RAISING CASH INDUSTRY.
I n music parlance, they call it second- album syndrome – or a sophomore slump. The artist’s first effort was a major success, but the second suffers a commercial or critical nosedive. You can apply that principle to production companies – becoming overly reliant on one successful release or format to keep the staff in shirts. But there comes a point when you need to ring-fence some cash – either to fund development, hire more staff or prepare the company for a potential sale. But unless you know a wealthy benefactor who’s prepared to hand over a fistful of money, how do you do it without accruing debt? Veteran filmmaker David Green ( Buster , Fire Birds ) is a good example of someone who has started a business and come out quids in on the other side. “When I returned to London in 1992, after living and working in Hollywood for several years, I set up my own production company, September Films,” he says. “With a young family, I didn’t want to take on debt, so although I had high ambitions of making independent features, I started with several factual commissions from ITV, my alma mater.” Green persuaded his old documentary mentor, Alan Whicker, to house his Whicker’s World franchise at September, and simultaneously convinced ITV boss Marcus Plantin to commission the infamous Hollywood Women series. He grew the business with ‘bread- and-butter factual’, which allowed him to eventually sell it to DCD Media in 2007 without ever taking on debt. ASK THE EXPERTS Companies that can help with the financial side of your business are out there, if you look for them. Lazarus Consulting is a UK-based boutique advisory firm, offering business development, capital raising,
corporate development and mergers and acquisitions services to industry clients. “Aside from a company taking on debt, the best way to finance growth is to raise capital via the issuing of new shares – ie equity finance,” says founder Steve Lazarus. “We’ve recently secured over £100m worth of investment and acquisition, including a recent £3.2m investment into Muso, one of our media technology clients.” Sammy Nourmand, managing director for Plan 9 Consultancy – and former executive director and CEO of DCD Media – specialises in helping companies ‘from entry to exit’. He advises clients to be realistic about what can be achieved with the resources at their disposal, and to ‘make sure you don’t risk your core business by spreading yourself too thin’. Nourmand adds: “Build short-, medium- and long-term strategies with contingency planning, as things rarely go exactly to plan.” He also says that companies should monitor progress and accept it will take time to achieve their ambitions. “Try to hold your nerve and don’t knee-jerk every time there’s a setback, otherwise you may find yourself going in circles,” he adds. There’s never an easy time to start or grow a company, as worldwide events can have a negative impact on finance. Brexit, the pandemic, the war in Ukraine and the global supply-chain problems are just a few that have hamstrung businesses internationally in recent years. Nourmand says that rising production costs and squeezed tariffs continue to be the biggest challenge, with producers frequently mortgaging their distribution income to fill deficits in their production budgets. “Increased interest rates, sky- high inflation and a contracting economy do not help with investment, but I have “Build strategies with contingency planning – as things rarely go exactly to plan”
KEEP IT SIMPLE ‘Bread- and-butter factual’ content was David Green’s speciality
ALL IN GOOD FUND Steve Lazarus suggests equity finance to support growth
69. FEBRUARY 2023
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