When writing a film business plan, most filmmakers get it wrong.Most film business plans include all sorts of gobbledygook (like charts and graphs and other stuff) that look great on paper but fail in the real world. Don’t feel bad. It’s not your fault.
Until a few years ago, filmmaking was discriminatory, abusive and monopolistic. As a result, traditional film business plans relied heavily on some third party, middle-man distribution strategy. “If we are really lucky we will get into Sundance and get rich.”
The Basics Of A Film Business Plan
When it comes to writing your film business plan, relying on a distributor to pick up your film and pay you a gazillion dollars is like waiting for the Tooth Fairy. It’s a nice thought, but not a solid business strategy that you can control.
Taking time to write a film business plan allows you to fully understand the business aspects of your project. You will outline your budget and show how the money will be spent to make your film. You will also highlight your team, your objectives and importantly, your marketing, sales and distribution strategy.
To get started, I recommend you take time to write out the following:
- Who is behind this project?
- Describe your film company.
- What NAMES are involved?
- How much money will you need?
- How do you expect to return the money?
- Who Is Your Target Audience?
- How Large Is Your Target Audience?
- How Will You Reach Your Audience?
- What Is Your Marketing Strategy?
- How Many VOD Sales to Break Even?
Completing an independent film business plan is a great step towards getting the money, but this is not the only step.
You might ask: “What if I just want to make movies and sell my movie?”
My response: “1995 called and they want their dumb distribution plan back.”
More Than A Film Business Plan
While a great start, your film business plan is one step in a process. In the United States, the Securities and Exchange Commission works to protect uninformed investors from scams. With the creation of the SEC, several laws, regulations and guidelines have been put in place to protect the innocent.
In order to stay compliant, before you attempt to raise money you will need to talk with a qualified entertainment attorney who focuses on securities law. The reason for this is simple. You want your movie project to be taken seriously.
The name of the game is compliance, transparency and trust.
Building off the information outlined in your business plan, you attorney will create a set of documents called a private placement memorandum. Your PPM will outline the goals for your film. It will explain the possible upside to your project, but more importantly, it will help prospective investors understand the inherent risks.
In addition to creating a PPM, your attorney will probably advise you to set up a legal business entity such as a corporation or limited liability company. While most anybody can bring litigation against you at any time, it is important that you find ways to keep your film business separate from your personal assets.
It is easy to feel overwhelmed when it comes to raising money. If that describes you, then make sure to check out my buddy Tom Malloy’s business plan template. Unlike the majority of film business plan templates out there, Tom keeps his very simple. Tom’s film business plan template will help you get started.