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Written by: Natalie Fell
Natalie is a business writer with experience in operations, HR, and training & development within the software, healthcare, and financial services sectors.
Edited by: David Lepeska
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on June 3, 2022
Investment range
$13,300 - $29,000
Revenue potential
$104,000 - $312,000 p.a.
Time to build
0 - 3 months
Profit potential
$62,000 - $94,000 p.a.
Industry trend
Growing
Commitment
Flexible
Here are the most essential factors to consider when starting your film production company:
You May Also Wonder:
Is a film production company a profitable business?
Yes, film production companies can be very profitable. Your success depends on how well you stand out from the competition and choosing a niche that’s in high demand.
How do I handle and manage intellectual property rights and licensing for my film projects?
You should consult with a qualified attorney with expertise in entertainment law. They can help you navigate the complex legal landscape surrounding intellectual property and licensing in the film industry and ensure that you have the necessary permissions and agreements to protect your rights and avoid legal issues.
How do I differentiate my film production company from competitors?
You can choose a niche market such as wedding films or documentaries. You can also be exceptionally creative with your film production and show clips of your work on YouTube.
How do I handle and manage casting and talent management for my film projects?
You can work with a professional casting director and talent agency. A casting director can help you identify and audition actors for your project, while a talent agency can provide representation and support for actors throughout the production process.
How do I get into film production with no experience?
It’s a difficult industry to get into with no experience. You should consider film school and then start getting experience with entry-level jobs.
Before starting a film production company, it’s important to weigh the pros and cons.
Trends within the film production industry include:
Challenges within the film production industry include:
Startup costs for a film production company range from $13,000 to $29,000. Your main costs will be the purchase of production equipment. Additional costs include production software, a website, and marketing expenses.
If you’re interested in taking an online course to develop your video production skills, sites like Udemy offer classes for under $100.
You’ll need a handful of items to successfully launch your film production company, including:
| Start-up Costs | Ballpark Range | Average |
|---|---|---|
| Licenses and permits | $300-$1,000 | $650 |
| Insurance | $500-$1,000 | $750 |
| Marketing and advertising | $1,000-$3,000 | $2,000 |
| Website setup | $1,000-$3,000 | $2,000 |
| Production Equipment | $10,000-$20,000 | $15,000 |
| Production Software | $500-$1,000 | $750 |
| Total | $13,300-$29,000 | $21,150 |
The average cost of film production services for a new company is $50 per hour. As your production company grows, your rates will likely be much higher. After factoring in operating costs, expect a profit margin of around 60%.
In your first year or two, you could work 40 hours per week at a rate of $50 an hour, bringing in $104,000 in annual revenue. This would mean $62,000 in profit, assuming that 60% margin.
As your company builds a reputation, you could raise your rates to $150 per hour. At this stage, you’d rent out a production facility and hire staff, reducing your profit margin to around 30%. With annual revenue of $312,000, you’d make a handsome profit of $94,000.
When it comes to starting a film production company, there are a few barriers to entry. Your biggest challenges will be:
Now that you know what’s involved in starting a film production company, it’s a good idea to hone your concept in preparation to enter a competitive market.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Research film production companies in your area to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a wedding video production company or a documentary production firm.
You might consider targeting a niche market by specializing in a certain aspect of your industry, such as music videos, shorts or animated films.
This could jumpstart your word-of-mouth marketing and attract clients right away.
You’ll be providing film production services for customers within a specific niche, which could include weddings and events, corporate videos, music videos, and more. You will most likely also offer editing services. If you produce shows and films for entertainment purposes, you could generate additional revenue by working to find production outlets for client projects.
Film production companies charge for their services in several different ways, the most common being per hour, per day, or a flat rate per project. A beginner film producer could charge anywhere from $25 to $100 per hour, while a more experienced professional could charge as much as $250 or more.
Depending on deliverables, daily rates for services could range from $1,000 to $2,000. Many wedding video production companies charge per event or package, which commonly ranges between $5,000 and $10,000. Aim for a profit margin of around 60%.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
If you’re not producing your own original content, your target market will be people looking to create films and videos for a variety of different reasons. For independent film projects and wedding and event video production, spread your marketing efforts across social media sites like Instagram, TikTok, and Facebook. To target customers looking for corporate video production, advertise your services on LinkedIn.
In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out a production facility. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
When choosing a commercial space, you may want to follow these rules of thumb:
Here are some ideas for brainstorming your business name:
Discover over 290 unique film production company name ideas here. If you want your business name to include specific keywords, you can also use our film production business name generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Here are the key components of a business plan:
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to film production companies.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your film production company will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
Choose Your State
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
The IRS website also offers a tax-payers checklist, and taxes can be filed online.
It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.
Securing financing is your next step and there are plenty of ways to raise capital:
Bank and SBA loans are probably the best option, other than friends and family, for funding a film production business. You might also try crowdfunding if you have an innovative concept.
Starting a film production company requires obtaining a number of licenses and permits from local, state, and federal governments.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your film production company as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use industry-specific software, such as StudioBinder, Celtx, or Dramatify to schedule shoots, create storyboards, and manage client and vendor contacts.
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
YoYou can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
Here are some powerful marketing strategies for your future business:
Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your film production company meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your film production business could be:
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a film production company, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in film production for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in film production. You’ll probably generate new customers or find companies with which you could establish a partnership.
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a film production business include:
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Film and video production takes a lot of hard work and a specialized skill set, but it’s a rewarding and creative way to earn a living. Right now the industry is growing fast, so you could launch your own firm and make good money while partnering with amazing clients and working with them to bring their ideas to cinematic life!
Now that you’ve done your homework, it’s time to launch the film production company you’ve been dreaming about and start working on the next Hollywood blockbuster.
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