Eric Deeran (Master Filmmaker) argues that video production businesses should avoid relying only on very large corporate clients because large projects have long sales cycles (typically 6–12 months), involve boardroom sales with many decision-makers (often 5–10), lower typical profit margins (about 10–20%), and require large crews. Instead, he recommends focusing on small-to-medium businesses (defined here as companies under $150 million annual revenue) and selling monthly retainers (commonly $5k–$30k/month) for simpler content that needs smaller crews. Retainer work yields much higher gross profit (typically 70–80%), predictable recurring revenue, and higher lifetime value; combining retainers with occasional big projects creates the healthiest model.
Questions this video answers
Any company with under $150 million per year in annual revenue.
Typically between 6 to 12 months.
Often 5 to 10 different decision-makers.
Typically around 10–20% profit margin.
Typically 70–80% gross profit.
Chapters
What's going on, guys? In today's video, we're going to be talking about why going after bigger companies is actually killing your video business and why instead you need to be focusing on smaller companies to actually grow your company and grow your video business. And it's pretty counterintuitive to what most people out there are teaching. And so in today's video, we're going to be talking about why you need to go after smaller type companies, getting them on retainer, to actually build consistency in the business, to actually grow the business overall. If you don't know me, my name is Eric Darren. I run Master Filmmaker and to date We've helped over 500 video business owners one to one, scale their video business and make more money in their companies while also doing something that they love. And in these YouTube videos, I'm sharing with you all of the lessons I've learned from doing that. So hopefully you can do that as well. And if you want to get our help, scale your video business as well. So let's go ahead and jump into it. So what most people are doing is they're going after big businesses, right? And the reason most people are going after these businesses is because they see things like $100,000 to 500k projects. And while these are great, they're awesome. The problem with this is there's a couple things, right? So some of the cons when it comes to larger companies and larger businesses and doing projects like this is from the time that you actually get the client on the phone to when you actually make money, it's a very long deal cycle. And if you've worked on larger projects, you know this, and you know this is an issue because you're typically working, could take anywhere between six to 12 months to get the deal done, right? And the problem is, what do you do in the meantime? Like, what do you do in this time frame in the meantime to keep your business afloat? Well, if you're constantly worrying or focusing on these larger projects where they're 100 to 500k, you have these really big spikes in your revenue and then you have nothing and then you have a really big spike and there's a lot of gap in here that is really tough to keep talent, it's tough to keep payroll, it's tough to keep people in your company because you don't have a lot of cash to actually allocate towards growing the company and keeping the company afloat. And like, these are fine, it's fine to do these types of projects, but the problem is it's just really, really difficult when you have these long sales cycles. You also are dealing with boardroom sales. And so there's a lot of like corporate kind of BS that you have to deal with within these deals. And it just takes a lot longer. It's a different kind of sales process. Right. Like I said, longer sales cycle. And it's also boardroom sales, which basically means that it's a lot more. You have to pitch to like five to ten different decision makers instead of one to two decision makers. Right. Which is part of the issue. It just takes a lot longer to get that done. The next is it's just not always super high profit margin, especially for video production. Typically what you're gonna see with a lot of companies out there is they're operating between 10 and 20% profit margin on these packages. So if you do $100,000 deal, you're typically not profiting more than 10 to 20k, which is obviously a problem because you don't have a lot of take home on that. So the business doesn't have a lot of operating income from the projects that you're bringing on. So there's not super, they're not super high profit margin to begin with. And they also require super large crews, which means you have a lot of people, a lot of moving parts, a lot of things that you have to build into this. And if for some reason like you have, you can't find certain crew members, then you have to spend a bunch of time finding more crew members. And, and it's a very labor and people intensive type game that you have to continuously find new people for these jobs. And if you can't find the people, then you're kind of in trouble and you're in a tough place there. And don't get me wrong, these types of projects are completely fine. There's nothing wrong with doing them. But I think the model here is fundamentally flawed because you can't really just build your business off of big business type transactions like this because you put yourself in a place where, like I said, you're going up and down, up and down, up and down, and you have these big spikes and in revenue and you're just struggling because you have nothing to do in between. So really what we suggest for a lot of our clients is we go after smaller businesses. And before you say, ooh, well I don't want to go after small businesses, like they won't have the money to pay me, you'd be surprised if you go to our case Studies on our website, we've hundreds of case studies. And all of those companies are just working. All the video production companies are literally just working with small businesses. So a small business is anybody under 150 million per year. So anybody less than $150 million per year in annual income, that's typically what a small business is classified as. So it's not as small as you think it is. I'm not talking about like mom and pop shops or like these small, tiny businesses. I'm talking about ones doing $150 million or less every single year in their business. Now, the reason I like this, some of the pros to this is we can charge them monthly retainers. So monthly retainers anywhere between 5k to. I've seen as high as 30k per month on retainer for very simple content. This is not content that like, you don't need multiple crews to go out. And that goes into my next point. But you don't need a lot of people to produce this. You literally need like one videographer and one editor to produce this content for them and then some project manager to actually like manage the actual project. So the other thing is, the other pro is they're smaller crews, so you don't need a lot of people to fill on this. Which leads me into my next pro, which is their higher profit margin. Typically, our clients are profiting on gross profit on these packages, anywhere between 70 to 80% gross profit, which means they have a ton of money to reinvest back into the business. And they don't have to actually rely on the next project because they have a bunch of profit from the existing project that they just did. So they don't have to do a ton of scrambling to find more work because the existing profit margins that they already have are, are super high. The other benefit to this is you have ltv. So you have a higher ltv, which means lifetime value. So client lifetime value, which means how much does one person pay you for the entirety of their time with you? And we have higher profit margins because people are paying you on a recurring basis. Now there's reoccurring, which means that you're someone's buying something and then deciding to buy again in six months or seven months or 10 months, but it's not consistent or recurring, means that they're literally on a payment plan on an online transaction where they get billed 5k or 10k on the 1st of every month, the 15th of every month, whatever it may be. You're billing them over and over and over again, which means you have predictable, sorry guys, my handwriting's terrible today. Revenue. And so this is super underrated because when you have predictable revenue, you can hire people, you can buy back your time, you can hire really amazing talent to work for you because you have consistent revenue coming in every single month. It's instead of having to rely on these bigger projects and these bigger things coming in and hope and pray that they come in in six to 12 months, right? So that's the biggest thing. This is why we focus on small to medium sized businesses as far as having retainers with these guys, because it gives us consistent revenue to where we have consistency every single month, where it's going up, up, up and our revenue is shooting up into the right. We don't have to worry about where that next client is coming from. This is why if you can combine your big business strategy with your small business strategy, right, then you can make a model where you have this recurring revenue coming in every single month and then you have these bigger spikes with those bigger projects coming in every six to 12 months, right? Super key here. So I don't think it's one or the other. I think you need both of these, right? To have an effective business, you, you need both. So hopefully that makes sense. Guys, if you have any questions, let me know in the comments down below. Hopefully you enjoy these types of videos. Shameless Plug. If you want to learn how we can actually help you scale your video business or help you implement the retainer model into your video business, there should be a link down below this video. You can click below, schedule a call with our team, see if it's a good fit and we'd be happy to walk you through that. And with that being said, enjoy the videos and we'll see you in the next one.
