How I Created Financial Leverage, Started, and Scaled a Service-Based Business
I used to work a terrible normal job. I didn’t like it. I never felt the pay was enough per hour. It was awfully inconvenient working based on someone else’s time. Here’s how I went from being payed $8 per hour, to up to $40 or more per hour.
First, what is financial leverage? Financial leverage is the idea of using a small amount of money to position yourself to make more, then reinvesting that money and positioning yourself to earn more again and again.
Seeing the Opportunity
During my time in college for music, I saw that there were several people offering recording of the MANY musical performances on campus. I had training in this and I happened to own a Zoom H2n all-in-one microphone. I didn’t own a camera, but I saw how I might make some additional cash. Doing this was also very convenient for me because I already attended many of these events. I never anticipated it blowing up like it did.
Minimum Viable Product
I saved for about three months to get the $200 to buy my own cheap Canon video camera. I bought the tripod for $40 from a friend. Then I had to buy a plate so I could properly mount the camera on it for $15.
At first, I offered free recordings to friends, promising no returns. Luckily, using my knowledge from the one audio class I had in my first year of college, I was able to get a fantastic sound out of my H2n through great mic placement and proper recording levels. Early on, I absolutely had to get the levels right because I was unable to adjust the levels while someone was performing.
In November 2015, I turned my first paid video around for $30. At this point, I still didn’t have a website and I had done no advertising, but how rewarding it was to be paid for skilled work as opposed to standing at a register.
From there, I got my first successes by being priced so far below the competition; those with professional equipment. Initially, I though having the lowest price was the best idea since I could get work that way and any work was better than no work, but in retrospect, I see that when you use price to distinguish yourself, there is the potential to lower the standard and doing this eroded my own earnings for a while. In between settling into a $80 rate for the equipment I was working on, I can see how I grew to be contacted by a different crowd as my reputation and price went up.
I had the minimum viable product to get me by, but just like with my work at my other job where I saved and saved, I mostly used the money I earned to reinvest into my business. I began advertising and I got things like extension cables and SD cards. Nothing super fancy.
In March of 2016, I ran a GoFundMe campaign. I created a video that showed the awesome opportunities I had already landed at that point (recording the school’s opera production and recording a full orchestra, featuring four students from the orchestra, as well as all of the student recitals I had done so far) and explained my reasoning for seeking additional funding for gear. The incentive I offered was pre-orders for my services at a slightly reduced price, but also to record my donor’s performances with the new gear if I had it at the time.
Side note: I see so many people around me set up campaigns with zero kickbacks. I think that this was vital to the success of my campaign. Absolutely find a way to give back to your donors. Hand written letters, using your service, a personal performance. Something.
Out of around $2200, I only raised around $680 if I remember correctly, but it was enough to boost me enough to buy the piece of gear that validated my business; some fancy microphones and an audio interface. Only three or so people pre-ordered, but I got some nice donations from friends and family.
For the rest of the school year, I recorded on that Canon camera and the new mics. No one else contacted me and the summer of 2016 was completely dead as far as recording work went.
Most of my time was spent interning on a full movie set in the area (unpaid). I got a big boost late in the summer when I was paid around $500 from the school for playing on the graduation ceremonies months earlier. I was obsessively shopping cameras at this point. I watched every review video and guide. I watched eBay pretty closely and kept a close tab on my financials. When I saw a deal for the camera body for around $950, I immediately broke a personal financial rule and transferred $100 from my savings to get it. For a few weeks, I didn’t have a lens, but I still toyed with the body and learned every single setting. Income from my normal job allowed me to purchase a lens in the same month.
Total investment so far: ~$2473 (Canon camera, tripod, plate, mics, mic stand, interface, camera, lens)
It took me a long time to get there, but I never complained or didn’t take action because I couldn’t jump right in and get the top tier stuff. I didn’t ask my parents for any money so that I could do this (though they did help me get a laptop for my birthday). I worked with what I had, and saved and built. I have ALWAYS operated on positive cash flow.
I never took a loan or used credit to attain equipment. If you do go that route, make sure your price still accounts for YOU getting paid. I met a guy who only charged as much for the service he provided to compensate for his monthly payments on his equipment purchase! When does he get paid?
From there, there was another growing period between finding a price I was comfortable working at, and the people who contacted me. I finally settled into a rate of $150 for the 3–4 hours of work it took me to cover and edit these events. This amount appears to be the sweet spot. As a student working a part time job, this consumes most of a paycheck, but is not beyond that. Ambiguity about price creates cautious customers so I’m not so afraid to disclose this detail.
I strongly recommend keeping a tally of all the work you do and tracking your hours. This will let you calculate your hourly rate. Do not work on an hourly rate because then the cost becomes ambiguous to the client. Make your best estimates and quote a flat rate. Account for extra time.
Getting a Website
I got a website in October or so as a place to showcase some of my work. I actually printed ads with the domain name on it before I even checked if it was an available (luckily it was)! At first, the website was a mess. I was trying to pitch photos, and video, and web, and all this junk when all it needed to say (and says now) is video and audio. It’s very limited in that regard. Because of its limited scope, I can make sure people are seeing what I want them to see and finding it quickly.
For your own freelance services, figure out what projects you like working on most and only target yourself at those. Limiting what projects you work on will be scary at first, but please trust me. It’s totally worth it. In a much shorter amount of time, you will become the one name or brand people come to think about when they need that service.
Yes. I absolutely have web skills. I have the knowledge to work audio on short films, do wedding videos, take photos. Do I do those things as well as a specialist though? No. Do I like working on all of those kinds of projects? No. This definitely took me time to discover and as I go forward in building other businesses this year, I’m keeping in mind that, from the outset, things do not have to be and probably won’t be perfect right off the bat, try as I might!
Leaving My Normal Job
I first considered leaving my normal job in August 2017. I had the full kit for my recording business, and between the hours I had at school, the hours at the normal job, the hours spent for my recording business, and the general mindset of the people who worked around there, I wanted out!
I felt like I was just on the cusp of having enough work to leave my normal job and that my recording stuff would take off if I went full force. Virtually EVERYONE I talked to was against it. My parents, my teachers, a few friends I told… I think that delayed me a week or two, but I was set and boy am I glad I left.
The Future of MattWrightPro
Doing this has been a nice stream of income for me, but it’s location dependent. My ideal lifestyle though, as detailed here, is location independent. As a result, I’ve been thinking about how I can preserve my work here.
Once I surpassed the threshold of work I could take on for myself, I started seeking other people to just do recording for me. We split the pay right down the middle. It’s a win-win because it’s time savings for both people. When I first started doing this, I would just lend my camera to the independent contractor and they would provide their own audio equipment. Once I leave though, I won’t be able to provide anything. I thought about having a gear locker, but that would require another person to keep inventory. I considered covering the rental costs of any necessary gear from borrowlenses.com as a business expense, but I feel, at greater than 30% of the pay per project, the expense is too great for right now.
So, here’s my plan going forward:
- Incorporate MattWrightPro
- Establish a list of three independent contractors who can provide their own equipment. Make sure they are trained to address the coverage of these events in a similar manner.
- Contractors benefit from the name I have established for myself. Next school year, I will develop new ads which I will ask them to distribute in the area. People contact me through the MattWrightPro website and email, then I reach out to each contractor to see who is available. Upon finding someone who is available, I connect them with the client. They record the event, then upload a mixed .wav file and the videos to a clod service as a ZIP file. Then I, who specializes in video editing, downloads the data, edits the material together, then delivers a download link to the client.
Because I still cover the editing, I am not just acting as a contractor and I can preserve some of my own income in this field. Having a team of three people who all have their own gear also allows me to cover even more recitals with far lower liability than if I was constantly managing the inventory of a business.
So that’s the story
That’s the story of exactly how I left my normal job and started working for myself and how I plan to scale my work in the future. I hope through seeing my path, you might see how you can escape the tyranny of working on someone else’s time and potentially create more income than that job could offer, especially as a student.
I still, at this point, never really labeled myself an entrepreneur. In fact, I still feel a little weird calling myself that. I just see myself as someone who creates their own opportunities.
- Define what business you want to be in. Where do you already have special skills?
- Save save save and prepare to fund the new venture. How much will it cost to create the minimum viable product?
- Continue working your normal job until you reach critical mass of appointments in your side business. You might take an income hit for a bit!
- Establish yourself as a brand, not an individual, through print ads, shirts, and a business Facebook page (not limited to these things). This is important if you want to keep getting contacted after leaving an area.
- Reinvest and experiment with outsourcing in order to scale, improve the reach and specificity of your marketing.