Slide 1 SO YOU THINK YOU NEED A LEGAL VIDEO BUSINESS PLAN Bruce D. Balmer, MBA, CIRM, CLVS, CCVS, CME Slide 2 SO YOU THINK YOU NEED A LEGAL VIDEO BUSINESSPLAN - OVERVIEW This class is designed to cover the high points and the tripping points in creating a business plan for a legal video company The class will not present a template of a business plan. No worries: the Internet has them by the bucketful The class will cover how to strategically think about your business and it s direction. PLEASE INTERUPT AND ASK QUESTIONS! I m going to be interrupting your sleep and asking you to participate consider it payback Slide 3 WHAT IS A BUSINESS PLAN? A business plan is a formal summary of your business from: An offerings perspective An operations perspective A financial perspective An organizational perspective A marketing perspective It is typically used to secure capital from investors or from banks Even if it s just used internally, it can be used by legal videographers to determine how to approach their market in a systematic and managed manner
Slide 4 THE SEVEN PITFALLS OF BUSINESS FAILURE AND HOW TO AVOID THEM BY PATRICIA SCHAEFER 1. You start your business for the wrong reasons 2. Poor management 3. Insufficient capital 4. Location, location, location 5. Lack of planning 6. Overexpansion 7. No website (a.k.a. no market presence) http://www.businessknowhow.com/ startup/business-failure.htm Slide 5 WHY DO A BUSINESS PLAN? It causes you to think through your entire business in a careful and strategic manner It forces you to evaluate your current situation, which is unique to you It encourages you to do your due diligence without spending money Spending money without doing due diligence is extremely easy to do in legal video It makes sure you don t plan to fail by failing to plan Slide 6 COMPONENTS OF A BUSINESS PLAN Description of the business, vision, goals, and keys to success Work force needs Potential problems and solutions Financial: capital equipment and supply list, balance sheet, income statement and cash flow analysis, sales and expense forecast Analysis of competition Marketing, advertising and promotional activities Budgeting and managing company growth The Seven Pitfalls of Business Failure and How to Avoid Them, Patricia Schaefer, ibid
Slide 7 COMPONENTS OF A BUSINESS PLAN SWOT Analysis Provides information for many aspects of a formal business plan Can be provided as a summary attachment Is not specifically necessary in a formal document, but is absolutely vital in an informal document being done for your own use. Slide 8 SWOT ANALYSIS Strengths What do you or your company bring to the marketplace? What makes you or your company unique and add value? Resources, skills, location Weaknesses What do you need to be successful, with respect to resources, skills, markets, that you don t have? Also known as barriers to entry Opportunities What markets or services are you uniquely positioned to exploit? Threats Who or what can blow your plan to bits? It s not just the obvious stuff, like changes in technology or local competitors. It can include government or legal issues, national firms, unavailable resources, relationships Slide 9 FINANCIAL STATEMENT What you can afford How much money do you have access to, right now, to start your business? How much do you need from outside sources? What your startup expenses are How much capital are you going to spend before you start making any profits in the profession. What your anticipated operation costs are All those things you don t think about, including professional services, accountants, E&O insurance, accounting software What your anticipated two-year cash flow is All the ins, all the outs Most companies fail within the first two years due to a lack of capitalization and worst-case scenario planning Useless to plan longer you re not that good
Slide 10 Vision Statement Strategic, 10,000 foot global viewpoint of what your company, or you yourself, are attempting to accomplish in the marketplace Provides a direction for the company s purpose and motion Think sun no matter where you are, everyone knows where the sun is Helps you make decisions when there are conflicting directions to move in More useful when many people are involved Provides the long view perspective Slide 11 Mission Statement Tactical, 1,000 foot viewpoint of how your company plans to accomplish the vision in the marketplace, a.k.a. Business Philosophy What markets are you pursuing? Slide 12 THELEGAL VIDEO MARKET SPACE Trial Presentations Day In The Life Video Picture - in - Picture Video Depositions Drone Video Site Surveys Settlement Brochures
Slide 13 Mission Statement Tactical, 1,000 foot viewpoint of how your company plans to accomplish the vision in the marketplace, a.k.a. Business Philosophy What markets are you pursuing? What revenue streams are you going after? Slide 14 REVENUE STREAMS Advocate Encoding Video Catch Trial and Deliverables Preparation Streaming Release Syncing Editing Video Slide 15 Mission Statement Tactical, 1,000 foot viewpoint of how your company plans to accomplish the vision in the marketplace, a.k.a. Business Philosophy What markets are you going to pursue? What revenue streams are you going after? What are your order winners?
Slide 16 ORDER QUALIFIERS VERSUS ORDER WINNERS Order qualifiers are criteria that must be met to provide value in your market space Order winners are criteria that retain clients for the long run Order qualifier Capture audio and video Order winner(s) Capture audio and video in a professional manner for a competitive price Deliver anything the client wants quickly Deliver high end services to plaintiff attorneys Any of these statements may be order winners for your market. They probably don t all apply to how you approach your business. Slide 17 You can only satisfy two out of three Price Speed Quality/ Flexibility The Order Winner Tradeoff Slide 18 We encode MPEG-1s And MPEG-2s Live in the field We deliver {DVDs} at the depo Speed Price Quality/ Flexibility We deliver anything the client wants in 24 hours We focus on delivering synced {MPEG-1s} WEcapture HD and deliver really great SD The Order Winner Tradeoff
Slide 19 Mission Statement Tactical, 1,000 foot viewpoint of how your company plans to accomplish the vision in the marketplace, a.k.a. Business Philosophy What markets are you going to pursue? What revenue streams are you going after? What are your order winners? Speed of delivery Flexibility / product quality Low price You can satisfy two out of three Slide 20 Principles Operational, 100-foot viewpoint of key operating rules you will use to run your business. What specific rules do you implement to accomplish the mission? What kind of equipment do you buy? Low cost to client does not always mean low cost equipment; it may mean taking many low paying jobs to offset higher acquisition costs How do you bill? Extend credit? Process credit cards? How do you process jobs? When do you say no to a job? When do you add services? When a client asks? Or when there s an opportunity in the marketplace that fits your mission? Slide 21 Vision and Mission statements sit on the wall and create to act as a beacon for anyone who works there or visits. They provide a clear direction in which the company is heading, no matter who looks at them Principles give you clear direction of how to accomplish the Vision and Mission in the day to day chaos of making decisions concerning your business When do you say yes. When do you say no. When do you say maybe.
Slide 22 MARKET SUMMARY Using the SWOT Analysis, summarize your market for someone who does not know Legal Video. Who are your customers? Law Firms Court Reporting Agencies Other Videographers Who are your competitors? What do you know about their market share? What is the pricing structure for commonly sold products? What might you bring to the table that makes you different or necessary? Slide 23 OPPORTUNITIES Using the SWOT Analysis, clearly identify what problems exist in the market and how you can solve those problems Location Coverage Pricing Types and levels of service Etc. Slide 24 POTENTIAL OPPORTUNITIES Video depositions Video encoding Video editing Video syncing Day in the Life Settlement brochure Web streaming Independent medical examinations Witness preparation Mock trials Site examinations Picture in Picture Catch and Release 24-hour Expedite
Slide 25 WHAT PRODUCTS AND SERVICES ARE YOU PREPARED TO OFFER? Your capital purchases are based on what you plan to offer now and over time Knowing what you plan to offer and when you plan to introduce the offering provides a timeline for purchases Your technical needs will be driven by your product and services offerings Slide 26 OPERATIONS WHAT TASKS NEED TO BE PERFORMED? Tasks Purchase materials and equipment Paperwork preparation Video capture/archiving Producing deliverables Invoice customers Collect checks Pay vendors Potential Titles Product development IT Management Marketing Scheduling Bookkeeping Production Slide 27 OPERATIONS WHO NEEDS TO PERFORM THE TASKS? Job titles (see previous slide) Number of employees Pay structure Training requirements Outside professional services Accountant Lawyer Insurance agent If not you, then who?
Slide 28 FINANCIAL Three unique components Capital requirements What do you currently have? How much more do you need? Annual sales forecast Includes pricing considerations Annual expenses Direct costs Manpower Materials Machines (equipment) Indirect costs Insurance Rent Salaries Marketing Time-phased forecast Slide 29 SOME QUICK COMMENTS ON PRICING Your total costs are different than everyone else in the business. You have access to the same prices on the internet for equipment and outside services like syncing You have unique overhead and labor expenses Building, insurance, accounting, etc. cost different in different locations South Carolina and New York do not have the same living expenses! You can ask others how much they charge for a good or service. You have no idea, unless you do a financial statement, whether you can make money in legal video at someone else s market price Relying on others to set your prices will make your success or failure based on other people s approach to the market. Spend the time understanding how to price services and goods so you know if you can compete at the market price in your unique market. Slide 30 FINANCIAL STATEMENT 2015 Jan Feb Mar Apr. Total Revenues Sales Other Income Fee Refunds Total Revenues Cost of Sales Purchases Salaries & Wages Gross Profit Revenues Cost of Sales - Expenses Commissions Marketing Travel Insurance Equipment Taxes Office Expenses, etc. Total Expenses Net Income Gross Profit - Total Expenses SPENDING SHOWN OVER TIME
Slide 31 REVIEW OF BUSINESS PLAN Description of the business, vision, goals, and keys to success (Vision, Mission, and Principles, Opportunities) Work force needs (Titles and Tasks) Potential problems and solutions (Weaknesses) Financial: capital equipment and supply list, balance sheet, income statement and cash flow analysis, sales and expense forecast (Financial Statement) Analysis of competition (Threats) Marketing, advertising and promotional activities (Have a website) Budgeting and managing company growth (not covered and not necessary for a startup) The Seven Pitfalls of Business Failure and How to Avoid Them, Patricia Schaefer, ibid Slide 32 HYPERLINKS FOR FORMAL BUSINESSPLAN TEMPLATES GOOGLE: BUSINESS PLAN TEMPLATES Writing a Business Plan Guidelines ($$) http://www.entrepreneur.com/formnet/form/1177 Finish Your Business Plan ($$) http://www.growthink.com/products/vsl-business-plan-su Bplans Business Plan Template http://www.bplans.com/business_plan_template/ Slide 33 SO YOU THINK YOU NEED A LEGAL VIDEO BUSINESS PLAN? Bruce Balmer, MBA, CIRM, CLVS, CCVS, CME legalvideo@compuscripts.com QUESTIONS?