Making mistakes is a necessary component to finding success in your video production business. You need to apply what you learn from those mistakes to maintain that success.

Throughout my career, I have made thousands of mistakes. I think the key to my success is that I’m not afraid to make a mistake and when I do, I bounce back quickly. Then, I apply the knowledge gained from the mistake to never go down that path again.

Because I have made so many mistakes, it has become easier and easier to instinctively make the right decision when important decisions need to be made.

Below are three lessons I’ve learned over the years that stemmed from some pretty serious and not-so-serious mistakes.

1. Get a business line of credit

Sales have never really been a challenge for my video production business. We have grown at a reasonable pace since day one, but what has been a problem is receiving payments from customers in a timely manner.

Early in my career, I severely damaged my credit because these late payments from customers caused me to fall behind on my payments to vendors, banks, etc. Finally, after a few years of overwhelming heartache and stress, one of my mentors helped me realize that all I needed to do was manage the period between the time I had to pay a bill and the time I got paid a customer is a commercial revolving line of credit. .

So I talked to my banker about setting up a line that would cover 3 months of expenses that I would pay as the checks came in. This is a must for your video business to keep cash flow in balance so you never fall behind on payments again.

Every business, no matter how big or small, has a line of credit for the same reasons you and I should. Call your banker today to ask how to set up a line of credit for your business. It can make the difference between keeping your head above water or going down with a sinking ship.

2. Always get it in writing

This lesson is not just about contractual agreements with your customers. It refers to the need to have a written record of every agreement you make in your business. If you tell a client that you will do something for something, you should write it in an email or in the form of a production agreement and send it to them.

Also, be sure to close the loop by asking them to return a signed copy of the agreement or a simple email response indicating that they understand the terms.

The same goes for the deals you make with suppliers, employees, etc. As the owner of a video production business, you manage thousands of details on a regular basis and the only way to know for sure what the terms of any agreement were is to have a paper or electronic record.

If you ever have a question about a settlement, I suggest you consult your attorney. It’s worth a few hundred dollars to get it right. Plus, you can trust that knowledge and apply it to future deals.

3. Keep your fixed expenses low and your variables high

When you first taste success, you’ll be tempted to buy the video production equipment and software you’ve always wanted but couldn’t afford. Perhaps even hire full-time employees to handle most of the workload for you.

Be careful! By now, I’m sure you’ve realized that the video production business is very cyclical in nature. Just because everything is fine right now doesn’t mean your sales will still be as strong a month or several months from now.

If you take out equipment loans and hire employees when times are good, you’ll have the cash flow you need to make loan payments and cover payroll. However, when sales drop, you will still have to make the same payments and payroll.

This will put you in a bad spot because you don’t want to make payments for equipment or pay employees when there is no work to cover costs.

Always remember that there are two ways to increase your earnings

1) Sell more.

2) Spend less.

If you are a talented salesperson and marketer, selling more might not be a problem. If you’re a better videographer than a marketing genius, focus on protecting the revenue you’re already earning from existing customers and word of mouth.

Ultimately, it’s the amount of money you get to keep that counts.