By Roger Pierce
An entrepreneur simply can't work all of the time. "That's why it's so important to keep money in your business and put it to work for you," entrepreneur James Downey advises.
TV and film lighting expert James Downey relaxes on a show set. Build equity in your business by re-investing profits, he says.
His company, Fullerton Productions Inc. (email@example.com
), specializes in designing lighting and staging for television, film, commercial and live events. Over the past 10 years, Downey has "lit up" many famous faces including Eugene Levy, Tony Curtis and Pierce Brosnan.
Downey's work credits include shows such as The Food Network's Christine Cushing Live, The Life Network's Sex Toys & Chocolate and famed Canadian Broadcaster Pamela Wallin's Talk TV. He also did the lighting on The Lord of the Rings exhibits at the Royal Ontario Museum and Casa Loma. He's currently lighting a new show for The Comedy Network called Pop Culture.
Downey, 36, started out as a contracted lighting director. He was making good money, but saw an opportunity to earn more. "Big shows require plenty of lights so I was renting a lot of expensive gear on behalf of my clients," he explains. "I decided to start buying my own lights to rent directly to my customers."
He started small. He bought and rented one studio light, then two, then four. "It just kept snowballing," he says. "The more gear I bought, the easier it was to finance because banks like lending against hard assets."
His re-investment strategy has paid off. "My rental equipment makes money for me even when I'm not working on a set," Downey says. "Plus, by owning my own gear, I can design a show's lighting the way I want and stay within client budget."
While his work is technical, Downey calls himself a "people person" who puts his clients at ease. "A lot can go wrong on a set," he comments. "I try to make sure my clients are never worried about anything I'm handling."
MAKE YOUR MONEY WORK FOR YOU
Some say money makes the world go around. While that statement is debatable, it's certainly true for a small business.
While you may love your business so much you'd work for free, it's really money that will keep it alive. You'll have to make plenty of money decisions as an entrepreneur, such as:
What assets to buy. Invest in things that make you money, such as equipment, machinery or technology. A fancy new leather office chair may look good behind your desk, but a faster printer will more likely contribute to profits.
Taking on overheads. Renting office space or leasing a new vehicle can so easily be justified as necessary business expenses. However, smart small business owners don't spend it until they've earned it. Keep overhead costs low during your early years to give your small business a chance to get on its feet.
Paying yourself first. It's too easy to shovel all of your personal money into your hungry new small business. Set aside 10% of your personal draw each month for your own future.
Establishing a cash cushion. As an employee, you wisely set aside three month's salary in case you lost your job. Small business owners must also establish a cash float to help weather rainy days.
-- Entrepreneurship expert Roger Pierce trains people on how to start a small business in the Up & Running Biz Launch Program.
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