Business aspects Re: [TCML] Giant 13M Eye Candy

[Jim Lux]

David Rieben wrote:
> Hi Phil, all,
> 
> Yes, I was thinking the same thing as to the cost
> of such a "project". Of course I have no idea what
> the total final cost would be and I'm sure that Jeff
> isn't going to share any of that kind of info with us.
> However, I'd suppose that by the time you consider
> all the fancy NEW system components along with the
> time, labor and expertise that is going into the cre-
> ation of this system, the transportation for the coil itself
> and all of the support crew to and from Beijing, including
> food and lodging and/or expense accounts, you'd have to
> be looking at several million US dollar$ !!
> 
> David Rieben


And one should distinguish between the "estimated cost", the  " actual 
cost", the "bid price", amd the "actual amount paid", which, in the 
entertainment industry are all likely to be different.

I imagine most of us on the list could, after sitting down with the 
catalogs, figure out what it would cost to buy the materials for a coil, 
brand new. And, then, you could probably figure out how long it would 
take to build it (work hours wise).  Note that we hobby types tend to 
spend longer building a coil because you're improvising to use something 
you found cheap.  If you just buy what you need, in the form you need 
it, it's a different process.

Then, you need to allow for a place to build it, tools (I note that Jeff 
has a forklift.. something essential for building big stuff.. ), 
relationships with vendors who provide useful services (machine shops, 
etc.).

Shipping to China?  I assume you put all the stuff in one or more 
containers, and it's around $2K to ship a container anywhere in the 
world.  Then you'll have the container loaded on a truck, and pay some 
mileage fee (used to be something like $.50/mile, but I'm sure it's 
easily three or four times that now), but you could look that up in a 
catalog too, or get a bid from a trucking company.

And then there's the usual "running a business" kinds of things to 
factor in. taxes, insurance, cost of money (you have to pay for stuff 
before you get your money for what you're building, and most small 
businesses don't raise working cash by selling stock.. you borrow it 
from the bank, and recently, that has been a royal pain.)

When I was in the effects business, we did our pricing fairly simply..

We'd take the cost of materials (including spares) and add the cost of 
labor (we'd use $25/hr and double it to cover taxes, insurance, etc), 
and add the cost of any special unique expenses (rental of equipment, 
travel, shipping, etc.).   Then, we'd double that.  That's the number 
you'd quote to the production company.  You'd get a deposit from them of 
50% (solving the working cash problem).  When the job is done, you 
invoice them for the balance (adjusting for changes in things like 
rental equipment, but the labor and parts were bid as fixed price, with 
changes if the shoot ran an extra day).  They'd whine and complain of 
poverty, and you'd wind up taking 90%.

The "doubling" the estimate provides the cushion for unexpected expenses 
(which always occur) and pays the overheads, business taxes, liability 
insurance, etc.  It's not perfect, but if you stay reasonably busy, it 
works out.  Also, in the effects business, all the workers are 
essentially contract day labor.. nobody gets a salary, so if there's no 
job in the shop, everyone goes home, and you turn off the lights.


Some effects houses have a secondary line of business selling some sort 
of product, or renting specialized equipment, which allows them to have 
a continuous small stream of business to pay for someone to answer 
phones and keep the front office open.  For instance, there's a guy 
named Matt Sweeney who makes specialized air guns that shoot hollow 
pellets used for all sorts of "bullet hit" effects (fill the pellet with 
fuller's earth, and you get little puffs of dust when it hits).  He 
sells and rents these "Sweeney guns", as well as actually doing effects. 
  The company where I used to work, Reel EFX, makes fans and the 
Diffusion Fogger.  Several other firms rent out specialized rigs (often 
ones they built for a job) like water dump tanks, big fans powered by V8 
motors, pivoting platforms with hydraulic cylinders to actuate them, 
"flying rigs", trebuchets, etc.


Jeff's operation is fairly unique, and somewhat different from D.C. 
Cox's Resonance Research.  He's got a specialized niche catering to live 
shoots and effects work, while D.C. does more permanent displays 
(although I'm sure they've both done both kinds of things).  It's not 
like the worldwide market for tesla coils is huge either.  This sort of 
specialization is generally a good thing. There's enough idiosyncracies 
in the business, both in knowing what the customers need and in just 
creating the thing your selling, that it takes a while to get the 
combination successful (need a big artificial tornado?  Talk to Reel 
EFX.. others build tornadoes, but nobody else can make the tornado "hit 
the mark" for the camera, and provide the support personnel and 
infrastructure tailored to a shoot)