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#1 Aaron King

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Posted 23 June 2010 - 04:08 PM

Hey everyone, I'm not sure if this have ever been discussed here, but I have some questions about how some of you have purchased your Steadicams. I am taking the approach of getting a business loan, but I am having a difficult time researching and putting together a business plan, especially since buying a Steadicam is different than creating a business in the traditional sense. Has anyone else gone this route before, and if so what advice do you have? What about a Lease company? Interest rates are a large concern I have as I would like to go the route with the smallest percentage.
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#2 Alfeo Dixon SOC

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Posted 23 June 2010 - 08:59 PM

I am taking the approach of getting a business loan, but I am having a difficult time researching and putting together a business plan, especially since buying a Steadicam is different than creating a business in the traditional sense.

Robert Starling is a huge advocate of telling you this is (which it is) a business. Aaron, you should do the business plan anyway. You can always write into your business plan an option for equipment leasing. But you will have a better understanding of what you need to do to become a successful running business.

I've seen a lot of "barely used" rigs on the market lately... the whole "buy it and they will come" is for the dreamers and dreaming doesn't pay the bills. To tell you the truth, you gonna be looking at a min investment of $50K upwards to $150K. Now would you just drop that kind of cash on faith? No, but a good business plain may show you that within 2 years, you could be on your way to being in the black on the books.

Has anyone else gone this route before, and if so what advice do you have? What about a Lease company? Interest rates are a large concern I have as I would like to go the route with the smallest percentage.

I did the lease route and believe me, thats one huge check I write every month. Bank loan is your best bet and there are companies that specialize in film equipment out there. Even check with a few elder ops you may know to see if they have a personal relationship with a bank/banker. That bank/banker will know how profitable this business can be and may even know how much equity can be squeezed out of film gear. They will want to do business with you if they knew.

Good luck

-Alfeo



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#3 Aaron King

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Posted 23 June 2010 - 09:18 PM

Thanks Alfeo,

Currently the budget my wife and I have established for this is 50K, which is based on the used items I have my eye on here in the forum. I know the business plan route is the smartest, it's just creating a well constructed budget plan is becoming very daunting and it has gotten me a bit frustrated. I still have plenty of time to get this put together as my training course is still a month away and then I will have an even better idea of items I'm not thinking about, which could very well change the amount needed. I will look further into specific banks and bankers in my are of Nashville TN to find ones that have approved Small Business Loans for the film business here. Thanks. Any other input and advice from others is much appreciated.
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#4 Alan Lifton

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Posted 24 June 2010 - 03:06 AM

Thanks Alfeo,

Currently the budget my wife and I have established for this is 50K, which is based on the used items I have my eye on here in the forum. I know the business plan route is the smartest, it's just creating a well constructed budget plan is becoming very daunting and it has gotten me a bit frustrated. I still have plenty of time to get this put together as my training course is still a month away and then I will have an even better idea of items I'm not thinking about, which could very well change the amount needed. I will look further into specific banks and bankers in my are of Nashville TN to find ones that have approved Small Business Loans for the film business here. Thanks. Any other input and advice from others is much appreciated.



A business plan is the only way to go. Back when I bought my used Model II in 1986, the bank insisted on it. So I did a marketing survey of all the businesses in my market that I thought might use my services; ad agencies, TV stations, colleges and universities, in-house corporate video departments, and like that. If a group would show interest, I asked them for a "letter of intent" indicating how often they felt they might use me. With a bunch of letters like that in hand, the bank was happy to provide funding. All the bank cares about is how it's gonna to get its money back. Period. They don't care how cool the steadicam is, or how beautiful your shots are, or anything like that. They just wanna make certain that they'll be repaid on time. Do the business plan. It'll also help assuage your fears about making a legitimate go of it; if the numbers add up you'll feel better...
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#5 richard bellon

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Posted 24 June 2010 - 05:41 AM

Hi

Have you tried to find a private investor? I went through the whole business/loan went to 10 different banks and non of them would give.
I struggled for about 8 mnths to find the finance needed until finally i found somebody private, i showed them my business plan that i put together for the banks and the next day i had my finace.

I was fortunate to find someone like this. This also helped in terms of monthly repayment. I only had to pay when i worked. I gave them a 4yr plan and they agreed to it.
I also saved loads and loads on interest which needless to say is a BIG score

kindest regards
Richard
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#6 Aaron King

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Posted 24 June 2010 - 07:52 AM

Alan, I like your plan of gathering letters of intent from all your clients. I have been informing several producers, coordinators and directors I work with here in Nashville and have gotten a very good response from them all, but I never thought to get a letter stating their intentions to utilize the steadicam on upcoming jobs. Great idea.

Richard, I have thought about private investors but I have no idea who to always approach, especially outside the film business. I also had written that idea off thinking that it was more a fantasy situation rather than real, but since you had success in it I will resurrect that idea as a true possibility. I had once thought about approaching a couple of the companies that routinely higher me and talking to them about investing in the rig and as payment I would do that many said jobs for them until it is paid for. Does that sound like a reasonable approach or any accident waiting to happen?
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#7 richard bellon

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Posted 24 June 2010 - 08:25 AM

hi Aaron

Your idea of approaching producers/companies you work for i think is a fantastic idea. I dont know if u have bought the ste4adicam operators handbook, but in the one chapter, pg 327 it says that a operator has done that before with great success.

I dont know if the producers/companies there would be willing to invest in you/gear, but here a lot of people across the industry have managed to finance equipment that way, i know of a grip who got his first tracking vehicle that way, One of my closest friends is a sound recordist and he has managed to buy microphones, recorders etc. These purchases however have always been during a feature or about to start features,

I would definately go that route before getting a bank loan.

kindest regards
richard
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#8 Robert Starling SOC

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Posted 24 June 2010 - 10:58 AM

Hi Aaron,

With a lease you don't need a business plan to qualify, just a little money down, okay / decent credit and show some ability to pay it back. A co-signer can help as well.

You do however need a business plan for your own purposes (thanks for noticing Alfeo).

I have a great complete rig for sale right now with just about everything you'll need aside from a remote focus and transmitter. The arm for instance is brand new. Here's my shameless plug but if you're interested I can hook you up with Andrew at Summit Commercial Finance; he just got another up and coming operator qualified this week for the purchase of a used rig.

Clipper 24 System For Sale

Robert
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#9 RonBaldwin

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Posted 24 June 2010 - 11:29 AM

Hey everyone, I'm not sure if this have ever been discussed here, but I have some questions about how some of you have purchased your Steadicams. I am taking the approach of getting a business loan, but I am having a difficult time researching and putting together a business plan, especially since buying a Steadicam is different than creating a business in the traditional sense. Has anyone else gone this route before, and if so what advice do you have? What about a Lease company? Interest rates are a large concern I have as I would like to go the route with the smallest percentage.


I know nothing about you, but here's a quick question...have you taken at least 1 workshop yet to make sure this is what you want to do? Many get into steadicam thinking it's a way to make a quick buck but find it can be a year or two before the first real paying gig. It's a commitment.

rb
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#10 richard bellon

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Posted 24 June 2010 - 01:24 PM

Hey everyone, I'm not sure if this have ever been discussed here, but I have some questions about how some of you have purchased your Steadicams. I am taking the approach of getting a business loan, but I am having a difficult time researching and putting together a business plan, especially since buying a Steadicam is different than creating a business in the traditional sense. Has anyone else gone this route before, and if so what advice do you have? What about a Lease company? Interest rates are a large concern I have as I would like to go the route with the smallest percentage.


I know nothing about you, but here's a quick question...have you taken at least 1 workshop yet to make sure this is what you want to do? Many get into steadicam thinking it's a way to make a quick buck but find it can be a year or two before the first real paying gig. It's a commitment.

rb



i second that, make sure this is what you want to do before laying out all that cash especially if it isnt yours

kindest
richard
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#11 Aaron King

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Posted 24 June 2010 - 04:25 PM

Ron,

I will be taking my first workshop this July, but I have been meeting with Jim Wells (an operator here in Nashville) on a couple of occasions and has put me in his Ultra rig and showed me a few basic things. I waited to make any true commitments in pursuing steadicam until I had the chance to try on a full size rig and make sure I liked it. I wasn't about to throw down the money for a class to find out if I enjoyed steadicam when I knew I could find that out for free in the area. I will not make any purchase until after the class because I realize there's a lot that can happen between now and then, and plus I want to get as much instruction and guidance as I can in making the right choice for me.
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#12 MarkKaravite

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Posted 25 June 2010 - 10:59 PM

Dear Aaron,

There is much good advice here. I would add the following comments.

Regarding your budget for purchasing a rig, it's tough to know everything you'll need when you haven't been operating Steadicam before. Make sure you have everything you need on your list before acquiring financing. If you miss something you need, you'll likely have to pay cash for it later, which can put a pinch on cash flow. I have a spreadsheet from the last rig I built which has every item, down to the cable. I'd be happy to send it to you. You certainly won't buy everything on that list, but it will show you what to consider.

Roughly, if you plan on spending $50K, in addition to a business plan, a bank will look for you to have around 20% minimum cash into the deal, so you'd need $10K - $15K cash on average. Say you put $15K down, and your loan is for $35K. Try to find a bank that will amortize a business loan over 5 years (instead of 3). You're payments will be lower, and you can always pay extra principle if things are going well. On a $35K loan at prime interest rate, you could expect to pay around $700 / month. Now that is less than 1 day's rental at normal rates.

On my first loan, I showed my bank how many days a month I was already doing Steadicam (renting a rig) vs. how many days a month I needed to work the equipment to pay the note (which was 1). Now banks are very tight these days with their lending practices, so you may have a harder time. All the more reason to have a solid business plan.

I did my first Steadicam loan 2 decades ago, and I am still with the same bank, and the same loan officer. I've done several equipment loans and real estate deals with the same guy. It pays to look closely at the bank you start with, make sure they're a good fit & establish a track record with them. Subsequent deals will be much easier to finance.

Email me at mkaravite@comcast.net if you want to look at my equipment purchase spreadsheet. And by all means, make sure you love this craft before you take the plunge.
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#13 Aaron King

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Posted 26 June 2010 - 10:42 PM

Dear Aaron,

There is much good advice here. I would add the following comments.

Regarding your budget for purchasing a rig, it's tough to know everything you'll need when you haven't been operating Steadicam before. Make sure you have everything you need on your list before acquiring financing. If you miss something you need, you'll likely have to pay cash for it later, which can put a pinch on cash flow. I have a spreadsheet from the last rig I built which has every item, down to the cable. I'd be happy to send it to you. You certainly won't buy everything on that list, but it will show you what to consider.

Roughly, if you plan on spending $50K, in addition to a business plan, a bank will look for you to have around 20% minimum cash into the deal, so you'd need $10K - $15K cash on average. Say you put $15K down, and your loan is for $35K. Try to find a bank that will amortize a business loan over 5 years (instead of 3). You're payments will be lower, and you can always pay extra principle if things are going well. On a $35K loan at prime interest rate, you could expect to pay around $700 / month. Now that is less than 1 day's rental at normal rates.

On my first loan, I showed my bank how many days a month I was already doing Steadicam (renting a rig) vs. how many days a month I needed to work the equipment to pay the note (which was 1). Now banks are very tight these days with their lending practices, so you may have a harder time. All the more reason to have a solid business plan.

I did my first Steadicam loan 2 decades ago, and I am still with the same bank, and the same loan officer. I've done several equipment loans and real estate deals with the same guy. It pays to look closely at the bank you start with, make sure they're a good fit & establish a track record with them. Subsequent deals will be much easier to finance.

Email me at mkaravite@comcast.net if you want to look at my equipment purchase spreadsheet. And by all means, make sure you love this craft before you take the plunge.


Wow, great advice Mark. I really appreciate that. The more I am working at this, the more I am realizing exactly what you just told me. I believe renting a rig locally for a while is the way to go as I put money away for my own and gain experience to prove myself with. Then your right, I will have hard facts to show the bank on what my work expectancy, and monthly intake will be like. I will send you a personal email about that spreadsheet.
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