Everyone who has been reading along knows I’ve seen every episode of The Profit.
I like the style Marcus Lemonis uses to involve himself with companies.
In an early episode, he told the wine people something to the effect of he isn’t a consultant and that he doesn’t help companies he has no ownership in.
That may even have been in the first season. I immediately thought about what it is that I do and what makes it different from what he does.
As a freelance video editor, I *am* a consultant or a mercenary or however you’d like to consider it.
People have a need they can’t fulfill via the staff they currently have, so they contact a freelancer to do the work and then disappear.
This is great for everyone involved, because the freelancer doesn’t have to go to work at somebody’s office every day, and the client doesn’t have to pay for days when the freelancer isn’t working.
Recently, Marcus bought into a company where the dude is talented as a clothing designer but sucks as a businessman.
Of course what’s going to happen is that that guy is going to become one of the go-to designers for all of Marcus’ brands that need something along his line of expertise. That’s probably the best part of the team he’s putting together. Somebody sucks at doing business but is great at creating displays for trade shows. Great! 😀 Your new job is creating displays for trade shows for all of my companies.
Another thing mentioned in this episode is that the designer’s company needed to have a story.. a message.
The dude had no message and no target consumer. He had no cohesion in what he was creating, but instead it was just anything that came to mind.
It was a good example of dealing with someone talented who was out of his depth as far as doing business.
What reminded me of me in that situation is that careers progress the same way businesses do, and it’s a good idea to assess what’s going on and whether it’s the right direction for what you currently do and who you currently are, as opposed to who you were when you first started.
I graduated from college alum.MIT.edu/www/BillCammack as a computer programmer.
Eventually, I decided that I wanted to be a video editor, so I bought video and audio input/output cards for my programming computer and began my new career.
Speaking about that for a second.. Entering the workforce is different from being a student. Monotonous.
If I was going to have to do something every day, it was going to have to be something I WANTED to do and not just something I did to get money, which was what programming was.
It’s better to do something you enjoy all day and get paid for that than to do something that bores you all day and you only feel like your day really starts AFTER you get out of work. 😀
So after studying on my own to learn video editing, which really meant learning the functions of video editing programs, (Specifically, I learned on Premiere) I wanted to work for people.
So the focus had changed from going to college to become accredited in a field I could make a lot of money in to being employed in that field, then becoming bored, then learning another skill, and now (at this point in the story) getting paid for my new skill.
I did that. My first clients were local businesspeople and educators.
This is partially because I was only letting people I ran into know about what it is that I do professionally.
Once I did that, the next step was to get hired by a video editing house.
The point of that was to work on films, commercials, music videos, television shows, news, corporate video, whatever.
I went door-to-door peddling my wares and ended up as the “backup editor” you could say at an editing suite where just the Sony monitor (television) cost $20,000 USD. :O
This was the other benefit of working for a company. I got to learn how to use equipment I obviously couldn’t have afforded to purchase.
In fact, the editing houses hadn’t PURCHASED their equipment either. They had bought them on credit and were paying them off over such-and-such years.
Once I worked for an editing house, my plan was to become a freelance video editor… Or maybe it wasn’t. o_O
All I knew at the time was that I wanted to work more than I currently was.
It just so happened that my next phase was freelancing at companies that had the hardware and software that I had learned how to use.
At that point, I was proficient with at least 5 different editing systems, including Adobe Premiere, Apple Final Cut, & Avid Media Composer.
This diversity allowed me to pick up more freelance work than other people who only knew one system.
I think this is important to note because of the “what is your message?” aspect of a business or career.
At the time, my message was that I could edit on whatever system you had, and I don’t think I ever restructured my message as my career progressed.
“Don’t Think I Did” meaning that I never thought about it and never cared about it and probably never even noticed it.
So I became platform agnostic. I could talk to you about business without being concerned which computer or software you owned.
Again, thinking about this aspect of my message, it was based on something that doesn’t exist anymore, which is having to know different systems because you can’t afford any of them and if you don’t know the specific gear that company has, you can’t work for them.
Eventually, laptops became so powerful that they could run professional video software on them and I started doing most of my work from my own computer, meaning that even though I was still using Premiere, Final Cut Pro, and Media Composer, I had immediate access to all of them for studying or doing work.
When that happened, the list of systems I offered work in became only those three. Partially because all of the market share was absorbed between them, and partially because my freelance clients either used one of those three systems or were sending me the files to work on my own system. That’s ahead of the story, though. 😀
So my message was that I knew what I was doing, I was good at it, I was fast at it, and I was platform agnostic.
I also added to that that I had worked for professional companies and done professional work.
Looking at this list in the context of restructuring, these are all DEFENSIVE messages.
They’re all messages that overcome obstacles to people hiring me.
If your company owned Media Composer and I couldn’t use that but was an expert in Scitex Stratosphere, that wasn’t an OBJECTION to you hiring me, it made it just plain IMPOSSIBLE! 😀
Again, this was because I had to work for companies who had leased $100,000 worth of equipment. I couldn’t do the work for one company at another company! 😀
This all went away when I got my systems on my laptop and could work from home or take my computer to anybody’s office, plug in an external drive and do the work.
So my plan had been to work more, and the way that ended up working out was I was added to a list of competent freelancers available at short notice in Manhattan NYC.
This worked out PERFECTLY for me because the work was sporadic but important. I was building relationships with company owners and managers who knew me for excellence in doing the work and interacting with their staff and clients.
This is pretty much where I stopped thinking about career trajectory. I had arrived.
Getting hired by some new company for one day’s worth of work became two days and then a week and then two weeks at a time.
The work I was doing and my increasing day rates quickly outpaced my expenses and I was making more money than I needed.
Eventually, I ended up permalancing for around 7 months for an advertising agency.
Permalance being permanent freelancing, meaning I was charging freelance rates, but working every single workday for 28 weeks = 140 days, which was well above $50,000 USD for half a year’s worth of work.
Since then, I’ve always been ahead of the game, as far as making more money than I spend.
I don’t carry debt. I have fixed expenses and some variable expenses on top of those.
All of my equipment is paid for. I’m not leasing anything. I’ve simply been trading time for money, and it’s all profit, which is why it was tough to consider myself a business as opposed to a person doing work.
So long as income was outpacing expenses, I didn’t really have a business goal once I got where I wanted to be in my industry.
This The Profit episode reminded me of this because the dude was good at designing hats, got some money from that, but then overdid it trying to make random clothing items and having storefronts he didn’t need. He gets credit for putting the money he made back into his business, but he isn’t a businessman. That was the time for him to partner with someone who knew what they were doing and he would never have been on The Profit to begin with.
At some point, I stopped doing work at client locations. I stopped taking my laptop to people’s homes or businesses. I started working online.
As my friend André Maletz puts it, I do local work via networks.
The internet is so fast at this point that I can send and receive HD (high definition) video files efficiently.
I communicate with clients via instantaneous video chat.
There’s no difference between what I do on a regular basis with anyone in the world and when I’m at a client site in an editing suite sending them files and talking to them via video chat when they’re 30 steps away from where I am in another room in their facility.
This cut out a lot of expenses, including transportation and eating out.
This cut out a lot of wasted time, such as commuting to work, especially during rush hour, when it might have taken me an hour or more to get to a client site, meaning two unbillable hours wasted every single weekday.
Work is done electronically and payment is electronic. I don’t even have to bother with going to the bank, filling out a form, standing on a line, and depositing a check.
Unfortunately, so much winning becomes boring.
Becoming Bored means you aren’t focused on self-improvement.
I attempted to remedy that in 2017 by making a return to IRL work.
That was educational, but it wasn’t an improvement from my previous style, so I reverted to saved. 😀
It wasn’t an improvement because it added a lot of variables that wasted a lot of time, including clients arriving late for their sessions, such as TWO HOURS LATE, which they still got billed for, but that isn’t my goal, billing people for time we DIDN’T work.
So looking at my current situation in the context of the latest The Profit episode, I see that I have no relevant message and I have no current ability to improve my situation.
Improvement is on a vector, meaning it has a velocity and a direction. Without direction, there can’t be useful velocity.
Let’s apply what Marcus usually does with companies to my situation:
First, we determine who has equity. I do. I’m 100% in charge. No creditors. No debts. No business partners to show up halfway through the episode.
Next we figure out that I have zero inventory because I don’t sell physical items. I don’t buy anything from someone to turn into something different to sell to a consumer.
I have no employees, which to a freelancer feels like there’s no labor expense, which was my main issue I think when I started thinking about this situation like a company.
I’m actually my own employee, but at the same time, I “own the business” so I’m paying myself from company profits and I’m not paying myself because I *am* the company. ¯\_(ツ)_/¯
I know what my fixed expenses are, and I know approximately what my variable expenses are, from looking at past history of expenditures.
I can’t determine how profitable my “company” is because I don’t work consistently. My expenses remain relatively consistent and my income fluctuates based on how much time I feel like working.
This is because I determine my own rates and I don’t have to work full-time to cover my bottom line expenses.
If I *DID* work full-time, my income would be either double or triple my expenses. That isn’t my goal, however.
For example, the amount of money I spend per day to cover my bottom line is 1/3 of my actual day rate.
Variable expenditures might bring that number closer to 1/2.
No inventory means no fire sale…. Or does it? o_O
I don’t have unsold goods in a warehouse that I have no intention of selling, which is costing me double. It’s costing me because I’m not turning the goods into money that my company can use for self-improvement and it’s costing me for renting the storage facility.
I do, however, have hours that I don’t work that I could be working… Such as right now while I’m writing this blog post. 😀
I could do a fire sale on editing services. o_O
I could offer premium services at cut rates for a short amount of time.. Let’s say one month.
So let’s say that for the month of February, I’ll work with anybody’s budget so long as I like the video or audio they’re working on, and I actually feel like working on that project.
This would make more people aware of my services, but so would purchasing advertisement space on Facebook & Instagram. 😀
I may or may not do that. It’s a part of the process on the show so I added it to this evaluation.
Fire Sale on the goods that aren’t being sold, and then get rid of debt. I don’t have any debt.
Get rid of creditors and extra partners who aren’t adding anything to the situation other than the money they previously invested. I have neither.
So now we have a valuation of the company, which is how we determine the $ value of shares in that company.
For example, if a company has $100,000 invested in it as far as inventory yet to be sold, bought equipment, loans, money from investors, and cash on hand, then if you pay that company $100,000 USD, you are purchasing 50% of that business because it’s now worth $200,000 and you contributed half of it.
Of course, profitability is a factor in determining that. From what I’ve seen, it looks like you’re aiming to make your investment back in 3 years, as far as what your monetary benefit is going to be from your percentage of their profits.
Once we determine the new ownership structure, (Marcus usually aims around 50% or 51%) we can get down to People / Process / Product.
I am “the people”. 😀 The question is whether that should remain the situation.
People have wanted me to make an agency for a long time. 😀 I haven’t wanted to make an agency because other editors aren’t as particular as I am and I would end up having to re-do their work anyway.
Having said that.. Looking at it in the style of The Profit, what I would want to do is vet editors and subcontract work to them from clients of mine.
That would be valuable in two ways:
First of all, if I did this fire sale and ended up with more customers than I could work for, I would be able to accommodate extra clients under my own umbrella.
Second.. If I didn’t feel like working full-time, I could work as much as I like and then delegate the rest of the work to my employees.
As-Is, that style won’t work, based on how I work. It might work once I refine my business style during this process.
So for now, I am “the people”. I like myself. 😀 In fact, everybody knows I love myself! 😀
I don’t need to change anything about the People aspect of the three Ps.
Process will be dependent upon Product, so we’ll figure that out last.
What is my Product? o_O
Let’s go back to the beginning…
My product was originally that you need a computer programmed and I have the skill to do it and the personality that you want to spend time with every day at work so you hire me.
My next product was being a gym trainer, the value of which was that I no longer had to pay for my gym membership and I met a lot of chicks.
My next product was being an audio editor and I made commercials for companies to put on the radio with my own equipment that I was using for making music.
My next product was audio for video. My next product was video editing.
My next product was video editing for television.
My next product was video editing for any person or company with the proper budget.
I left out videography. I used to be a videographer, but I stopped doing that because the margins weren’t competitive.
What I mean by that is that there’s way more work involved with filming something than editing something and I was getting the same amount of money for both, so I’d rather do less work than more work.
This is similar to when Marcus arrives at a store that sells pies and dog food and the pies make up way more of their revenue and have a higher margin than the dog food.
Get the dog food TF outtaheuh! 😀
That’s what happened to videography. I can still do it but I don’t.
I have more products that deal with social media, music, and other fields, but the margins aren’t competitive with video editing.
If I were going to invest in myself, I would want to invest in a video editing company as opposed to a company that does a bunch of other stuff that generates revenue more slowly.
The justification for the other elements aren’t there if your goal in life is to make money as quickly as possible.
However, these are “the arts”, and the question is whether you’d rather make records for less money or make corporate video for way more money.
At the end of this year, do you want to be able to say you made a bunch of money or you made a bunch of good music?… or both?
Even if I decided right now that the only product I’m offering is video editing, there are divisions within that.
My original concept was to offer editing for any company with any system.
This was necessary because I had to work locally.
Now, I can work locally via networks, meaning that I can work for a company in Germany, video-chat with them in real-time, and offer them the same value as if I lived in Germany when I live in the USA.
This is another consideration sparked by The Profit.
When you’re working locally, it’s better to be diverse in what you’re offering.
When you’re working globally, it’s better to have one thing that you specialize in and are excellent at that you’re offering to everyone who requires that skill.
In the episode I just watched, the clothing designer made a bunch of nonsense and he also made some things that resonated with buyers.
“Buyers” meaning companies that would buy wholesale from him and sell his clothes to their customers.
By reeling this dude in, Marcus made him into someone who can sell to major chains.
Marcus also made him someone who could design for any of Marcus’ fashion businesses.
Apparently, this is vertical integration as opposed to horizontal integration.
Bringing this designer into the fold means that Marcus can pay him a cut rate to apply his expertise across his entire fashion line.
While he’s being paid a cut rate, he’s making more money for his own business by spending more time getting paid for working, so everyone wins.
If I were to apply that to myself, I would offer video editing in Adobe Premiere and audio work in Avid Pro Tools.
It’s all well & good to know other programs, but at this point, people hire me because of my experience, not because of my button-pushing skill.
Send me the files and I’ll do the right thing with them. We’ll discuss it over video-chat and I’ll send you the final product electronically and you’ll pay me electronically.
The value of streamlining the product to Premiere & PT is that it’s simple for the potential client to understand and it’s easy to describe to people who don’t understand what I do.
Yes, I can mix in Logic instead of PT, but that software works differently and requires a different mentality.
Switching between the two would have been useful when I first started, but it’s a hindrance now.
If you can’t send me files that I can use in Premiere and PT, I’m better off not working with you and working with someone else.
When Marcus takes his new company people to co-packers or whomever, those companies always do only one thing. They package ice cream or they cut designs into fabric or whatever. Everybody plays their position.
As far as product, I can play my position globally with Premiere & Pro Tools.
The goal isn’t to work for everyone right now. The goal is to work efficiently.
Switching between PT and Logic is like switching video games. It’s the same concept but different controls. Not switching games means you can rely on muscle memory. It’s the same thing with video and audio software. You can maximize your efficiency by sticking to your favorite software.
There’s no value at this point in my career of being software agnostic.
This is what I do. This is the program I do it with. Get down or lay down.
So the last element is Process.
“The People” is me.
“The Product” is local video and audio editing via networks, utilizing Premiere & Pro Tools.
One thing I should say about that is that video editing works by frames per second, which is approximately 30.
Pro Tools is necessary because the divisions are 44,100 samples per second instead of 29.97 frames per second.
Otherwise, everything could have been done in Premiere.
What’s tough about this exercise is throwing away skill sets.
I’m being Marcus and the company at the same time.
I don’t want to invest in myself unless I can streamline my PPPs into a package that can easily be explained and sold to clients.
Some skill sets, however, are only meant to get you through that stage of your career and/or life.
It was necessary that I knew how to edit in Media 100, Speed Razor, Scitex Stratosphere, Adobe Premiere, Avid Media Composer, D-Vision, and probably other programs I forgot that I learned.
The work I did in each of those programs demonstrated to future clients that I know what I’m doing and hiring me would be the right thing for their company.
At this point in time, the program isn’t important. I get sent files and I send back finished product. HOW I get from point A to point B doesn’t matter.
Streamlining to Premiere & Pro Tools takes the guesswork out of my process and retains my muscle memory.
Instead of my client base being “people who need video editing on any platform”, it’s now “people whose companies would benefit from real-time access to an Emmy Award-winning video editor from the top television market in the world, Manhattan, New York City”.
My process will become more efficient because I know who my “people” are and what my product is.
By offering limited services worldwide, I can surpass the efficiency of offering various services locally.
There are more people around the globe who need specialized services than there are people in Manhattan that need diversified services.
There’s no point in commuting to New Jersey or 1 New York Plaza in Manhattan when I can start working as soon as I roll out of bed.
There’s no point in only working for New Yorkers when I could work for people in Los Angeles, Berlin, or Melbourne.
I’m taking over my own company. I’m reclaiming my time! 😀
2018 is going to be about streamlining and doing business at the highest margins.
I think people should assess their careers and/or businesses yearly.
It’s easy to go off on a tangent. It’s easy to become more successful than your original plan intended.
it’s easy for your local style to make you more successful than local business can accommodate.
After all this stuff I just wrote, I might become involved with one company that takes up all of my billable hours.
The bottom line is covering your expenses and then making as much money as you want to afford how you’d like to enhance your life.
Going from “rags to riches” (I’ve never been in rags, due to my parents being Middle Class my entire life) doesn’t mean you should keep doing what you were doing when you were in rags when you ascend to riches.
My video editing career has been based on people taking a chance on me based on word-of-mouth from other businesspeople they respected and then deciding on their own that I was bringing the requisite quality & demeanor to the table.
At the end of the proverbial day, the point of a BUSINESS is to make money as quickly as possible.
Remove the elements that are slowing you down, and focus on the elements that are more valuable for you.
After all these calculations, I’ll probably end up being a maître d’ for a restaurant! 😀 😀