Why Filmmakers Must Establish A Production Company

Filmmakers must establish a production company.

And that means you should too!

Taking time to establish a production company (the right way) will help you get taken more seriously.

In fact, it is an essential part of your filmmaking career. And given all the changes taking place in our industry, you should probably take a few seconds to stop what you’re doing, read this article and then click here and tweet it to your friends. 

Here is picture of Rory Delaney and me hanging at the American Film Market. He always takes time to establish a production company. And one thing I like about Rory is his ability to get movies made on time and under budget.

Establish A Production Company | Jason Brubaker and Rory Delaney at the American Film Market

Don’t Ask For Permission

Before we get too far into the nuts and bolts of how to establish a production company, it’s important that you understand something.

If you’ve been following filmmaking stuff for any length of time, you know that one of my key filmmaking success philosophies is to stop asking permission to make your movie.

The whole practice is time consuming, humiliating and at the end of the day, nobody cares about your movie more than you do.

Well, actually, people will care when you make it easy.

More on this in a second.

But first, check this out.

The following note is pretty typical of the stuff filmmakers send me every week.

Here is a recent example of someone asking for permission (What NOT to do)

Hi Jason,

I’ve been reading Filmmaking Stuff for over a year and love your emails. My problem is, I have lots of great ideas for a movie. But I can’t find anybody willing to produce my movie for me.

I thought about esablishing a production company. But I don’t really want to do that stuff. (I just want to make the movie.)  If I send you my screenplay will you produce my movie for me?

It is really good! Please let me know ASAP.

Filmmaking Frank

I am going to be frank with filmmaking Frank.

Aside from his unwillingness to go the distance on his movie or at the very least, establish a production company – what he is asking is a very difficult request.

As much as I would love to read the script and spend the next three years of my life producing, I am very busy working on my OWN projects.

  • This means I’m busy. Not much room for much else.
  • This means I’m losing sleep and occasionally crying over a lost deal.
  • This means my FOCUS is getting MY next movie made.

So the idea of dropping everything that I am doing to establish a production company (for Frank) and then  produce Frank’s movie is not appealing.

And it may not make good business sense.

This is what they mean when they say: “Rejection is nothing personal.”

And it’s not. Most agents, producers, directors and other filmmakers have a full plate of stuff they are working on. The only time they will stop what they are doing is if your project seems more promising than the one they are currently working on.

(Read that again if you need to.)

Here is an example of how Filmmaking Frank could grab attention:

Hi Jason,

A few months ago, I grabbed your Film Finance Guide. (Great stuff there.) After going through the guide, I decided to stop waiting for someone to give me permission.

I went on to establish a production company. Then I talked with my lawyer, got some paperwork and then located a prospective investor. I’m happy to report he has funded my movie and we have 500K in escrow!

One minor issue. I don’t know crap about distribution. And I’m in over my head here. I’d love to find out if you have any bandwidth for consulting. Happy to discuss a fair rate too, if it makes sense.

Would you have time to get on the phone?

Frank

Do you see the difference here? In this example Filmmaker Frank took time to establish a production company and actually do the work. He raised money and presumably knows the scope and scale of his movie. He also took time to research me, my background and gear an email towards my interests, which is Video On Demand Distribution.

From a busy professional perspective, Frank got my attention by preemptively answering my BIG question:

“What’s in it for me.”

Based on the email, someone willing to help him would probably be able to negotiate:

  • Consulting fees.
  • Credit on his (fully funded) movie.
  • A new collaborator and friend.
  • Possible back end percentage.

The point here is, in the second example, Frank disarmed me. He made me think that working with him would complement my current business, not distract me from it.

Why Filmmakers Must Establish A Production Company

First things first.

Taking time to establish a production company allows you to take the necessary steps towards the fun part of filmmaking, which is actually making your movie.

Before you get all hog-wild with emails and invites for co-production ventures, you need to know a few things.

As a filmmaker, the moment you start putting your project together, you’re in business.

It is at this point that many filmmakers get a business card and set up a website, touting the wonders of their upcoming projects. It is also at this point when many costly mistakes are made.

How you decide to establish a production company and then conduct your filmmaking business can have legal and tax ramifications.

Before you produce a feature film or speak with any prospective investors regarding your movie project, you should first speak with a qualified professional on ways you can protect your personal assets from liability. These professionals will help you decide on the appropriate business entity for movie. And in this way, you can establish a production company the right way.

Here is a short video on how to establish a production company and why you need to do so.

Additionally, the moment you decide to start putting a project together, you should also seek out the legal and tax advice of qualified professionals. After meeting with these folks, you might find that operating your production company under the protection of a corporate entity (such as a corporation or LLC)  may provide safeguards that you otherwise were not aware of.

Filmmaker Action Pack

The steps of setting up a business entity are pretty simple, but they could be a little costly depending on your state (or country) laws and tax liabilities. Also, as a general disclaimer, I am not qualified to offer legal or tax advice. So I can only talk about my own experience – which may not be right for you.

Here are some Action Steps to establish a production company:

1.     Once you have a desired company name, chat with an attorney about establishing a proper legal structure for your company. Each state is different in terms of laws and tax consequences. Create a team of trusted tax and legal advisers. These folks will help guide you towards raising money and also keeping everything legal.

2.     I REPEAT – Talk with a qualified professional first. If you’re short on cash, many states offer an organization of lawyers for the arts. Check with your state film commission or do a web search for appropriate contact information.

3.     Once you establish your company, create a website, logo and a business card. These marketing materials will share consistent colors, fonts and logos. Make sure everything looks great. If you are spending more time focused on the “look” of your company, you have lost perspective. Your primary goal is to make movies, not fiddle with websites.

If you’d like more information on any of this stuff, check out these professional filmaking tools.