Production Company Business Plan
If you want to start a production company or expand your current company, you need a business plan.
The following business plan template gives you the key elements to include in a winning business plan for any type of production company. It can be used to create a film production company business plan, or business plans for music production, a video production company and/or a media company.
Production Company Business Example
I. Executive Summary
Business Overview
[Company Name], located in [insert location here], is a one-stop video production company that is fully equipped with the latest technology used in the film and video production industry. The Company focuses on producing high-quality videos for its clients in the surrounding community. The Company’s goal is to become one of the leading video production brands and compete with the leaders in the industry not only in the United States, but also on the global stage in the near future.
Services Provided
[Company Name] will provide high-quality video production for its clients. Its services include:
- Product videos
- Corporate training videos
- Brand videos
- Documentaries
- Scriptwriting and editing
- Story boarding
- Single-camera and multi-camera shoots
- Professional video and lighting equipment
- Animations/Motion graphics
Customer Focus
[Company Name] will primarily serve businesses in [Location]. It will also look to offer its services to advertising agencies and local filmmakers who need professional video engineering and advertising.
Management Team
[Company Name] is led by [Founder’s name], who has been in the video production industry for [x] years. [Founder] is a certified and licensed video producer. He has extensive experience in the video production industry, working for leading video producing companies prior to starting his own video production company. He will have the help and support of his business partner, [Insert Name], who will handle the marketing and admin tasks for the company.
Success Factors
[Company Name] is qualified to succeed due to the following reasons:
- There is currently no video production studio in the area having the latest video production equipment that the company has.
- There has been significant growth in VFX and Aerial videography over the past few years. Those who cater to this market have been thriving.
- The management team has a track record of success in the video production business.
- The video production company is a proven, successful business in the United States.
Financial Highlights
[Company Name] is currently seeking $380,000 to launch a video production company. Specifically, these funds will be used as follows:
- Build-out and Startup costs: $150,000
- Video production equipment: $180,000
- Working capital: $50,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Top line projections over the next five years are as follows:
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $1,080,000 | $2,472,768 | $2,830,825 | $3,240,728 | $3,709,986 |
| Total Expenses | $962,000 | $1,539,107 | $1,719,742 | $1,901,321 | $2,112,641 |
| EBITDA | $118,000 | $933,661 | $1,111,082 | $1,339,407 | $1,597,344 |
| Depreciation | $25,600 | $25,600 | $25,600 | $25,600 | $25,600 |
| EBIT | $92,400 | $908,061 | $1,085,482 | $1,313,807 | $1,571,744 |
| Interest | $29,946 | $26,202 | $22,459 | $18,716 | $14,973 |
| Pre Tax Income | $62,455 | $881,858 | $1,063,023 | $1,295,091 | $1,556,772 |
| Income Tax Expense | $21,859 | $308,650 | $372,058 | $453,282 | $544,870 |
| Net Income | $40,595 | $573,208 | $690,965 | $841,809 | $1,011,902 |
II. Company Overview
Who is [Company Name]?
[Company Name], located in [insert location here], is a new, independent video production company focusing on producing high-quality videos for its clients. The Company seeks to cater to the needs of a wide range of clients ranging from individuals to corporate organizations, national clients to international clients. [Company Name] is a video production company that is fully equipped with the latest technology and equipment used in the industry.
[Company Name]’s History
[Founder’s Name] is an entrepreneur with a passion for videography. He seeks to provide a one-of-a-kind upscale video experience for his clients. [Company Name] will become a renowned video production company in [Location].
[Founder’s Name] has selected an initial location and is currently undergoing due diligence on each property and the local market to assess the most desirable location for the video production studio.
Since incorporation, the company has achieved the following milestones:
- Developed the company’s name, logo, and website
- Determined the list of services to be offered
- Determined equipment requirements
- Began recruiting key employees with experience
Services Provided
[Company Name] will provide high-quality video production for its clients. Its services include:
- Product videos
- Corporate training videos
- Brand videos
- Documentaries
- Scriptwriting and editing
- Story boarding
- Single-camera and multi-camera shoots
- Professional video and lighting equipment
- Animations/Motion graphics
III. Industry Analysis
There are 4,510 movie and video production businesses in the US with a market size of $17 billion.
The primary positive factors affecting this industry are the demand from movie theaters and the trade-weighted index. In recent years, film producers have begun to subsidize production costs through the sale of in-movie product placement. In addition, high-profile films often attract co-branding deals with marketers outside the industry.
Total advertising expenditure is also expected to drive revenues, representing a potential opportunity for the industry. As a majority of content is video-driven, the need for the industry’s services is expected to continue to rise.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve filmmakers, artists/celebrities, advertising agencies, corporate organizations, as well as TV stations in the [Location] area. Over time, the company expects that the studio will gain regional and national attention.
The precise demographics of the town in which the retail location resides is as follows:
| Total | Male | Female | |
|---|---|---|---|
| Total population | 1,644,518 | 778,476 | 866,042 |
| AGE | |||
| Under 5 years | 5.20% | 5.60% | 4.80% |
| 15 to 19 years | 4.30% | 4.20% | 4.40% |
| 20 to 24 years | 7.20% | 7.00% | 7.30% |
| 25 to 29 years | 12.10% | 11.90% | 12.40% |
| 30 to 34 years | 10.60% | 10.90% | 10.30% |
| 35 to 39 years | 8.00% | 8.30% | 7.60% |
| 40 to 44 years | 6.70% | 7.00% | 6.30% |
Customer Segmentation
The Company will primarily target the following customer segments:
- Filmmakers: The city has quite a number of creative and independent filmmakers that are in need of professional video engineers and production to polish their works.
- Artists/Celebrities: A large part of the clients will be independent artists as well as celebrities that want to put their talent out there. The Company will record and produce good-quality videos for these artists.
- Advertising agencies: The Company will help agencies create the best quality video for their advertisements.
- Corporations: The Company will serve businesses by making corporate videos to help them increase their brand awareness and generate new business leads.
- TV Stations: The Company will serve various TV stations in the area and produce video content for TV, ranging from pre-production activities to post-production.
V. Competitive Analysis
Direct & Indirect Competitors
VidTech
VidTech is the town’s most well-known video production company and has been in business for xx years. VidTech specializes in producing influential films for global businesses that want to stand out. Competitor 1 offers product video, corporate video, brand video, internal communication, documentary, animation/motion graphics, VFX, training video. VidTech caters to businesses only, but the company will be catering to business as well as other customer segments like independent artists.
HHR Production Studios
HHR Production Studios caters to various groups of customers. HHR Production Studios was designed with state-of-the-art facilities and technologies, and in turn, has been the studio of choice by artists, corporate organizations, and advertising agencies. HHR Production Studios focuses on the advertising and marketing industries. However, HHR Production Studios’s layout of the product portfolio is very comprehensive, but it still lacks in providing 3D animations and VFX.
Star Video Services
Star Video Services is one of the renowned video production companies in the United States. Star Video Services’s is a strategic video solution company producing videos for the fitness, health, and wellness market. The company’s strategic insightful approach for every project is what sets it apart. Star Video Services, on the other hand, does not produce videos for all segments and is only confined to the fitness, health, and wellness industry.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- Management: The Company’s management team has x years of video production experience that allows them to serve customers in an improved and sophisticated manner than the competitors.
- Relationships: Having lived in the community for xx years, [Founder’s Name] knows all the local leaders, media, and other influencers. Furthermore, he will be able to draw from his existing personal and professional relationships to develop an initial client base.
- Location: [Company Name]’s location is near the center of town, giving the company access to budding artists, corporate organizations, filmmakers, and advertising agencies.
VI. Marketing Plan
The [Company Name] Brand
[Company name] seeks to position itself as a respectable, upper-middle-market competitor in the video production market. Customers can expect a high-quality and concept-to-reality video production experience.
The [Company Name] brand will focus on the Company’s unique value proposition:
- Convenient location.
- Offering high-quality service to independent artists/celebrities, ad companies, corporate organizations, TV stations, and filmmakers.
- Professional video engineering for any type of video production.
- Providing excellent customer service and customer experiences with high-quality production.
Promotions Strategy
[Company Name] expects its target market to be the filmmakers, artists, corporate agencies, advertising agencies and TV stations. The Company’s promotions strategy to reach the audience includes:
Pre-Opening Events
Before opening the video production company, [Company Name] will organize pre-opening events designed for prospective customers, local artists, and press contacts. These events will create buzz and awareness for [Company Name] in the area.
Advertisement
Advertisements in print publications like newspapers, magazines, etc., are an excellent way for businesses to connect with their audience. The Company will advertise its company offerings in popular magazines and news dailies. Obtaining relevant placements in industry magazines and journals will also help in increasing brand visibility.
Public Relations
[Company Name] will hire an experienced PR agency/professional(s) to formulate a compelling PR campaign to boost its brand visibility among the target audience. It will look to garner stories about the company and its services in various media outlets like podcasts, television stations, radio shows, etc.
Social Media Marketing
Social media is one of the most cost-effective and practical marketing methods for improving brand visibility. The Company will use social media to develop engaging content in terms of various forms and technologies of video production and post customer reviews that will increase audience awareness and loyalty.
Customer Loyalty Programs
[Company name] will create a winning customer loyalty program to keep its best clients coming back again and again.
Ongoing Customer Communications
[Company Name] will maintain a website and publish a monthly email newsletter to notify customers about new events, products, and more.
Pricing Strategy
Pricing strategy is one of the most important functions that any business can plan for attracting customers. Prices are a foundational element of a company’s revenues—if managed carefully, they can generate high profits.
[Company Name]’s pricing will be moderate, so customers feel they receive great value when availing of the video production services. The customer can expect to receive quality video production services at a more affordable price than what they pay at an ultra-premium video production company.
VII. Operations Plan
Functional Roles
[Company name] will carry out its day-to-day operations primarily on an appointment basis. Walk-in clients will be served by the earliest available specialist, but priority will be given to clients who booked an appointment prior.
To execute on [Company Name]’s business model, the company needs to perform many functions, including the following:
Service Functions
- Videographer
- Scriptwriting
- Pre-production and Post-production
- Professional video engineering
- Sales manager
- Customer service
Administrative Functions
- General & administrative functions including legal, marketing, bookkeeping, etc.
- Hiring and training staff
Milestones
[Company Name] expects to achieve the following milestones in the following [] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is led by [Founder’s name], who has been in the video production industry for [x] years. [Founder] is a certified and licensed video producer. While [Founder] has never run a video production business himself, he has been active in the industry as he has worked for leading video production companies as a video production engineer and managed it for xx years.
[Founder] graduated from the University of ABC, where he majored in video production and cinematography.
Hiring Plan
[Founder] will serve as the CEO. In order to launch the video production studio, the company will need to hire the following personnel:
- Videographer
- Studio Manager
- Video Producer
- Recording Engineer
- Administrative staff [Number]
- Marketing and Sales Executive
- Accountant
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come from:
- Video production contracts
- Video editing
- Video Production Consultancy and Advisory Services
The major costs for the company will be the cost of construction of facility/set production, logistics, video production equipment, and salaries of the staff. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market. Moreover, rent for the prime location is also one of the notable cost drivers for the [Company Name].
Capital Requirements and Use of Funds
[Company Name] is currently seeking $380,000 to launch a video production company. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses, and working capital. Specifically, these funds will be used as follows:
- Build-out and Startup costs: $150,000
- Video production equipment: $180,000
- Working capital: $50,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Number of Clients | Average |
|---|---|
| FY 1 | 42 |
| FY 2 | 63 |
| FY 3 | 96 |
| FY 4 | 162 |
| FY 5 | 243 |
| Monthly Rent | $3,600 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
