3 Steps To Making Your Business More Profitable

Hello Filmmakers!

We have some insights to share that are a little different from the lessons you usually hear from Muse. Today, we want to dive into filmmaker finance - and before you roll your eyes (I can feel it), I will remind you that at the end of the day, we all have bills to pay.

So, let’s talk about making your business more profitable so you can stop doing the b^&&s%#t and spend more time making work you love.

Cool? Let’s jump in.

Step 1: START PAYING YOURSELF

I know, it sounds silly but actually paying yourself for the work you do is very often overlooked in our industry.

Paying yourself appropriately does not mean you are taking advantage of a client.

In order to be a World-Changing Filmmaker, you need to be an expert - it is absolutely critical. With the exception of the occasional passion project, an expert wouldn’t accept a job for no pay. So why are you willing to accept silently paying yourself less than you’re worth?

It’s time to change that.

Instead, start including a “management fee” line item in your budget proposals. This line item is meant to consider the expenses that may seem less tangible, but are critically valuable to the success of your project, like your time! Typically a management fee is between 10% and 20% of your budget and should cover the overhead that goes into managing the business. A management fee is critical to ensuring that you are profitable and can use that profit to grow your business.

Think about it this way – any time that you spend on this project is taking away from you growing your business or working on other opportunities, so you need to account for that accordingly.

Step 2: BUILD A BUDGET - AND EVOLVE IT

Look, budgets are a pain in the butt. Nobody got into filmmaking to make budget spreadsheets. So often we just throw out a number we think the client will agree to and then hope we can do the project for less.

We have all done it.

Getting a yes from a client can be, or at least feel like, a big win. But in reality, we are simply getting trapped in the cycle of hustling. Always needing to say yes to the next job instead of choosing work that you are excited about.

So let’s make the change.

Instead, make it a practice to create a budget before you pitch a project. This allows you to proof out the amount that you are pitching so you know that it is both feasible and profitable for your business. Remember to build in a buffer for the things that will?always?come up.

Then as you learn more, evolve your budget!

We recommend having (at least) two versions of your projects’ budget. The first version is used for the pitch and is purposefully broad to ensure you can accomplish the goal and come away from it profitable. Make sure your client is aware that line items in your budget may change once the creative is finalized, but the overall total will remain the same. This flexibility in the line items is necessary to make the best decisions for the creative.

As you finalize the creative, evolve the budget based on your creative needs. Once you have this evolved version of your budget, then comes the hard part - actually sticking to it.

Step 3: TAKE THE TIME TO LEARN

If you want to be a?World-Changing Filmmaker, you cannot continue to do the same thing over, and over, and over. You must stop, and take the time to learn from your successes and your mistakes.

As you go through the production process, track your actual expenses within the "Actuals" column of your budget. This is key for ensuring you know where your budget stands as you make decisions and know you will not go over budget. Then, after post-production, do a deep dive reconciliation and *actually take the time to review it*.

Were you over budget on travel but under budget on crew? Were you over in everything? Were you under in everything? Then, think through how you can apply those learnings to the next budget you do, always refining your skillset and your understanding of the nuances of filmmaking as you go.

I know the finances behind filmmaking can be wildly overwhelming.

On March 29 through 31, Muse will be hosting a live workshop for our new course?World-Changing Filmmaker Live?in Portland, Oregon. We will be in-person working with folks on all the fun financial things like budgets, profit and loss statements, cash flow, and everything else that will help you make better business decisions to be able to actually invest back in your business.

Join us?– we can help you demystify all things filmmaker finance and get back to telling the stories that will change your world.