Buying through "Bill me later"

[Renny Hayes]

Hello, business forum,

This is the single most knowledgeable place I've been to to when it comes to making camera purchases, so I greatly value the opinion of the "hive mind" here.

More to the point: I'm working out a plan for starting a videography business, but I'm really just a kid, and don't have $4000 to readily spare. I know my target market, but they don't know me, so it would take about a month to get exposure (3 pro-bono events). B&H offers a service called "Bill Me Later," which allows you to delay payment and still have the product in-hand for 6 months, after which they "call in" all payments with full interest. I see the profit model here, as I'm sure a good 50% of people forget to pay their dues on time, but therein lies my issue.

Is it reasonable to expect a camera and kit to pay for itself in 6 months of steady work? Alternatively, if you have experience with the Bill Me Later service: Are you penalized for paying off remaining balance with a credit card?

[Robert Turchick]

I would never buy equipment without having cash in hand. Too many things can go wrong and you're screwed credit-wise and can owe a ton of money very quickly.
Better to rent if you need high end gear for a job and since you should take a deposit for each gig that will more than pay for the rental, then the balance of the job can go to your bank account to start building up to purchase your own gear.
It's worked very well for me and though it's taken a few years to build up to a fully outfitted production company, I don't owe anything on the gear.
Nice feeling!

[Craig Seeman]

What's your business model?
You are doing work for free for what type of client?

If your business costs you money you need to charge money even if it's only break even at first. If your business model doesn't meet your expenses, you're gambling your financial future with your credit history.

That you are not charging 3 clients and then risking money you don't have is bad business model. Show me/us a business model and maybe we can make a viable suggestion.

[Craig Seeman]

Business startup model for newbie.

Create website targeting the kind of work you'd like to specialize in.

Put together a demo reel assuming you've ever shot video. Even if all you have is consumer gear, working within its limits you can do good stuff. You'll learn resourcefulness which will always be worthwhile to you.

Shoot for a not for profit for free for your demo reel. Make sure they give you proper credit (link to your site). Their donor base is a potential customer base.

Create a project that might be for a fictitious company that represents your target. Execute the project. This gives you creative freedom to show your best stuff. This might be a sample TV spot. It might be a corporate training video.

Develop and execute a marketing plan that gets your website and your work seen.

Develop an entry level rate structure that will cover you living expenses and the renting or purchasing of the equipment you'll need.

Get deposit when client books. You now have some cash on hand to put towards the gear. Don't overbuy. Don't forget you got this client with your consumer gear demo so they liked your work, they're not buying a gear list. Keep your costs very low until you can raise capital to buy an upgrade.

If you get several bookings in advance of the work, you have even more capital to put towards purchase. This means you're buying relative to the growth of your business.

In short, put yourself in a position where you have paying work coming in order to make capital outlay on gear.

_________
When might Bill Me Later work?
You can sell your current camera for $5K to buy a new one for $10K. You can cover a big portion of the purchase immediately. You already have clients who will immediately notice whatever advantage the new gear offers. You're already in business and can accurately gauge how quickly you can raise the capital to pay off the other $5K before the interest is due.

In short, you can cover a good portion of the cost and already have a secure client base that will bring in money quickly to cover the rest.

_______
But I hanker for that camera and I know in my heart I'll get work I promise.
Alternately, if you hanker for the camera make sure you have ANOTHER source of income so you can save money to cover a good portion of the cost and that other source of income will continue to pay it off while you setup your video business. In this case you business plan is to use your current job to capitalize you new business.

In summary. SOMETHING MUST CAPITALIZE your business. Never take risk without capital based solely on income speculation.

[Sareesh Sudhakaran]

why not rent equipment on your first few projects, save the money and then buy equipment once your business is up and running? Nobody is going to hire you just because you own professional gear, unless renting out is your business (if so, talk to a few rental houses first).

[Renny Hayes]

Craig, that was the most straight-forward, honest answer I think I could have ever gotten, and I didn't even have to ask "How do I start a business?". Getting an answer that complete anywhere else would have been like pulling a mouthful of proverbial teeth. (Also, just for future reference, I've found a widely untapped market in Bar-Mitzvah videography, which is my focus as a consistent source of gigs.)

(Also, just for future reference, I've found a widely untapped market in Bar-Mitzvah videography, which is my focus as a consistent source of gigs.)

Reworking my plans a little based on your advice :

That you are not charging 3 clients and then risking money you don't have is bad business model. Show me/us a business model and maybe we can make a viable suggestion.

So now, rather than buying a load of equipment to start, I'll work with my consumer-grade stuff for these first 3 "freebies". I will need to buy some new memory cards and a small audio recorder. (Assuming I can get 3 gigs) do I charge "cost of materials" for this?

Put together a demo reel assuming you've ever shot video. Even if all you have is consumer gear, working within its limits you can do good stuff. You'll learn resourcefulness which will always be worthwhile to you.
......
Shoot for a not for profit for free for your demo reel.

This makes sense. The demo reel was the original aim of that first month, but doing it with my current gear lessens the profit time-crunch. One issue here is that it would be difficult to determine what a "not-for-profit" Bar-mitzvah is. Obviously, none of them are run by businesses. I've heard people say to find someone who's not actually willing to pay for a video service, and then offer the service for free. Is this sound advice?

Develop and execute a marketing plan that gets your website and your work seen.

This might be a bit of an issue. Like wedding videography, Bar-mitzvah videography services seem to spread well by word of mouth and Google. If someone searches "Bar Mitzvah Video [nearby ZIP code here]," he or she should have no trouble seeing me (I've tried this, there's a clear geographic void in videographers around me). I have some experience in web design, so I can work on a site.

Develop an entry level rate structure that will cover you living expenses and the renting or purchasing of the equipment you'll need.

Get deposit when client books. You now have some cash on hand to put towards the gear. Don't overbuy. Don't forget you got this client with your consumer gear demo so they liked your work, they're not buying a gear list. Keep your costs very low until you can raise capital to buy an upgrade.

If you get several bookings in advance of the work, you have even more capital to put towards purchase. This means you're buying relative to the growth of your business.

This make a world of more sense than buying on credit. I guess the last thing I need to work out is a contract. Thanks for that extensive list, you got me thinking about things I otherwise would have ignored. This is why I love DVinfo.

why not rent equipment on your first few projects, save the money and then buy equipment once your business is up and running?

I didn't mean to dwarf your comment with my enormous wall of text, Sareesh. I'm actually trying to get in contact with an old family friend who runs a high-end event service downtown. I'm hoping he'll rent/lend out some extra gear at some point down the road, that is, if he ever checks his email...

[Wendy Marberry]

Make sure you have a letter of engagement if not a legal contract stating what the expectations are. What you will shoot and for how long, what (if any) edits or revisions you will make, and how and when the final product will be delivered. Especially how many copies you will make for free (I would deliver ONE free copy on DVD and offer to make additional copies at $20/each). Also make sure they agree that you can use the video of them for promotional purposes.

I did a free job for a non-profit a year ago, and just this week got asked for another copy. Not the end of the world but had I set better expectations at the time it would have been easier to do it then! Took me 5 times as long now because I had to dig up those files out of storage, find them etc.

Oh and set up a good cataloging system so you can find things later LOL. GOOD LUCK!!!

[Craig Seeman]

Wendy is right. You MUST get it in writing and you must be very specific regarding time whether hours or days. In my case if a project is to take x hours or days, I include revisions in that. I make the client aware that THEY must leave time for revisions (or pay for more) and that time is the key measurement. Changing titles might only take a few hours but changing motion graphics might take days. This is why I don't measure number of revisions because a revision can be simple or nearly a complete re-edit.

In this kind of work (I did weddings as part of my work for a few years) I specified my creative control (no revisions beyond fixing errors). They saw my previous work and if they liked it they got me, the artist. My style was self evident and I'd certainly answer questions and give explanations of what I'd do. Sometimes in the course of shooting a live event you don't have time for some things and do for others. For that reason I generally didn't like myself into too many things.

These kinds of jobs were flat fee of course and I knew how many hours it would take 1 camera vs 2 camera vs 3 camera for shooting and editing, so I didn't need to discuss time. It generally took 4 to 8 days to edit and I charged for the number of cameras. I also charged for optional additions such as rehearsal shoots, bridal prep, etc

Delivery date was generally an estimate, not tight, because the amount of work I had in any period would change. Delivery time was faster during "off" season compared to when I might be shooting two or three weddings back to back.

[Craig Seeman]

Renny, you should look for Jewish charities to do free work for in return for credit and a link to your website.
I think you should only do free Bar-Mitzvahs for friends and family since they'll see it as a "gift" and they'll promote you word of mouth knowing you'd normally expect to be paid.

If you do free or underpriced work for "customers" you're going to hurt your business right from the get go. While you'll get something for your reel, the word of mouth you get will also expect an unsustainable price. You want word of mouth recommendations with SUSTAINABLE pricing. If you don't do that, you will never have enough money for the equipment you want. In fact that's how you'll go out of business. It's not how busy you are but how much money you make.

Your equipment isn't free. Your time has a price. There is no such thing as "free." You are either making or losing money.

In fact offering to work without pay tells the client you don't have confidence or experience yet . . . and that's the word of mouth they're going to give to their associates. You can not win at that game.

[Renny Hayes]

Originally Posted by Craig Seeman

Renny, you should look for Jewish charities to do free work for in return for credit and a link to your website.
I think you should only do free Bar-Mitzvahs for friends and family since they'll see it as a "gift" and they'll promote you word of mouth knowing you'd normally expect to be paid.

If you do free or underpriced work for "customers" you're going to hurt your business right from the get go. While you'll get something for your reel, the word of mouth you get will also expect an unsustainable price. You want word of mouth recommendations with SUSTAINABLE pricing. If you don't do that, you will never have enough money for the equipment you want. In fact that's how you'll go out of business. It's not how busy you are but how much money you make.

Your equipment isn't free. Your time has a price. There is no such thing as "free." You are either making or losing money.

In fact offering to work without pay tells the client you don't have confidence or experience yet . . . and that's the word of mouth they're going to give to their associates. You can not win at that game.

Friends and family and charity. Got it. TANSTAAFL.

Thanks to both of you on the contract advice. Also, Wendy, you reminded me that I'm definitely going to need a RAID drive at some point, or I risk never being able to dig up those old projects.

[Jim Andrada]

Bill me later is actually a PayPal "service", not B&H. B&H is just one company that offers it. It's basically like a charge card except you don't have to start paying right away.

I used it once because I got a $25 discount on the first (and only) purchase and I paid it in full on the first billing cycle - they send you a monthly statement.

Bill Me Later - Wikipedia, the free encyclopedia