3 Steps to Making Your Business More Profitable
Caitlin
3 Steps to Making Your Film Business More Profitable
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Pay yourself a management fee, build the budget before the pitch, then reconcile the actuals.
Three habits make a film business profitable. First, add a management fee line of 10 to 20 percent to cover overhead and your own time. Second, build a budget before you pitch, keep a broad pitch version and a detailed creative version, and hold the total. Third, track actuals during production and reconcile them after post.
So we have some insights to share that are a little different from the lessons you usually hear from Muse. Today, we want to dive into filmmaker finance - and before you roll your eyes (I can feel it), I will remind you that at the end of the day, we all have bills to pay.
So, let’s talk about making your business more profitable so you can stop doing the b^&&s%#t and spend more time making work you love.
Cool? Let’s jump in.
Step 1: START PAYING YOURSELF
I know, it sounds silly but actually paying yourself for the work you do is very often overlooked in our industry.
Paying yourself appropriately does not mean you are taking advantage of a client.
In order to be a World-Changing Filmmaker, you need to be an expert - it is absolutely critical. With the exception of the occasional passion project, an expert wouldn’t accept a job for no pay. So why are you willing to accept silently paying yourself less than you’re worth?
It’s time to change that.
Instead, start including a “management fee” line item in your budget proposals. This line item is meant to consider the expenses that may be seem less tangible, but are critically valuable to the success of your project, like your time! Typically a management fee is between 10-20% of your budget and should cover the overhead that goes into managing the business. A management fee is critical to ensuring that you are profitable and can use that profit to grow your business.
Think about it this way - any time that you spend on this project is taking away from you growing your business or working on other opportunities, so you need to account for that accordingly.
Step 2: BUILD A BUDGET - AND EVOLVE IT
Look, budgets are a pain in the butt. Nobody got into filmmaking to make budget spreadsheets. So often we just throw out a number we think the client will agree to and then hope we can do the project for less.
We have all done it.
And getting a yes from a client can be, or at least feel like, a big win, but in reality we are simply getting trapped in the cycle of hustling. Always needing to say yes to the next job instead of choosing work that you are excited about.
So let’s make the change.
Instead, make a practice to create a budget before you pitch a project. This allows you to proof out the amount that the you are pitching so you know that it is both feasible and profitable for your business. Remember to build in buffer for the things that will always come up.
Then as you learn more, evolve your budget!
We recommend having (at least) two versions of your projects’ budget.
The first version is used for the pitch and is purposefully broad to ensure you can accomplish the goal and come away from it profitable. Make sure your client is aware that line items in your budget may change once creative is finalized, but the overall total will remain the same. This flexibility in the line items is necessary to make the best decisions for the creative.
As you finalize creative, evolve the budget based on your creative needs. Once you have this evolved version of your budget, then comes the hard part - actually sticking to it.
Step 3: TAKE THE TIME TO LEARN
If you want to be a World-Changing Filmmaker, you cannot continue to do the same thing over, and over, and over. You must stop, and take the time to learn from your successes and your mistakes.
As you go through the production process, track your actual expenses within the actuals column of your budget. This is key for ensuring you know where your budget stands as you make decisions and know you will not go over budget. THEN, after post production, do a deep dive reconciliation and actually take the time to review it.
Were you over budget on travel but under budget on crew? Were you over in everything? Were you under in everything? Then, think through how you can apply those learnings to the next budget you do, always refining your skillset and your understanding of the nuances of filmmaking as you go.
I know the finances behind filmmaking can be wildly overwhelming.
Let us know if you like this type of content in our newsletters, we love sharing what we have learnt with you all!
Caitlin
A 10 to 20 percent management fee, a budget built before the pitch, and a real reconciliation after post. Three habits that make a film business profitable.
3 Steps to Making Your Business More Profitable Pay yourself a management fee, build the budget before the pitch, then reconcile the actuals. Three habits make a film business profitable. First, add a management fee line of 10 to 20 percent to cover overhead and your own time. Second, build a budget before you pitch, keep a broad pitch version and a detailed creative version, and hold the total. Third, track actuals during production and reconcile them after post.