The only true and effective way to leverage your video business.

Episode Transcription

Den Lennie (2s):
G’day guys! Den Lennie here host of the How to scale a Video Business podcast here, coming to you with another solo episode this week, we were in a bit of a run, actually have a lot of solo episodes. I did a couple and then a few people got in touch and said, Hey, we have, we actually really liked these. Can you do some more? So here we are doing some more. Now, today, I’m going to talk to you about the power of leverage, you know, and most of us start as freelancers and become business owners. And the biggest lesson that I’ve learned throughout all of this is the power of leverage that is leveraging how other people and other resources.

Den Lennie (42s):
So we get into that in just a second. So the biggest obstacle to growing your business is actually a lack of resources when you’re a freelancer or, you know, the days you’re not working and you’re not doing anything else, you were just full on him for the job. And, you know, from my shooting days, they could be like a really long days. So I’m, I was working in London, it was light, you know, some, you know, Our hour and a half to get to the job you should eat all day. And then, you know, you’ve got to kind of put 10 hours a non on site and then get home. And that’s like a day in, day out and it’s punishing. And when you start to run a business, you’re also trying to juggle, you know, business marketing, you know, starting out of jobs.

Den Lennie (1m 27s):
And, and that just reaches a point where you just, you just, you can’t do any more on your own. And, and I call it like the critical mass phase where you literally don’t have enough hours in the day to do everything you need to do. And so you just have to give up something like And I giving up. I mean, you have to relinquish control over every aspect of production. And, you know, I used to be like this. Like I did the production to do the shooting and do the editing to do the grading. I didn’t want to let go of any of it, but you reach a point where you are, your income hits a ceiling and you can only do so much because it’s just you and, and it puts an enormous pressure on your home life, a non this pressure on your health and, and it’s stressful.

Den Lennie (2m 7s):
It’s stressful as all How. So the only way to go to scale your business sensibly is to leverage the help of other people need to do that. You need to be earning enough. So it starts with your pricing and starts with making sure you’re charging enough, not just to cover off, you know, what you want to spend the day, but also as an overhead, a future overhead that might not exist yet. And one of the things we, we first get our accelerator clients to do if they are, if they come from a direct from freelance is, is adjust the pricing. And oftentimes this can be quite an uncomfortable process because we’re so used to charging a day rate.

Den Lennie (2m 48s):
But what we’d like to do is look at the overall value. You’re bringing into a production and charge and according fee, and it can be based on, you know, a camera hire and, and, and people on site and pre production. And post-production, it’s perfectly okay to do that, but it is, it is a limiting factor in scaling your business. If you don’t start looking at pricing much more seriously. So you’ve got to factor in things like, you know, production fees and, you know, the easiest way to add 12 or 13% margin to any production or to start charging a production fee. And in my book, you know, the filmmaker’s go to budgets and courts and which you can get for free on the website.

Den Lennie (3m 30s):
The Podcast is, it is a whole chapter on how to justify it a production fee. So when a client says, what’s the production fee, you’ve actually got a lot of them content that you can see back to them. I’ve never had the production fee push back. People just don’t understand it so that therefore, if you learn how to explain it correctly, you’ll find yourself in a much stronger position. So once you start to charge more, you can actually have some access cash coming in to the business. That’s cash. That’s not needed directly for you to live off. And that’s when you can start to employ other people. Now, if you take editing, for example, the easiest thing to let go of is editing. There’s just hundreds of amazing editor. Who’s out there who will work for 20, 30 pounds an hour or 2030, $8 an hour.

Den Lennie (4m 13s):
It depends on where they are and you’ll get a very, very competent job. But what you need to do is is if you’re, if you’re billing out at editing, it saves 500 a day. You know, you can’t pay an editor 500 a day. My, my rule of thumb when I was in Sydney, I mean, the rates and Sydney were at about nine 50 a day, Aussie dollars for an editor at a frat for editing. I would get I’m the client to pay at nine 50 D for the editing, because I’m supplying the job and the project in the edit suite and in the office. And I pay an editor $40 an hour. So that was three 20 a day for the editor. And that was the rate. They were happy with and I was charged in the client at nine 50. Now that might seem like an excessive a moment, but when you start to factor in your overheads of a rant and power and computers and, and just winning the client projects, it’s not really, you need to be making sort of two or three times, probably ideally three times, whatever your pain, your team on, on editing, because it’s, it’s, you know, where you can make money and that’s the money you need to, to be able to buy, you know, to hire a production managers, are there other teams to help you?

Den Lennie (5m 19s):
So, you know, but leverage can happen in other ways, you know, leverage can happen. But if you’re just, and if you’re still doing your own books, if you’re still using zebra or thinking of a year, zero or MYOB or whatever, it might be that, you know, a quick books are it’s, it’s quick and easy software, I can do it myself. Then you kind of missing the point because the boot keeper will kind of will know more about that topic. And I always use the analogy. You wouldn’t give your clients, the footage you’d filmed to edit. Would you say you just wouldn’t do that really? Typically not normally, because they might be able to assemble it. They may be worth to download a movie for free and, and start throwing it together. But, but their not going to, they’re not gonna know that kind of the nuances of, of, you know, how to put a story together.

Den Lennie (6m 4s):
So why is it that that film makers in the system is doing their own books? Its it’s ludicrous, its madness. If you, if you are listening to this and you still do your own books for gods sake, stop it now. You’re being an idiot. And if that offends you well, that’s nothing to do with me. But the point is is that you shouldn’t be doing low value tasks that you are not skilled. I have an incredible book keeper and she keeps me up on the street. Now, if she gives me the advice on taxation or advice on what I can claim, what I can claim, she put me in touch with an amazing accountant. It’s been an absolute godsend and it’s been worth every single cent. And, and I’ve had bookkeepers since probably 2010.

Den Lennie (6m 44s):
You know, it’s just, it’s just a great investment to have somebody else looking over your numbers and kind of make you feel a bit uncomfortable about what your spending that’s the best bit, because you’ve then got some accountability. So the first thing that you do is get a bookkeeper. And then I think probably an editor is his great leverage. Or if you were doing a lot of production stuff, then maybe even a virtual assistant, you know, I have a few different virtual assistants and they just take a lot of the day-to-day admin off my plate, which means, and as I’m in a meeting this morning with one of them, and I said, you know, I no longer have to think about posting social media or any of these other things. So for example, we do ’em, you know, coaching calls every week and the Video business accelerator.

Den Lennie (7m 25s):
As soon as the calls up, she’s done loading it. She is transcribing it. She is getting it ready to pull out the back into the group. She is doing a lot of the day-to-day admin and the group for me, and which means I can focus on delivering content, creating content, managing marketing campaigns, managing sales calls. And that is very, very high and best use of my time. And if you want to learn a bit more about the highest and best use theory and go back and check out a, an episode of that with Ben Simkin, which was all about that and highest and best use theory. And it, you know, there are, you, you cannot scale a business alone. You know, business is not a solo pursuit, it’s a team sport.

Den Lennie (8m 8s):
And so if you want to really scale you, you’ve got two, you’ve got to have to get help from other people. There’s just no way around it. And if you are, you know, if, if you’re, if you’re just, if you’re trying to do everything yourself, you’re going to lose now episode 77 is a way to do with Ben Simkin on the highest and best use. And the theory of constraints is a great episode to go back and listen to, but I’m leveraging the help of other people is critical for business growth. And it’s something that is that it’s a bit of a mindset shift for you if you’re a freelancer or if you’re not used to hiring people because it can be, it can be kind of scary.

Den Lennie (8m 54s):
And, and the secret leverage is systems. If you don’t have systems and you’ve not, you’re not clear on what you want the outcome to be, then hiring someone. That’s going to be a giant waste of time and a lot of stress. And one of the things that we are very focused on inside the video business accelerator is systems, business systems. Those are our systems for every single thing that you’d do. You know, things like a simple system for onboarding a client, making sure that you do it at the same way every time. And in fact, we’ve just been working for the last couple of months on a brand new, you know, a business systems and process for that. We’re launching an early in the new year and, and it’s literally the systems for how to run a video production business.

Den Lennie (9m 35s):
And we’ve got, you know, a number of businesses doing high six figures now in our, in our groups and many doing mid six figures. And we know the steps that need to happen to get you from where you are now to where you need to be. And we’ve got plenty of businesses to come into us doing 10,000 a month. Then I end up doing 20 to 25, 30, 35,40 a month within six to eight months. So we know that the system works and But systems don’t just stop there. Our systems are, are there for when you onboard a new client, when you onboard a new team member systems of that, to make sure you don’t mess up simple things. We’ve got systems for post production systems for the, every aspect of production you can imagine.

Den Lennie (10m 18s):
But more than that, we’ve got systems for how to attract clients into your business that are a good fit because you’ve got a system for identifying who your ideal clients are. And you’ve got a system for how to nurture those clients from an inquiry to a sales decision and 14 days. And we’ve walked out exactly the steps that needs to happen to make that predictable. Because once your pipeline, your sales pipeline is predictable. Your revenue becomes predictable. And once your revenue’s predictable, you can start to see what you’re gonna be making few months from now. And I don’t know about you, but like when I was brought back when in my business in the early days, I mean, it was hand to mouth month to month.

Den Lennie (10m 60s):
Now I’ve got predictability. I can tell you what we are going to, you know, bring in January in February because we’ve got, we got a system, we got a predictability, we can speak and forecast where things are going to go. And, and my clients who are doing the same way, they were teaching them the system where we were sharing exactly how to do it yourself. And, you know, we’d been having some incredible success stories recently, despite COVID, despite what’s going on out there, going and going on with that, with the elections or anything. And we run, we run on the video business accelerator as a, as an immunity program to anything that’s happening in the external world. We have an incredible success stories just last week where that it can be on the podcast just the week before secure at a $75,000 project in a week through, through just consistently marketing the same way and consistently reaching out and consistently being consistent So systems and leverage.

Den Lennie (11m 55s):
And, and, and he is a big fan of, of interns, but again, he hires interns and he brings them in and it should only be clean and what’s involved. And he gives them a really clear outline and many of those interns and it becoming a full time paid team members because Derek has a system. And so systems are the absolute core of leverage. And if you are going to work with within the system, you know, if you’re going to do bookkeeper, you still have to present your books in a certain way and give them the information. Once they have that information, they can, then, you know, they can go ahead and process. So, you know, leverage is one of the things that are leveraging the health of other people free as your time up from all of those little tasks.

Den Lennie (12m 43s):
And, and the other thing I’ll just add here is that oftentimes you can think, well, it only takes me a couple of hours a week to do my book. So it only takes me a cup of hours a week. So I do this, or it only takes me 10 minutes, three minutes to do this, not in the next thing, but it all starts to add up and you get this compound effect where, you know, if you’re not tracking your time effective, or you’re not tracking what you’re doing on a daily basis, you can start to see that things are becoming a problem. And I had an issue Once with it with a bookkeeper or that wasn’t working out of there because it was tracking how we were spending my time. I was having to do an awful lot of work to kind of reconcile a things and check things out and they weren’t accurate. And I realized by tracking it that we’re spending a couple of hours a week or fixing mistakes.

Den Lennie (13m 26s):
So I knew it was time to get a different bookkeeper. And I got a much better bookkeeper who is more expensive, but it does have a much, much better job. And so if you’re not tracking and measuring, then, then you’re going to, you’re going to lose leverage. So that’s really important, but more than anything. And it’s just being very clear in how people are getting the help other people leverage to help other people, forces you to be more organized, forces you, to be clear in your purpose. You know, what is your business exists and your mission, how much money do you want to make each month after tax? And then, and then therefore, how much do you need to generate in sales in order to be able to secure that?

Den Lennie (14m 7s):
And then all of this takes a bit of time on it. It takes a bit of work, but then when I can see it to you is if you try and figure this out yourself, it’s going to take you years and they have the advantage of, are there members and say in the video business accelerator, or is that it’s a coaching program that teaches them how to do it right now and, and the shame of months and months of the learning process. And ’em, you know, we’re always, we’re always improving the process based on the feedback we get from our members. And we’ve got an absolutely incredible group of members just now who are absolutely smashing goals. And I’m really proud of them. You know, a few of what has been a very tough year, but the resilience has been shown by our members, his, his, off the charts. And, and yet it is driven by me.

Den Lennie (14m 48s):
I mean, I just don’t take any bullshit. I refuse to allow anything on the external world to impact my business or what we were doing and that dropped off on the members. So to sort of bring this back into kind of a really, resilient point for you on this episode is that leveraging the help of other people is the only way to scale your video business. There is no other way you can see where I could just, if it has got some bigger clients that spend more, I could make more money. Yes. But if you were doing everything yourself, then that is a problem in our business and look at it. That’s okay. Because if you’re just want to be a help for hire, if you want to be the kind of the filming tradie who gets it gets paid well for a day’s work.

Den Lennie (15m 33s):
And it is as you know, exchanging time for money, that is completely all key, but you are always going to be constrained by you. But if, if you’re not sat in the edit suite or out on a shoot, and you’re not, you’re not, you’re not learning. And if you’re out on a shoot that you haven’t got some of it in the edit suite, that you’ve got an asset, which is sitting costing you money, not making you money is like the airline industry. You know, planes don’t make money. When you’re set on the ground. They are just assets that are depreciating and rotting. They need to be flying to be generating income. And obviously the airline industry has had a bit of a battering this year and there’ll be casualties. But if you’re optimizing your resources and, and you got to think of your business as a series of resources or a series of assets that are all capable of generating you income.

Den Lennie (16m 23s):
So your camera kit is an asset. When it’s on a job, it’s creating income for you. Your edit suite is an asset. If it switched on in someone sat down and cutting, it’s making you money. But what most freelancers do is they have an edit sweet, a high spec machine that sits and does nothing when they’re out on a shoot. And then when you’re consequently, when they’re in editing the camera gear, sitting not making any money. So a very simply put, if you can find an editor to work with you, then you may not need an edit suite. They might edit on their own machine and you can focus on shooting and keeping clients happy. And that way you can leverage the help of other people.

Den Lennie (17m 3s):
And as I look at it as ever been in an easier time to higher editors, you know, offshore or in other countries who are very, very capable and have the equipment available and the bandwidth on the internet to download and upload files. And so I strongly recommend you, you consider it. And if you need help with the systems side of it, well that we can come up and we can help you with that. And so the Video business accelerator, umm, you know, oftentimes knowing what to do is, is the number one challenge. And then once you know what to do, it’s actually being held accountable to doing it because you know, it’s a hard running, a business is really hard. And I mean, I’ve got, I’ve got T Tim just know designing the website is on another team.

Den Lennie (17m 47s):
Right. And the copy I’ve got my assistant doing stuff for me, but I’m still having to coordinate elements of that. And it’s only, you know, it’s Monday, Here in recording this and it’s like, it’s a full on day and I’ve got requests coming in everywhere. But I’m not having to do like one side record this podcast. I don’t, I click the file with the road into a, into a, into a folder. And then it gets handled by Milca. She does everything else. And then it gets sent to my copywriter and, and he writes all the notes and Kelvin is an absolute rock star. And, and he does incredible work on the notes, but I’ve got to get the Podcast to him and to give him time to do that. And I’m, and so my, my system is on a two hour on a Monday, I’ll have a note that it pops up in my calender at two o’clock and he says, have you recorded a podcast?

Den Lennie (18m 33s):
And if they haven’t, I drop everything I’m doing. And I, and then my sister has a record at there. And then, because if I don’t do that, my team can do there are bits and therefore the episode wouldn’t go live on Thursday. So yeah, a little bit of an insight that for you guys are still, a lot of these solo episodes are generally recorded on a Monday. I like to keep the content fresh. And on a Tuesday I tend to record it immediately after our, our coaching call where I can sort of share something unique and insightful from the call we’ve just had. And yeah, look at leverage Is is the biggest wind I think I’ve had in my business And but it takes time to train people and you have to have systems.

Den Lennie (19m 13s):
So I’m like, I’m going to be, I’m going to be making some systems content available soon. So look out for that. And in the meantime, have an awesome day. You’ve been listening to the How to scale a Video Business podcast with me, your host Den Lennie. If you’re a video of a business owner, it’s hit a ceiling and we benefit from a mentorship support and coaching and check out how you can work with me over at denlennie.com. Don’t forget to subscribe and rate the show over on iTunes. And we really appreciate you taking a few minutes to leave review and don’t forget to share if you feel you’ve gotten value from this episode and you think it would be useful for other filmmakers, you know, and please do me a massive favor and share it on social media and in groups that you might be in to see you next week.