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Max & Jake Bore You To Death About Budgeting
96 Plays3 years ago
You seriously need to take budgeting seriously.
Basically, budgeting is the activity that makes or breaks your operation. How you handle it makes all the difference whether you're just getting started, or you've been at it for a long time.
Take a moment to listen to Max & Jake's tips for making this process fast, efficient and productive. You won't regret it.
In this podcast we breakdown how great budgeting will:
- Get you more work
- Get you BIGGER budgets
- Get you in the door with agencies
- Get you off the hamster wheel of making the same financial mistakes again and again that are holding you up
Recommended
Transcript
Jake Rorda's Departure Announcement
00:00:05
Speaker
Okay, we are back after a long hiatus, nearly a month and a half since the last time. We have recorded a Crossing the Access podcast, and I am Max Keiser, CEO of Pipeline, and I am here with Jake Rorda. I'm Jake. Hey, everybody.
00:00:28
Speaker
Uh, it's kind of a sad day pipeline. Uh, and because this is Jake's last day with us here. And, uh, that's, that's really gone for now, but not forever. Gone for
Jake's Evolution at Pipeline
00:00:41
Speaker
now, but not forever. He's now the official first member of our board that we didn't even know we had founding member founding member. The truth is making software takes a long time and the development process goes on forever. And it takes a long time. We can make any money.
00:00:58
Speaker
And Jake is a hot commodity out there and he, and we simply have had to, we have to move on, unfortunately, and Jake has to move on from what we can afford to pay him for the amazingness that he brings to us. But I know it's been amazing to be with him and Jake's been great, so great to work with you over the last,
00:01:27
Speaker
I've years. Six, I believe, 2015, October 2015. Yeah. Yeah. From our production company days at hand crank, where you started off as an 18 year old. Yeah. Bookkeeper.
00:01:41
Speaker
Assistant bookkeeper. Assistant bookkeeper. Then that bookkeeper went bananas. And then because that's what happens when you try to keep books for a production company, you go there. That's fair, yeah. Yeah, that's what happens. I'm sure a lot of you out there have had that experience of having your bookkeeper go bananas. And then you kind of graduated up to sort of what we call the CFO level because we thought it sounded cool.
00:02:08
Speaker
And
Pipeline's Financial Focus Shift
00:02:09
Speaker
then, and then into operations, because you just were such a natural at moving over into helping folks and helping our company put out fires and just get on top of our systems and our numbers. And then it was just such a natural, you know, of all the folks.
00:02:27
Speaker
that I worked with at Handcrank. It was just such a natural to bring you along to pipeline where we were basically building systems, but with software. And taking everything that we learned over the years. Yeah, but the one thing- Well, thank you. I really appreciate that. And I've really enjoyed these last six and a half years. It's been a lot of fun and I've learned a ton about production and about software. So I've loved it.
00:02:53
Speaker
Yeah. And don't worry, he will still be around and we'll still bring him back for podcasts and so forth. This isn't the last of me. You'll hear me again. It is not. But I know for a lot of our customers that have worked with you, they've really, really enjoyed working with you. So I'm worried about how those people will react. But it's important that they know that it was not acrimonious and that it was just a simple matter of development of software takes a fucking long time.
00:03:23
Speaker
And so it's just we just need to keep our runway as long as we possibly can while we try to make this craziness known as all-in-one production management software for video producers work. So thank you so much, Jake, for your contribution. But Jake still will be a consultant, particularly as we have made a big pivot
00:03:46
Speaker
pipeline
Importance of Budgeting in Video Production
00:03:47
Speaker
as well and that is the other thing is we've pivoted from really looking at all aspects of production to really focusing on the financial aspects first and foremost as we've seen our budget our budget tool one of the many tools that pipeline offers we've we've seen that be the one that has just been the one that people have really stuck with and so we've tried to go back to that to build from that and
00:04:12
Speaker
And Jake was instrumental in helping us come up with making that work. And so he will still be consulting with us a great deal on making the next steps of time tracking and overarching corporate financials for your company all make sense, come together and be the kind of thing. And QuickBooks integration, Jake knows QuickBooks like the back of his hand. All those things are coming up in pipeline and that's there are sort of
00:04:39
Speaker
Our focus right now is really on those financial aspects as there's so many ways you can go in the business. And we've decided that financial is where we can make the biggest impact on our users. So Jake will continue on as a consultant in those regards because he does have a finance degree. He is a financial genius on these things.
00:05:02
Speaker
And he can be of such great help to Steve, who's our lead developer in New Jersey and myself as we keep on keeping the torch alive for getting this production software out the door and to be as awesome as we know you all need it to be. And provide the most value. Yeah, absolutely. But today we're
Strategies for Budget Presentation
00:05:22
Speaker
going to have as Jake's final podcast, a fitting podcast about budget tips. And we, um, look, we,
00:05:32
Speaker
You can't take your budget seriously enough. That's honestly what everyone blows past that budget thing. It's everything. You have to remember what you're doing. Are you in this for a career or is this a hobby? If it's a career, you've got to be thinking about the money you're bringing in and how much you're spending, and that's your budget.
00:06:04
Speaker
I remember when I first started using a budget template of any kind. When I first started writing down, oh, this is what I spent on the last five projects. I should probably use this to remind me of what I need to charge because there were so many times that I just forgot to charge people for things because I didn't put it in the budget to begin with. And you all, everyone starts the same way. Everyone starts with really fancy, amazing,
00:06:27
Speaker
Yeah, yeah, that's right.
00:06:34
Speaker
gear and editing NLEs and just fantastically cool gear and stuff and like a literal, if they're lucky, a Google Drive spreadsheet to do their budget.
00:06:49
Speaker
There's not an equal, you're not using the same high level tools when you first start out. No, it's so funny because that's the thing that keeps all the rest of it going. Knowing that you have some profit, knowing that you have your margin, knowing that you are taking into account things that happened in the past and being able to do it quickly because
00:07:15
Speaker
I mean, you're more likely to do it when it's quick. You are. If it's not like shit, man, I got 17 other things to do. And this is going to take me all day. Then you you're going to procrastinate and and coming in last with your budget to an RFP is a great way not to get it.
00:07:35
Speaker
Honestly, coming in first is the way to get it. If it's the first thing that client sees, your budget shows up, Johnny on the spot, and it makes sense and it looks nice. This is an incredible impression. It's the first thing they got back from you. It's way before the statement of work because that comes later. Really, the first thing is like, well, what do the numbers look like on this crazy project that we're talking about?
00:08:01
Speaker
Yep. And the more quick you are to deliver and the more organized you are, the client's going to see that as what you do. You deliver on time and well. So they're going to use that as an example for the work you're going to deliver.
00:08:21
Speaker
Or even if it's about what you're giving them back to the napkins. So say you don't even, you're just on the phone with them and you're just pushing around some numbers while they're talking because you know at the end of this conversation, you know what's coming up. They're going to say, that's so great, Max, that you guys are so, you're creative geniuses. We love all the work you do. But how much is this going to cost us at the end of the day? Seriously.
00:08:44
Speaker
And you kind of know that you could tell them, I'll call you back in three days. But you know that you kind of probably got to give them something right then to kind of keep them interested. And you've been feeling them out the whole call. You've been feeling them out. You've been listening to them. They threw something out. They usually will drop a hint.
00:09:04
Speaker
here
Flexibility in Budget Adjustments
00:09:05
Speaker
and there, there's almost always a hint of what that budget is gonna be. They mentioned a friends video they heard was 10,000 and they really liked it. Bingo. You just heard that $10,000 doesn't scare the shit out of them. And these are the cues that you learn to follow as you go, but to be able to even just push something around on a piece of paper so that
00:09:32
Speaker
even while you're talking to them on the phone, you kind of know, you know what, this is probably going to be around a $20,000 job or something like that. And that you're able to say at the end of the call, you know, you know, Susan or Gary or whatever, I think
00:09:47
Speaker
I don't know, I think we could get away with this with a two-day shoot. And we're usually about 10 grand a day. So I'm hoping that we can bring that together for you on this. And then they say, oh, well, that sounds interesting. Let's keep on pursuing that. Even if the budget winds up being twice that, you honestly kind of have to give them a little sugar to keep the conversation going.
00:10:10
Speaker
Yeah. So let's say, let's say I just got off the call with a client. I told them I'd have some numbers for them to look at by the end of the day. Where do I start? And what do I start sharing with them? Yeah. I mean, the trick is getting out of dreamland as fast as you can. So the phone call is generally like really exciting and the client's excited. You're excited. Everybody's excited. You're going to do some funny, interesting, moving, uh,
00:10:36
Speaker
exciting, use some different cameras. Hopefully, it's a kind of job that you're excited about. But I feel like on 95% of the jobs where I get a call, I'm pretty damn excited about it. Even if it's a small budget, I don't know, I just get excited. It's just fun to get paid doing what you love to do and it never gets old. If it feels like you're getting away with something, then you're doing the right job. That's what I've always said.
00:10:59
Speaker
And so, again, you just get that sense of like these guys are going to pay me to do some shit. And so, so I think it's the first step is getting out of dreamland and getting into reality and saying, okay, how can I
00:11:14
Speaker
How can I compare what they're talking about to something I've done before? Because that's really the only way you know. Let's face it, the first 10 jobs, 20 jobs you have in this industry, you probably won't make any money at all. There's just really almost no way that you're gonna make any money. You probably shouldn't make any money.
00:11:32
Speaker
You probably should just be out there blowing your client away and losing money and just getting a reputation for yourself. But eventually that doesn't go very far. And I think that's Jake, where you're talking about, are you a hobbyist, which you are at that point, by the way, or are you really in this to pay your bills, raise a family and, you know,
00:11:51
Speaker
whatever it is you want to make a feature film, just build a company, you know, whatever it is, you're going to something greater than just the sheer exhilaration of making a video and film. Yeah.
00:12:05
Speaker
And so I think it really comes down to the history and following your history. I mean, again, as I said, I think that the big thing was having written down, these are the elements that went into the last budget I did. How does this compare with this budget? And what am I looking at in comparison with that? And did I make any money that last time around?
00:12:32
Speaker
Yep. So you need to know some of the jobs that you've done before, especially the ones that are like this. You need to know, I really like what you said there. You need to know whether or not you made any money on that one. If you totally went over budget and you lost money, well, guess what? You're now going to know what other things you need to add to that budget.
00:12:51
Speaker
You're going to know you need to market up more. You're going to have new clues to really agree. You're going to have new clues, exactly. And you're going to know. And it's going to be more. I mean, the budget is going to be more when you go to that client that is like six months down the road as opposed to one month down the road. And they're going to say, well, wait, I know Bob. And he told me you did it for five grand. And now your time is going to be 10. And you're like, yes. Yep.
00:13:22
Speaker
There are new costs. There are things that you didn't include in the last one. Let's say I'm now remembered of all the things I need to put in that budget. I'm starting to put it together. How do I start presenting that to the client?
00:13:38
Speaker
I think that's a great question and I think the presentation of what you give them is everything and it doesn't have to be glamorous or you know really well formatted okay but I think it does need to be
00:13:53
Speaker
It needs to be inclusive depending on who the client is, right? Okay. So if we're talking about an agency, okay. And probably if you're new, you're not working for an agency. If you're new, agencies probably don't want to hire you because they're terrified of you screwing up their client
Handling Agencies vs. Smaller Clients
00:14:08
Speaker
relationships. So let's just assume that they are not agency and they are just sort of mom and pop companies. And that's generally where we all start. We all start making videos for smaller, you know,
00:14:20
Speaker
500,000, a million dollar small, medium businesses. And, and they, they don't, they don't really know if you gave them a super detailed budget, they're going to be like, I don't, it's like me going, get my car worked on. I don't look at like all the little rivets and, uh, you know, steering fluid and things they put in there. I just look at the end number and it's, it's that, it's that bottom line number that they're really watching for.
00:14:48
Speaker
It's like, what did you do? And what does it cost? If it's my car, I'm like, so you fixed the brake thing. And it was $900. That's all I know. I really don't care about all the middle, all the little line items. I just have no idea. I would say that you are
00:15:08
Speaker
worse off if you do give them a line by line because if they don't know what they're talking about, they're going to go through it. I'm sure everybody's experienced this at some point. They're going to go through line by line and say, well, what's this? Why are you charging me for two lights? Why am I paying $900 for a light? Why can I do this cheaper? They're going to nitpick you and you're going to get burned.
00:15:31
Speaker
you're going to get burned and it's just going to be brutal and there's just no point. But what I do think works for that kind of, let's say the non knowledgeable buyer, um, is to, uh, offer them some choices, like hopefully in your negotiations on the phone, the first time you got a sense of where they live and what they're willing to spend. And let's say you kind of feel like they're a $10,000 client. And so,
00:16:01
Speaker
what they're asking for is a $20,000 video. And that's typical. They have a number that they feel comfortable with, but they're asking for quite a bit more than fits into that. And so the trick at that point, I think, is I do think it's very worth your time to develop three budgets for a client like that to low the median, the high.
00:16:25
Speaker
and to aim below their number that you either you crock or you've actually heard from them or and then hit their number and then go above their number. And especially if they gave you a comp where
00:16:40
Speaker
they, what they're really wanting is much more. And you can say, well, here's, here's what you showed me. This is what you showed me is going to be a $20,000 job. Yeah. And here's why, but here's what I can do to you for you for 10,000. And also here's what I can do for five or on the flip side. Sometimes what you can do is if you think it's going to be a $10,000 job, you may present.
00:17:08
Speaker
an $8,000 budget, a $10,000 budget, and a $12,000 budget so that you show them the extra value they're going to get for $12,000, come up a little bit from your number, and you're going to get a lot more. And suddenly, that extra $2,000 is not going to sound so bad compared to $10,000.
00:17:25
Speaker
Yeah. And the places that I've seen that really work in the past and the time, the difference in my has often been around talent. Strangely enough talent is really expensive. Good talent is really expensive. And that's where the client doesn't realize they see something really nice and they, they shoot it to you and they say, I'd like something like this. And you look at it and you say, look at that talent. That is, that is like thousand dollar a day talent.
00:17:51
Speaker
Right. That is not a few friends of mine that I called and they came to be in it. These are like either like super good looking or super unique looking or a demographic that's hard to match. Like here in my town of Bellingham, when people want people of color and so forth, it's like you have to go searching for them because we don't have a lot of that in our town. And yet that brings a great deal of quality to the product to be able to get people of different like ethnicities and all kinds of things in there. But that costs more money.
00:18:21
Speaker
And so talent is one of those things where you can say, I can get you that talent, but it's going to be at this $20,000 level. But without that talent, it's going to be at this $10,000 level. And that's a really easy thing for them to see. And I've had them buy off on the higher budget many times. As you say, Jake, make it crystal clear, what's the difference you're getting with that upgrade? And you'll be amazed at how many times you get the upgrade.
00:18:50
Speaker
Exactly. Yeah. As long as you're doing your margins properly, that upgrade is going to pay. You got to do the percentage margins. Don't take it in the shorts yourself because they upgraded. Go ahead and mark up. If it went from a $300 expense to a $600 expense, still get your 20% on that expense. Exactly. Now, what if you're talking to an agency?
00:19:17
Speaker
so different because they know the costs already. They already have been through this probably a lot more than you and they've dealt with the market quite a bit more than you and so they're going to want to see a line item budget. They don't necessarily need to see markup so they definitely had ones that want to see them but they want to see a line item budget and that's where you
00:19:43
Speaker
The interesting thing here is that you're going to show them a line item budget, but at the same time, they're going to know the difference between your line item budget and the company that can't do what you can do creatively. They'll judge that on the markup. They'll be like, okay, so you want me to have a director and you're going to tell me a director is $1,800 a day.
00:20:11
Speaker
And yet I can, I know I can get a director for $750 a day, but your directors are better. And that's why we called you in the first place because we wanted that je ne sais quoi, that thing that your company brought to it, a hand crank, my old company, it was emotion, right? Like we really
Balancing Client Relationships and Honesty
00:20:28
Speaker
like,
00:20:28
Speaker
It was all about emotion and we could bring emotion where other people couldn't and so they would pay us more because they banked on the idea that we could bring in that emotion and they knew that was what was a value to their customer. They knew that's what their customer was hiring them to do is provide emotion in their production and so they were.
00:20:45
Speaker
Although they wanted to see the reality of the numbers and that's the difference. So you do have to give them more line item things. They want to see what they're paying the director. They want to see what they're getting for the camera. They want to see all that because they know it and they they love it. They love going through line by line, but it doesn't scare them as much.
00:21:01
Speaker
and they're not going to nickel and dime you as much over those items. They just want to see them, but they truly don't, you'll honestly wind up getting more money out of them because they, if you've established a niche and like, let's say like, you know, our friend Spencer here in town, he's like amazing at shooting mountain biking videos. Like I would pay him three times as much as some Joe Blow to shoot mountain biking video because he's fricking amazing at them and he knows what he's doing.
00:21:26
Speaker
Um, and so it's like, I know I'm going to get back from him this like super quality thing. Let's say I'm an agency that needs a mountain biking video. And, and so it's, you really, that's where like.
00:21:38
Speaker
what your relationship is with that agency and what your niche is with that agency comes into play. But don't be surprised they want to see line item and don't be afraid of it either. Yeah, definitely. Don't be afraid of it. And you know that they know what they're talking about, so they're not going to be scared away by the lines. And I'd say don't be afraid. Don't necessarily try to be the cheapest option. Exactly. I wouldn't even worry too much about providing them three options. I would go high.
00:22:05
Speaker
Yeah, I'd go high and I'd include a lot of things. I'd include what you really want because that shows them that you're thinking about all those things. You've done this before. You know what goes into a project like this. You're thinking of those things. You're prepared. Whereas this other company that is bidding to them
00:22:24
Speaker
They make him in a lot lower, but the agency is going to look at that and say, well, why don't you have these grips? Why don't you have this equipment or why aren't you, why are you only budgeting 10 hours for the producer? I've lost jobs because of that for sure, where we were trying to cut corners and then they caught it and then they didn't like it. Yeah.
00:22:43
Speaker
And we were trying to be like, let's be a little cheaper for them. And then they got scared because they're like, oh, you don't have enough producers on this. So obviously we're going to have to do all that work and we don't want to do that. Or, you know, and then also they're going to be more savvy to things like, oh, I see that you have, you know, a mini area on this. Well,
00:23:01
Speaker
Why don't we just do red? What would that cost? And so forth. And so they know what they're talking about. And they're going to be more likely to, if you do come in too high, they're going to be more likely to say, that sounds good, but what would happen if we did this? And maybe they'll try to come back. Yeah.
00:23:20
Speaker
And that's a good point, Jake, because the mom and pops don't know that. And if you come to them and they thought they were getting 10 and they got 15 and there's no other options, they're just going to be petrified and walk away. And you've lost that relationship. And they just, they didn't know. They just didn't know that there was, they don't know that there's another option. And by presenting them a low, medium, high, you're almost doing the negotiating for them. You're showing them that there are options.
00:23:48
Speaker
And also, you're also covering your ass when you deliver. And they're like, well, the acting seems kind of wooden. And you're like, well, remember when we decided not to hire the pro actors? Remember when you said you knew a guy that was going to.
00:24:02
Speaker
and we put your brother in it. Exactly. And that's what happens coming up the line. And that's why I say you do the SMB jobs a lot the first couple of years before you really land a couple of agencies. And I think that offering those three different budget levels, but then that again comes down to how fast can you churn them out? Because you can't have a budget
00:24:26
Speaker
taking you all day. We're all busy. We've all got shoots to do. In the beginning, we've got editing to do. When you're wearing all those hats, yeah. All those hats. You just can't have it take forever. You need the ability to make quick revisions, track your work, all that jazz. That's a good point. You should know how much time you want to spend on that budget.
00:24:50
Speaker
And I think a couple things go into that. You want to look at how big that job is, not just in top number, but in profit. You want to make sure that that's going to be a profitable job. And you want to see how likely you're going to get it. And I'd say spend, it's probably proportional to profit and probability. The more profit, more probability, more time you should spend on
00:25:18
Speaker
on that project and vice versa. And we need a formula for that, I feel. Yeah. We need to devise a formula that we can share with everybody that's like $20,000 profit margin equals three hours with a nine out of 10 probability. And I remember we were always trying to figure out this
00:25:40
Speaker
magic
Learning from Initial Losses
00:25:41
Speaker
formula. But look, at the end of the day, it's also going to work into how excited are you about the project, right? And like, but I do believe that the real critical thing is how well do you know this project?
00:25:55
Speaker
And in the same way that I said that the first time you're getting going doing work, you're not going to make any money. I would say that every time you make a leap to a new level of production. And I think that's what we're all doing every day. We're always making it every day. If we're lucky, we're moving to a higher level of production.
00:26:16
Speaker
and a budget and of like creative and all these things, every time you move to that new level, you're not going to make any money. And that's okay. That's really okay. As long as you're truly moving to that new level, the trick, what's not okay, is doing it the second and third time and not making any money. And you should be able to go back to your first budget and say, what did I do wrong?
00:26:37
Speaker
What did I do wrong? Exactly. And what was I not taking into account? And I remember the first time we did a quarter million dollar national TV spot for Zulily, at the end of the day, our margin just wasn't that great. It was like if we were used to making, I don't know, what were our usual margins on jobs?
00:27:01
Speaker
I usually we would spend no more than about 37 to 40% on the project costs but that was because we had a lot of overhead expenses that
00:27:13
Speaker
we typically didn't line it up in the budget, things like the creative director, sales. Yeah. So a margin of 60%, but take that with a grain of salt. That's- Take that with a grain of salt. However, that allows you to compare it against say the Zulily job, which had a margin of like 20%. And then you realize, well, okay, we didn't actually lose money, but we certainly didn't make money. And yet we've
00:27:36
Speaker
And it took a lot of, it took an all hands, all hands on deck approach. Working late nights, long nights, building huge sets, everything. And yes, everyone was proud of it and excited to do a national and see it on TV on, you know, NBC, CBS, ABC. But is it a way that you can go forward in the universe for a very long period of time? Hell no. And so it's, you know, when you get that next national and you're like,
00:28:03
Speaker
Oh, okay. Actually, this is how we have to do it. That really is the thing that I think never beat yourself up for not making or even losing a little bit of money when you jump to a new echelon. Just beware of the second and third time and just make sure you track that first job as carefully as you can so that you can use it for those because you will get called again. Once you've done one national, you'll get called for another assuming that you didn't, you know,
00:28:32
Speaker
completely pooch it. A lot of people do, frankly, and we should have a whole podcast on like doing national ads for the first time. And, you know, I've heard so many horror stories about people doing, you know, $600,000 jobs and going into debt, $600,000 on them and never existing again after it, or being loan sharks after you and all kinds of crazy shit. There's
Refining Costs for Profitability
00:28:56
Speaker
a lot of liability.
00:28:57
Speaker
Oh, definitely. Yeah, yeah. And another podcast on insurance insurance podcast on on on financing your clients, which is a horrible thing. Oh, that's a whole nother thing. Yeah. But back to your point of, you know, underbidding.
00:29:17
Speaker
kind of a point I'd like to make there is don't be too hard on yourself. If you lose a job because somebody came in lower, especially when you're going to that next level, because
00:29:31
Speaker
That other person probably was doing it for the first time. They didn't have a comp. They didn't know what all to bid and they're probably going to lose money and go make a note to yourself and go do a Google search on that company a year from now and see if they're still around because if you budgeted it properly and you didn't get it,
00:29:53
Speaker
that's probably a blessing because, you know, if somebody came in lower and they did get it, they probably didn't make any money. Hey, celebrate it, man. Like celebrate it. Like, Hey, Hey man, you, you got it. You won. Fantastic. Good luck. I hope, I hope you make that work. Um, but if you had, if you knew, for instance, even you knew the client and you knew what they were going to put you through and you'd already been there, uh, you know what, you know, and, and, and, and honestly, that's why, um,
00:30:22
Speaker
I think as your company grows, working with agencies can be a really great thing because they will honestly want to stick with you because you know what you're talking about. I've seen some people be very successful staying with an agency for a long time because that agency knows that they know what they're talking about, they deliver good work consistently, they budget it properly but not
00:30:48
Speaker
you know, they're not gouging the agency. So, yeah. Okay, well, there's another good example, Jake, is like, let's say you are working with an agency for a long period of time. Believe me, they kept those old budgets. They go back and they look at your line items from three budgets to go. And they wanna know why this director that was 1250, you know, three months ago is 1750 this month. So be very careful there.
00:31:17
Speaker
Be careful, but also that's another really good reason to use templates. So you're charging the same rates for the same people. If that was an agency template that you used and you pulled it up again, boom, your chances are that's going to be a lot similar line by line. You want to be careful about that.
00:31:38
Speaker
agencies will be looking for that. They'll be saying, we're giving you so much business. And by the way, keep that in mind, they are giving you so much business. So is it really worth it to say, I'm gonna go ahead and kick them up an extra 30% to lose them, take that into account because that might happen. And so just another really good reason for templating that budget and not racing
00:32:04
Speaker
through a new budget that's like you're new, this is my new, I make a lot of money budget that I just created that marks everything up by 75% and you drop that on them and they're like, what the fuck is this? And you'll lose them like super fast and they will just, they're, because they're looking for it, they know that you might be getting kind of comfortable with them and they like it, but they're wary of it with reason.
00:32:32
Speaker
It's the same as you and your vendors, you know, you and the people that you hire. Yeah, if they just suddenly came into you tomorrow and said, I'm another 50%, you'd be taken aback, too. You know, I've had it when you get a grip that is like $350 one day, and then like literally two months later, $700, and you're like,
00:32:52
Speaker
Are you seriously three times the grip you were? I know you were just coming up then, but jeez Louise, I'm also the guy that hired you and you were coming up. There's a bit of a relationship. Their prices aren't the same for everybody. Never think they are. I thought they were in the beginning when I first
00:33:10
Speaker
I thought everyone gets the same price. That's not really right. There's different relationships, there's different shades of gray with everybody and it is all about that. We've had lots of podcasts about all about the relationship with the client. Think about that first. Think about your relationship with the client. It's okay for your vendors to go up in price and it's okay for you to go up in price, just have a good reason and be very clear about that.
00:33:34
Speaker
So I think that one of the things we're saying here is be careful on those leaps from one style of video to another. The fastest way to start being profitable is to do a lot of the same size jobs and get comfortable with the type of job and a size of job that you know you make money at.
00:33:52
Speaker
and that you understand really well. Get that down. For us, it was like nonprofits. Like we did a lot of nonprofit work and I loved it. I loved nonprofit work and I understood the margins and we were just good with that. And then we were able to build off that to other things.
00:34:07
Speaker
And so it's like knowing one or two areas, and for some people it's explainer videos. For some people it is, you know, talking head and B-roll for corporate events. And for some lucky fuckers out there, it's, you know, action-adventure sports things.
00:34:26
Speaker
Even like my friend Spencer, it's like, sure, he's doing mountain biking videos, but believe me, he knows what the market will pay for a mountain biking. I've talked to him about this. He knows what the market will pay for the mountain biking video and he knows what he can spend on making it. And so he's found his place in that universe. And then you can build from that and you expand from that and say, well, I'm going to make mountain biking videos. That means action adventure. I could also make ski videos or I could do these other things.
00:34:49
Speaker
And so just be careful of making these humongously quantum leaps from one style to another, say, from nonprofit to fashion. You probably don't know what fashion costs to produce. Do it, because that's what keeps life interesting. But just be careful when you make those transitions. And don't beat yourself up too much as you're doing it. Be careful of what you don't know when you make a switch, or when you go after a larger project, or even if it's in the same niche.
00:35:19
Speaker
yeah yeah so I you know let's kind of wrap it up and think about like I think, for me, the number one.
00:35:29
Speaker
thing is don't take this not seriously. Don't just knock off the budget like it's bullshit or it's just a carbon of what you've done before or whatever you want it. You want to give it enough time to be serious but not too much time to like kill you from doing all the other work you got to do when you only have a 25% chance of landing the gig generally anyway.
00:35:51
Speaker
But be honest with yourself. That's the number one thing. Be honest with yourself. And the only way you can be honest with yourself is write down the numbers that the thing cost you the last time and compare it with this time and add a little bit on for your knowledge and expansion of your universe. But check those margins. And I'll tell you, one way to go is
00:36:18
Speaker
If it's within the world that you know, and it's a little unclear, expand your margin a little bit to cushion it. So if there are some unknowns on this project, you need a little bit more cushion, a little bit more markup. I think so. Yeah, I think so. If it's within the world that you know, if it's within the world you know, like let's go back to our nonprofit example. If it's like a nonprofit video, but they're like, well, we kind of want to try doing this all cinema verite where you just follow people around.
00:36:48
Speaker
I've never done that before. I don't know what that looks like. Be generous with yourself. Just say, I'm guessing it'll be this, but let's give myself 10% to 20% more on top just because I don't exactly know what that looks like. And so
Introduction of Pipeline's Budget Builder
00:37:04
Speaker
I'd say, you can't do that when you're making a quantum leap, like non-profit the fashion video.
00:37:11
Speaker
but you can do it when you're still operating in the world that you know. The other thing is to be honest with yourself is use numbers that you know to be true, use your past numbers, pull from a template, a template, a past budget, something that has been out there before. Oh, I really like that. No numbers that you know to be true.
00:37:31
Speaker
put in what just needs, what the number needs to be in order to make the budget work. It's gonna come back and bite you because you're not gonna find that director at 500. Put in the number that's true that you've done before.
00:37:48
Speaker
I mean, look, at the end of the day, the client hires you for a number of reasons. The first thing they saw was your work on your website or something that they saw that you did for someone else. At that point, they have no idea what you cost. They just want to talk to you, just want to get you on the phone, they're excited. But then it really is, what they perceive is the value of your skill, going to match what they have in cash to pay you.
00:38:12
Speaker
And a lot of times, frankly, it's a limited amount. They don't have unlimited funds to just keep going. So really, this is the critical part of the business is matching what you've put out there as your skill set with what their numbers are. And so the budget is that absolute crux where that happens.
00:38:35
Speaker
Uh, last two things I would, I would personally add are, um, like you were saying, be honest with you. One of the things about being honest with yourself is budgeting for every project. Don't just assume that you know what that project is because you've done something similar, sit down and pull from that template, put a budget together. Yeah. Remember what worked and what, what didn't work on that last one and adjust accordingly.
00:39:01
Speaker
Then, when you're budgeting for every project, somehow or another, check your margins to make sure that you're still making the profit that you set out to, that you budgeted for. Whether that's doing it per budget, keeping some kind of, how did I do against this budget? Or whether that's just checking your overall company profit every month. One way or another, make sure that you are
00:39:30
Speaker
making the profit you set out to so that if you're not, you can adjust accordingly. Yeah. And now is when I'll do the plug for pipeline budget builder, because I mean, this is why we went back and we now are offering just the budget builder $10 a month.
00:39:47
Speaker
Because we think that, you know, that is such a critical tool in your toolbox and and yeah you can use Google Drive, you can do all that, but if you want to visual and visual is really nice to be able to just visually see how it all adds up.
00:40:01
Speaker
focused way of looking at your budgets that's easily repeatable and very fast to produce. $10 a month, man, give me a break. This is going to be the difference between you making $10,000 and $100,000 in a year generally.
00:40:18
Speaker
is what happens at this critical budget thing. So we do encourage you to give it a look, go to videopipeline.io, take a look at our budget builder. We have actually taken down all of the other aspects of our software to rework them towards a financial angle. So the budget builder is all that you can sign up for right now.
00:40:37
Speaker
But there's a free trial we really encourage you to do it. And it's,
Farewell to Jake and Future Endeavors
00:40:42
Speaker
it's been the best part of all of us that we've put into that from our friend Julian that helped us with the visual design of it over a moment out film we're going to have him on the on the show in a couple weeks to Jake who put in all of his
00:40:58
Speaker
long nights struggling over budgets and struggling over profit and so forth. To me, trying to run a company, trying to make some money and yet do what I love and make the right choices strategically that need to happen quickly because God, you all know they need the budget yesterday. They all say the same thing.
00:41:16
Speaker
This is so great, but we have to make this decision in two days and you have to process all this information so quickly. The only way to do that safely is with old budgets and pipeline allows you to create as many budgets as you want, as many revisions as you want, as many templates as you want. I really encourage you to go give it a look. There really isn't anything like it in our industry right now. Don't take it for granted. Take a look at it. It's a budget tool I wish I always had.
00:41:45
Speaker
Me too. Yeah, I know it's again goes back to like Royal Tenenbaum's like when Royal Tenenbaum himself is like, I wish I was a Tenenbaum too. Yeah. But yeah, and then again, and then I just want to say goodbye to Jake. Goodbye, but not
00:42:03
Speaker
What do they say? So long, not goodbye. I don't know. But it's been wonderful having you on the pipeline team for the last three years. And I can only hope that someday we can get you back when the company is just blowing up because everyone realizes what we're creating. And it's so exciting for everyone. But until then, I wish you well at the wealth management firm that you're going on to. We're dealing with people with real money. It's going to be so exciting.
00:42:32
Speaker
And so, it has been just a remarkable honor to work with you. And I know that all the folks that have worked with you in the industry feel the same way. And so yeah, so thank you so much for everything. Thank you, I really appreciate that. And I've had a lot of fun these last few years and I look forward to still being connected to the company, so.
00:42:55
Speaker
Yeah. Oh yeah, absolutely. Well, you're a shareholder, so you're not going to be. So yeah, so anyway, everyone have a great, have a great week and we will talk to you later. Thanks for listening to our podcast and be sure to share it with your friends and be sure to check out our software at videopipeline.io. Thanks Max.