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How do you define the right metrics for a creative business and measure them?

We are a young tv and film production company based in Mexico, producing tv shows and commercials for a range of international clients. We are two founders, (30&32) from Germany.


Thus far we ran the company not knowing which metrics really to look at when measuring our business, basically, we've been running without a strategy.

Fortunately, we've been doing well and been growing slowly but steadily. We're a team of 6 now, but as we grow, it's becoming increasingly difficult to do the job without having real and reliable financial oversight.

We're having a very hard time defining key metrics and measuring our work, as basically, every single one of our clients follows a different routine (diff. times in acquisition, very diff profit margins / volumes per client, very diff production cycles, etc.)



We're currently looking for financial advisors, but I'd really like to know if you have input on what kind of variables to look at when trying to get a grip on these numbers, and how to measure them?



Our goal for 2016 is to have a reliable financial forecast in place that allows us to look 6 months ahead, maybe with a best-and worst case scenario.

Is that a dream?

3 Replies

Hamid Saify
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Hamid Saify Advisor
SVP of Marketing | Digital Executive with Acquisition & Product Development Focus
Foremost, wish you the best with you business. How about revenue/profit per hour to complete a job? The measure of time becomes a slippery slope sometimes, especially for newer clients.

I think that may even help your pricing strategies moving forward.



Mark Amin
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Mark Amin Entrepreneur
Working to keep marketing SIMPLE, EFFECTIVE and AFFORDABLE for growing small business
To put you at ease, it is not uncommon to start up a business without a strategy or KPIs (key performance indicators) - yes, it sounds strange but you can actually still do well at the start without a strategy or KPIs. But it doesn't last long. Soon you will need a strategy in place. So you have asked this question at the right time.

I'm not a financial professional but a marketer and business owner. My recommendations may be marketing skewed. But there's one thing I strongly suggest financially - engage a management accountant who knows how to work out the cost of producing your work, cash flow and pricing strategy. On the marketing side of things, here are KPIs you must have in view:

1. Are you working with your ideal clients (some things you want to consider here will include: are you feeling recharged every time after you finish a client's work, are you driven to do you best for the client)
2. How are you referred to in the market by clients, in other words, how are clients describing you and your work
3. Is your work producing the right balance of creativity and desired impact, that is, delivering the intended message
4. Your sales cycle process - how long does it take before a client say "Yes, you're hired!"
5. Are you hitting the right profit margin

Hope these help.

Larry Patrick Zolob
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Larry Patrick Zolob Entrepreneur
Marketing & Consulting, business development, careers blogger, entrepreneur, advisor, org hacker
Such a risky business, I feel for you.
My entertainment background is on the distribution side but some similar issues.

In your world as you know the game is to produce assets and then monetize them and there a million variables there both on revenue and cost side.

First and foremost, you need a cash flow dashboard. Most production companies don't have deep pockets. Revenues may be fixed yet costs are variable. Cash may come later, after you have invested. All sorts of crazy things.

If you're not flush with cash set up a cash flow dashboard that's real time. That way if you hit a production snag e.g. bad weather and you lose a day or something you can make real time decisions if you can absorb the variance without the bank bouncing your checks.

Second is about P&L. You obviously are creating one for the company but you also need to cross reference by customer/client (if these repeat themselves) and by asset type. On the latter you will start to learn what's working better e.g. TV commercials, films, TV episodes etc which will help you adjust rates for services and payment terms and a bunch of other things you build into your contracts.

Lastly you need variance reports for every project. Actual vs projected costs. It's kind of like renovating. You think a new kitchen costs $40K but turns out costing $65K. You'll see patterns repeating themselves which you will need to address via better management or more realistic costing/pricing.

Hope that helps!
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