A business plan is a tool with three basic purposes: communication, management and planning.
As a communication tool, it is used to attract investment capital, guarantee loans, convince workers to hire, and help attract strategic business partners. Developing a comprehensive business plan shows whether a company has the potential to make a profit. It requires a realistic look at almost every phase of your film project, particularly the distribution and subsequent revenue streams required to recoup your investment. In addition, it shows that you have solved all the problems in your project.
As a management tool, the business plan helps you track, monitor, and evaluate your progress. The business plan is a living document that you will modify as you progress through your project. By using your business plan to establish timelines and milestones, you can measure your progress and compare your projections with actual achievements.
As a planning tool, the business plan guides you through the various phases of your business. A thoughtful plan will help you identify obstacles and obstacles so that you can avoid them and establish alternatives.
But more importantly, in a film project, the business plan also serves another important purpose; you need it to attract investors to finance your project. No one is going to invest in your project unless you can see how they will be reimbursed and more importantly, you will make a profit.
“Anyone looking for financing for anything should have a business plan, period,” says talent manager Glenn Rigberg, Rigberg firm, Roberts, Rugalo of Beverly Hills. “An Independent Film Business Plan [without money and a hard offer to go with it] it won’t make actors stick. But a strong and compelling plan can give a filmmaker a degree of credibility in the fundraising arena. That’s where it counts. “
What should be included in a film business plan? Your business plan should always be simple and straightforward. Don’t waste a lot of time developing a 40-page document that no one will read. Keep it to 10-15 pages maximum. Generally, each plan includes the following;
* The Executive Summary: A cover page that lists the credits of the producers, director and talent and describes the budget, start date and other key information in short, short paragraphs.
* A synopsis: a short version of the story followed by a “investment merits” section, which breaks down all the positive elements of the project, but does not include the ending (you want them to read the script). These elements can be established talent, distribution guarantees, or large potential audiences for the film.
* Environment – a short summary to educate your reader about the industry and opportunities within the industry. You can also describe who your potential clients are and you can mention some movies that look like your project.
* Operations- Description of how your internal operation will be structured from top to bottom to produce the project. Indicate what support services, casting, equipment, facilities, locations, legal advisory services, subtitling, etc. it will be necessary to successfully execute the project. Document the key capital requirements necessary to deliver your project. Describe the sources and terms of the funding. Indicate what funding has been obtained and how much is still needed.
* Marketing – Describe your company’s approach to chasing the market to distribute your film and earn income. Summarize your distribution channels and your strategy.
* Financial Projections: Provide an analysis of what it will cost to produce the film that addresses the total funds required, the source of the funds, and the balance to be financed. Include a budget summary with projected costs above and below the line. List your sales projections and briefly describe how you obtained them.
* Financial statements – Prepare a cash flow statement showing cash inflows and outflows from month to month during the first year. Prepare a balance sheet that reflects the assets and liabilities of the project. Prepare an income statement showing the income, expenses, and profitability of the project.
In these times of recession, cash is hard to come by. It is no longer enough to present a spectacular script and a fantastic release. In this new independent movie economy, people who still have money want to see payback projections, marketing plans, internal rates of return, and multiple sources of income. An informative and properly prepared business plan will go a long way in obtaining financing for your project. It can also be a valuable tool in ensuring the timely and efficient completion of your movie.
