Cutting Costs, Not Corners

Starting a business during an economic downturn and seeing it thrive is not the stuff of dreams, as one production house proves in the third of our six-parter.


Friends and relatives asked: "Why now?" His reply was, "Why not now?" Meet Mr Alson Ho, 34, who decided, economic downturn or not, to go ahead and set up his own company.

"I had always wanted to run my own business, so now is as good a time as any," said Mr Ho of his company, Embassy, a production house creates on-air promotional trailers for local broadcasters, corporate videos and sales tapes. Its clients include SPH MediaWorks, Mediacorp and Universal Music. Though only three months old, the company is already making profits.

But behind this success is a concerted effort to work smart - cutting costs without cutting corners.

For most production houses, a huge upfront investment is made buying its editing equipment. Such a system can cost up to $200,000.

Embassy, however, uses an editing system, which works on what Mr Ho calls "off-the-shelf software" that he personally configured into a computer. This system costs less than $30,000.

"Advancements in technology have given us less expensive alternatives to the present editing systems," he said. "I researched, participated in Internet forums and asked questions to find out more about suitable software.

He then bought the components from shops in Singapore - and with the help of the Internet - built the system. This allowed me to streamline the functions I need for editing purposes."

He added proudly: "At the end, the videos we produce still meet broadcasters' standards. There's no compromise on our quality."

Mr Ho's main priority for his budget was the equipment. After that, any extras would have to be paid for from the remaining budget. He had to find other ways to reduce costs.

For example, Mr Ho did the wiring up of the editing system himself, saving the company about $3,000. Although he is not technically trained, Mr Ho picked up this knowledge during the eight years when he worked with a local broadcaster.

Family members also provided much support: "My brother is a contractor, so he helped keep the renovation costs down. He suggested using Styrofoam boards, instead of more expensive materials, to help soundproof the office!

Equipment like the hot-water flask, refrigerator, scanner and printer, were donated by friends. Mr Edmund Low, a partner in the company, said: "We wanted a no-frills office that is comfortable for us and our clients. Thank goodness the minimalist look is still in!"

A good network of friends and family was also a valuable source of free advice and information pertaining to the setting up of a business. Queries on legal issues, money matters, and even leasing agreements, were answered thanks to them.

Today, Embassy's cost saving practice continues. For instance, lights are switched off when not in use, and recycled paper is used.

For Mr Ho, cost saving has also meant a change in lifestyle: " I no longer take taxis! I now use the buses and trains. Also, I've cut down on expensive dinners and family holidays."

Nonetheless, there are no regrets. Although the hard work and long hours have resulted in heavier eye bags, Mr Ho feels it is all worthwhile. "Now, at the end of the day, I still have to think about how to grow the business, approach clients, and balance the books. This may be difficult, but it's also very rewarding.

"To start your own business, you must have passion for it, so all the hard work is worth it."

Looking ahead, Embassy now hopes it can start courses, so that it can share its knowledge in using the less expensive editing systems with others in the broadcast production industry.

As for possible negative effects of an economic slump, Mr Ho is optimistic for his company: "Should companies cut back on their budgets, they might avoid bigger production houses and look to us instead.

"After all, we can work with these smaller budgets and still produce good quality videos. And with lower overhead costs in our company, our charges are also more competitive."