It doesn't matter how big or small the project is; the budget is the most vital key to making your movie a success. It is also a critical factor in determining whether or not a movie is profitable for investors or, as we call it in the business world, ROI.
Essential Tools Needed For Success
Filmmakers need to know how much it costs to make a movie. This guide will show you everything you need to know about film budgets so that you can plan your next project accordingly.
The link below is a excel spreadsheet template and can be used with google sheets. Google sheets is part of google drive that will allow you to share amongst your production team.
There are two phases of a budget to think about; Preliminary and Secondary. The Preliminary is the initial budget to help you obtain funding, and the secondary is more geared towards after the funding is secured. Think of the Preliminary as your proposal to an investor; they will want to see their ROI and how it will be of value to them. The secondary is the aftermath and literally what you have to work.
We will primarily be talking about the preliminary budgeting within this guide, though. There are situations where you don't need the two-phase approach. For example, suppose you are filming a short film. In that case, you will primarily stick to the Preliminary Budget due to the small amount of required funding. Short film producers will only approach private investors if it has a great return on profit.
Different Aspects Of A Budget
There are also some things to think about when assessing how much your overall budget is going to be;
- Locations
- Marketing and Distribution
- Cast and Crew.
Strategies To Consider Before You Begin
You got to determine if the cast and crew will be paid or will not because there isn't any in between. Either the cast and crew all get paid, or the cast and crew don't. But in my view, I'd choose everyone getting paid. It is simply because the overall value of the production will go up exponentially.
Let's face the math; No one wants to volunteer, and if they do, they will not operate at their peak performance. You want to bring a sense of value; everyone has mouths to feed and bills to pay. Making a Movie isn't a hobby; it is a job. It is time to shift your mindset from this minimal production mindset to a top-tier one.
Change Your Mindset
If you have a $10,000 budget for a production, and you spend less than $8,000 of it on one actor, it will decrease the overall value of your project. In turn, it will leave you with only $3000 to spend on the rest of the production.
It's not a good mindset to have. The actors only make up for a small amount of the production, but the crew is where it will make or break your film.
Tip For Success
If you are working on a very minimal budget, write the script to the locations that you have available and not the latter. It will save you money on your production because you won't have to think about film permits and if you need security or not. You have the locations available for free, so why not use them?
Kevin Kellum said; "There must be a fine balance when it comes to hiring actors and crew on a film set. You want a name that will bring in money but at the same time not cost you your whole production budget. Finding that balance will not only free up and save money but it will also bring in money.
Preliminary Budget
What do I need to account for to make this practical? Here are some standard percentages to account for when making your budget.
- Pre-Production - 10%
- Production - 35%
- Post-Production - 35%
- Marketing and Distribution - 20%
Pre-Production
Pre-Production is the beginning phase of production, and things to account for within this is office supplies, acquiring insurance, script fees, location scouting, and courier service. You can adjust it with or without having a casting director but on a higher budget, you would account for a casting director's rate.
Production
Production is a heavy hitter, and it is because there are a lot of things to think about and adjust. Like I said above, if you have a very minimal budget, write the script for your available locations. Otherwise, you will have to account for the safety and security of the locations. Costs for these will include location permits and security, plus paying for the location itself.
Heavy Hitter items to Adjust The Budget For
Travel expenses on your cast and crew, lodging, paying the cast and crew, and gear rentals. I put gear rentals in because not every DP or Gaffer will own 100,000 dollars worth of gear. Plus, if you use their gear, you, as the production company, are responsible for its liability.
It is in your best interest to rent the gear that the crew owns vs. having them bring it on set and risk the overall production. If something breaks, it doesn't fall on the gear owner. Instead, it falls on the production company.
How much should I pay for my cast and crew?
It all depends on what you have to work on. Plus, there are minimum requirements to account for if it is a Union/Sag Set or Non-Union Set. Union Sets have guidelines and stipulations to account for, and they will vary according to the union you work for. So, yes, there is more than one.
Crew Members are Employees
Crew members are non-exempt employees. This type of employee is required by law to be paid hourly rates; however, some features within these hourly rates are adjusted and won't make up an actual day rate. One of the features is OVERTIME. If you have an employee scheduled for 12 hours, you will get them done within 12 hours, or you will have to adjust to paying overtime.
Post Production
Post- production is another heavy hitter because this is where the main make-or-break comes into play. I always advise people to set aside a big portion of the budget for Post. Here are some of the thing you got to account for:
1) Composers
Composers will overall set the mood and the tone for your film. They will go through the film and create music that fits overall. For example, If you have a very drawn-out emotional scene, you wouldn't want a heavy rock song to play underneath it, right? Of course not; you would want something mellow and sentimental that will play with their heartstrings when the audience hears it.
2) Sound Designer
Sound Designers will go in after the picture lock has been completed and create the subtle sounds a normal ear would hear in an environment. Such as; Doors opening and closing, feet are walking through sand, etc. These subtle sounds make a massive difference in the overall production value.
3) Editors
You will have to hire several different types of editors depending on the script, VFX or Visual Effects, Colorists, and the main timeline editor. Like the composer, every type of editor plays a vital role in setting the tone and mood of your film.
Marketing and Distribution
I can't stress these elements enough because, without these, no one will know about your product and where to go to see it.
There are many different types of marketing, about 40 different types with thousands of strategies that fall under sub-categories. For example, there are many different avenues to look at regarding distribution. Some are Theatre, Streaming Services, and social media.
The most cost-effective way of marketing is word of mouth, but how do you get people to start talking about your film? Either by the power of social media or by reaching out to bloggers or vloggers and seeing if they would be willing to do a shout-out and discuss your project involved.
What to Account for when Budgeting For Marketing and Distribution
Set aside 20% - 30% of the budget for Marketing and distribution. Distributors typically get paid on the back end of things, but for now, let's stick to 20% of your budget.
To get started, you must create a strategy to both to turn a profit and reach your audience. Of course, many will think I want everyone to see my movie, but this isn't what you want.
DEMOGRAPHICS 101
When it comes to marketing, you have to scale down to the demographics you want to reach and then account for how you will reach them. Distribution will then play a critical role in reaching the targeted audience. Figuring out your target audience is always based on who you made the film for, and what you want them to learn. You wouldn't teach a Kindergardener College math would you?
How to create the budget
Now that we got these addressed, it is time to understand how to create the budget. When it comes to assembling the budget, there is no right or wrong way of doing so. Still, there are many critical factors: Above the Line, Below The line, Below The Line Post, and Others. We will address each one and help you get a basic understanding of how to adjust for it.
Formula
Here is a simple formula that you can use to help you figure out the exact amount needed for each:
Formula: Number of days (or hours) x unit rate = line item cost
Above The Line
Above the line is where you would include the Principal Actors, Writers, Directors, and Producers involved. Above the line can also include acquiring the rights to film the said project, like obtaining copyrights, etc
Below the Line
Below the line has many high costs, such as equipment, permits, props and set design, locations, general crew or staff, production needs, lodging, food, travel, office supplies, and rentals. ETC...
Below The Line Post
Below the line-post is known as your post-production budget. The below-the-line post will include your editors, composers, and sound designers. Plus other misc expenses to ensure it is done correctly.
Other
The OTHER section on the preliminary budget should have a better name because it is the most crucial part of the budget. The other section will include your marketing, distribution, production insurance, and entertainment lawyers. As I said, I would rename OTHER to CRUCIAL if I could.
Think Like a Business, Not a Side Hobby
I want you to think of your script as the product you are selling and the budget as your business plan. When approaching a private investor to open a small business, they want to see your plan of attack and what you have to show for it. If you ever watch Shark Tank, this is an excellent example of how to present your product to an investor.
Some might say, but it isn't a business that I'm opening, but that is where you have to change the way you think. Each movie you create is a brand new business that you are starting, and it is up to you to make it a success.
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