The Dark Side of Being a Video Business Owner - EP#101 with Danny Lacey

Hey, guys, it's Dan here with the how to Scale a Video business podcast, episode 101. I'm so excited that we've cracked the century. Thank you so much for being a subscriber, being a listener, and if it's your first time to the show, I hope you enjoy being here. We've got 101 episodes now for you to review.

This week.

We're going back to the second part of our interview with Danny Lacy from Stardom Media in Wakefield in England. Last week we had an incredible conversation about how Danny started life as a a radio broadcaster, started getting into filmmaking and grew this incredible company and some of the pitfalls and the challenges they had along the way. And this week we're going to talk about how he's growing a business in a regional space in the uk. So many filmmakers think to build a business you've got to be in London or Manchester or New York or Sydney, and it's simply not the case. And in fact, as we discovered a few weeks ago, we had Caleb Maxwell on on the show. You know, being regional can actually be an advantage. And what Danny shares in this episode are some of the benefits of being regional, some of the cost efficiencies you can have. But that doesn't mean that you're not working with major clients doing fantastically important projects with, you know, sizable budgets. But what he does in this episode, he talks about how he scaled starter media from one person to 13 at its peak. But then also he's been very, very honest and vulnerable about the challenges of growing too fast and how they. They had some issues where a particular client went out of business and left them with a massive hole, which unfortunately meant they had to kind of downsize the business. But it's a very raw episode. It's very honest, very real, and I think you will get a huge amount of value from this. Now, before we get into that episode, please do make sure you subscribe on the app of your choice. And if you could leave us a review, I would be super grateful. It's really how we get the word out on the show. And I just also want to mention that we have some incredible free resources on the website and particularly we've got a marketing video which you don't have to opt in or anything for, and it introduces my three call strategy. And we talk a lot about sales in this session today. But I wanted to give you the opportunity to kind of download a script and watch this video on how to call existing clients and re engage them to win More work, because oftentimes, if you let your last clients go too long, they just forget about you. So it's a script that will help you do that to kind of overcome some of the confidence issues you might have in getting on the phone and calling clients. Anyway, we're going to learn a lot more about sales in this episode, so I really hope you enjoy this episode with Danny.

Danny, thanks so much for agreeing to come back. It was so great. And anyone who's listening to this, who's not heard last week's episode, please go back and listen to it where Danny sort of shares his backstory. But, Danny, today I wanted to talk more about Starter Media. We left off last week. We'd won this contract to create this TV studio and you'd hired your first employee. Now you're at nine employees. You've had up to 13.

Tell me the journey about, you know, I guess first of all, you know, you had this major client, then you've got employees, and then you start to think, I need more employees, need more work. How did you go about marketing your business to attract more clients into the business? And how did you manage that in terms of balancing team and clients and finding the time to do that?

Okay, I think to answer that, I need to step back, go back a little bit just to. So I was doing the whole filmmaking thing and then I decided to set up the corporate video production side of things. And I just want to just to kind of contextualize where I was then compared to what I'm doing now. So the way I found my first ever client was, I think, quite an interesting story. And when I tell it, people are often interested by it and fascinated, I guess, but. So I decided to pick up the Yellow Pages. And yes, it was the Yellow Pages back in those days, and I'm showing my age now. And I highlighted 100 businesses that I was going to call and see if they'd be interested in having a video created at a really good price. Because, you know, when you're starting out, you have to do whatever you can do to get clients through the door. And I think I was seven phone calls in and I got through to this guy, this old guy on his mobile phone, and I said, hi, I'm Danny from Starter Media. Just wondering if you'd be interested in a video for your business. We can do. And before I could go any further, he was like, yep, yeah, I'm interested. He was on the phone, he was driving, I'm sure he was hands free. And he was like, yeah, yeah, I'm interested. I tell you what, I've got this client and I'm doing some health and safety videos for them and it's funny you should call me actually, because I was just about to start ringing around to see if there's any video companies around that I could get a price from. And this. I know. I remember the feeling to this day, even right now, I can. I can sense that I was shivering. I was really nervous. I had absolutely no idea what I was going to say next. I had absolutely no idea how much I was going to charge this guy. But anyway, he said, look, let me know how much you charged me for a day filming. It's in Blackpool, which is the north east, northwest of England, and my client is B and Q. Now, B and Q are one of the biggest DIY retailers in the country. And he was the help.

Yeah, exactly. Huge, massive. And he said. And he was the health and safety company that B and Q hired to look after the north of England refit. So whenever B and Q opened a new warehouse or refit out an old warehouse, he was responsible for going in and checking that the workforce were secure, safe and all that. And so we were filming several health and safety videos anyway. So that prompted me then to go out and buy a camera. It was the worst camera you can imagine. It was terrible, terrible, terrible. But I knew nothing. And so I remember charging, I think I charged him, and this is ridiculous for the work that we did, but I had no idea. It was literally stick my finger in the air kind of day. I think it was £450 for a day filming, for weeks worth of editing and so on. So. But, you know, it opened the doors and we ended up doing a lot more work for him and. And it kind of escalated from there and then to continue from that. So the other clients, a lot of them at that time came from people I already knew. So because I'd been in radio and obviously there's an advertising side of radio I was in, you know, I knew a lot of companies, a lot of contacts within companies. And so once people found out that I was doing video, they were introducing me to people and suddenly I was, you know, developing and building these clients, doing corporate videos for them. And then. So every company has what I call a spike moment. So the Sky TV thing was a big spike. The B and Q thing was a spike moment. There was another one that came between those two and that was for a local window company who asked us if we could do a TV commercial for. We'd never Done TV commercials before, but me being me, it was a, yeah, cool, we could do that. So we ended up creating each month new TV commercials for this window company. And they're quite a big company in the, in the north of England. And so suddenly I've got, you know, one, two, three clients and four clients and five clients. And some are regular, some are one off ad hoc clients. And then obviously the TV project came along and that's when, by then we. But I accumulated quite a few clients. But at that moment in time, that's when everything became mega serious because then I was all in. And then what happened and I think this was negative impact on the business. We became all encompassed in within that project. So that one client became pretty much 90% of our business which was, you know, quite dramatic change in circumstances. But at that time all I was focused on was money. It's like, wow, this is a lot of cash. We can do a lot of things with this. And so I got sidetracked really on where my business was going. And for 12 months, if not a little bit more, we were just focused on this TV client. And then nine, 10 months into the contract I realized that my business was suffering, that my business, I was losing the momentum that I'd built several years prior to that. And so I decided that we were going to take action and that we were going to end the contract with the client.

And then start with building up that client base again. So that was another pivotal moment for us. We did 12 months and then it was back to zero pretty much. And it was literally like that. It wasn't a transitional period, it was end of the 12 month period, the contract ended and suddenly I had three members of staff at that time and a lot of freelancers that we were working with. And then it was that whole crap, now what do I do? I've now got a few little clients from previous, but now I've just lost that six figure client. What next?

And the thing is, it isn't interesting. You know, we often think that TV commercials is where the kind of glamour is. It's like, you know, you're doing TV commercials, you made it the big time. But as you've rightly commented there, you know, it can be all consuming. So what happened next? You know, so you've suddenly got these three members of staff, so you got three salaries plus your own, plus an office gone from six fig to, to practically zero. So what happens next?

Okay, I have to cast my mind back to those moments. So it was, it was devastating. The Effect because we were getting a set amount every month from this one client. And so cash flow was good. And then suddenly the month we. Within a month, we had literally very, very little coming in. So I had to take. I had to just take massive action. And that was. I just. It was then that I realized that I'm a salesperson. Even though it says CEO above the door or managing director or whatever, I'm a glorified salesperson. My job is to go out and find work. And so I spent the next few weeks just solidly looking at new clients. How can we expand? Luckily, because we had the TV stuff behind us, the Sky TV stuff and all the content we created, our portfolio suddenly started to look quite attractive. And we had the TV commercial stuff and the B and Q and several other bits because that's, for me, that's another really important side of running a video production business is you're only as good as your portfolio and that portfolio will open doors for you. You know, it's massively important. So there's two things happening. There was a bit of speculative work and then there was me going out and just literally trying to drag clients into the business. And luckily, because of the service that we're offering, it's quite an interesting. We're not selling insurance or paperclips and stationary and all that kind of stuff where people kind of slam the door on you. Videos slightly easier to sell in so much as it's an unusual thing for people to hear when you're trying to sell to them. It's like, well, what you trying to sell me? And then you mentioned video and how it can improve that and suddenly you've got that you striking up that conversation. So I did a lot of networking, going to breakfast, networking events. We were doing a lot of outbound marketing, picking up the phone, emailing.

And that was working. You know, we were getting enough through the door to cover our costs as a business. We won. We were never kind of cash rich. It was always reinvested back into the business. I was taking, you know, next to no wage out. I was on complete minimum, absolute bare bones that I could afford to live off. And then eventually we got to a stage when I realized that I needed help with my sales. And so I decided that I was going to look for a salesperson to bring into the business on a business development side of things. And this is when our next peak happened, our next spike moment happened. So we brought Kat in, actually, who was our business development manager. And for me at the time, and this is a, probably a completely separate conversation altogether, but at that time I was paying, I wasn't paying huge amounts in wages. You know, we were in that kind of, we weren't minimum wage but we were certainly in that fair bracket. But we weren't paying huge amounts. But to get Cat through the door we were going to have to put our hands in our pockets and pay a significant, significantly more in salary than we've ever paid before. Which was really tough for me because I was, wasn't sure whether we would get a return on that investment. And so anyway, we did. We, we hired Kat as business development manager and she turned things around. Within three months we were, we went from earning 150 grand in the year to 350 grand the following year. It was that, that dramatic so.

Massively. But what she was also doing, and I think this is really important as well as the head of a business is she was giving me inspiration and motivation to go out there and do better than what I was doing previously, if that makes sense. So I had somebody to kind of bounce off when it comes to. Because being an entrepreneur is a very lonely place. You know, psychologically it's a nightmare place to be. And again, you know, when, when I was talking in the last episode about you need to work out what kind of business person you are. You also need to appreciate the psychological aspects of running a business. It's a very stressful, anxiety led, depressing place.

It's probably the hardest thing you'll ever do. And I think people often see the good times, they see the perks, they see the rewards. What they don't see is the stress, the anxiety, the responsibility and that self doubt that you have practically every day that you're just not good enough. So yeah, it's brutal.

It is, it's awful. It really is. You need to be a certain kind of person to want to do this. So having that business development person there was helpful. Helpful because it felt like I had somebody in the team that was with me, my level taking on the burden and the stresses of bringing new clients to the business. So. But it had a, it had a massive effect. It was a big investment but it paid off. It paid off, you know, massively for the business. So I think hiring people and hiring the right kind of person has enabled us to grow to where we are at the minute. And don't get me wrong, we've not, you know, it's not been plain sailing all the way. It's been more turbulence than anything else. And I Think anybody who says, you know, their business is running smoothly and hazard, I think they're lying. You know, all businesses, doesn't matter how big or how small you are, it's all relative. You all go through the same kind of pain and headaches and it's, it's endless. It's, it's into its millions, the things that you could possibly experience trying to grow a business through its various phases. The, through the, from no staff to one staff, from one staff to 12 staff, from four figure revenue to six figure revenue. Every step of the way there's always new challenges to deal with. And again, mentally, psychologically having to deal with those. You know, I've learned to deal with it over the years. I deal with it a lot better than I, than I used to do. You know, the stress of running a business was really difficult for me to deal with at times. And so having a team around me worked because they're unable to keep the business ticking over and running. Well, I have my moments of, you know, I'm not really sure what I'm doing. I'm not sure whether I'm doing the right thing and where's the next paycheck, next client going to come from, which is again a completely, you know, we could go off, I could talk for hours on the, just, just on the stress side of running a business. So. Yeah, so I think that answers your question. I'm not sure if I've answered your question. I've got a few times.

Absolutely. And so at one point you got up to 13 employees and you're now sitting at nine. So what happened there, was there, was there a kind of growth spurt and then it kind of retracted. Tell me about that.

Okay, so.

I was growing my business offensively. So I was, I was, I was going, I was pushing forward, I was reinvesting going forward, reinvesting. I was far from playing the defensive growth model in my business.

Which meant that.

The profit, the payroll versus revenue ratio wasn't the best because I had the future in the mind. But it made the, meant that we were vulnerable.

And you know, you should have, when you're running a business, if you hire a member of staff at 20 grand a year, they should be bringing in, you know, they should have value of 50, 60, 70 grand a year, whereas my business didn't have anywhere close to that. Which is insane and not a really good way to run a business. However, there was always method in my madness and I thought, you know, I had a future goal in plan, but it meant we were vulnerable. And unfortunately, that vulnerability bit me in the ass a couple of times. And we lost.

We lost a client. We didn't lose. The client went. They went belly up. And they owed us quite a lot of money. And so that was eating into our cash flow dramatically. And so some difficult decisions had to be made. And I'm talking about the R word, the word that entrepreneurs and business owners want to try and avoid at all costs, and that's redundancies. But we had to do it for the survival of the business. And I've had to do it twice in two different periods, both for different reasons. First time was just me just being naive and making mistakes. And I'll wholeheartedly hand my hands up to that, and that's something that I'll learn from. The second time was the client issue. They were owing us. Well, they owed us 60 grand at the time. And for a company of our size, that was a huge amount of money. And it just came to a head where we were just cash flow. We just couldn't keep on top of cash flow. It's starting to. And I knew if I didn't make decisive action there and then the business would go under. So we had to make those decisions. And luckily, Touchwood, you know, we've bounced back and we've grown significantly, significantly since. And I think one of the lessons in that is that you have to make decisions quickly in business, and you need to pull yourself away from the kind of pride and personal side of it and wear your business hat. At the end of the day, it's about those numbers. Money coming in, money going out.

And as the CEO, managing director, chief of everything, you have to make sometimes difficult and unpopular decisions.

Every day. You have to do that and you have to make them. I think the key thing is. And again, my notebook came in handy. I had to write down what was wrong with it. You have to really dig deep, first of all, and I think you have a responsibility to figure out what has gone wrong, where did, how did this start? And you all, as the head of the company, you always have to. It always comes back to you. You've got. You can't blame anybody else. It's nobody else's fault. It's not even the client's fault. Who hasn't paid you for. That's not their fault. It's your fault for allowing that to happen and to have an effect on your business and for not safeguarding against that in some form or other. And again, you know, as CEOs, entrepreneurs, or whatever, you want to call us? We're not perfect. The way you learn is by making mistakes. And some mistakes are bigger than others. I make mistakes on a daily basis, but those mistakes are small little mistakes that can be quickly ratified and away we go. But every now and then you make a big, you know, some big errors, big errors in judgment. And that's what happened with us during those, you know, particular moments. And like I say, we had to make those decisions very quickly. And there's lessons to be as long as you're learning from those lessons, like now, you know, hiring slow, firing fast is a very well known saying that a lot of business people use. And it's so true. You know, having the right people in place is, is massively, massively important. And if you have to get rid of people because their jobs have become redundant for whatever reason, you have to move quickly. You've got the, the, you know, it's in the best interest of your company and everybody else that's still working for the company to, to survive.

Yeah, no, I love that. It's, it's, it's very true. So I just wanted to have, you know, move sideways a little bit to talk about startup media today because, you know, a lot of video businesses I speak to think that to become successful you have to be in a major metropolis. Manchester, London, Sydney, Melbourne, New York, and, and oftentimes I'll be speaking to, to people and they're like, oh, but I only have a small company in a small town, you know, how can I possibly, you know, compete? And what I've actually found is that regional based businesses often do better than in Metropolis. And I think that's partly because in a metropolis, everyone's flocking to Metropolis to try and make it. So. Talk to me about how, how you've grown the business in Wakefield because, you know, to have a team of nine, you're doing something right. And, and so where are you at today and how have you managed to, to build a business like that, doing the kind of work you do in a regional part of England?

That's a good question. I think I'm less focused on locality. Unless we have clients up and down the country. We have a lot of clients in London, in Leeds, in Manchester, up and down, left and right of the country. So I've never really, to be honest with you, I've never really thought about the way I deal with businesses. There's, you mentioned the flock of sheep mentality and that's exactly, it's the whole purple cow thing. You know, everybody's heading over that direction. Whereas I think, well, actually I'd write. Would you? If I am at my philosophy on the whole, you know, metropolis thing is the last thing I want to do. And networking events are a good example of this. You walk into a really busy room where there's a lot of people having conversations with each other and you're stood in the corner trying to get everybody's attention but you can't because everybody's busy intermingling and chatting. Whereas I want to go into a room and I want to make my own noise. So much noise that people in that other room are listening. Oh, that sounds interesting. What's going on in that other room? And then they're following you into that room. So that's always been my mentality and philosophy when it comes to building my business is I'd rather not be in that busy room where there's a lot of people talking, the same conversations, vying for the same attention. I want to be the business that's in the next room or the next building creating something that makes an attractive kind of noise where other people are listening in and thinking, oh, I want to, I want to go and get involved in that room and see what's happening in there and then you're in control of that conversation. As opposed to the flock of sheep mentality where we're all, you know, running around like headless chickens actually trying to get people's attention. So where, so that where I base the business has that mentality. Leeds is on our doorstep. Wakefield is, is the smallest sister city. That said, you know, Wakefield has some pretty big brands. We've got Coca Cola's European head office here, we've got Burberry and tons of others. So the way I was looking at Wakefield and I mean, I'm Wakefield Tingley born and bred, so I'm literally local to the area. Anyway, it was just, well, if it's good enough for Coca Cola and Burberry, there's something going on in Wakefield that's quite interesting. So I had that thought process as I was looking for. And also it's cheaper. Let's, you know, let's not hide from the fact that, you know, you're running a bit. If I was in Leeds, it'd be three times what I'm paying right now. If I was in Manchester, the same story. Wakefield, though locality wise, it's on the Leeds to London train line. It's close to motorway networks so it's not really out of anybody's way to come and see us. In Wakefield. Far from it. In fact, it's quite very easy me, for people to come and see us. So it's got loads of different aspects for it. Yeah, it's a talking point. You, you know, just the fact that you're talking about it with me now is a testament to, you know, it is a talking point when I'm talking to people in Leeds and Manchester. Are you from Wakefield? Where's that? You know, it's a bit of a talking point and we're not part of the same picture with all those other people and all that other noise that's. That's out there. But then there's also the, the financial side of it. Our overheads, if you take payroll out of it, our overheads are tiny. You know, our rent and our business rates are minute.

It's really smart. Like we had, we had Caleb Maxwell on the show. He's actually one of my clients who works out of Bendigo in Australia. It's a big country town and he's killing it. And his, his philosophy is that we want to help, you know, rural brands speak on an international stage and they have got so much work and again, it's lower capital costs to actually be operating there. I think it's very smart.

And we're also hiring local as well, which I think is quite interesting even because we're in quite a very kind of specialist area as far as recruitment goes. You'd expect all the talent to be coming from London and Manchester and Leeds, but most of our staff are actually Wakefield based, which is, I think it's quite interesting. So I'm big on that as well. I like recruiting locally as much as I possibly can for the business and want that to continue as well.

So 2020, what kind of work are you doing as a company? What kind of work are you doing personally? Now that you've got a team of nine, are you still out selling or how does your. How does your role changed?

It needs to evolve. Right now I'm still working heavily in the business. Obviously coronavirus hasn't helped. We've to, you know, make some changes, not to personnel, but to the way we do things. We've had to adapt and it certainly opened our eyes to a few things. So I'm heavily involved in the business at the minute. I'm trying to get to that stage where so my. I've got a productivity plan. This will kind of contextualize what I'm trying to say. So at the minute, my target is to have 40% of my week on sales. 40% of my week on marketing, 15% of my week on business strategy, and then 5% with all those fitty little bits of admin and marketing for me being the most important thing. So I'm trying to get into a position where I can actually just spend those allocated percentages of my week working on those particular things. But I'm still in that zone. We're going through that transitional period where I've just got enough staff to do all the stuff that needs to be done. So I'm not working on the actual projects. I've got account management, the actual production team, so on and so forth. And so I can do the other sides of the business. But I always get end up putting, jumping in and putting out fires and having to those little jobs that take an hour of your time before you know it. So I'm still not there yet, but I'm getting closer to being able to work just. And I know the business will grow much quicker when I can get to that stage where I'm literally 100% working on the business. And that's why I'm looking at the role of a managing director for the business as my next hire in the next six months or so to bring somebody into to run the business for me so that I can then be the CEO of this business and grow it. So right now it's. I like to think I'm being organized and productive, but I'm literally spread all over the place still putting out fires and doing those odd jobs here. And then I'm trying to not be doing that.

I know so many entrepreneurs running multi, multi million pound and dollar companies and it doesn't really change. I don't think it ever really changes because if you're an entrepreneur, you've got your fingers in every pie at some capacity. But I just wanted to just talk a little bit about the music. To my ears, when you said you want to spend 40% of your time on sales, 40% of your time on marketing. And I speak to a lot of filmmakers and.

What'S almost said as a badge of honor is like never had to do any marketing. It's all just word of mouth.

And I find that terrifying because I think word of mouth just is not what it was. I think you have to work harder to find business these days and if you're not putting a significant portion of your time and energy into to marketing and sales, I don't see how you can grow. Clearly this is something that you believe is also very, very significant. Why is it so Important to dedicate so much time to marketing and sales.

Because you need to be constantly ahead of yourself. So you need to be three months ahead constantly because from past experience, if you're not, it will come and it'll hit you like a ton of bricks. It's all right saying that we're getting a lot of work through word of mouth. I don't need to worry about, you know, next month, this month sorted. I've been there. You know, when I was a one man band myself, that was my, you know, so I started out, you know, I've got these couple of clients, I'll be fine. And then we lost the Sky TV thing and it was suddenly the realization that right now I need to start earning some money. So. And I don't ever want to be in that place again where it's like, right, I need to start from scratch. So having that marketing and marketing is all about long, long term, all about getting eyeballs on your brand. Marketing feeds into sales. It's the same kind of thing. And you just. And there's the competition out there as well. You've got to remember that it's not just you on your own out there and it's, you don't get the look of, you know, the pick a mix of all the clients and stuff. You've got to, you know, you've got to market yourself so that when people do come across you and your brand, they've got to then make a decision as to whether or not they want to use you. So that's where your marketing comes in and your brand, your own personal brand and then there's the sales side of it. So how much are you going to charge? How much value you're going to, are you going to bring me versus, you know, the nearest person up the road who's offering the same kind of service. So you know, you're only going to have those, those clients around for so long before you have 10 clients, down to five clients, down to three clients, down to next to nothing. And then your competition who are out there selling and doing the marketing, they're a year ahead of you already. And now you're having to really play catch up. So. And again for me all comes down to that. What kind of person do you want to be as far as business goes? If you want to be that one man in the band working from home and you just want three or four clients and you want the lifestyle, I'll work eight hours a day and then I can spend the rest of my time with My family, then great. You know, if you have a downturn, you'll probably just go get a job and that's fine. But if you want to be a business owner growing a business for future sustainability and success as an entrepreneur, then you need to be your own salesperson, you need to be your own marketer. And if you can't do either of those, then find somebody who can and quickly.

I can't think of a better place to pause this episode. Thank you so much for sharing, so much. Incredible insight.

Thank you.

Where can people find you?

So me, I've got so my person, I've got a website so I'm trying to build my own personal brand as we're doing so that hopefully we're feeding to the business because I feel like I've got a lot to share and some knowledge to share. So I've got Danny Lacey Business as my personal website.

If you go to our YouTube, my YouTube channel as well, which I think you can get to through Danny Lacey Business on there you'll find a load of behind the scenes videos we were filming for 18 months behind the scenes of all the ups and downs that the business was going through. Some of the stuff that I've just been talking to you and we filmed it and we've shared it online and it's really in depth and stuff that you probably wouldn't see in other videos, the information that we're sharing. So if you go to DannyLacey Business you'll see links there to the YouTube channel. So definitely go in there and check that out. And then StardomMedia is the video production company. So it's s t a d a media.co.uk well mate, we will link to.

All of that beneath this and I'd love to have you back on the show at some point in the future because I'm sure you'll have more, more perspectives on growing and scaling a business.

I'd love to. And thanks again for the opportunity and it's been fantastic talking to you. Hopefully you'll hopefully some of the stuff I've been sharing, hopefully somebody can take something from what I've been talking about for the last half two episodes.

Hey guys, thanks for watching. I hope you got a huge amount of value from that episode. If you're looking for additional support or resources to support your business journey, then head over to Denleny.com where you can get a whole heap of other resources, free downloads and access all the other episodes in the series. Be sure to subscribe and I'll see you next time.