A Step-By-Step Guide to Setting up a Film Production Company 

Here are the most essential factors to consider when starting your film production company:

1. Studio — Secure a studio space for filming and post-production. This could range from a small office to a larger facility, depending on your needs and budget.
2. Production equipment — Invest in high-quality equipment such as cameras, lighting, sound equipment, and editing software. You may also consider renting equipment to keep initial costs down.
3. Crew — Hire experienced professionals for key roles such as directors, producers, writers, cinematographers, editors, and sound designers.
4. Financing — Determine how you will finance your projects. Options include personal savings, loans, investors, crowdfunding, and grants. Research and apply for film grants and tax incentives that can help reduce production costs.
5. Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or hire one of the best LLC services on the market.
6. Legal business aspects — Register for taxes, open a business bank account, and get an EIN.
7. Networking and industry engagement — Attend film festivals, industry conferences, and networking events to connect with other filmmakers, distributors, and potential collaborators. Join professional organizations and guilds related to film production to stay informed about industry trends and opportunities.

Step 1: Decide if the Business Is Right for You

Pros and cons

Before starting a film production company, it’s important to weigh the pros and cons.

Film production industry trends

Industry size and growth

• Industry size and past growth – The US movie and video production market is worth $18.2 billion in 2022. After experiencing a decline over the last several years, the industry is back on the rise.((https://www.ibisworld.com/industry-statistics/market-size/movie-video-production-united-states/))
• Growth forecast – The US film industry is expected to grow by 8.3% annually through 2027.((https://www.zippia.com/advice/us-film-industry-statistics/))
• Number of businesses – In 2022, 4,912 movie and production businesses are operating in the US.((https://www.ibisworld.com/industry-statistics/number-of-businesses/movie-video-production-united-states/))
• Number of people employed – The US movie and video production industry  employs 34,633 people in 2022.((https://www.ibisworld.com/industry-statistics/employment/movie-video-production-united-states/))

Trends and challenges

Trends within the film production industry include:

• Through the use of social media platforms like YouTube, amateur film producers can showcase their work without having to go through established media channels. Many independent filmmakers have had their work go viral, landing them bigger deals. 
• Gaming and filmmaking are beginning to come together through the incorporation of virtual reality technology. Big companies like Netflix are exploring movies and TV shows that have an interactive component where audiences can influence a program’s outcome.

Challenges within the film production industry include:

• The recent pandemic put a countless number of film projects on hold and many were canceled completely. Although the industry is experiencing a comeback, it’s still feeling the effects of the past few years.
• Even if you capture the perfect footage, the editing process can be very time consuming, especially if you detect issues with sound or picture quality. This can cause a great deal of stress, especially when there are client deadlines to meet.

What kind of people work in film production?

• Gender – 32% of US film producers are female, while 68% are male.((https://www.zippia.com/film-producer-jobs/demographics/))
• Average level of education – The average film producer in the US has a bachelor’s degree.
• Average age – The average film producer in the US is 40 years old.

How much does it cost to start a film production company?

Startup costs for a film production company range from $13,000 to $29,000. Your main costs will be the purchase of production equipment. Additional costs include production software, a website, and marketing expenses.

If you’re interested in taking an online course to develop your video production skills, sites like Udemy offer classes for under $100. 

You’ll need a handful of items to successfully launch your film production company, including:

• Lighting kits
• Lenses
• Microphones
• Computer
• Website
• Production and editing software

Start-up Costs	Ballpark Range	Average
Licenses and permits	$300-$1,000	$650
Insurance	$500-$1,000	$750
Marketing and advertising	$1,000-$3,000	$2,000
Website setup	$1,000-$3,000	$2,000
Production Equipment	$10,000-$20,000	$15,000
Production Software	$500-$1,000	$750
Total	$13,300-$29,000	$21,150

How much can you earn from a film production company?

The average cost of film production services for a new company is $50 per hour. As your production company grows, your rates will likely be much higher. After factoring in operating costs, expect a profit margin of around 60%. 

In your first year or two, you could work 40 hours per week at a rate of $50 an hour, bringing in $104,000 in annual revenue. This would mean $62,000 in profit, assuming that 60% margin. 

As your company builds a reputation, you could raise your rates to $150 per hour. At this stage, you’d rent out a production facility and hire staff, reducing your profit margin to around 30%. With annual revenue of $312,000, you’d make a handsome profit of $94,000. 

What barriers to entry are there?

When it comes to starting a film production company, there are a few barriers to entry. Your biggest challenges will be:

• Purchasing expensive production equipment
• Finding distribution channels for your films

Step 2: Hone Your Idea

Now that you know what’s involved in starting a film production company, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research film production companies in your area to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a wedding video production company or a documentary production firm. 

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Plan your niche and offerings

You’ll be providing film production services for customers within a specific niche, which could include weddings and events, corporate videos, music videos, and more. You will most likely also offer editing services. If you produce shows and films for entertainment purposes, you could generate additional revenue by working to find production outlets for client projects.

How much should you charge for film production?

Film production companies charge for their services in several different ways, the most common being per hour, per day, or a flat rate per project. A beginner film producer could charge anywhere from $25 to $100 per hour, while a more experienced professional could charge as much as $250 or more. 

Depending on deliverables, daily rates for services could range from $1,000 to $2,000. Many wedding video production companies charge per event or package, which commonly ranges between $5,000 and $10,000. Aim for a profit margin of around 60%. 

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

If you’re not producing your own original content, your target market will be people looking to create films and videos for a variety of different reasons. For independent film projects and wedding and event video production, spread your marketing efforts across social media sites like Instagram, TikTok, and Facebook. To target customers looking for corporate video production, advertise your services on LinkedIn. 

Where? Choose your business premises

In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out a production facility. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Film Production Company Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “production house” or “film company”, boosts SEO
• Name should allow for expansion, for ex: “Dream Factory Studios” over “Romance Film Studios”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Film Production Business Plan

Here are the key components of a business plan:

• Executive Summary: A brief summary outlining the core elements of the film production company business plan, including its mission, vision, and key objectives.
• Business Overview: A concise description of the film production company, outlining its history, mission, vision, and the unique value it brings to the market.
• Product and Services: Clear and detailed information about the films and related services the company will produce, including genres, themes, and any additional offerings.
• Market Analysis: A thorough examination of the film industry, identifying target audiences, market trends, and potential opportunities for the production company.
• Competitive Analysis: A comprehensive evaluation of competitors in the film production industry, highlighting strengths, weaknesses, and strategies for differentiation.
• Sales and Marketing: Strategies for promoting and distributing the company’s films, including sales channels, promotional activities, and audience engagement plans.
• Management Team: Introductions to key members of the management team, emphasizing their relevant experience and skills in the film production sector.
• Operations Plan: Detailed insights into the day-to-day operations of the film production company, covering pre-production, production, post-production, and workflow processes.
• Financial Plan: A detailed projection of the company’s financial performance, including revenue forecasts, budgetary considerations, and potential return on investment.
• Appendix: Supplementary materials, such as resumes of key team members, additional market research data, and any other relevant documentation supporting the business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to film production companies. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your film production company will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a film production business. You might also try crowdfunding if you have an innovative concept.  

Step 8: Apply for Film Production Company Licenses and Permits

Starting a film production company requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your film production company as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.  

You may want to use industry-specific software, such as StudioBinder, Celtx, or Dramatify to schedule shoots, create storyboards, and manage client and vendor contacts.

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

YoYou can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

Marketing

Here are some powerful marketing strategies for your future business:

• Professional Branding — Ensure your branding, including logo and promotional materials, reflects creativity, professionalism, and your unique storytelling approach.
• Website and SEO — Develop a visually appealing website showcasing your portfolio and client testimonials. Optimize for search engines using keywords related to film production and video content creation.
• Direct Outreach — Connect with potential clients at industry events, film festivals, and networking meetups to introduce and promote your services.
• Social Media Engagement — Use platforms like Instagram, LinkedIn, and Vimeo to share your work and engage with your audience, enhancing visibility and attracting potential clients.
• Industry Blog — Establish thought leadership by sharing insights about film production and industry trends through a dedicated blog.
• Video Showreel — Regularly update and promote your showreel on your website and social media to highlight your best and recent work.
• Email Newsletters — Keep clients and potential leads informed with updates on new projects and industry news.
• Workshops and Webinars — Host educational sessions on video production and storytelling to engage your audience and demonstrate your expertise.
• Partnerships with Creative Agencies — Collaborate with creative and marketing agencies to expand your client base and work on diverse projects.
• Client Referral Program — Implement a referral program that rewards past clients for bringing new business to your company.
• Targeted Advertising — Utilize platforms like Google Ads and LinkedIn for targeted advertising to reach businesses and professionals in need of film production services.
• Film Festivals and Competitions — Participate actively in film festivals and competitions to showcase your work and gain industry recognition.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your film production company meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your film production business could be:

• Magically memorable films
• Top-quality video for weddings and corporate events
• The power of film brings stories to life

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a film production company, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in film production for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in film production. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a film production business include:

• Production Crew – Film footage, edit content
• Administrative Assistant – Schedule shoots, assist with tasks on set
• Marketing Lead – Manage social media accounts, run ad campaigns

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Film Production Company – Start Making Money!

Film and video production takes a lot of hard work and a specialized skill set, but it’s a rewarding and creative way to earn a living. Right now the industry is growing fast, so you could launch your own firm and make good money while partnering with amazing clients and working with them to bring their ideas to cinematic life!

Now that you’ve done your homework, it’s time to launch the film production company you’ve been dreaming about and start working on the next Hollywood blockbuster.

Quick Answers

Is a film production company a profitable business?

Yes, film production companies can be very profitable. Your success depends on how well you stand out from the competition and choosing a niche that’s in high demand.

How do I handle and manage intellectual property rights and licensing for my film projects?

You should consult with a qualified attorney with expertise in entertainment law. They can help you navigate the complex legal landscape surrounding intellectual property and licensing in the film industry and ensure that you have the necessary permissions and agreements to protect your rights and avoid legal issues. 

How do I differentiate my film production company from competitors?

You can choose a niche market such as wedding films or documentaries. You can also be exceptionally creative with your film production and show clips of your work on YouTube. 

How do I handle and manage casting and talent management for my film projects?

You can work with a professional casting director and talent agency. A casting director can help you identify and audition actors for your project, while a talent agency can provide representation and support for actors throughout the production process. 

How do I get into film production with no experience?

It’s a difficult industry to get into with no experience. You should consider film school and then start getting experience with entry-level jobs.