It is no surprise that starting a business requires a lot of work. At this point, you’ve found your company’s niche and chosen a catchy name. But what’s next? The short answer is a lot of tricky work. Don’t be intimidated! If you break it down into key elements, you’ll launch your successful production company in no time.
The Business Plan
First, your production company needs a business plan. The business plan is critical to your company's operational and creative aspects. It guides you and your team toward your production company’s mission and creative vision. Additionally, the business plan solidifies your company’s financial plan and sets goals for future growth. The business plan also represents your production company to stakeholders such as investors, clients, and team members. In short, your business plan adds structure to your ambitious plans for your amazing production company!
The Production Insurance
For your business to run safely, you need to insure it. Unsurprisingly, there are several types of insurance options for production companies. The spectrum ranges from commercial general liability to DICE policies, and sometimes you may need to utilize a combination of insurances to produce a project. It is as complex as it is important!
If you understand insurance before you start working with clients, you’ll be better prepared to hit the ground running once you book projects. That way, you can focus on bringing your artistic vision to life rather than stress about the paperwork!
Insurance is an area where seeking professional advice from a lawyer can help prevent issues. As we’ll discuss in the sections below, spending the time and money to ensure your company is up-to-par with local and federal requirements is the most critical element to your business’s success!
The Legal Side
The truth is that creating your own production company can get complicated. If you have a small business or entertainment lawyer with you from the start, your access to legal expertise will make the process less overwhelming.
For example, a lawyer can help you decide which type of business you want your company to be. There are different types of business structures, such as LLCs (limited liability companies), S-Corps, and sole proprietorships. While the U.S. Small Business Administration breaks down different business structures, personalized legal advice is the best tool to choose the correct business type for your production company!
Another key element to building your business is understanding government requirements. An attorney–and a professional tax accountant–is a critical resource for aligning your business with federal and state laws. Whether you’re figuring out how to stay compliant with industry regulations or up-to-date with licensing, working with a legal expert makes it easier to meet all requirements from your local government bodies and federal ones.
The Finances
Speaking of taxes, let’s talk about money. Of course, building a company costs money. It’s a worthwhile investment when you’re working to combine your passion and skills into a profitable business. The thing is, you can’t count on reaping the rewards of your business if you don’t have your company’s finances in order.
This is an area where a professional, such as a production accountant, is vital to the well-being of your production company. A production accountant will aid you in setting up everything you need from a banking account to tax documentation.
Importantly, you should also be aware of any state or municipal requirements like business taxes. Your business can only succeed if you follow all the right procedures financially. That way, you can be sure your company is fiscally sustainable and successful!
Next Steps
With the backbone of your business complete, you are ready to build out your production company! Now is the time to dive into hiring your team, developing HR for your company, and building your SOPs. It is also time to focus on projects. This is your opportunity to compile creative material to show potential clients and investors. Soon enough, you’ll see your hard work pay off!
The success of Plaid Pony Productions is proof that you can get through the weeds of business development and run your dream company. We know it's difficult, but we hope you know feel more prepared to dive into building the next great production company!
