The Film Business

F-Up #15 “I Don’t Need a Business Plan”

film fuck upsThe F-Up

A business plan is to film financing what a resume is to job hunting. While your resume alone will likely never get you a job, no one will likely take you seriously if you don’t have one. So, you have to have one and it has to be impressive—the same goes for a business plan.

Some people may argue that filmmaking should be art and not business, so why would you make a business plan? Their mistake is treating the two as mutually exclusive. The earlier you realize that a film is many things, including a business, the better off you will be.

How to Do It Right

More than likely, you are not chasing the dream of filmmaking to write business plans. However, you will find that the process of writing it will force you to think through your strategies and thus actually help you and your movie succeed.

It doesn’t really matter if you are raising money to start a dry cleaners, Internet startup, or any other type of business; the document you give to potential investors describing what you’re offering is your “business plan.” It is also sometimes called an “investment memorandum,” “offering memorandum,” “prospectus,” or “private placement memorandum” (or “P.P.M.,” to pretend as though this document could be made cool by using an acronym), but any of these names means the same thing.

When you approach someone to invest in a film, you are absolutely proposing a business investment, and you must conduct yourself accordingly. You are not asking for a handout, donation, or gift; you are asking for an investment. A movie is a high-risk investment venture and should be treated as such. Do yourself a favor and have a professional, thought-out, and enticing business plan ready to go.

You can write a business plan yourself, and it may even prove less intimidating than it sounds. There are several good books or courses you can take on how to go about writing one. The topic is more than worthy of its own book, but to give you an idea of what a business plan might entail, here are some likely sections:

To start, you might have:

● Your objective

● Company description

● Bios for the management team

● Legal disclaimers regarding investing in general

● The amount of money you’re looking for

● The amount you are offering investors in priority return

Next, the business plan will contain information about the movie itself, including:

● Synopsis

● Cast and characters

● The people involved in the project

● An estimated budget

● Projected schedule for the entire project

● Marketing, distribution, and sales strategies

It is also good to include:

● An overview of the state of the movie industry as a whole

● Financial projections that show how well your film(s) may do

● And even more legal stuff describing some (but not all) of the risks involved

Although a lot of those sections may sound intimidating, most of them are fairly standard, and you’ll likely find that with some hard work, writing this is something you or your team is capable of. And, if you find that you’re not the right person to write your business plan, you can hire a lawyer or producer to put the document together for you. There are even people who do nothing but write business plans for a living.

If you do write the business plan yourself, put as much work into it as possible, and then have a lawyer review it before giving it out to potential investors. There are laws about how you can go about offering investments and securities, with many states requiring that certain wording and disclaimers be included. So let a lawyer help keep you out of any potential hot water. After pouring days or even months into the document, know that your potential investors may never even read it. They may give it to their accountant or lawyer to review, or it may barely get skimmed at all. Regardless, the simple existence of your business plan is critical to your film being taken seriously as an investment opportunity. Once again, it’s like your resume: it may not get you a job, but no one will take you seriously if you don’t have one. The business plan has to be a compelling sales tool, and it has to be professional because some savvy investors will absolutely painstakingly review it (or have their accountant and/or lawyer do so).

Excerpted from First-Time Filmmaker F*&^ Ups by Daryl Bob Goldberg ©2011 Elsevier Inc. All Rights Reserved.

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