an absent landlord? Will you be a fascist? (I knew a business owner saw no correlation between rates of pay and quality of service. He saw no relation between increase in workload, with no parallel increase in personnel, and the corresponding result: decrease in quality and increase in errors.) Will you promote from inside, subsidize training and education of your employees, or will you resent proximity and familiarity and be seduced by the foreign, new, and exotic. Will you hold your freelancers hostage? Generate blacklists? Are you allowing employees freedom to utilize the company’s resources (at least, at a discount) during downtime to produce their own work (which ultimately promotes yourself, as well.)
How do you promote yourself? You’ll discover that industry clubs, seminars, conventions don’t have potential clients, only more desperate jerks like you. It’s like expecting hot chicks at the math club Christmas party (Danika Mckellar aside.) They only exist to increase tourism at the exotic convention site, and so that widget manufacturers can get you to drool over the next new accessory or adapter.
Remember to regularly turn you efforts inward. Are you so busy filling your customers’ orders that you neglect producing materials to promote yourself? You need to show off.It attracts the attention and buzz of your peers and competitors, and especially potential clients.
Speaking of side projects, I don’t understand why so few are not generating their own product to market, in order to advance to the next business plateau, the next class. That’s what the ultimate goal is in this industry: to graduate from service provider (beholden to clients’ whims), into a product producer (creating and feeding demand.) If you’ve paid off your overhead and infrastructure, it’s time to expand into a new venture: your own product. It’s the only option considering the alternative. (It’s an interesting debate: Growth, how do you define it? Increase in volume, or quality? Increase in profit or profile? Do you expand your capacity, getting a larger factory floor, personnel, shifts? Or increase what your customers pay? They only way to do that is to court premium clients. But those are high maintenance divas and you have to ruthlessly fight your bloodthirsty competition for access to them.) So, If the market is driven by growth, not profit, what else can you do? You can only squeeze the margins so much until you’re forced into cooking the books and hiding debt in your subsidiaries, or you restructure into a pyramid Ponzi model. So, once you’ve reached a certain plateau (that is, saturated your market and monopolized the service sector), your choices are clear: either spin off all your departments and subsidiaries into separate companies and reap a tidy IPO profit, or make the transformation. It’s evolution. You can choose to be the more fit and survive.
All of these questions and issues regarding your business plan are rhetorical and abstract. They’re broad and general, sure. But, pondering them, asking them out-loud, brainstorming and sound-boarding with your comrades will bring opportunities and challenges into specific relief. That way, you can confront them.
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