In case you considered the grueling start-up of a prodco – chock full of long hours and wearing multiple writer, editor and producer hats – the hardest part of growing a company, think again. Most admit the toughest stage in a prodco’s existence actually comes later, when it is producing more than 100 hours of programming with revenue in the US$12 million to $25 million range. What’s especially tricky at this stage – when there may be over 100 employees, a facility, and a more formal organization – is managing growth. With the mom and pop stage a distant memory, success depends on more than just entrepreneurial passion and long hours; skilful decisions have to be made about how to expand the company.
At this point, you have to consider how to delegate responsibilities while maintaining production quality, and how to build departments that can fluctuate as production volumes do. Atlas Media founder and president Bruce David Klein, whose own New York-based company aims to triple the size of its development department in the next year, has recently faced all of these issues. In expanding Atlas, Klein says the two main questions were: ‘How do we grow our core business?’ and ‘What new, but related, business opportunities are out there for us?’
It’s also important to contemplate what’s realistic in the short, medium and long term. Sounds basic enough, but it’s hard to think ahead when you’re focusing on the day-to-day running of a company and its productions. Still, make the effort to think clearly and honestly about your company’s potential growth, and what the opportunities are.
Here are some more tips from the pros on how to prepare and execute your company’s growth:
1. Don’t rely on the tried and true
Sure, you may have strong repeat business from networks and distributors, but you don’t want to assume you’ll secure certain amounts of business from returning clients. It’s wise to cover your bases and scope out new areas of opportunity.
While you’re doing this, says Nick Catliff, MD of London-based indie prodco Lion Television, make sure you don’t spread yourself thin in either production or development. He’s seen many indies do so over the years, and it doesn’t end well because they either stop serving the clients they’ve been working with regularly or fail to develop programming for new broadcasters.
To help build relationships with new contacts for Lion Television USA’s New York office, Christy Spitzer was recently hired as its director of development. The arrival of two new full-time executive producers has also bulked up its development department, says Catliff. This frees up Tony Tackaberry, who runs that Lion office, to be more involved in forging relationships, and the overall development and new ideas.
2. Make every second count
With all of this work building new relationships and keeping existing clients happy, deciding how to best utilize your time and staff is crucial. Determine how much time you’ll spend chasing the big, valuable projects (which, if they don’t come off, leave you with nothing), and how much you’ll spend chasing everything else. Observes Stephen Lambert, chief creative officer at RDF Media Group, ‘you’ve probably got less time and fewer resources devoted to winning the big, valuable project. Getting that balance right is always tricky.’
3. Look in the mirror
In the preliminary stages of expansion, ask yourself some basic questions, the answers of which will become the basis of a business plan. These questions seem obvious, but they tend to slip through the cracks during frenzied production schedules. Klein recommends asking: Who are we? What are we good at? What do we love doing? Where do we make and lose money? What are our goals? How important is money to us? Are we risk takers by nature? What is our company’s dna that needs to be passed on to the next generation?
4. Ready, aim, target
It’s smart to set budget and revenue targets every year. This allows you to measure where the company is against its goal at any point during the year. They’ll also act as a road map of projects you have to land and go into production on by a certain period of time to hit your financial targets. Says Catliff, ‘At any one time, we’re looking at our financial year, and we have projects in production: those that are confirmed are definitely going to happen; and then those we think are going to happen within that financial year… That’s what any sensible company would do – it doesn’t matter if you’re making television shows or selling sandwiches.’
Have a clear idea of what you think you’re going to get back when you put money into development – what will make a worthwhile investment? Lion has changed how it sets targets since the time it tried – unsuccessfully – to set up a drama department eight years ago. ‘We thought ‘If we go into drama, we need to turn out this amount every year,” says Catliff. The company set a three-year business plan and after two years hadn’t sold a drama at all. They then realized in order to make their money back they’d have to sell so much that it wasn’t practical, so they closed the department. The mistake, says Catliff, was making the jump from doc to drama in one shot, rather than from docs to formats to factual to drama. ‘What we learned is if you’re going to go into another area of television, you want to do it organically.’
For companies in the position to make acquisitions, look at prodcos that would take you into new genres: which are profitable, and who do you think you can make more profitable by making them part of your group? That’s what RDF has done since acquiring six uk prodcos since being listed on the stock market in May 2005. They also had to consider who was heading the companies in which they were interested because overly hefty compensations can have a price. When acquiring a creative production company where the owners are the creative drivers, you want a deal where they’re going to be well rewarded, but not so well rewarded that they’re going to ‘retire to the south of France,’ says Lambert.
5. Let others help make decisions
It’s natural, as the founders of a start-up company, to make decisions about the company’s growth on your own. But, as you hire heads of departments, make sure you also get their input. These people shouldn’t be burdened with the day-to-day issues of running the company, says Catliff, but rather on key issues like: What areas should we be going into? Where should we be investing? ‘We listen to them because they’re closer to the ground than we are,’ he says.
Key execs are also part of the decision-making process at Atlas; several of them have been hired over the past year or so, including an evp of business development, an SVP/GM and a VP of production. But look outside of your office’s walls for input – use outside experts like management consultants, accountants, banks, strategic consultant companies, and even your own clients. This way, as Klein says, ‘insight comes from people of many disciplines.’
6. Show flexibility
The key to executing a well thought-out business plan is to be flexible. ‘You can’t hide behind your plan,’ says Klein. ‘You need to bob and weave like you always have.’ Just like a chef adds flair to a recipe by straying from the cookbook’s measurements, you can spice up your business by showing you are able to make adaptations to your plan as need be. While a plan should act as an aspiration, don’t beat yourself up with it. What you really want to do with your plan is perform better than forecasted. ‘You want to say ‘Our business plan this year was to increase turnover by 15% and margins by 20%,” says Catliff. ‘Well, if you increase margins by 25%, fantastic – no one’s going to blame you for going off plan.’
Don’t forget that there’s a great opportunism in building your company. If a stroke of fate throws an opportunity your way, use it to your advantage. For instance, one of the reasons Lion Television USA recruited Spitzer was because they found out she wanted to move. ‘Had she said ‘I’m quite happy where I am, I don’t want to move no matter what you say,’ then we wouldn’t have recruited her and the next stage might have happened a month later,’ says Catliff. ‘You have to take a scientific approach, and then accept that it’s not a science pretty quickly afterwards.’
7. It’s all about people
One of the most fundamental components when it comes to expanding your business is successfully attracting – and retaining – the best talent. It’s a challenge prodcos face daily, and one that requires you to analyze the spirit of your company, the structure, the current size and your ability to communicate (mass emails about company picnics aside). Television is a competitive people business, and if people don’t like working in the environment you’ve created, ‘then you’re stuffed,’ says Lambert.
Low turnover at the senior level can be a positive indicator, but it doesn’t mean you should neglect considering new talent. New additions, especially well-connected ones, should be welcomed. While many of Lion’s senior execs have been with the company for a long time, Catliff always has his eyes open for fresh faces. ‘As soon as you bring in a really good executive producer he or she will say ‘Oh, well we’ll bring in 100 contacts,’ and obviously contacts from the broadcasters too, which is the most important thing,’ he says.
8. Share the wealth, share the responsibility
With the right people onboard at your blossoming company, it’s time to divide some of the major responsibilities. You want to go on vacation at some point, don’t you? Appointing heads of departments can help. If you assigned someone as the front person for a specific office or department, trust that you’ve chosen the right person and then – even though it may be hard – let them do their job on their own. While Lion is now structuring much fewer ‘floating’ executive producers, Catliff says there are many more heads of departments, including Tackaberry in New York.
9. Honesty is the best policy
There’s no point fooling yourself – accept what you are good at. You may want to do a mega-budget underwater exploration feature, but if you’ve been producing award-winning home décor shows until now, you may not be making the connection to your company’s identity and what you do best. ‘You need to be truthful,’ says Klein. ‘Know thyself. What do you do really well, and not so well? Success begins with being honest with yourself.’