Budgets keep video productions in line and on time. Learn how to develop professional budgets, quotes, and proposals for any kind of shoot, and transform those estimates into invoices.
- Hi, my name's Rich Harrington, and welcome to this course on video budgeting. We're going to take a look today at the process of developing and actually putting together budgets for video projects. Now this will work quite well for those of you working professionally in video production as well as if your company needs to produce a video. Additionally, if you work in other related creative services like photography or graphic design, you'll find a lot of the skills that we cover are quite applicable. To give you a little bit about my background and why I'm qualified, let me just walk you through what I do and my company.
I'm the founder of RHED Pixel, a visual communications company. But along the way I've also worked with a startup called Piqsure and I am the Publisher of Photofocus.com. I make my living regularly being a video editor and a director for video projects as well as shooting photographs. Now, I feel like I've got a pretty good handle on the creative side of things. Many of you have probably watched some of my online classes or read books that I've done. But what most people don't know is that before I ventured out and founded my own business, I really went through the somewhat painful process of mastering business so that I could be more successful as I started to take risks.
I'm certified as a Project Management Professional by the Project Management Institute and this allows me to take a bit more of a structured approach to creativity. I put this in place at RHED Pixel which is a visual communications company located in Washington D.C. For us, the company's been around since 1999 and the bulk of our work is full service, delivering finished video projects for customers. But we also do a lot of support to other professionals who shoot in our studios or use our crews for certain projects. We've won a Cine Award which is a fairly prestigious honor in the video industry.
And we offer a wide range of video, interactive, and multimedia services. Now that's my background and I'm going to use this as I start to explain a real-world project. Later today, we're going to take a look at a TV commercial that we produced and I'll do the budget with you and show you how it all comes together. Now there are some objectives for this course. So what are you going to learn? First up, many people see budgeting as a black art. They just sort of guess and they really think there's a lot of mystery to it. But budgeting is quite simple.
In fact, it's a lot just like going to the store with a shopping list. If you do it right, it's just a logical approach of breaking down what you think is going to happen and what those things are going to cost. A lot of folks rely on a BONSOP approach. This is back of napkin, seat of pants to craft their financial plan. Simply put, many people just guess. They put down a number that they think the client will go for or they do this the wrong way. I've worked with people who simply said, "Well, what do I need to make my N nut this week? "What's it going to take to keep the company afloat?" And they budget that way.
Budgeting is all about getting paid for the work that you do. And when you understand a project and you think it all the way through, it's really not that difficult. I'll share with you a very logical and straightforward approach in this course. Simply put, it doesn't have to be guessing. It doesn't have to be a black art. It comes down to a really straightforward process. What you really need to consider is breaking down the project into a practical budget. This means that we think about what are all of the steps, essentially a work breakdown structure.
Then we identify the end deliverables. A deliverable is simply something that is tangible that you're going to give to the client: a service you're going to deliver or the end product. Once you can measure these, these are going to drive what it's going to take to pull it off. This is the key to being able to decide when the project is complete and what you should be paid. We're also going to take a look at some strategies for estimating time and labor. Now in the old days, it was possible to often do work as time and materials and occasionally those contract types still exist.
But for the most part these days, the world has moved to fixed-price contracts where it's important that you lay out a clear scope of work and what that work is going to cost. Clients don't like a lot of variety or unexpected charges. So it's essential that you're able to identify what is the work that's going to get done and really have some good estimation tools. I'll share with you some practical easy ways to do this, particularly when you're working with creative professionals who aren't always the best at estimating their time. We've got a lot to cover but let's move on and discuss a little bit some of the background information you should know about your organization or your needs so you can get the most out of this class.
- Evaluating outsourcing and partnering options
- Setting your rates
- Incorporating material and overhead costs
- Scoping the project
- Estimating the production time
- Collecting data with time tracking
- Creating a quote or proposal
- Setting payment terms
- Creating an invoice with Word or Pages
- Dealing with billing and collections