Two clients, one retainer and a lens on EMI
Three former NSQF Media students want to start a two-person-plus-one studio in Rohtak. They have ₹40,000 in savings, one used DSLR, one tripod, one LED panel, and a shared laptop. Client A offers ₹15,000 for a two-day product shoot but demands a complete copyright buyout, no advance, and payment 60 days after delivery. Client B offers an ₹8,000 monthly retainer for four social-media reels and asks for exclusivity in the same product category for 12 months. A local shop asks them to shoot a wedding for ₹6,000 with no written agreement. The team has not registered the business, has no GST registration, no insurance, and no invoice template. One partner wants to take both clients; another wants to refuse Client B because of exclusivity; the third wants to buy a ₹28,000 lens on EMI. They have a bank balance of ₹40,000 and monthly personal expenses of about ₹12,000 each.
1. Evaluate the two client offers and the wedding request from a cash-flow and risk perspective. Explain which you would accept, renegotiate, or decline, and why.
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Start with the cash gap. Three partners have monthly personal expenses of about ₹36,000 in total and only ₹40,000 in the bank. That is roughly one month of survival money, before rent, transport, data or equipment. Any offer that pays in 60 days does not solve this month's problem.
Client A - ₹15,000, full buyout, no advance, 60 days. The fee is not the main issue; the terms are. A two-day product shoot will consume transport, food, props and at least two people's time. With no advance, the studio funds the shoot and waits two months. A complete copyright buyout also means the studio cannot show the work in a portfolio without permission. Action: renegotiate - 30–50% advance, payment within 30 days, and either a limited licence or a higher fee for full buyout. If the client refuses all three, decline or accept only if another job covers the cash gap.
Client B - ₹8,000/month for four reels, 12-month exclusivity. The retainer is predictable, which is valuable, but 12 months of category exclusivity can block better-paying work. Action: narrow the exclusivity to a specific product sub-category and 3 months, or price the exclusivity separately. If Client B agrees to ₹8,000 for four reels without exclusivity, it is a useful base. If not, decline.
Wedding - ₹6,000, no written agreement. The amount is low and the risk is high: no scope, no advance, no liability limit, and a once-only event. Action: accept only with a one-page agreement, 50% advance, a clear shot list and a limit on delivery. Otherwise decline. A wedding cannot be re-shot.
Priority: quick cash with a written advance first, then the retainer with narrowed exclusivity, then Client A only on revised terms.
2. What formal steps would you take in the first 30 days to register and protect the business, and how would you sequence them given the limited cash?
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Sequence by cost and by what unlocks cash.
Week 1 - free or near-free identity and banking. Decide the legal form (a partnership or LLP; an LLP costs more to register, a partnership deed is cheaper). Get a Udyam registration, which is free and gives a small-business identity. Open a current account in the studio's name; do not mix personal and business money. Create a simple invoice template with the studio name, address, GSTIN if applicable, invoice number, description, amount, payment terms and bank details. Have a written partnership deed stating who owns what, who signs, and how profits and exit are handled.
Week 2 - tax and contract basics. Consult a chartered accountant on GST. GST registration is generally required once turnover crosses the threshold, and it may also be needed if a client demands a GST invoice. Do not register blindly if turnover is below the threshold; the compliance cost may exceed the benefit. Get a basic service agreement and a copyright/licence clause reviewed. For a buyout, the assignment must be in writing and signed.
Week 3 - insurance and risk. Get public liability and equipment insurance quotes. At minimum, insure the camera and laptop and add a personal accident cover for the partners. A wedding or event shoot without liability cover is an unmanaged risk.
Week 4 - portfolio and payment discipline. Publish three case studies with client permission, set a 30–50% advance rule, and send invoices the same day as delivery. Keep a cash-flow sheet.
With ₹40,000, spend first on the current account, deed and CA consultation. Delay the lens.
3. The third partner proposes buying a ₹28,000 lens on EMI. Build the argument you would make for or against this purchase, using the numbers in the setup.
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Argue against buying now, unless a signed job requires that exact lens.
The numbers: ₹40,000 in the bank minus ₹28,000 leaves ₹12,000. That is less than one partner's monthly personal expense and nowhere near the team's combined ₹36,000 monthly need. An EMI adds a fixed monthly outflow before the studio has a single confirmed advance. If Client A pays in 60 days and Client B's retainer starts next month, the studio may miss an EMI and damage its credit or the partners' personal finances. The lens also does not generate work by itself; a ₹28,000 lens on a used DSLR does not fix lighting, audio or the lack of a second camera.
The alternative: rent the lens for the specific shoot. A rental of ₹800–₹1,500 per day is cheaper than an EMI until there are repeated paid jobs that need it. Put the ₹28,000 into a reserve that covers two months of basic costs, or into insurance and a second-hand audio recorder, which will improve more client work than one lens.
When the purchase would make sense: a client signs a contract that specifies the lens, pays an advance covering at least 50% of the lens cost, and the studio has three months of expenses in reserve after the purchase. Until then, the lens is a want, not a business asset. If the partner still wants it, propose a written rule: no equipment EMI until the studio has ₹60,000 in reserve and two repeat clients.