It’s important to narrow your company’s brand identity to guide you when choosing projects to produce.Ĭhoose a name that embodies your company’s identity, is memorable, and is meaningful to you. What type of content do you plan to specialize in creating? Maybe you want to produce low-budget horror features, or maybe your focus is sci-fi genre projects or artistic independent films. Unit cost = (fixed costs + variable costs) ÷ number of unitsįor this example, it costs your company $22,650 to make the corporate marketing video.How To Start A Production Company In South AfricaĪ production company, production house, production studio, or a production team is a business that provides the physical basis for works in the fields of performing arts, new media art, film, television, radio, comics, interactive arts, video games, websites, music, and video. Step 3: Calculate the cost of production. Now multiply that by the number of days required to produce the video.įixed costs over five days: $3,450. Your company pays $690 toward fixed costs every single day. Total fixed costs for the month: $13,800.įor this example, let's say your company operates 20 days out of each month. Simply divide your fixed costs for the month by the number of days your business operates, and then multiply the result by the number of days needed to complete the production. Step 2: Work out the fixed costs for the five days. How to calculate the cost of production: Step 1: Add up all your variable costs for the five days. At the same time, your company pays monthly rental and utility costs plus software licenses and salaries. Over those five days, your company rented equipment, paid for a location permit, and paid various freelancers (videographers, editors, voice-over artists, actors, sound engineers, etc). It takes two days to shoot and three to edit before delivery of the final product. Your video production company produces a corporate marketing video for a client. Unit cost = (fixed costs + variable costs) ÷ number of units For example: The cost of production becomes a factor later when working out how much to charge a client after adding your mark-up. Whether recording albums, producing corporate videos or weekly podcasts, the cost of production tells you how much money your company uses to make one unit of production (a video, a song, a radio show). Production Company Metric: Cost of Production Include due dates and the names of responsible staff members. Provide a list of your expenses and your projected income.Ĭreate a timeline and fill it with all of the activities you need to complete before you can start your production company. Think about anyone you've already employed and all the other freelancers you still need to hire to make a success of your production company. How will you make sure clients know about your great production company? How will you create brand awareness? How does your production company differ from the competition? What makes you special? What does your ideal customer look like? Think about the clients you'd like to work with, as well as the audiences who will enjoy your productions the most. Think about how your production company will ultimately benefit customers. What services/solutions are you providing? What makes your production company superior or different? Consider how your products will contribute to the industry. Some important questions to answer include: Some of the information you collected during the market research phase may come in handy here. Doing some legwork beforehand will help you to gain a better understanding of your brand identity, goals, and offerings, which will result in a more refined business plan.
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