Getting into the personal history business

(FORTUNE Small Business) -- Dear FSB: I'm starting a small side business where I will be taking down oral histories from clients on a computer and adding digital photography. The problem is: I don't know how to figure an hourly cost for the service. Could you direct me to place where I might find help?

- Elaine Potmesil, Alliance, Neb.

Dear Elaine: It sounds like you've landed on an interesting and deeply rewarding business idea. The big question is: can you make money at it?

There's a growing interest in what some call "personal histories" these days, says Jim Cooper, a film producer and director who runs Socratic Productions, in Barrington, N.H.

Whether it's the portable audio recording stations erected by the nonprofit StoryCorps across the country, or sons and daughters capturing their aging parents for posterity, personal biographies of one sort or another have become a prominent part of the American zeitgeist, Cooper said.

The personal-history industry has even its own trade group. The Association of Personal Historians (APH) is a nonprofit professional organization for personal historians in North America.

The APH holds regional and national conferences each year and is an excellent resource for connecting with other professionals in your area, said Carlyn Saltman, a filmmaker in Montague, Mass. whose company, YourStoryMatters, makes personal histories and memoir videos.

But be warned: personal histories aren't the next Beanie Babies.

"This is a loss leader," said Cooper, who started his company in 2004 and says he typically produces 12 oral video histories a year for families and individuals. The personal documentaries start at around $3,000 a month, depending on the complexity of the project. But with average projects taking 130 hours to complete, it can be hard to turn a profit. "I'd need to charge twice as much as I do to make money off them," he said.

One of the most difficult aspects of making a business out of personal histories is the sheer number of variables that will change from job to job, said Saltman.

For example, elderly subjects may not be able to talk for long, requiring frequent return visits. Depending on how far you are from your subjects (people travel long distances in Nebraska) that could add time and money. The list of other variables is endless: how many subjects will you interview? In how many locations? Does your customer want to include still photographs? Music? If so, what kind (there are copyright issues involved)? How about special effects? Subtitles for non-English speaking interviewees?

It's so important to work out the scope of the project in advance that Saltman offers free consultations with customers to figure out what they want. She then prepares a detailed estimate of the time and cost, which can take 100 hours or more and run from $4,000 to $10,000 or higher, she said.

"It's like a car - you can buy a car for $18,000 or $40,000. It depends on what you want," she said.

The biggest and most important variable is your time. "How much time do you want to spend with your client to do the recording? That can vary," she said.

Location also matters: you'll find more customers who can pay for a high-quality personal history in cities such as New York City and Boston than in more rural areas, Saltman said.

An alternate approach for your business is to spend less time and energy, but do more oral histories at a lower cost, Saltman and Cooper said. That may require hiring a crew of young and inexperienced editors, reducing the amount of tweaking and preening you do (for example, cleaning up scanned digital photos) and working from established project templates that make the finished products more homogeneous, Cooper said.

The good news is that, these days, the Internet makes it easier than ever to produce and market professional-looking books or DVDs, even in very small quantities. For example, online publishing company LuLu.com of Morrisville, NC, has published more than 500,000 titles from its two million users, said President and COO Bryce Boothby. Most of those are books, but around 10% of LuLu's titles are CDs and DVDs, he said.

The company's Web-based platform makes it easy for small business owners and authors to set up their own storefront and sell their creations online. You set the price, but revenues are shared 80/20 with LuLu, he said. Starting in March, LuLu plans to expand the services it offers to its users, including help with cover design, editing, marketing and promotions.

Regardless of the approach you take, there will probably always be tension between your creative instincts and economic necessity. According to Saltman: "You do this for the creative pleasure you get from it - the excitement of telling someone's story creatively."