Movie Studio Business

            The first asset the company will acquire is a workspace. The company is a start-up and with limited capital will rent a renovated space worth $10,000 a year. However, as employees and support staff grows, the studio will have to consider relocating to a bigger space. The current workspace will have to be a place conducive to carry out meetings with potential investors. Another asset the start-up will acquire basic equipment and gear.

The production gear will have the capability to produce films with natural lighting. The company, therefore, will have to invest in computer hardware and software, booms, microphones, and lighting. A digital camera capable of shooting decent pictures will also be a priority for the fledgling company. All these production gear will cost the company approximately $15,000. The low-budget video production gear that will fall under the budget includes Panasonic video camera, tripod, camera light, three-point lighting kit, short-gun microphone, boom pole, shock mount, wireless microphone, portable digital audio recorder, light reflector, headphones, external hard drive, and a drone.

            Among the integral costs of the business will be salaried for employees and crew. The start-up will strive to keep the salaries for employees lean as possible to ensure business continuity in the foreseeable future. Another crucial expense for the company is marketing materials. It will include developing a professional website and business cards. Licensing of the business will ensure compliance with state laws while insurance while cover against fire, theft, and liability.

            There are expenses the start-up will have to incur in the course of carrying out its business of film production. The start-up expects as the company grows the expenses will increase. Budgeting will be crucial to guarantee the company takes on more projects as funding grows. The largest overhead costs will include salaries for employees and renting workspaces. Other ongoing expenses will include expenditure on specific documentary and short films with travel expenses in-calculated into quotes to clients.

            The targeted market will be the end viewers of the produced documentaries and short films. Profiling the demographics of the target market before embarking on a project will help in securing funding. A clear understanding of the targeted viewers will not only help in reaching them but also in developing future content, producing, and distribution once the projects are complete. Another critical audience the movie studio should impress is the investors. They are a critical component to the success of the business and will include venture capitalists, commercial clients, and government grants, givers. However, as this is a new business it is most probably likelier that close friends and family members willing to invest in the venture with their discretionary income are to be the first investors.

            The start-up will make money in diverse ways. However, establishing a distribution system will determine how much income the business earns. The company will aim to distribute through the box office but this an optimistic view for a new movie studio such as this as it takes many studios years to achieve the milestone. At first, the studio will look at emerging distribution channels such as streaming services and even traditional forms such as DVD circulation. Nevertheless, the studio will aim for quality videos to achieve this objective as soon as possible by landing the large budget-movie films. Because the movie studio will concentrate on documentaries and not industrial films being paid on an hourly rate will be important. Agreed-upon rates and day rates will ensure the studio breaks even in the first six months.

            Knowing how much to the first clients of the studio will depend on the market rates. Whether availing DVDs at film festivals or delivering a project to a small business or working in conjunction with a big movie production house charging competitive rates will ensure repeat business. Income from projects varies widely depending on the project and other factors. A basic example of a start-up that has made working on simple projects is Key Moment Films that charges up to $5,000 gripping wedding events in its basic package (Moreau). Conducting thorough market research is the key to success.

            According to the US Bureau of Labor Statistics, individual producers and directors made a median income of $71,000 per annum in the year 2016(Madura 20). Regardless, this is just a statistic in that if a movie studio does insist on quality or identify a niche failure is the only outcome. Aspects that the new movie studio will leverage on to ensure success include location, specialty, talent, reputation, and above all professionalism.

The principle that the new business should keep in mind is that revenues earned are directly proportional to professionalism and quality. Salesmanship will be the key ingredient combined with quality to drive the growth of the movie studio. To achieve profitability and break-even within the first six months, the above factors combined with reputable distribution channels will be integral. Keep in mind that some major production companies earn revenues of $100 million and still lose make lose resulting from bulging production and marketing costs.                              

 

 

Fantastic Grip Movie Studios

                                                    Business Start-up Costs

	AMOUNT IN $ (6-months)
Assets
Equipment	15,000
Office furniture	7,000
Bank	5,200
Cash	2,000
Fixtures	10,700
People	30,000
Supplies	4,200
Software	4,300
Sub-Total	78,400
Start-up costs
Workspace Rent	5,000
Permits	1,000
Marketing Materials	750
Market Research	800
Certificates	500
Initial Investment	5,000
Salesman Commissions	3,200
Legal Fees	4,000
Cost of Inventory	7,000
Professional charges	2,500
Total start-up costs	29,750
Financed by:
Owner’s Injection	20,000
Family and friends Contributions	11,750
Total Equity Financing	31,750
Bank short-term loan	16,900
Total Liabilities	16,900
Total Equity Financing and Liabilities	78,400

 

 

Third Step

Fixed expenses = Rent + Insurance + Utilities + Phone + lease +health Insurance+ loan payments +taxes + Internet + Shipping + other services = 17,500

Last Steps

Estimate of salaries, employees and hired contractors = 9,7000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Works Cited

Madura, Jeff, K M. Casey, and Sherry J. Roberts. Personal Financial Literacy. Boston: Prentice-Hall, 2010. Print.

Moreau, Patrick. “5 Huge Mistakes. Still Motion. 2017https://www.stillmotionblog.com/costlymistakes/