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December 2014
Issue: March 1, 2002

Starting a new business in a down time

By: By Michael Gresch

Who says the fun is gone from this business? Having built a new commercial editorial company from scratch with three other founding partners over the past 12 months, I'm here to say that finding enjoyment from working in entertainment is an arduous but not entirely lost art. Neither is the concept that a company in this field can be designed to provide good service, attract top clients, respond to client and employee needs, roll with the punches of the changing times and still turn a profit. These practices are alive and well in 2002.

When we took the leap of faith to launch Terminal in January 2001, we did so with a clear idea of our goals and how we wanted to do things. We had the one blind purpose of doing good work and having fun doing it. While the industry at that time was seeing a boom of dot-com advertising dollars, wide-spread extravagance, and a run on office space, our back-to-basics business plan focused simply on creating a place whose calling card would be its professionalism and its high quality of work.

Lean and mean

Helping our efforts was the fact that all of the company partners - and the people who came aboard to join us as employees - were on this same page from day one. For us, it was about the work, and creating an environment where employees and clients would like to be. We tried to instill this common goal in everyone and have them look at the business from that viewpoint. We brought in talents at the top of their game, but we didn't hire beyond our means. We found individuals who wanted to grow at our pace and opted to grow the business from the bottom out. We worked hard to advocate company diplomacy and a sense of team spirit. We made things comfortable with respect to our clients' needs and ours, but avoided overkill in the form of, say, the latest espresso or cappuccino machines. We focused on finding the right mix between long- and shortform jobs and on hitting a happy medium between relaxed and stringent management practices. We looked to our past experiences, to the things we had valued from different jobs along the way. Quality relationships, integrity, being realistic as a business owner, treating the company's money as if it were your own

What we didn't know, of course - and no one else expected, either - was how very odd and incredibly dramatic the year in which we were launching our brave little endeavor would turn out to be. The early part of 2001 started out well: we, like many other companies, had a full slate of work through the first part of the year, with commercials and music videos for a variety of clients, including Ford, Coca-Cola and Lexus. Before long though, trends that were already driving profits and ad budgets down long before September 11th began to gain the upper hand. Then the attacks themselves slowed things way down industry wide.

A wild Ride

Over those months, we kept working while I wondered how our company - how any company in its first or 50th year - could adjust to such radically different business parameters. I wondered about a business climate that, on LA's West Side for example, was going from one that had been generating a shortage in office space a few months before to one that is now breeding empty spaces. I wondered how a creative and economically sound work environment could be sustained through inconstant times. Now that the stakes seemed much higher, I wondered how many businesses might be forced to go under on the basis of just one bad management decision. I wondered how I could keep us out of that boat.

By virtue of being the lean and mean company that we were (and are), we ultimately kept our scales aligned pretty well. And by having a crew already concentrated on a field of work and their enjoyment of it, we didn't have far to go when, through soul searching and a re-alignment of priorities, institutions began to have to boil their businesses back down to the essentials.

One of the interesting things about our experience - and I think this is rather telling - is that I don't believe we would have changed anything about our approach in opening Terminal, even if we had known in advance what a wild ride 2001 was going to be. We still would have wanted to serve clients from the standpoint of comfort and quality. We would have wanted to attract clients on the basis of completed work rather than hype. We would still have invested in the most gifted artists available, not the most capable coffee machines. Even if we had known all of the events that were in store for our inaugural year, we would still have jumped in feet first, with the same strategy. We would have felt good about it and had fun along the way.

Learning to adapt

Not that it all would have been easy. It wasn't, in fact. As an industry, it's getting less and less comfortable for us to sleep in this "bed" we've made. We have customary procedures that seem almost to prohibit success, especially during hard times. How many other industries, for example, break out every widget in a project bid for the client to see? In doing so, breaking out and exposing any or all profit areas. Agencies commonly hire cost consultants to nickel and dime on budgets, making it ever more difficult to improve and sustain our bottom lines. These practices are not going away, so we all must be aware of them, and learn how to adapt. Not just production and post companies, but every facet of this industry. Equipment overhead often forces finishing facilities to carry the heaviest loads, and because they are at the end of the production cycle, they often get the biggest squeeze. Agency's margins are the tightest they have ever been, trying to turn out their creative with limited budgets, with client's still expecting them to jump through hoops.

So this new year, like no other, presents us with plenty of reasons, to learn, to improve our industry where we can and to remember the core reasons why we found pleasure in working in this craft in the first place. As far as Terminal is concerned, our motto of doing good work and being known for good work is as applicable as ever in 2002. Over the next months we are planning a more public "coming out party" for the company. And we expect to be using our off hours to expand and experiment with alternate forms of project work.

Looking back with a first year of operation under our belts, I think I can sigh and say we passed "Starting A New Business 101" as a self-guided independent study in 2001. In 2002, we seemed to already be enrolled in "Steering Your Business Through A Second Year 102." And we definitely signed up for the electives "Fun 101" and "102."