How To Establish A Production Company Without Going Broke

Successful film producers take time to establish a production company. This is an essential part of a film-producing career. And before we get too far into the nuts and bolts of launching a production company, you must understand something.

One of our key filmmaking success philosophies is to stop asking permission to become a film producer. You don’t need permission to choose your career path and become successful.

You just need a plan of action and the tenacity to keep going when things suck.

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Establish A Production Company

Making a film time consuming, challenging, and at the end of the day, nobody cares about your film project more than you do. People will care when you make it easy—more on this in a second. But first, check out this note. It is typical of the stuff filmmakers send me every week. Here is a recent example of what NOT to do:

“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 film for me. Can you do it? My movie is amazing!”

Aside from this reader’s unwillingness to go the distance on his project, at the very least – What he is asking is a challenging request. As much as we would love to read his script and spend the next three years raising money to develop and produce it, I am focused on my personal slate of projects.

Unreasonable Requests Get Ignored

I’m not trying to be a jerk. Dropping everything I am doing to establish a production company and then produce this movie (for someone I don’t personally know) may not make good business sense.

Most agents, producers, directors, and other filmmakers are focused on producing their work. They will only stop what they are doing 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:

A few months ago, I grabbed your filmmaking products. (Great stuff there.) After going through the courses, I decided to stop waiting for someone to grant me permission.

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

One minor issue. I don’t know crap about distribution. And I’m in over my head. I’d love to find out if you have any bandwidth for one-on-one film distribution coaching. 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 the time to establish a production company and do the work. He raised money and presumably knows the scope and scale of his movie. He also took the time to research my background and write an email focused on my interests.

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.

Establish A Production Company (Now!)

Establishing a production company allows you to take the necessary steps towards filmmaking, which is making your movie. But 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. Many filmmakers get a business card and set up a website touting the wonders of their upcoming projects. It is also at this point that 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 talk with a qualified professional to protect your personal assets from professional liability. These professionals will help you decide on the appropriate business entity for a movie. And in this way, you can establish a production company the right way.

Seek Out Legal Advice

Additionally, the moment you decide to start putting a project together, you should also seek out qualified professionals’ legal and tax advice. 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 some safeguards.

Setting up a business entity is pretty simple, but it could be 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 suit you.

Once you have the 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 keeping everything legal.

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 search for appropriate contact information.

Once you establish your company, create a website, logo, and 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.

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ARTICLE BY Tom Malloy

Tom Malloy is a film producer, actor, and writer. Over the course of his career, he has raised over twenty-five million dollars to produce, and distribute multiple feature films. If you're ready to "level up" your film producing, make sure to check out Movie Plan Pro. The video training and downloadable film business plan template will provide you with the same tools Malloy uses when approaching prospective film investors.
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