Creatives involved in film, television, and video game production have long used production companies to build a brand, protect their assets, and work on more significant projects.
In this master guide, we explore how any creative can use a production company to enhance their innovative work and think bigger.
What is a production company?
A production company is a vehicle for anyone doing creative projects. They can be small, one-person operations or sprawling billion-dollar empires.
Either way, a production company is a legal entity that empowers creatives to take on more significant projects, secure more funding, and protect their intellectual property.
Benefits of starting a production company
People creating content like films, video games, or other complex media have long used production companies to achieve bigger and better projects.
However, you don’t have to be a filmmaker, content creator, or video game designer to take advantage of production companies’ benefits.
Setting up a production company can benefit any creative who wants to do more significant work. These ideas apply universally, even if they started in the film and media worlds.
However, those of you doing media production will get extra value from this guide.
Who should create a production company?
Anyone who plans to do various creative projects with varying partners or objectives.
Even if your projects aren’t “traditional” media projects like films, television, or video games, you can still create one. We’ve worked with fine artists to create production companies that have empowered them for years.
A production company helps you build a brand.
A production company lets you build a brand.
For many artists and creatives, their brand is their most valuable asset, so knowing how a production company can enhance it is crucial.
That’s because a production company lets you imprint your voice and viewpoint on various projects that, over time, develop your voice and perspective.
You can do high-level projects.
Similarly, having a production company imparts credibility—not just because you’ve built a brand but also because you’ve built a reputation and shown your serious intent to create something that lasts over multiple projects.
3 Key Steps To Form a Production Company
Establish your niche
Since you will be building a brand and reputation, it’s vital to establish your niche.
What type of content are you creating? Films? Video games? Immersive? Maybe more than one of them.
You also want to decide what projects you want to take on – are they independent films or high-production television shows?
The creatives we’ve worked with to form their production companies have all chosen a niche and developed something within it.
Incorporate your business
To start any company, you need to establish a business entity formally.
That’s true for production companies, too.
Having a business entity is key because it protects your assets from legal liability (which is huge). It also gives you credibility in the eyes of those who deal with you because it shows you made the investments to take things seriously.
Also, having a business entity is critical when starting a production company with others. Although it requires a little more upfront planning, setting up a business entity correctly and with appropriate legal guidance will help you create an agreement between collaborators that ensures long-term success.
Get funding for your production company.
All businesses require some capital.
That can come from self-funding, loans, or angel investors.
One of the first things to consider is how you will fund your production company. Then, make a business plan that outlines how those initial funds will be recouped.
Production Company Leadership
Traditionally, production companies have various people in leadership roles. Not all production companies need to have precisely these people, but they should have someone who takes responsibility for each of the areas—and that might even be the same person if your production company is just you.
Here are the critical roles in a production company
- Head of Development (who decides what scripts to produce and guides the creative team),
- Head of Production (who’s in charge of budgeting and the physical production process),
- Head of Post-Production (oversees the editing and post-production process)
- Head of Distribution (who’s in charge of marketing and selling your content).
Production Accountants
Entertainment accounting is complicated and very industry-specific. Additionally, production crews are often hired on a rotating basis and have different rules and regulations. And a lot of money goes to many different places.
A production company can live or die depending on the strength of its accountants.
Therefore, anyone forming a production company must have an accountant understanding entertainment financing and related industries.
Working with an attorney for your production company
All of this might feel overwhelming – but it need not be.
Anyone starting, growing, or scaling a production company works with an attorney.
Having an attorney means that you have the support of someone who has not only been through the process many times but can also take care of all of the crucial legal pieces that need to be in place to operate at a high level.
Every production company has a lawyer it can call for help setting things up or for advice along the way.
That lawyer often serves as production counsel, ensuring every project goes smoothly.
Production counsel handles things like establishing IP ownership, drawing up contracts between collaborators, making crew agreements, getting clearances and releases, securing permits, and ensuring that all the needed documents are in place so that your project succeeds.
As lawyers who do this type of work daily, we have seen how good legal support helps you delegate the problematic and overwhelming parts so that you can focus on creating.
Production Insurance
Media production can be rife with risk. That means that when you create your production company, you need to ensure you have appropriate insurance.
Insurance policies come in all shapes and sizes, so working with an insurance broker will be critical. An insurance broker can help you understand the appropriate policies for your production company or production.
Also, distributors and financiers will often require insurance for the production company or a particular project.
Doing projects with your production company
Once your production company has been set up, you will do projects.
Since each project will be different, there will be other requirements and needs, but we can offer some high-level advice to get you started.
Starting small and building out
Start small and get bigger if you’re starting your production company.
When you’re beginning, you can produce short and cheap proofs of concept to demonstrate your company’s voice and capabilities. That might mean creating a short film or television pilot that you can use to convince investors and others to finance full-time projects.
Also, starting small will give you more chances to establish your brand and voice as it creates a portfolio of work.
Creating entities for your projects
You will create separate entities for each project as you work on larger projects involving more people, financiers, and collaborators.
For instance, each film your production company does will likely be held under a separate entity.
This makes it simpler for everyone to collaborate on a specific project while not having legal involvement with your ongoing production company, which could get sticky.
It also limits legal liability from a specific project to that project and insulates the production company and other projects.
And since each project has its requirements, intellectual property, financing, and distribution deals, it will need a separate entity to house everything neatly.
Think of each project that your production company does as its own business; it all makes much more sense.
