Friday, September 12, 2008

Business Plans for Films

My friend and fellow FA Member, Destri Martino, asked me about a business plan for her friend's film - one that could help him raise money.

I truly don't know how effective business plans are in raising private equity money. Most first and no-budget features find their money through family, friends and credit cards. And those peeps could not care less about business plans.

Even with business folk and other private equity investors with whom you are not emotionally connected, there are, in my experience, other things far more important than the business plan. For me, a compelling combination of a solid track record and personal charisma seemed to be most effective. Do you have a track record? Can you show a history of successful films (either artistically or commercially - preferably both) you've been involved with on any level? Can you (or a partner) speak knowledgeably and compellingly about films and film business? Can you (or a partner) articulate a "vision" for the investment? Do you (or a partner) have good salesmanship skills and can "close the deal"?

Stylistic options in seeking funding for films

I've found these things to be FAR more important than the best business plan. That said, it's important to have a document you can lay in the hands of any potential investor - even a family member. Business plans can often give legitimacy to a project and, ultimately, always do more good than harm, if written properly. At the least, they can provide a business map for the filmmakers, themselves.

But many business plans are NOT written properly. In fact, most are a complete farce because they lack the key component - a thorough marketing/distribution plan, which is the only way an investor can see how the money will return to them. It's also the only way YOU, the filmmaker, will see money return to you.

He are two places (so I am told) you can go to get good info/education/support for writing a solid, compelling business plan:

Honestly, I haven't used either. I've simply heard good things about them from knowledgeable people. If you use either, I would love to get your feedback to share with our other readers. However, I have created business plans - usually stealing structure, ideas and even information from other business plans that impressed me.

Here are my own 7 key points in building a good business plan (having no idea how they jibe with the business plan courses mentioned above):

1. Tailor every single business plan to meet your investor's objectives. Do a little homework to make sure the plan is speaking directly to their interests. Surprisingly, those objectives are not always just about money (but they are rarely NOT about money).

2. Have a clear plan for distribution. That is how the money comes back. If that isn't not clearly worked out the investor will see no way to make a return on their investment. This includes a separate marketing plan. It's not enough to say that you will play festivals and hope some distribution company picks it up. That's not a plan, that's a fantasy (in today's marketplace).

3. Anything you promise or proclaim, you should be able to back up with hard numbers and a solid plan.

4. You must acknowledge the risk in no uncertain terms. Otherwise, you could get in big, big trouble.

5. Use lots of pictures and graphs. Keep the text simple and easy to read. They are busy peeps and want to get to the bottom line as quickly and easily as possible.

6. Don't include detailed budgets or full scripts. Just project outlines and budget topsheets. If they ask for more, give it to them, but don't inundate them with stuff or they'll be too overwhelmed to look at any of it.

7. Offer many comparisons to successful films or production companies. What films or companies are out there that have done well commercially and/or artistically? How is your film(s) or production company like them?

Of course, I must reiterate that a business plan is only an informational document - NOT a sales tool. YOU, the filmmakers, are the biggest sales tool. Your confidence, intelligence, experience, passion, determination, vision, talent, etc. is what will close the deal with a potential investor. Inject all that into the business plan, then bring it to the table in person when they agree to meet with you.

Go get 'em!


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