Starting a production company can be incredibly daunting. There are so many business aspects that appear mundane and confusing to the typical creative starting a production company. But the truth is that laying down a proper foundation is essential for any new production company to grow and prosper. In this article, we outline twelve steps on how to start a production company in the modern age. Let’s dive in.
How to start a production company
1. Research the market
Getting started right away and shooting anything and everything possible might sound like a great idea when starting a production company. But before you shoot a single shot, it is important to do your market research. This is important for companies producing either independent films or commercial advertisements.
When producing an independent film, research doesn't mean you must write a film according to what is popular. But rather understand and determine how the film you want to make can be positioned in the world of indie films, streaming, and top film festivals.
On the topic of the latter, researching film festivals can be the deciding factor that gets your film into film festivals. Here are a few tips on how to choose the right film festival.
If you are aiming to produce commercial work, research is just as, if not more important. Research the market in your specific area and determine how to position your company to fulfill the market needs of your area.
Research also may involve reaching out and learning from others. Here are the founders of a small production company Dose of Society. They reached out to Gary Vaynerchuk, a well-known and successful entrepreneur, to ask him how to scale a small media company.
While the advice Gary Vaynerchuk gives them is valuable in and of itself, it is important for you to conduct your own research in your area. It is also important to research competing companies and take note of the services they are offering. Understanding what you’re up against will help you determine how to position and market your company.
Starting a film production company
2. Determine your niche
When starting a production company, you may find that a specific niche excites you the most. For indie film companies, this may be a certain genre such as horror or science-fiction. In commercial production, companies this may be a focus on weddings, restaurants, start-ups, or even gyms.Part of finding a niche is being yourself. Following what excites you and narrowing in on it will help create a trail to the niche that you will thrive in. Here is a video breaking down why your niche must be determined by you and what you are passionate about.
As the video states, it is important to follow your instincts when determining your niche rather than what others tell you is a great niche to pursue. When first learning how to start a production company, take a look at existing companies and understand what markets are saturated in your area.
How to start a film production company with no money
3. Name your company
Naming a company can be incredibly fun, but often difficult. When naming your production company, definitely include your personality and have fun with it, but keep in mind a few guidelines.
It is important to come up with a name that is memorable and easily searchable. It’s easy for company names to get lost in the minutiae of the internet. Utilizing a city name in your company name is a great way to help potential clients find your company more easily. Here is a great Ted talk that discusses how to come up with a great brand name.
It is also important to make sure that your name is original and legally avoids copyright problems. Enter your possible company names into the National Business Register to check if your name is taken.
How do you start a production company?
4. Create a business plan
One of the most important steps when creating a production company is creating a production company business plan. Without a business plan, starting a company may be easy, but growing it in a sustainable way will be incredibly difficult.
Putting your business plan on paper will help you and your team gain a clear direction on the company with actionable steps. Here is some first hand advice on how to think about growing a production company.
Perhaps most importantly, a business plan can be presented to potential investors, advisors, team members or clients to prove to them that there is a plan for the future of the company. When people are going to invest their money or time into a company, they will want to know that there is a plan behind the idea.
How to start a film production company with no money
5. Assemble a team and equipment
While it is always an option to start a company alone as a sole proprietor (we’ll get to that in the next section), working with friends is not only more fun, but it can increase your production value immensely.
Being a one man or woman show can spread you thin and decrease the level of production on your projects. There will inevitably be projects that come up where you will need to find and hire a great film crew. A proper set will entail a few key positions. What positions are absolutely necessary? Here’s a video to give you a better idea.
This team will either be composed of freelancers, employees, or business partners. To determine which you will employ, refer to your business plan and finances to see what best suits your company.
Once you have your crew, using StudioBinder’s film crew list management software will help you stay organized and efficient when managing your crew.
In addition to a team, you will need equipment. When starting a production company, it is common to be on a very tight budget. Production lighting kits, mirrorless cameras, and camera lenses can get pricey. Here is a video that breaks down some essential equipment needs that won't completely break the bank.
Keeping your team and production organized is the difference between amauteuer productions and professional productions. Production softwares like StudioBinder’s production management software will help take your company to the next level.
Register a film production company
6. Determine your type of companyOnce you determine if you will be starting the company by yourself or with a team, you will need to determine what kind of company you will be. This is a crucial step when making a film company and is heavily determined by company structure, taxes, and your company business plan. Here is a video that breaks down the different types of companies you can choose from.
To recap, here are your options as stated here by the U.S. Small Business Association where you can find more information:
1. Sole Proprietorship:
A sole proprietorship is easy to form and gives you complete control of your business.
Sole proprietorships do not produce a separate business entity. This means your business assets and liabilities are not separate from your personal assets and liabilities. You can be held personally liable for the debts and obligations of the business. Still wondering what a sole proprietorship is? Check out the video below for more information.
Sole proprietorships can be a good choice for low-risk businesses and owners who want to test their business idea before forming a more formal business.
Partnerships are the simplest structure for two or more people to own a business together. There are two common kinds of partnerships: limited partnerships (LP) and limited liability partnerships (LLP).
Limited partnerships have only one general partner with unlimited liability, and all other partners have limited liability.
Limited liability partnerships are similar to limited partnerships, but give limited liability to every owner.
Partnerships can be a good choice for businesses with multiple owners, professional groups (like attorneys), and groups who want to test their business idea before forming a more formal business.
3. LLC (Limited Liability Company)
An LLC lets you take advantage of the benefits of both the corporation and partnership business structures.
LLCs protect you from personal liability in most instances, your personal assets — like your vehicle, house, and savings accounts — won't be at risk in case your LLC faces bankruptcy or lawsuits. LLCs can also have a limited life in many states.
These can be a good choice for medium- or higher-risk businesses, owners with significant personal assets they want to be protected, and owners who want to pay a lower tax rate than they would with a corporation.
4. C Corp (Corporation)
A corporation, sometimes called a C corp, is a legal entity that's separate from its owners. Corporations can make a profit, be taxed, and can be held legally liable.
Corporations offer the strongest protection to its owners from personal liability, but the cost to form a corporation is higher than other structures. Corporations also require more extensive record-keeping, operational processes, and reporting.
These can be a good choice for medium- or higher-risk businesses, businesses that need to raise money, and businesses that plan to "go public" or eventually be sold.
5. S Corp (Corporation)
An S corporation, sometimes called an S corp, is a special type of corporation that's designed to avoid the double taxation drawback of regular C corps. S corps allow profits, and some losses, to be passed through directly to owners' personal income without ever being subject to corporate tax rates.
S corps also have an independent life, just like C corps. If a shareholder leaves the company or sells his or her shares, the S corp can continue doing business relatively undisturbed.
These can be a good choice for a business that would otherwise be a C corp, but meet the criteria to file as an S corp.
How do I start a production company?
7. Consult a lawyer or legal advisor
Creating a production company legally can be complex. Consulting a legal advisor or lawyer will help ensure that you are taking the necessary steps in starting your company. Many people jump into starting a production company without laying the foundations.
Here is a video with first hand experience explaining why this is such an important step for anyone starting a production company.
There are many small business lawyers and entertainment lawyers who specialize in production services that can give great legal advice throughout the process. This step will help you avoid any costly problems in the future.
How to start your production company’s bookkeeping
8. Set up your bookkeeping
Entertainment payroll, production insurance, and other expenses can get complicated and unorganized very fast. Consulting a CPA and setting up your bookkeeping right away will also help you avoid costly problems in the future as well as any legal ramifications for overlooked processes. This step will pay off when it's time to file your taxes, apply for a loan, or pay your employees.
How to start a production company website
9. Establish an Online Presence
Whether your production company produces independent films or commercial work, having an online presence is incredibly important. A website will enable you to showcase your work and allow clients or audiences to find you.
In this day and age, it is a great idea to develop a social media presence as well. Instagram, Facebook, and YouTube are all places where trailers, commercials, and other video work can live and be discovered by clients or potential Hollywood players.
How to create a production company portfolio
10. Produce proof of concept projects
Once you create a website and online presence, you will need to produce work that lives there. This gallery of work will obviously grow as you take on more client work, but initially you may have to shoot some proof of concept ideas that will help clients get a better idea of what your production company is capable of creating.
StudioBinder's web series, Making It, followed the entire proof of concept process from the script to the first day of shooting. Here's the first episode on how it all began.
When shooting independent films, sometimes creating a short film as a proof of concept for a feature film is a great way to get eyes on your project and potentially funding.
How do you start a production company?
11. Build a client network
Once the foundations of your company have been established, the next most important step is getting new clients. This is where you will actually see a return on your investment. Here are some fundamental tips for finding new clients for your production company.
The keys to building a client network is networking and delivering consistent, high quality work. Your initial clients will be your best allies in getting new clients, so maintaining a good relationship is essential.
How to start a production company plan
12. Plan for the future
Planning for the future of your production company can be difficult in an industry that shifts and changes so often. In this day and age, technology progresses and changes at the blink of an eye. Keeping your focus on how the market is changing, what’s trending in the industry, and what new tech is emerging will help you steer your company like a ship in the right direction.
Starting a production company is no easy feat by any means, but if you are passionate, persistent, and willing to put in the work it is absolutely achievable. Hopefully these tips bring you one step closer to executing your plan of starting your own production company. Remember there are endless resources online that will help you get started.
A guide to creating your business plan
A key part of starting a production company is creating a business plan. And creating a business plan for your new production company can be daunting. Luckily, we’ve covered the fundamentals of how to create a production company business plan in our next article and even included a free template to lay out your business plan.