How to Build a Profitable Production Company

How to Build a Profitable Production Company

If working in the film industry doesn't suit you for whatever reason, but you still want to make a living with your filmmaking skills, client work is far and away the most consistent and profitable path.

In the past five or ten years, demand for video content has skyrocketed. Quite simply, companies and organizations of all types want videos because it’s one of the best tools around for connecting with people. In a nutshell, there’s plenty of work out there for filmmakers because video is a very hot commodity at the moment. And that's not going to change any time soon.

On the flip side, however, there are also way more people freelancing these days. So while there may be more and more work each year, it might feel as if it's getting harder to win jobs because there's more competition.

Don't worry though, most of that competition is in the lower end of the market, and today's episode of the Filmmaker Freedom Podcast is all about landing higher-end clients consistently.

In order to tackle this subject properly, I brought in Matt Davis, a dude who's founded two highly successful production companies (Harvest FilmWorks and Life Stage Films), as well as co-founded Studio Sherpas, which is a kickass resource for anyone looking to build a more profitable video business.

So here's what you'll learn in episode 5: 

  • Whether or not you're cut out for the freelance filmmaking life, or running a production company.
  • Why niching down and focusing your skills is one of the most profitable things you can do.
  • Why you don't want to be booked solid if it's with the wrong kind of clients (plus some insights on finding your ideal clients again and again)
  • Why a basic sales funnel is the key the landing your ideal clients on a consistent basis and never running out of new work.
  • A free tech recommendation to supercharge your new sales funnel, plus the kinds of content that you should send leads to turn them into paying clients.

Here's the episode. You can also listen and subscribe through iTunesStitcher, PocketCasts, and the Google Play Store.

If you enjoy today's show, it would mean the world to me if you'd leave a rating and review on iTunes. That's the best way to support this small indie show and to help new filmmakers find it!


 
 

The first season of the Filmmaker Freedom Podcast is sponsored by my friends over at Music Vine.

You have a lot of choices these days when it comes to finding music for your films and video projects. But Music Vine stands above the pack.

Not only is it refreshingly straightforward to license music you’d actually want to use, but it’s also genuinely affordable, even for indie filmmakers on shoestring budgets.

And the best part is, the music is all thoughtful, expressive, and genuine. It’s sourced from indie artists all over the globe who put the same care and attention and soul into their music as you do into your films.

That’s why all of the music in this podcast comes straight from the Music Vine library. Here's the playlist of songs from this episode.

You can get 10% off your first purchase when you use the code FREEDOM at checkout. Enjoy.


Practical Takeaways from Today's Episode

First and foremost, we need to answer the question of whether or not you're cut out to do client work for a living. So here's a handy (although fairly subjective) list of pros and cons that should help you get it figured out.

Pros of doing client work for a living

  • You can do it from just about anywhere in the world where there are local businesses that need video content.

  • Even if you’re not in an area where there are local business, you can still do certain types of freelance work with nothing more than an internet connection. 

  • You get to “work for yourself” and “set your own schedule,” although that might still mean working 60 hours a week. Regardless, it can also free up significant time for passion projects once you’re financially secure.

  • The amount of money you can earn is only limited by two factors. How much you work, and the quality and budgets of your clients. You can’t always work more, but there are surefire ways to get better clients, so your earning potential is huge if you play your cards right.

Cons of client work

  • The bulk of your income will come from projects that aren’t creatively fulfilling or even interesting, at least when you’re just starting out. Lots of talking heads and b-roll.

  • Unless you have a solid, repeatable system in place to generate new business, your income won’t be stable. You’ll go through periods of feast and famine, and it can be difficult to weather those slow times unless you’re financially savvy.

  • Taxes. The first time you do your taxes as a freelancer, you’ll probably want to cry. You can avoid this by diligently setting aside 25% of everything you earn in a savings account, as well as tracking every single dollar you spend on your business. You'd be surprised at the number of things you can write off, so keep track of everything.

  • If you want to succeed with client work, you’re going to be doing a lot of marketing and selling and accounting. If you see yourself as purely a “creative filmmaker” or as someone who doesn’t “do business stuff,” then I’ve got bad news. Freelancing isn’t for you.

  • There are a lot of bad clients out there, especially on the lower end of the market. People will demand free “spec” work, they’ll hold your payments hostage, or not pay you at all, and plenty of other bullshit.

If you're game for living the freelance life (or the life of a production company owner, which is client work on steroids), then these are the foundational things you need to know in order to get started.

1. It’s not enough to just be a good filmmaker. 

You’ve got to be a businessperson. You’ve got to know how to find clients, pitch them, and close the sale. You have to know the basics of accounting, marketing, and plenty of other business-y things that creatives typically don't like.

So many filmmakers think it’s enough to just have a cool demo reel. They post it to social media sites and on their website and expect clients to come to them. Unfortunately, it doesn’t work that way, and filmmakers who try to make a living without marketing themselves almost always fail.

2. This is a relationship business, and the most important thing you can do is to make your clients happy. 

Client work is a relationship business, and once you get started, you'll find your best clients are repeat clients and referral clients. So it’s going to pay off if you communicate well, do what you say you’re going to do (when you say you're going to do it), and are generally pleasant to work with.

This sounds like it should be obvious, but you'd be surprised at just how much you can differentiate yourself from other freelancers by consistently implementing these basics. 

Some additional tips to get you started (or help you take your business to the next level).

  • When you're just starting out, your "clients" will often be established production companies who need a helping hand on their larger productions. This is a great way to get your foot in the door and learn the ins and outs of client work before trying to start your own business (if that's even something you want to do).

  • Also, if you're new to this and wondering how to land your first few clients, non-spammy self-promotion and networking are the name of the game. Get out there (both online and offline) and authentically connect with people. In particular, you'll want to connect with other freelancers and production company owners, as well as potential clients in the niche you'd like to serve. When you have a large network full of people who not only like you, but know exactly what kind of work you do and who you do it for, the chances of new clients coming to you go up dramatically.

  • Like in the film industry, people who do client work live and die by their reputations. The best way to thrive as a freelancer is be someone who clients want to hire again and refer to their friends.

  • One very, very easy way to set yourself apart from all of the low-quality freelancers is to just deliver work on time and on budget, and communicate effectively throughout the process. Seriously, it sounds so simple and obvious, but a lot of freelancers suck at this, and it destroys their chances of getting referred, thus making their lives immeasurably more difficult.

  • If you price your work as a commodity, you’ve already lost the game. The price of your work shouldn’t be dictated by what amateurs and bottom feeders are doing, but instead by what top quality clients are willing to pay for someone who can solve their specific business problems.

  • Speaking of which, most clients don’t really care about you, your gear, or what makes you “unique as a filmmaker.” Instead, they care about improving their bottom line. When you internalize this, you can position and market yourself much more effectively.

  • It follows that the best freelancers are the ones who do their research and put in the work to understand what their clients want. Find a specific market that you can serve well, learn what clients need (often by doing web research and having real conversations with potential clients), and then position yourself as the person who can give them exactly that. This is how you get out of the “low end” of the market, where everyone’s competing for the same shitty generic jobs and undercutting each other with lower and lower prices.

  • Beyond just knowing how to make films, learn hard skills like marketing, accounting, pitching and persuasion, and storytelling. And develop “soft skills” like communicating better, creative problem solving, leadership, and time management.

  • There will be bad clients, but the best thing to do is to take full responsibility and build systems and processes into your business for dealing with it. For instance, you can have a policy in your contract (you do have a contract, right?) that makes it clear that clients don’t get their deliverables until you’re paid in full. Don’t let yourself be a victim of bad clients.

  • Don't be afraid to team up with other freelancers on more ambitious projects. You can often deliver superior results by hiring a specialist or two than you could if you did all of the work yourself. Plus this is a great way to meet future partners (if you decide to start a production company) and future collaborators on your passion projects.

  • Above all, client work is a relationship business. The best way to succeed is to make your customers exceedingly happy. That’s how you get repeat business, and that’s how you get referrals.


Bonus Segment: How to Price Your Work, Ask for Referrals, and Why You Should Always Track Your Time

These are additional clips from my interview with Matt. We cover some essential points that you need to understand if you're starting a production company (or just flying solo as a freelancer).


Further Reading & Resources to Help You Find Better, More Profitable Clients Consistently

Book: Book Yourself Solid - Michael Port

Book Yourself Solid is the gold standard for how to build a thriving client-based business. Definitely check this out if you want to build a repeatable system for booking new (and desirable) clients.

Book: Win Without Pitching Manifesto - Blair Enns

I actually haven’t read this one, but it comes highly recommended from a few freelance filmmakers I know. Also, you can actually read this for free on the Win Without Pitching website.

Article: What 15 Years of Writing Videography Contracts Has Taught Me - Ron Dawson

It's crazy to me how many freelancers and production companies I've seen that just don't use a formal contract. You really should. It protects you. It protects your clients. And it sets expectations and outlines outcomes. Anyhow, if you're new to this whole contract business, this is the best article I've found that explains all of this stuff in clear, useful language.

Article: Why You Need to Use Email Marketing for Your Freelance Business - ConvertKit

Like it or not, email marketing is still far more useful and profitable for service based businesses than social media. If you want a simple guide to getting started with email marketing (including what types of emails you should be sending), this is a solid place to start. It's also part of a larger magazine issue all about freelancing, which you should check out. It's super comprehensive.

Software Tool: MailChimp

There are more email marketing tools out there than you could count on 20 hands, but MailChimp is (and likely always will be) the best place to start if you're new to that world. It's free up to 2000 subscribers, and it's got the basic automation stuff you need to make your sales funnel start working for you in your sleep.

Course: Selling Like a Sherpa

This is one of Matt Davis's courses. I went through it last winter, and I can honestly say that it’s a no-brainer investment for any filmmaker who doesn’t have some kind of process in place for lead development, pitching, and proposals. It’s pretty expensive though, so make sure you’re committed to client work before forking out cash for something like this. Or read the books above and develop your own process.

Course: The Creative Class

Paul Jarvis is one of my favorite freelancers/businesspeople, and it’s due to his unflinching integrity and willingness to be uncompromising about the things that matter to him. If that’s the type of freelancer or business owner you’d like to be, I absolutely recommend The Creative Class, his course on the nuts and bolts of being a successful freelancer. Also, be sure to check out his books, his podcasts, and his weekly newsletter.

Software Tool: Freshbooks

When you're just starting out, you'll almost certainly want to use a software tool like Freshbooks to handle your business accounting, invoicing, payment processing, etc. There are a couple of tools like this on the market (I use one called Billy), but Freshbooks is the standard bearer.


Join the Podcast Squad

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Just record your answers into your computer or phone mic, and then you might just hear yourself on the show!