How much money do I need to start a film production company?
For this set of costs, one needs at least $15,000. The money already covers microphones, lighting, booms, cameras, and the pertinent hardware and software for film production. Note that if you're working on a smaller budget at the start, film equipment can be leased.
Investing in a film business is considered risky and complex, even though it also looks glamorous. Ample research on productions, talents, and audiences is a must.
More importantly, one needs to study the source of funds for the various costs to be incurred in the business. Some consider hedge funds and private equity, specifically for investments in the entertainment industry.
If you are one of those who deem the film business interesting and would like to know more, then this article is for you.
5 Top Costs Involved in a Film Business
For those venturing into new film production for the first time, it is crucial to know what the typical startup costs are.
Before you can even make money – whether through individual DVD sales, streaming services, and other ancillary sales and forms of distribution – you’ll have to start somewhere. Only then can you also have reasonable hourly rates, day rates, or flat fees for projects and other commercial work moving forward.
Initial costs will cover mostly insurance and legal fees. Of course, software needed for editing and filming, including equipment, should be factored into the prices.
Like in any business, office space is also needed. A studio space should suffice for a startup.
Then there should be additional operational costs for maintaining the business, including wages, utilities, and production costs. The row might go longer. That is the reason to have important skills like cash flow management. Otherwise, difficulties and problems might bother.
To further understand these costs, let’s take a look at the breakdown per item.
Office Space
While others can run a new film business from the comforts of their own garage or a spare room in their house, the time will come that, ideally, one’s team will grow, and better space is needed. Once that happens, a budget of $10,000 or more is required annually.
After all, especially when conducting meetings with various investors, a spacious, safe, and secure space sounds better than a personal home space.
Production Equipment
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How can a film business start without the right set of equipment? For this set of costs, one needs at least $15,000.
The money already covers microphones, lighting, booms, cameras, and the pertinent hardware and software for film production. Note that if you’re working on a smaller budget at the start, film equipment can be leased.
Film and Crew
How can a film business start without the right set of equipment? For this set of costs, one needs at least $15,0000.
Regardless of the levels of films, you’ll be making – whether an independent movie, a big movie or a short film – part of your costs will always include your people. You will need to pay your actors, editors, camera operators, studio shoots, narrators, scriptwriters, and directors.
On top of that, audio files, B-rolls, video rendering, and other fees are crucial costs, too. Video rendering can cost $75 hourly at the minimum, audio files at $1000 hourly, and your B-roll between 10% – 50% of the overall budget.
The salary of the people part of the production varies, too. As a benchmark (so that you can expect higher costs for big movies), the rates for independent films include paying the director at least $250 hourly, cameramen at $400, editors at $175, and actors at over $500.
Note, too, that the examples above include the people on top of the film business production chain. However, just as crucial are other crew members, you will employ both for the pre-production and post-production phase, which include sound mixers, camera assistants, production assistants, costume designers, and makeup artists.
This is why for anyone just setting up the business, consider not hiring for positions like stunt coordinators or VFX artists, especially if the film production does not need them. This is especially true for those working on dramatic feature films first or for short films on a limited budget.
Remember: A Good film is not all about elaborate choreography and outstanding special effects. A script and a set of talented people can work – you just need to be resourceful with what you have in the beginning.
Marketing Management
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Let’s say you were able to secure the best of talents in your production. That still won’t be enough – your film needs to be properly marketed.
Thus, for marketing materials, you need to allow at least a thousand dollars. You need to have carefully designed business cards and a professionally designed webpage.
License and Insurance
Lastly, your business needs a license and insurance. This can cost you up to a total of $6,000 annually.
For a film production business, the most important types of insurance to acquire are theft and fire insurance – needed mostly for securing film equipment. The minimum you can get is liability insurance.
Conclusion
Once all of these main costs are covered, then the next phase of the fun begins Profits. In the United States, the country’s Bureau of Labor Statistics provides an estimated salary of $71,000 for directors and producers alone (this data was from 2016). Hotshots in the industry are already earning up to 45 billion dollars.
For smaller film companies, a reasonable amount in annual profits can still be $50,000 – $100,000 – which may not be bad, depending on your standards and expectations.
We hope that this guide has given you an idea, more or less, of how to start a film business. The lack of money should not deter you from pursuing your dream – there are available funds and grants you can join and competitions. Good luck!
George Relish is the Editorial Director at Quidable. Before starting his work at Quidable, he was a bank auditor for more than 5 years. He is passionate about reading science fiction, travelling, and football.
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Photo: CineDirektor FILMS
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