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Old 12-05-2017, 06:20 PM   #1
DEVINDER83
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Seeking advice on starting a production company

Good evening everyone! Its my absolute pleasure to discover this forum and share my thoughts here. Im an independent filmmaker who has produced and directed couple of award winning and multiple festival screening short films and one documentary. Infact my second short film also got a distribution here in the US. I made these films couple of years ago and since then have been working in corporate world in an unrelated field. Since quite some time I had been planning to find ways to make my real passion as profession. As we all know, its tough!
I have plans of making an independent feature film soon, but im not expecting that to turn into any windfall as most indies lose money! Recently I decided to go part time in my alternate career and put some of the money I have earned over the last few years in starting a video production business which will have some decent cameras, lenses, post production studio etc etc. Looking at some existing similar businesses, I estimated total investment to be around 50-75k which included 4-6 small to medium end cameras, high end lenses, solid lighting equipment, microphones, sound design softwares, couple of editing workstations and other miscellaneous stuff.
So, here is my plan-

1. Rent a small office space in an inexpensive semi commercial area where I can put equipment and have decent space for post production work, including mini interview shoots, green screen etc.

2. Immediately start making some revenue for the company by renting out equipment, post production equipment and studio space to independent filmmakers, documentary filmmakers, political marketing companies, etc etc

3. Start producing and developing work for corporate clients, educational clients, events etc. Ofcourse this will take some time to take off, I assume

4. Develop a team of other technical people-DOP's, sound designers, editors and animators etc and hire them on project basis; hire a part time administrative assistant to help in scheduling, answering calls etc

Btw, forgot to mention, I plan to start this business somewhere around greater washington DC metro area-northern virginia/baltimore area.

My long term plan is to hone my both creative and technical skills through the projects I will do through my production company, develop a network of creative people and eventually make my indie feature film using most of resources from the company (both equipment and talent wise)
I would like you experienced guys to give your two cents on following points-

1. How does the overall plan sound in the context of current climate of video production business and is there anything important Im missing here?

2. What kind of cameras and other equipment you guys advice on investing in keeping in mind the current advancements in technology and future?

3. Is there anything else I can add in my planned list of equipment rental/services offered which has lot of demand nowadays. I mean may be something like media conversion from one format to another or perhaps something else?

Million thanks in reading it and thanks in advance for your help.
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Old 12-05-2017, 06:49 PM   #2
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Old 12-05-2017, 07:05 PM   #3
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Well I'm no expert, but I'll get the ball rolling.

It seems the new standard is 4K, so you'd probably want to make sure your cameras record in 4K.

As far as the scale of all of this, you might want to start even smaller than you have in mind. Any idiot college kid with a camera can compete. You would probably want to start with two cameras, some lighting gear, some sound gear, and an editing computer, all located in your garage. From there you can build a portfolio of professional advertising type work and grow.

Just my two cents.
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Old 12-05-2017, 09:59 PM   #4
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Start with:

What sort of work do you want to do in the first 12 months? What sort of clients do you anticipate you will be able to get in the first 12 months? How achievable and how compatible are those two questions? What do you realistically expect you will be able to do in terms of the level of work in the first 6-12 months?

Renting out equipment and space is not an easy money maker, and takes a huge amount of initial capital. Unless you're going to be investing in Alexas and top of the line equipment and suites (which you won't be able to on even 75k) you'll be lucky to even make your money back in 24 months.

Renting out equipment and space should be a supplemental money stream, not a main source of income unless that's specifically the business you want to get into and you can afford to do it properly.

My suggestion would be start small. Start at home, build up some clients and re-invest all the money you make into your business. I know sometimes we need to take risks, but spending $75k up-front seems like an unnecessary risk. Buy one camera and some basics for now. Spend $5-10k. Build up a few recurring clients who can sustain you. Then expand. That way you get to test the market. No use spending $75k on equipment and gear and finding you can only get a handful of clients whose budgets are no higher than $400/video and the people who want to hire your facilities can only afford $50/day...
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Old 12-06-2017, 07:05 AM   #5
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I'm with Jax:
start from home.
Do yo know how to get clients?
No?: start networking and get the book 'Get clients now!'.
If you start from scratch it might take a month or 2 to land a first great job.
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Old 12-06-2017, 10:28 AM   #6
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Why don't you market yourself as a director instead of a full service production company, and then, said production companies can hire you? No overhead!

Specialize in something. Ex: Shoot a commercial reel with a couple spec commercials, like a fake Ford or iPhone commercial, etc. to get into commercial direction. Big money in commercial direction! Then, prod companies hire you, instead of you having to create one. Just an idea! Good luck!
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Old 12-06-2017, 12:03 PM   #7
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Old 12-06-2017, 04:25 PM   #8
DEVINDER83
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Thanks everyone for your wonderful responses! I will reply one by one-

@All-Star Productions - Thanks so much! I agree 100% with you. The estimate I had given earlier was for an existing full fledged similar business. Ofcourse as a start up, I wont get everything right away. Any suggestions on specific cameras and other stuff?

@jax_rox- Thanks so much! Well, you raise very pertinent points. I think a very small investment might not be helpful for the goal I have, although completely agree with you that rental income is going to be only supplemental-which is fine with me. Also, as mentioned to earlier poster, I agree that no point investing 75k right away. But i do want to give the company a professional look and pitch it more than average joe with a camara. Otherwise if you only operate from a garage with minimal equipment, you are competing with 100's of, if not more, videographers and editors in your area. Btw, when you mention that pure rental business could work, what kind of minimum investment you would imagine for that?

@WalterB- Thanks for your input. Yes, Im not very far from what jax is saying. I do have some network in DC area where I could start with, but Im aware of the time and effort it will need to even secure first few clients. Im up for the challenge.

@indietalk- Thanks so much for your response. Hmmm..well I see your point, and will ponder more over it. I dont have any experience with commercials, but if you look at some of my work, you may think I have a talent for that. But isnt that business already very competitive and hard to break into?
@directorik- Thanks so much! To answer your questions
is there an immediate need for those services? Are
there not enough equipment rental places in that area? Will you
have enough equipment or is your plan to rent out one kit at a
time? Is there a need for studio space in your area?


Honestly i dont know how much need is really there. I do see few rental companies, but not much. Im planning to buy atleast 2-3 cameras, some high end lenses and lighting equipment and few other things to start with.
As for your last question in terms of exp of doing a business, I do have business degree and have been running a consulting business since few years. Although im not sure how much will the insurance cost for such kind of businesses. My S corp is already in place and i have EIN number too.

Once again thanks so much to everyone and please chip in with more thoughts. Im all ears!
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Old 12-06-2017, 07:18 PM   #9
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Quote:
Originally Posted by DEVINDER83 View Post
I do want to give the company a professional look and pitch it more than average joe with a camara. Otherwise if you only operate from a garage with minimal equipment, you are competing with 100's of, if not more, videographers and editors in your area.
Again I ask, what sort of clients do you anticipate you'll be working with? When you're out on set, or have clients who don't supervise the edit, how does having a fancy office set you apart, other than increasing your overheads?

Of course, you definitely want to pitch it more than an 'average Joe' but in my opinion the biggest way you can do that is through the quality of your work.

Quote:
Originally Posted by DEVINDER83 View Post
when you mention that pure rental business could work, what kind of minimum investment you would imagine for that?
Depends. Your profile says you're in New York, so is that incorrect, or will you be moving to start this business? How much knowledge do you have of the local industry...?

I don't know the markets you're talking about, so I can't realistically give you an idea of what competition there is in terms of rentals, what sort of productions are shooting and what sort of needs they have. You'd need to research that pretty heavily and also find the hole in the market. No point investing in five Alexas if there's already four rental houses with a bunch of Alexas. Alternately, there may be one rental house with an Alexa that has so much demand they can't keep up, in which case it might be worth investing in one - for example.

Quote:
Originally Posted by DEVINDER83 View Post
Honestly i dont know how much need is really there. I do see few rental companies, but not much.
My suggestion is to write up a comprehensive business plan and really research competition, client leads, rental houses etc. etc. especially if you're planning on a major outlay, but even if you're not planning to spend any money business plans are vital and extremely helpful.

Quote:
Originally Posted by DEVINDER83 View Post
Im planning to buy atleast 2-3 cameras, some high end lenses and lighting equipment and few other things to start with.
I keep coming back to it but how will you know if this will be adequate enough if you don't know what sort of clients you'll be getting, what sort of work you'll be doing, and what sort of work is out there available to you? 3 cameras seems like a fair outlay if you're going to be working mostly solo in the beginning. How many jobs would you have where you'll absolutely need more than one camera? Is it enough to justify purchasing extra cameras, rather than simply hiring them? At what point do you decide that it's worth investing in a second (or third) camera rather than hiring every time. Where will you source second and third camera operators from? What sort of lighting equipment, exactly, will you need (i.e. will you need an interview kit that you can rent to expand on for bigger jobs, or are you going to be making branded short films where you might need totally different types of lights and light modifiers?), where will you get the crew to help you with lighting? What will you charge? What do you need to make to both cover your costs and pay yourself a wage?
This should all be covered in your business plan, by the way.

I can rent a full Alexa Mini kit + a small set of Cooke Mini S4's for ~$1,500/day. To buy the entire rental kit new (including all accessories, batteries, head and legs, follow focus, matte box etc.) would edge you up into the $150-200k range.
There are many people who can justify that cost with the type and amount of work they get, particularly if supplemented by rental income. But it wouldn't make sense to go out and invest that much money on the hope that you'll get the work to not only pay it off, but cover your other expenses and still be able to draw even a small wage.

If you know that you're going to get enough work to be able to do all that, then by all means.
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Old 12-06-2017, 07:44 PM   #10
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Originally Posted by DEVINDER83 View Post
Honestly i dont know how much need is really there.
If there isn't a need then you are wasting your money.
So i'm curious, if you're not trying to fulfill a need then why are you thinking of doing this?

What about having a production company appeals to you
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Old 12-06-2017, 07:46 PM   #11
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Originally Posted by DEVINDER83 View Post
@indietalk- Thanks so much for your response. Hmmm..well I see your point, and will ponder more over it. I dont have any experience with commercials, but if you look at some of my work, you may think I have a talent for that. But isnt that business already very competitive and hard to break into?
What IS your experience in? It may help this discussion.
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Old 12-06-2017, 10:42 PM   #12
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Old 12-08-2017, 08:56 PM   #13
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I can't believe I've never thought of renting out equipment before. It's like reaping all the benefits of work during your down-time. (I think I'll look into doing this myself. Not a lot of filmmaking stuff going on around me, but you never know)

So, something else you could look to do is general photography and videography. Weddings, school photos, modeling, etc. Easy gigs, good chance to work with the equipment, and you'll want to have as many revenue streams as possible, just in case.

What's your ultimate passion? Making feature-length films or just about anything video related?
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Old 12-08-2017, 09:08 PM   #14
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I can't believe I've never thought of renting out equipment before. It's like reaping all the benefits of work during your down-time. (I think I'll look into doing this myself. Not a lot of filmmaking stuff going on around me, but you never know)
Dry-hires can be a great little income earner - just make sure you've got your insurance sorted.
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Old 12-09-2017, 01:04 AM   #15
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Im done with you here and please with all your 'trying to help' comments, spare me.
No good deed goes unpunished here.

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He was neither Entrepreneur A or Entrepreneur B. He was Entrepreneur C, who spent a little bit of time finding the gap in the market and researching the kind of demand for it. That's what made him successful. It was being Entrepreneur B that got him into the original situation
It saddens me this isn't common sense.
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