According to the U.S. Bureau of Labor Statistics, opportunities in the motion picture industry will increase 14 per cent from 2008 to 2012. Film production companies proliferate throughout the United States and offer audiences the opportunity to see diverse stories on screen. Major film production studios may dominate the market, but savvy, independent filmmakers who exhibit a flair for storytelling and value creative control might find artistic freedom in starting a full-scale production company.
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Build a Niche
To build a solid film production company, a film entrepreneur should carve out a marketable niche. In other words, having a good idea for a film and then subsequently developing a likable, fresh script requires an understanding of the potential audience. Filmmakers who begin production companies generally have a certain level of expertise in a movie genre (e.g. horror, action, independent). A filmmaker with a specific, creative vision should research a niche by examining the characteristics of the people who will most likely watch the film. Determine the audience and match a vision or style compelling enough to capture a niche market.
Create a Legal Name
In addition to targeting a niche audience, a filmmaker should register her production company as a legal business. A film entrepreneur can accomplish this by setting up a sole proprietorship (SP), a limited liability company (LLC) or a limited partnership (LP). For creative entrepreneurs starting out, a sole proprietorship offers simplicity but carries some risks. A sole proprietorship means that the business owner and the company exist as a single business entity. Thus, a sole proprietor in a film production company bears the entire financial risk if a lawsuit or other unforeseen calamity occurs. However, a sole proprietorship can be cheaper and easier to set up compared to other business entities. As a film entrepreneur advances in her career, a LLC or LP may provide more protection against personal financial risk and legal claims against the production company. LLCs and LPs lower risks by separating the film entrepreneur's personal finances from the business income. However, LLCs and LPs require more cost to set up and maintain.
Write a Business Plan
After formally setting up a legal business structure, a filmmaker should create a business plan which accurately details upcoming film projects. The most important part of writing a business plan starts with developing a unique script with broad appeal. The business plan needs to describe the type of production, means of distribution and overall production costs (e.g. cast, crew and distribution). A filmmaker also needs to gather a reliable team of actors and crew members to support the success of the business plan and the production company. This team does not have to be a "team of rivals" but should complement the overall vision of the film entrepreneur.
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