The only true and effective way to leverage your video business. EP #136 - Den Lennie

G', day, guys. Dan Lenny here, host of the how to Scale a Video Business podcast, coming to you with another solo episode this week. We're on a bit of a run, actually, of solo episodes. I did a couple, and then a few people got in touch and said, hey, we actually really like 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, 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's leveraging help of other people and other resources. So we'll get into that in just a second.

So the biggest obstacle to growing your business is actually lack of resources. When you're a freelancer, you know, the days you're out working, you're not doing anything else, you're just full on into the job. And, you know, from my shooting days, they could be like really long days. And when I was working in London, it was like, you know, sometimes an hour, hour and a half to get to the job. You shoot all day, and then, you know, you've got to kind of put 10 hours in on. On set and then get home. And that's like 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, sorting out jobs. And. And that just reaches a point where you just. You just. You can't do any more on your own. And I call it that the critical mass phase, where you literally don't have enough hours in a day to do everything you need to do. And so you just have to give up something like. And by giving up, I mean, you have to relinquish control over every aspect of production. And, you know, I used to be like this. I do the production, I do the shooting, I do the editing, I do the grading. I didn't want to let go of any of it. But you reach a point where your income hits a ceiling and you can only do so much because it's just you. And it puts an enormous pressure on your home life, enormous pressure on your health. And it's stressful. It's stressful as all hell. So the only way to scale your business sensibly is to leverage the help of other people. Now, to do that, you need to be earning enough. So it starts with your pricing. It starts with making sure you're charging enough, not just to cover off, you know, what you want to earn in the day, but also an overhead, a future overhead that might not exist yet. And one of the things we first get our accelerator clients to do if they come from the direct from freelance, is adjust their pricing. And oftentimes this can be quite an uncomfortable process because we're so used to charging a day rate. But what we like to do is look at the overall value you're bringing to a production and charge an according fee. And it can be based on, you know, a camera hire and people on set and pre production and post production. It's perfectly okay to do that, but 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 the easiest way to add 12 or 13% margin to any production is start charging a production fee. And in my book, you know, the Filmmaker's Guide to Budgets and Quotes, which you can get for free on the website, the podcast is it, there's a whole chapter on how to justify a production fee. So when a client says, what's a production fee? You've actually got a lot of content that you can say back to them, I've never had a production fee pushback. People just don't understand it. So that therefore, if you learn 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 excess cash coming into 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 editors out there who will work for 20, 30 pounds an hour, 20, $30 an hour, depending on where they are, and will get a very, very competent job. But what you need to do is, is if you're, if you're billing out at editing at say 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 in Sydney were about 950 a day, Aussie dollars for an editor. For, for editing. I would get the client to pay 950 a day for the editing because I'm supplying the job and the project and the edit suite and the office, and I'd pay an editor $40 an hour. So that was 320 a day for the editor and that was the rate they were happy with. And I was charging the client 950. Now, that might seem like an excessive amount, but when you start to factor in your overheads of rent and power and computers 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 you're paying your team on editing because it's, it's, you know, that's where you can make money and that's the money you need to be able to buy, you know, to hire production managers or other teams to help you. So, you know, but leverage can happen in other ways. You know, leverage can happen if you're just. If you're still doing your own books, if you're still, you know, using zero thinking or zero or MYOB or whatever it might be that, you know, or QuickBooks or it's quick and easy software, I can do it myself. Then you're kind of missing the point because a bookkeeper 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? You just wouldn't do that, really. Typically not normally, because they might be able to assemble it, they might be able to download imovie for free and start throwing it together, but they're not going to know the kind of, the nuances of, you know, how to put a story together. So why is it that, that filmmakers insist on doing their own books? It's ludicrous. It's madness. If you're listening to this and you still do your own books, for God's sake, stop it now. You are, 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're not skilled in. I have an incredible bookkeeper and she keeps me on the straight and narrow. She gives me advice on taxation, advice on what it can claim, what I can't claim. She put me in touch with an amazing accountant. It's been an absolute godsend. It's been worth every single cent. And I've had bookkeepers since probably 2010. It's just a great investment to have somebody else looking over your numbers and kind of making you feel a bit uncomfortable about what you're spending. That's the best bit because you've then got some accountability. So the first thing you do is get a bookkeeper. Then I think probably an editor is great leverage or if you're doing a lot of production stuff, then maybe even a virtual assistant. I have a few different virtual assistants and these just take a lot of the day to day admin off my plate, which means I was having 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, you know, coaching calls every week. And the Video Business Accelerator, as soon as the call's up, she's downloading it, she's transcribing it, she's getting it ready to post it back into the group. She's doing a lot of the day to day admin in the group for me, which means I can focus on delivering content, creating content, managing marketing campaigns, managing sales calls. And that is a 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, go back and check out an episode I did with Ben Simkin which was all about that highest and best use theory. And you know, you cannot scale a business alone. You know, business is not a solo pursuit, it's a team sport. And so if you want to really scale.

You'Ve, you've got to, you've got to get help from other people. There's just no way around it. And if you are, you know.

You know, if you're, if you're just.

If you're trying to do everything yourself, you're going to lose. Now episode 77 is what I did with Ben Simkin on the highest and best use and the theory of constraints. A great episode to go back and listen to. But leveraging the help of other people is critical for business growth. And it's something 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, can be kind of scary. And the secret to leverage is systems. If you don't have systems and you're not clear on what you want the outcome to be, then hiring someone is going to be a giant waste of time and a lot of stress. And one of the things we're very focused on inside the Video Business Accelerator is systems. Business systems. Those are systems for every single thing that you do. You know, things like a simple system for onboarding a client, making sure you do it 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, business systems process that we're launching in early in the new year and it's literally the systems for how to run a video production business. And we've got, you know, a number of businesses doing high six figures in our, in our, in our group 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. I know we've got plenty of businesses that come into us doing 10,000amonth and end up doing 20, 25, 30, 35, 40amonth within six to eight months. So we know the system works. But systems don't just stop there. Systems are there for when you onboard a new client, when you onboard a new team member. Systems are there to make sure you don't mess up simple things. We've got systems for post production, systems for every aspect of production you can imagine. But more than that, we've got systems for how to, to, to, to, to, 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 in 14 days. And we've worked out exactly the steps that needed to happen to make that predictable. Because once you're pipeline, your sales pipeline is predictable, your revenue becomes predictable and once your revenue is predictable, you can start to see what you're gonna be making three months from now. And I don't know about you, but like when I was back running my business in the early days, I mean it was hand to mouth, month to month. Now I've got predictability, I can tell you what we're gonna, you know, bring in in January and February because we've got, we've got a system, we've got a predictability, we can speak and forecast where things are going to go and, and my clients are doing the same. We're teaching them the system, we're sharing exactly how to do it yourself. And you know, we've been having some incredible success stories recently, despite Covid, despite what's going out there, going on out there with elections or anything. We run the video business accelerator as an immunity program to anything that's happening in the external world. You know, we had an incredible success story just last week where Derek, who'd been on the podcast just a week before, secured a $75,000 project in a week through just consistently marketing the same way and consistently reaching out and consistently being consistent. So systems and leverage. And he is a Big fan of interns. But again, he hires interns and he brings them in and he's very clear on what's involved and he gives them a really clear outline. And many of those interns end up becoming full time paid team members because DERE has a system. And so systems are the absolute core of leverage. And if you're going to, you know, work with an assistant, I mean, if you're going to do bookkeeper, you start to present your books in a certain way and give them the information. Once they have that information, they can, you know, they can go ahead and process. So, you know, leveraged. It's one of those things that leveraging the help of other people frees your time up from all those little tasks. 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 books, or it only takes me a couple of hours a week to do this, or it only takes me 10 minutes, 50 minutes to do this, not 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 effectively, 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 a bookkeeper that wasn't working out. And because I was tracking how I was spending my time, I was having to do an awful lot of work to kind of reconcile things and check things and they weren't accurate. And, and I realized by tracking it that I was spending a couple of hours a week fixing mistakes. So I knew it was time to get a different bookkeeper. And I've got a much better bookkeeper who was more expensive but doesn't a much, much better job. And so if you're not tracking and measuring, then, then you're gonna, you're gonna lose leverage. So that's really important. But more than anything, and it's, it's being very clear in a helping, getting the help of other people, leveraging the help of other people forces you to be more organized, forces you to be clearer in your purpose. You know, why does your business exist 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? And all of this takes a bit of time, all of it takes a bit of work. But what I can say to you is if you try and figure this out yourself. It's going to take you years. And the advantage of our members inside the Video Business Accelerator is that it's a coaching program that teaches them how to do it right now and shave months and months off the learning process. And 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, for what has been a very tough year. But the resilience that's been shown by our members is off the charts. And that's. And yes, it's driven by me. 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 are doing. And that's rubbed off on the members. So to sort of bring this back into kind of a really salient 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 could say, well, I could just, if I just got some bigger clients or they'd spend more, I could make more money. Yes, but if you're doing everything yourself, then that is a problem in your business. And look, that's okay because if you just want to be a help for hire, if you want to be the kind of the filming tradie who gets, gets paid well for a day's work and is, you know, exchanging time for money, that is completely okay. But you are always going to be constrained by you, by, if, if you're not sat in the edit suite or out on a shoot, you're not, you're not, you're not earning. And if you're out in a shoot but you haven't got someone in the edit suite, then you've got an asset which is sitting, costing you money, not making you money. It's like the airline industry. You know, planes don't make money when they sit on the ground. They're just assets that are depreciating and rotting. They need to be flying to be generating income. And obviously the airline industry had a bit of a battering this year and there'll be casualties. But if you're optimizing your resources and you've got to think of your business as a series of resources, a series of assets that are all capable of generating you income. 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's switched on and someone sat down cutting, it's making you money. But what most freelancers do is they have an edit suite, a high spec machine that sits and does nothing when they're out on a shoot, and then when, consequently when they're in editing, the camera gear is sitting, not making any money. So 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. And I don't think there's ever been an easier time to hire editors offshore or in other countries who are very, very capable and have the equipment available and the bandwidth on their Internet to download and upload files. And so I strongly recommend you consider it. And if you need help with the system side of it, well, that's. We can come up and we can help you with that. Inside the Video Business Accelerator. Oftentimes knowing what to do 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 hard. Running a business is really hard. And I mean, I've got team just now designing the website, another team writing 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, I'm 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, once I record this podcast, I click the file with the road into a folder and then it gets handled by Milka, she does everything else and then it gets sent to my copywriter and he writes all the notes. And Kelvin's an absolute rock star and he does incredible work on the notes, but I've got to get the podcast to him to give him time to do that. And so my system is on a Monday, I have a note that pops up in my calendar at 2 o' clock and says, have you recorded the podcast? And if I haven't, I drop everything I'm doing and then my system is I record it there and then, because if I don't do that, my team can't do their bits and therefore the episode wouldn't go live on Thursday. So, yeah, a little bit of an insight there for you guys. These solo episodes are generally recorded on a Monday. I like to keep the content fresh on a Tuesday. I tend to record it immediately after our coaching call where I can sort of share something unique and insightful from the call we've just had. And yeah, look, leverage is the biggest win I think I've had in my business, but it takes time to train people and you have to have systems. So 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, Dan Lenny. If you're a video business owner who's hit a ceiling and we benefit from mentorship, support and coaching, then check out how you can work with me over@denlenny.com don't forget to subscribe and rate the show over on itunes, and we'd really appreciate you taking a few minutes to leave a 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, then please do me a massive favor and share it on social media and engage groups that you might be in. See you next week.