How to Start a Film Production Company

Summary: Film production could be costly, but it could also be within a budget with the help of new technologies. Interested in starting one? You can actually do so and if you hit it right, you may be on your way to millions. Read our guide and learn what you need to know in starting one.

Just like any other business, starting a film production company must begin with the development of a business plan, the identification of what legal structure the business should take and the identification of sources of funding.

To begin a film production company, it is necessary to define what type of movies the company will produce. Will it be real motion pictures or digital films? Deciding on this will let the owner know funding requirements and how to incorporate the business.

Digital Film Production

Digital film-making don't need as much funding as a traditional film production company. It is low cost and involves only simple editing, and affordable digital recording and editing equipment. It can reach a wider audience without the need for a big marketing budget. Digital films don't have to be distributed through traditional methods as they can be contained only on iPods and cellphones.

Motion Picture Film Production

Traditional film production, on the other hand, could be costly and could require one or more people doing business together. The work is more complex, necessitating delegation of tasks to ensure someone is doing the paperwork for the legal aspect of the business; another is networking with screen writers to develop scripts that could be made into films; another is looking for new clients and new talents; and another is looking for investors who could help fund film production.

Cost and Profit of Film Production

Some very low-budget films that gained wide popularity, like Robert Rodriguez's El Mariachi in 1992, cost only below $10,000. On the extreme, reportedly, the average cost to produce and market a film by a studio affiliated with the Motion Picture Association of America in 2007 was around $106 million. Low-cost films – like The Blair Witch Project -- that could take just below $20,000 to make, could generate millions in sales, generating large profit for the filmmakers. On the extreme end, large-budget films could flop, grossing sales way below the cost to produce it. Nonetheless, even a low-budget producer can still collect royalties of 3%-6% of sales on future showings of the films.

Film Production Equipment

Equipment needs in this business will depend on how big the planned production is. For digital production, there should be at least a digital video, tapes, hard disks, flash memory, tripod, and editing software. For large productions, there should be transportation, actor's trailers, rolls of films, cameras, cranes for moving set equipment, sit locations, props, costumes, generators, and computers.

If you are interested in movies then you might want to read our how to start a theater article to learn more about this industry.