The truth is that starting a production company can seem like an intimidating prospect.
Most filmmakers see themselves as creators and artists. Handling budgets and contracts is your least favorite part of the job, something you’ve got to do in order to find work.
Starting any sort of company is a big decision with a lot of business questions to answer. And if it’s a video production company, that means there will be a lot of extra legal requirements, gear purchases, and other expensive hurdles to clear.
To set you on the right path, we spoke with two people who have created successful production companies. They’ve done the work and managed to create sustainable businesses. We’ll include some of their thoughts and advice as we go.
Your Map to a Successful Company
As you think about how to start a production company, there are three key components to keep in mind:
- your local market demands,
- your team’s collected skills/interests,
- and the equipment purchases and camera gear you’ll need to fully kit out the crew.
Think of these three pieces as intersecting circles on a Venn diagram. Your job is to make those circles align as much as possible. It’s likely that you’ll only be able to focus on two of the three, but as long as you keep these in mind, you’ll be on the right track with your new company.
Let’s break down each of these three requirements:
1. Local Market Demands
Observe and analyze your local market. In the beginning, you probably won’t be able to travel cross-country to take big jobs. So when thinking about how to start a production company, dedicate a lot of time to figuring out what type of projects will be easiest to find.
That will help you sustain your business while you look for opportunities to grow.
“A lot of company success just comes down to treating people well. It's important that your client knows that you're more interested in helping them than you are in taking their money.
Obviously, if you're not making money you can't sustain a business, but we've found that most of our clients that return, return because we've been willing to go the extra mile to help them reach their goals.”
— Tim LaPointe, founder of Pointe and Shoot Media
These gigs may not be your favorite sort of project, or even what you’re best at. But production companies have to start somewhere, and finding work to pay the bills while you build your team is a sort of “rite of passage” most agencies go through at some point.
This will also help you understand what you should charge per project, which in turn helps you estimate the cost of actually running your company.
“[Production work] is competitive. There's a lot of people doing it and doing it too cheap. As soon as you have a decent portfolio, charge what you need to make the profit you want. Otherwise you'll never climb the ladder.”
— Neil Collins, founder of Neil Collins Recording
2. Established Skills and Interests
As a starting point, it helps to assess the skills of everyone involved. Figure out what your crew is good at so you can capitalize on your strengths. (And take note of your weak spots — that can help you add the right people later to round out your team.)
This is a helpful step whether you plan to work alone or hire a team of other filmmakers. Figuring out your skills and passions will help you plan out what sort of work you should look for.
“I only do work that interests me. I rarely do corporate work unless it's a company I feel will benefit my brand and vice versa. Having a passion for projects you are involved in is key. I am also a bit of a perfectionist so it's important to me that every project has the same level of investment.”
— Neil Collins
Yes, that may sound counter to what we just talked about. But as you get to the stage where you start acquiring equipment and gear, knowing what you’re good at and chasing similar opportunities generally leads to a higher quality for the finished products — something every creative has seen in past projects.
Using that approach will help you align the three pieces of your company’s Venn diagram.
3. Assembling the Right Gear
Once you’ve got a grasp of what projects are in high demand around you, and you’ve made a shortlist of people to work with, you’ve got to get the right gear together. Budget plays a big factor in these decisions, along with all the other factors we’ve covered so far.
Maybe your production company will be a one-person crew, and you’ll use freelancers or friends when necessary. Maybe you’ll rent equipment as you need it and rely on the gear you already own. All of these steps are completely viable paths for a new production company.
The important part is that you think about equipment needs before you start taking on jobs. It helps you set realistic goals, both for your expectations as well as what clients can expect from your work.
“[It’s important to avoid] comparisons! There will always be someone better than you at what you do and that's fine. You don't have to be the best in order to add value to someone's project. It's okay to learn from others but recognize your stage in your career and be ok with it.
Also avoid gear envy. Just don't do it. If you are able to make the films you want to make then you have the right gear, if you need something in order to be able to achieve your goals then it's time to invest.
Investment in your business is important, but focus on investments into equipment that will speed up your processes or add value to the output of your projects.”
Tips on How to Start a Production Company
While the mental image of that Venn diagram will help you brainstorm how to start a production company, you’ll need to take off your filmmaking hat and reach for your business hat.
You need a solid business plan to start a company. You’ll need to think about marketing, the legal steps of registering your business, how you’ll handle taxes, human resources, and a bunch of other things that probably aren’t things you’ve thought about before.
One of the most valuable pieces of advice to keep in mind is that you won’t be an expert at everything. It’s easy to find advice on how to register an LLC and how to manage a production team — everyone’s got an opinion on that sort of thing, and there are dozens of resources out there to help.
But part of starting a production company is knowing you will make mistakes. Your goal is to minimize the size of them, and learn from the experience as you continue to grow your business. That is probably the best advice we can leave you with:
“Don't let your mistakes defeat you, let them teach you. If you quote too low on a gig, quote higher on the next one. If your client doesn't like the end result, figure out why and make the next one better.
If you approach your mistakes properly, you'll learn far more from your missteps than you will from your perfections.”
— Tim LaPointe
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