In case you’ve been surfing the net on “how to start a production company” to no avail, fret not, this article is going to discuss extensively what it takes to establish a profitable production company.
Whether you are starting a film production company, music production company or paper production company, the steps involve are more or less the same.
Hence, put on your entrepreneurial cap as this article on how to start a production company takes you on a voyage of starting a successful production studio.
But before then, it’s very important to take a look at the concept ” production company.” And this brings us to the question;
What is a production company?
There’s no special or universal definition for this concept and as such a production company can be defined as a production house or a production studio.
In a more broader sense, a production company is a form of business organization that render a sort of works in the visual or performing arts, audio, radio and new media arts, film or television arts, comics and video games, etc.
The time is now entrepreneurial 0’clock; everyone is trying to venture into a business or the other.
So if you’re starting a new business in the production company, it’s a profitable venture really; all you need is to be fully prepared so as not to be financially and emotionally drained.
Accordingly, starting a production company won’t be has difficult as it sounds so far you can adhere with all the basic necessities that’ll be discussed today.
An ideal production company structure.
In other to touch every area while explaining how to start a production company with ease, It’s also important we highlight the production company structure or organogram.
And they are;
Head of Development
An ideal production studio must have a head of development who will also serve as the creative Lead. His major work is to identify a nice script to work on.
Head of Production
Also, the head of production will be saddled with a responsibility of producing a very great content.
He’s the one to hire an experience director, crew and cast members, and he handles the production fund and finances, etc.
The person saddle with this responsibility sees to the film editing process, motion graphics, visual effect work, etc.
Head of Distribution
Also, an ideal production company must have a head of distribution who’ll see to the selling of the audio, comics, film etc. He makes sure that all the produced articles are adequately distributed to the client.
Production Company Business Plan
Since the importance of a business plan to any new business establishment can never be overemphasized, it’s then necessary to say few things about it.
More so, starting a production company from the scratch requires you to discuss the following issues extensively. They’re what makes up an ideal production company business plan.
An executive summary is a brief and concise description of what the proposed production company will look like and what you need to do to make profit out of it.
While researching how to start a production company, you should also learn how to write a good mission and vision statement.
Your executive summary will also contain the formation of your production company team and employees, identification of your audience, production house location, etc.
You’ll also have to frame a short description on how your production firm will standout in the saturated labour market plus the categories of customers you’ll have.
In your production company business plan, it’s important you analyse the production business market. This can best be done after you must have carried out a market survey on the business.
Organization and management
For your business plan to be effective and accurate, you need to describe your production business partners — if you have one — and then map out an efficient business structure.
Business legal entity
Similarly, you’ll need to define the type of legal structure your production company will embrace. It’s over to you whether it’s limited liability company, partnership or a sole proprietorship legal entity.
Marketing and Sales
Identify how you intend to acquire new prospect, clients and customers for your end products. Ways to market them and how to make enough sales.
After all you can’t start a production company in a vacuum so it’s expected of you to identify the means of getting funds for your production business.
In your business plan, you’ll need to explain whether you’ll write to an investor or seek for loan from the traditional financial institutions.
Financial projection is another vital aspect of a workable business plan. Highlight how much you think your company will earn between the first five years of its establishment.
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However, the following are the surefire steps involves on how to start a production company without any problem.
1. Definite niche.
Be enlightened that one of the important things to do while researching how to start a production company is to reflect on what you enjoy doing the most.
If you are able to transfer what you enjoy doing the most into a company, then everything will be easier and you’ll be able to push forward.
That is to say, to start a successful production company, you need to define your niche first. There are many aspects that you can specialise on in this sector, hence it’s ideal you choose one.
Essence, you can start a film production company, you can equally start a book, magazine, newspaper or music production studio in the production industry.
Hence, it is very important you consider your financial budget and decide which of the production business you’ll venture into.
In case you derive major pleasure in handling the camera, you might then want to consider starting a production company that works on bigger films projects, short films, comedy skits, etc.
And if you equally have a nose for a news worthy event and eye for a well scripted story, then you might also want to venture into a newspaper and magazine production company.
And if you’re not a fanatic of a visual art, why not capitalize on a book production or music production company?
2. Market survey.
Market survey is one of the important aspects that must be covered when starting a new business from the scratch. So, it’s ideal you carry out a feasibility study on production company.
After you must have defined your niche in the production industry, then you’ll need to go out to conduct a thorough market research.
You’ll need to know how the production business is being run, where to get raw materials for the business, where and how to find your potential customers, etc.
In the same vein, in the course of doing your production company feasibility study, it’s important you learn about the custom of the trade. It’s important really!
3. Research the competition.
After you must have conducted a feasibility study on your proposed production studio establishment, up next is to do a thorough research on your competitors.
Look into the activities of all the production companies in your area. Doing this will gives you a full insight on what the production market actually looks like.
While doing this, you’re expected to cover all the production niches so as to have some basic knowledge on the business budget and the custom of production business.
4. Write a workable business plan
Having made a choice on the type of production company you’ll venture into and after you have carried out a thorough feasibility study, the next thing on how to start a production company is to write a your production company business plan.
The importance of an effective and workable production company business plan cannot be overemphasized. It’s the engine room of your legal entity.
With a well structured business plan, your production company will be able to see the lights of the day.
Therefore, to do this, you’ll need to follow all the steps highlighted above on how to write an effective production company business plan.
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5. Choose a production company name.
Another thing you need to know on how to start a production company is picking a unique brand and business name for your production business.
To do this, it’s advisable you pick a name that is very simple and easy to read, pronounce and remember. A brand name that’ll will say it all about your production business.
Always put your customers ahead of your own want. Only then will you be able to frame a nice name for your production studio.
6. Apply for Trademark
Choosing a nice and unique name for your production company is one thing, applying for the business trademark is another thing.
But before then, you’ll need to see if your chosen business entity name is available and not in use by anyone already. Only then will you be allowed to patent the business name.
So if it’s clear that your chosen brand name is free for use you can then proceed to register your business entity and patent your trademark.
7. Define your business legal structure.
Now is the right time to talk better on the available legal structures while you are still learning how to start a production company.
You can’t open your production studio for business without setting up the production company as a recognised legal entity first.
Thus, for you to know the available legal structures and which among them is best for your business entity, you can engage the service of an attorney or seek for a legal advice.
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The following is, however, the various types of legal structures:
- Sole Proprietorship
This type of business legal structure means you’re the sole owner of the production company and if there is any risk, you bear it alone.
Just like a sole proprietorship business structure, it’s a business own by many people. They share the profits equally, and they take responsibility for loss, too.
- Limited Liability Company (LLCs)
This business structure is best for a production business entity. If there’s any problem with respect to the company, the company bears the risk other than the owner(s).
- C Corporation
It’s a legal entity – though independent – that is owned and finance by shareholders. And host of others.
8. Register your company
Now is the perfect time for you to fill out all the necessary paperwork to make your production company a legal and legitimate business establishment.
After you must have gotten a brand name, trademark and a definite legal structure; there’s nothing more than to proceed to get your production company registered.
This is very simple, all you need is to pay some token and sign all the necessary documents needed before a license can be issued.
After every legal work has been done and you’ve gotten a license to open a production house or company, then you’re ready for business.
9. Secure funding
Now that your production company has been approved and you’ve gotten a license to open your own production business, there’s nothing much on how to start a production company.
The little but important thing that is left for you to determine is how to secure funds for the business.
But if you have enough investment capital on you, then the story will be different. But if the reverse is the case, may be you’ll need to write a business funding proposal to investors.
In case the investors are not ready to finance your video production company, you can perhaps seek for loans or reach out to family and friends.
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10. Choose a location
Now that everything is on ground; effective business plan, business registration certificate, license and business fund, now is the right time to look for a perfect location.
The location where your production company will be set up is very important as it has a great deal to contribute in your business marketing and distribution channel.
Depending on your chosen niche, if you’re starting a film production studio, it’ll be ideal if you set up your own film production house where there are numerous film production companies.
This will give you the opportunity to market your own business brand to your target audience.
11. Employ your staff
One of the easies but hard to do tasks on how to start a production company is team and staff members selection.
There are quite a large number of people out there looking for a job, but how do choose the best, experienced and hardworking one among them?
Whatever means you’ll employ to pick your team members, you’ll need to recruit your staff base on their areas of specialization in the production industry.
You’ll at least want to have intellectual people around you; employers that can take your production business to a great height with their level of expertise.
So your ideal production team could be five to fifteen persons if it’s a small business. But if you are starting out large, you may want to consider more number.
You will need to market your new business venture so that your target clients will know of your production company existence in the market.
There are many ways of doing this. You can market your business by going online. That is to say, you place an advert on blogs and websites and you can also use the instrument of social media platforms.
Also, you can adopt the offline or physical advertising where you go to media houses like TV, radio, magazine or newspaper for your new production company advert.
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Although this is not the only available option on how to start a production company, but the mentioned steps above are the proven ways to start a successful and profitable production company.