You have a start-up entertainment company, and like most entrepreneurs, you want it to be successful. Although you can’t predict how successful your movie or media venture will be, set your company up using established business practices to help get off on the right foot.
The Strategic Plan
A map of near- and long-term goals and how to reach them lies at the core of most companies. If you do not have a strategic plan or have been lax about updating your existing plan, creating or updating your plan should be a top priority.
The scope of your plan will be specific to your goals, and to some degree the changes your experience as you grow. But basic principles used by most businesses apply to entertainment companies as well. Pay particular attention to each strategic goal’s return on investment.
For instance, consider the resources required to a marketing campaign using social media. You’ll need to consider the employee hours involved relative to your allocated budget. Working through the financial implications of ideas can help your entertainment company avoid the kind of initiatives that sound good in theory but are unlikely to provide returns — financial, social or otherwise.
Using SMART Principals
Many companies use “SMART” principles when setting their strategic goals. Such principles help leaders focus on priorities and create achievable objectives.
Specific: To be SMART, a goal must first be specific. Goals should be as clear and detailed as possible. Include names, dates, locations, processes and requirements for completion.
Measurable: Goals also should be measurable. Clearly identify the outcome you’re seeking. For example, if you need corporate sponsor, your goal might be “Find at least three sponsors before the end of the calendar year.” Simply wanting “some sponsorship” isn’t measurable — or motivating.
Attainable: Additionally, your goals should be attainable. Set goals that are within your control. Although it would be great if you could grow 50% this year over last, is it really within the realm of possibility?
Realistic: And they must be realistic. While there’s nothing wrong with dreaming big, it pays to be realistic. Focus on initiatives that you’re both willing and able to pursue and that you believe you can accomplish. But be careful not to lowball your goals and shortchange opportunities.
Timely: Last but not least, goals need to be timely. Building in a time factor is essential to staying on track. Time frames can vary by goal and can be tricky in entertainment but necessary.
Coordinate Your Plan with Your Budget
You probably already developed an annual budget, but how closely does it follow your strategic plan? Established companies use budgets to support strategic priorities, putting greater resources behind higher priority projects.
Businesses also routinely carry debt on their balance sheets in the belief that it takes money to make money. This is tough concept for start-ups and needs to be monitored, but it’s possible to operate so lean that you shortchange your efforts. Although bare-bones budgets are unavoidable with young companies, consider putting some muscle behind your more promising initiatives as your finances improve.
Applying for a loan could provide you with the funds to grow. Building up your reserves also will help provide the additional cash flows essential to pursuing strategic opportunities in the future.
Allocating for Professional Advice
Successful companies usually budget for experienced professional advice. Although start-up companies typically see these costs as something they can’t afford, it typically will save you money in the long run. A lawyer, bookkeeper and accountant will help keep your business on the right track.
Paying for professional advisors is particularly critical when you’re embarking in major fundraising. Banks and investors want to know that the money they provide will be allocated and tracked properly. They will also want to “look under the hood” so solid financials and legal documents are critical.
For creatives, moving forward or being flexible is usually something you can embrace. These traits are critical in business as well. Just remember to apply best practices, both new and traditional, on the growth path of your start-up entertainment company.