In any business there are good times and less good times. There’s a saying that any fool can make money in a rising stock market, but it takes real skill to make money in a falling market. While the corporate video sector doesn’t really rise and fall in the same extreme way as the stock market, it does have periods of high demand and lower demand.
“Riding the bumps”
Here you can see how demand for corporate video services fluctuates over a year. This is an annual graph averaged over my 30 years of experience in the business.
What you can see is that there are definite peaks and troughs. The thick black line half way up the vertical axis represents the equivalent monthly income, if you earnt the same overall annual income in a regularly paid job. You can see that some months you earn way over the regular income and other months way under that level.
The key thing you need to think about is how do you survive during these ups and downs? Very early in my career, I was advised that one way to manage is to make sure that you have 3 months’ money in your bank account at all times. This ensures that in a lean month, you have a buffer to help tide you over into the next good month. It’s tricky to manage to keep this level of finances at the start of your business, but it is a very sound principle. These days, I actually aim to have much more than 3 months’ money in the account, because I really value the extra security. However, I’ve never actually needed more than 2 months’ money to keep me going in a lean patch, so the 3 months principle does seem to be valid.
“What causes the bumps?”
Another good question to ask is to consider what mechanisms lead to these ebbs and flows. If you can work out why they are happening, you might be able to develop strategies to work around them.
Some dips are easy to explain. In December, the whole corporate sector shuts down in the run up to Christmas. In April, we’re into a new tax year and nobody knows how long their new budgets are going to last, so they stop spending while they take stock and work out how best to manage their finances. July and August are the months when everyone goes on holiday, so there’s no activity then. The little dip in October is caused by the half-term break.
Similarly, the peaks have simple causes too. In March, everyone is dumping the last of their budgets before the tax year ends and they lose their cash to the company’s slush fund, so they spend it as fast as they can. In May and June, people are trying to get stuff done before everyone goes away for their summer break. The sequence of September, October, November is the single most busy time in the corporate video calendar. It’s known as “lobbying season”, because MPs have returned from their summer recess for the re-convening of parliament, so it’s a good time for big business to press for new legislation to help them out. This is one time of year when you might need to hire additional freelancers to cope with the huge demand.
You can find out more about how to survive and thrive in the corporate video sector in this course. You can watch the first 2 episodes in full for free.