Based on the lessons I’ve learned by running a business, I have written several articles on this blog pertaining to entrepreneurship. Earlier this year I wrote an article providing tips on what you need to have in your contract before starting any job. As I looked back over that list, I realized that I missed something very important. What happens if your client decides to pull the plug before the project is finished?

“No problem,” you say, “my client paid me a deposit up front.” That may be true, but a deposit usually only covers certain up-front creative costs. Let’s say the time you have invested into a particular project now exceeds the amount of the deposit. Let’s assume that you are well into phase two, when all of a sudden, the project is put on hold. Your client becomes unresponsive. When he/she does finally return your calls, he/she says that the company has been forced to table the project. So, how do you recoup the cost of your time up to that point?

Since this has happened to me before, I now insert a clause into each of my contracts which says something like, “Should Client terminate the project before its completion, Client is responsible for paying Company all unpaid costs incurred in the production of this video up to the date of termination.” By inserting this sentence, I can cover myself in case my client decides to shelve the video project before it’s complete. The wording of your contract ultimately might be a bit different from mine, but the point is to make sure that you get paid for your time.

Running a successful business (whether you are a sole proprietor, small business, or freelancer) depends a lot on exposure. Visibility is incredibly important, because when a company is in the market for your services, you want to be the first vendor on the call list. Sometimes, when you are first starting out, gaining exposure means conducting business trade-offs. For example, you might shoot some photos for a local publication in exchange for ad space. You might design posters, ads, etc. for a local event in exchange for sponsorship recognition. Nothing is wrong with this approach, but it’s important to be very selective for whom you do these trade offs. If you aren’t careful, you will find that you are spending a lot of time and creative energy for little in return. Sometimes the exposure pays off. Sometimes it doesn’t. The trick is to learn how to find those trade-off opportunities that will maximize your publicity. You also want to be aware of those groups, businesses, non-profits, etc. that are only interested in how many “freebies” they can get out of you. Doing favors is fine. Donating your creative talents to a worthy charity is fine. But ultimately, you have to pay the bills and you have to make a profit. So it’s important to strike a healthy balance between the two.

In the past, I have been asked to produce video content for various non-profits. Many times, these non-profits have little or no money allocated for video. I try to help out when and where I can, and I have learned that if you are willing to make special arrangements for them, then they are willing to negotiate with you, so that both parties can benefit. For example, a few years ago I did some video production work for a non-profit. I was willing to do the job pro bono, hoping to gain some exposure among local businesses. Last year, the same non-profit came to me with two video projects in mind – First, they needed a promotional video for an annual fundraiser. Second, they were interested in producing some PSAs. I worked out a deal with them that I would produce the promotional video for free and in exchange they would pay me my normal production rates for the PSAs. It was a deal that benefited both my business and the non-profit.

I would encourage all of you to be charitable, but I would also encourage all of you to be business savvy as well.

I’ve been drafting contracts recently for some new projects, and it got me thinking not only about the importance of having a contract, but the value in having the right content written up in your contract. You need to make sure that your contract covers any possible variable, so that if conflicts arise, you and your business will be covered. Of course, knowing exactly what to include can be difficult. After all, we that work in the production industry are creative folks, so the administrative tasks of running a business can be a challenge. Based on my experiences, here are a few guidelines on drafting a contract.

1. Describe the scope of the project. This may sound like a no-brainer, but it’s very important. You need to make sure that both you and your client are clear on the project as a whole. What is this video for? What are the goals? What will the video hope to achieve?
2. Based on the scope of the project, define the specific services you will perform so that the project responsibilities are fulfilled. Make sure you spell out exactly what you will be doing over the course of the production. Also spell out what you need from your client. Sometimes, in order to complete a video, I need my clients to provide me with still images, company logos, backgrounds, fonts, etc. In any contract, both parties should be clear on what their individual responsibilities are.
3. Specify the video project’s budget. Verbage is important here. Don’t say, “the budget for the video production services described herein are estimated at…” Never estimate in your contract. Be specific. Just write in what the budget will be.
4. Specify how much time you will be investing in the video. Every budget I draft is based on a number of factors, including the amount of time I plan on spending in pre-production, production, and post-production. Place these figures in your contract somewhere. It can read something like this, “The above budget includes X hours of pre-production, X hours of production, and X hours in post-production.  Should Client request changes to the project and Company’s time exceeds the budgeted time, Client agrees to pay Company its standard rate of X in order to complete the changes.” This particular clause covers you in case you get into production and your client starts making a lot of unexpected changes. If you aren’t covered in this way, you may find that you’re spending a lot of extra time on the video and not getting paid for it.
5. Define the payment schedule. I always ask my clients for a deposit before I start work on any video project. This money helps to offset initial time invested in the pre-production phase. I also make sure to specify in my contracts that deposits paid are non-refundable. This covers me in the event that a client pulls the plug on the video. In addition to the deposit, you need to specify project milestones at which time additional payments are due. For example, I usually ask my clients for a second payment after the video shoot, with final payment due after the video is approved.
6. Insert a clause to cover late payments. To help my cash flow, all of my invoices are net-15. However, net-30 is more realistic. Clients will often push that to net-45 or even net-60. To ensure that you receive payment from your clients in a timely fashion, insert a clause indicating that a late fee will be applied to any balance that is more than 30 days overdue. This will protect you in case your client is negligent about making payments.
7. Specify the delivery date. Make sure both parties understand when project milestones are supposed to take place, including delivery of the final video. Now, look back to #3 on this list. It’s important to remind the client (within the context of the contract) that any delay on their part in getting necessary materials to you will delay the completion of the video. You don’t want to be locked in to a deadline on the 10th of the month when you’re in your office on the 8th still waiting for your client to send photos, logos, fonts, etc.
8. Be sure to retain certain rights to the video. Every video completed is an addition to your demo reel that can possibly help you land the next job. So, in your contracts, specify that you retain the right to use the final video for display, publication, exhibition, awards, etc. for your own promotional purposes. I have never had a client that had a problem with this and it grants me the permission to show my work to other potential clients.

Working in video production as an independent professional or business owner can be a trial-and-error existence. Mistakes will be made and hopefully, lessons will be learned. The way I write my contracts is based on my experiences as a professional producer/director and business owner. Hopefully, these insights will help you in your own ventures.

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Based on my last post, I received another question regarding clients and client relations. My last post discussed those who like to include a little too much information into their videos. This particular question focuses on clients who can’t stick with the shooting schedule. Here’s the question:

My client is very knowledgeable about his business, but won’t follow a cut sheet to save their lives! We’ve been there to give directions and they are great about that. However, any general advice on how to shoot this smoothly (even w/o the cut sheets) so the post production isn’t a hair puller?

Let me first say that video shoots rarely stay on schedule. Once you get on location, things can get shuffled around and your day can run late. So, don’t panic if you’re at the end of the first day and you haven’t accomplished all that you hoped. I have written some articles on this blog that discuss shooting schedules. Hopefully you can find some valuable info in my archives that will help you schedule your video shoots.

Second, when you’re talking to your client about the shooting schedule, try approaching the subject from a financial angle. Staying true to the shot list will help everything run more efficiently, which will save your client money. I always tell clients that spending the time in pre-production to create and maintain a solid shooting schedule is vital to staying on budget.

Third, realize that many times you will simply have to “go with the flow.” As I said earlier, things fluctuate. Often, the activity on location will dictate how and what you shoot, not the other way around. For example, while working on a video project for a manufacturing company, I simply had to shoot the action as it happened. I couldn’t tell the foreman, “Hey, we need to shoot ‘X’ at station 2 right now,” because the manufacturing process has its own schedule. Sometimes there was no activity at station 2. I simply had to stay flexible and go where the action was. It did mean I had to jump around quite a bit, but that’s part of the documentary process. Sometimes it can’t be contained in a nice, neat shot list.

If you find that you are shooting your project in this style, remember to do one of two things (doing both would be even better):

1. Maintain a running log of what’s been shot
2. Slate everything (simply write down on a piece of paper what the camera is looking at, hold it up in front of the camera, and film it for a few seconds, just for reference).

Having a reference marker in your footage will help tremendously in post-production. That way, your editor can easily match up your shot with what’s mentioned in the script. Let’s say your video is for a drilling company and the script reads, “With our new, state-of-the-art Hole-Maker 9000, we can…” Well, if your editor has hours of footage showing different types of machinery, how is he/she supposed to know which piece of footage is the Hole-Maker 9000?

Yes, staying on schedule will make everyone happier and it will keep production costs down, but remaining open to new possibilities means that you may find a great storyline when you least expect it.

Video production is an industry full of variety. In my career, I have covered several different businesses, topics, people, and places. Browse through any video director’s client list and you will no doubt see a broad spectrum of projects. However, there may come a point when you are approached by one of your client’s direct competitors to produce video content. Should you take the job or should you politely refuse because of your existing relationship?

The answer to this question depends on a number of factors – most importantly, the nature of the relationship with your existing client. Here are some things to consider:

• If you signed a non-disclosure agreement with your client, then legally, you might not be able to accept a job from a competitor.
• If you signed some kind of non-compete clause, then you probably won’t be able to take the competitor’s job.
• Let’s suppose you produce a lot of content for your client on a regular basis. And let’s suppose each video requires you to be out on location meeting with your client’s vendors and other people your client does business with. Over time, these vendors might come to think of you as part of your client’s business (even though you, in fact, are an independent contractor). If those same vendors see you representing a competing company, they may take offense and the credibility of your first client could be shaken.
• If your client considers you as their “go-to” guy/gal for production work, they may get their feelings hurt if they realize that you are doing work for their competitor. In which case, they may not want to hire you for their next project. Be careful not to burn any bridges.

Ultimately, the choice you make should be handled on a case-by-case basis, because every situation is different. Obviously, if you have only produced one video for a client, and that project is now five years old, it’s probably okay to accept a job from a competitor.

It also might be helpful to address these concerns with a new client before the first project gets underway. If the new client is looking for a long-term relationship, then you probably need to discuss any non-compete policies the company may have. I know it’s tempting to jump at a good offer when it comes your way, but more important than new jobs are the relationships you have established with your existing clientele.

So now I’ll open the floor for discussion. What would you do in a situation like this? Do you agree or disagree with the considerations mentioned in this post?