A Step-by-Step Guide for Starting a Film Production Company

In today's digitally-charged society, the market demand for quality video content production is growing. For an aspiring entrepreneur interested in combing passion for film with business, starting a production company can be financially rewarding. Use this step-by-step guide for starting a film production company to get an idea of the elements involved.

Model A Plan

Becoming a successful production entrepreneur requires drafting a clear plan detailing the specifics of a production company. A plan will map out the startup and ongoing costs of business, define the target market, and show a timeline to break even. A break down of annual costs should include the cost of a workspace, production equipment, wages for employees and crew, marketing campaigns, and insurance and licensing costs.

The ongoing costs of running a production company will grow with the business. The main ongoing costs will be the workspace and employee wages, while other expenses will be a per-project or per-assignment basis. Define the target market (the viewers) that finished projects should reach. Understand the target market demographics to help get funding, write, direct, score, and produce a project. It's also important for finding appropriate distribution outlets.

Learn How To Be Profitable

A production company makes money based on the type of distribution. This can be box office sales, DVD sales, streaming service royalties, or ancillary sales from product placements and merchandising. Commercials and industrial films for corporate clients are typically paid an agreed-upon rate such as a day-rate, hourly rate, or flat fee depending on the project.

The market will determine how much a production company can charge clients. Charge rates that will make the business competitive in the region. The price of film projects will vary depending on the type of client and the project demands. Research the market and competitor production companies for an idea of appropriate pricing. How much profit a film production company can make depends on the area of specialty, location, talent, and reputation. The key to becoming profitable is to start small in the market and focus on building a reliable local clientele that values the quality of the company's work.

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Get The Necessary Permits And Licenses

Failing to get the necessary permits and licenses to operate a production company could cause the business to be shut down. The Small Business Administration (SBA) has information about permit and licensing requirements for each state on their website. Consult with the town, city, or county clerk's office for information about local licensing and permit requirements.

It's an important business practice to have a services contract with clients, especially if providing services on an extended basis. The contract should outline the terms and conditions of services, clarify client expectations, spell out payment terms and conditions, and the expectation of service level. Always have clients sign the services contract prior to starting a project.

Define And Market A Brand

A company's brand reflects what the business stands for and is important for public perception. Defining a strong brand will set the company apart from competitors and attract clients. Promoting and marketing a production company means creating a demo reel that showcases talent and services. Attend trade shows, submit work for film festivals, and register with video and film production company and crew directories such as Production Hub.

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Create a strong social media presence by showcasing the company's portfolio, small films, or short clips of longer works. Engage with online audiences by encouraging them to be a part of the creative conversation and re-share links to work.