This post is the first in a year-long series that is dedicated to sharing the lessons that we learned while making our first feature length documentary film. This post will outline how to make your production company official. Future posts will focus on building a team, financing your film, accounting for your film and making your production crew sustainable. The one constant during the creation of a documentary film is that everything, and I mean everything, takes longer than you think it will. With the Civil War being one of the most well documented historical moments, we struggled with how to find a way to tell a unique story about the Civil War without being cliche or overly history focused? How do you make the U.S. Civil War relevant to an audience 150 years later?
Old Glory Productions LLC was created out of necessity. As founders of the company, myself and John Paul Pacelli, found a need to tell the story of why Civil War Reenacting was still relevant. We began pondering this idea in 2011. The political, social and racial divides were evident then, they are possibly more obvious now in 2017; and we wanted to find out what remnants there were from 1860's American life that we could find parallels in our lives 150 years after the end of the U.S. Civil War. This is how our journey to create When to Die started
We found the story that we wanted to tell, but we didn't know how to tell it nor how to recruit the team that would help us make the film high quality. Neither of us had ever made a film nor started a business so we needed to find a way to make a professional level film while protecting ourselves, any potential investors and the subjects of the film.
Research your Space
The first step in finding out if you've got a winning idea for a film is to do extremely heavy research from the start. This applies to narrative and documentary, but for our purposes we decided that a documentary was the best way to tell the story of the legacy of the U.S. Civil War.
To star your research, see who has made similar films. You really need to challenge yourself to see the value in your potential project. It's easy to get sucked into your first idea because, if you're anything like me, it's fun to think about the proces of creation. But, if you are serious about making a film, and you're searching for the right story, ask yourself these questions:
What was the quality of those films that are similar to the film you want to make?
Are they telling the same story that you want to tell?
If the story has already been told, why would an audience want to see your version of the same story?
If the story hasn't already been told, why hasn't it? Is there no audience for your idea or is your idea truly unique?
The fact of the matter is that you most likely have a unique spin on a topic based on your perspective, but a great story is the starting point. As an independent filmmaker you need to be focused on the business aspects of the film in addition to the creative process.
Distribution deals don't exist like they used to. It's easier than ever to market and distribute your own film, so why not plan on your film being self-distributed from the start? If a good deal comes along from a distributor, great. But, for most of us, it's completely unrealistic to rely on a traditional finance and distribution model for your independent film. So, plan for the long term and think big when conceptualizing your film. It’s an incredible business challenge and it’s not the easiest business to become profitable, but it can be an incredible experience if you’re thinking for the long term.
Create the Business Entity
There are a few options for creating your business entity for the project. A couple of questions that you will need to answer prior to setting up your business:
- who is going to be involved?
- what you want to do with the film?
- Who is your audience?
- Most importantly for setting up your business entity, how you are going to finance the project?
We settled on an LLC for When to Die. This was because we really had no idea what to expect out of the process and we didn't have any film production connections in our network to give us guidance. In retrospect it might have been easier for our project to raise money and to find grants to fund the film by setting the organization up as a 501(C)(3). Since Something we didn't realize is that a lot of the grants that are available for independent documentaries are only available to non-profits. Also, if your content is extremely focused on a social issue or historical issuer where there is an organization that is dedicated specifically to your cause, there is most likely a grant that could be available to you.
"Limited Liability Corporation - A limited liability company (LLC) is the United States-specific form of a private limited company. It is a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation. An LLC is not a corporation; it is a legal form of a company that provides limited liability to its owners in many jurisdictions. LLCs do not need to be organized for profit. In certain U.S. states (for example, Texas), businesses that provide professional services requiring a state professional license, such as legal or medical services, may not be allowed to form an LLC but may be required to form a very similar entity called a professional limited liability company (PLLC)."
"A 501(c) organization, or simply a 501(c), is a tax-exempt nonprofit organization in the United States. Section 501(c) of the United States Internal Revenue Code (26 U.S.C. § 501) provides that 29 types of nonprofit organizations are exempt from some federal income taxes. Sections 503 through 505 set out the requirements for attaining such exemptions. Many states refer to Section 501(c) for definitions of organizations exempt from state taxation as well. 501(c) organizations can receive unlimited contributions from individuals, corporations, and unions."
The most common type of US tax-exempt nonprofit organization falls under category 501(c)(3), whereby a nonprofit organization is exempt from federal income tax if its activities have the following purposes: charitable, religious, educational, scientific, literary, testing for public safety, fostering amateur sports competition, or preventing cruelty to children or animals.
I would caution a would-be filmmaker to think really carefully about the fact that a lot of doors are closed to you if you set your film up as a for-profit entity. The odds of making money on an independent film, with the incredible amount of content that is being made right now is slim.
Filing for your Legal entity
Depending on your project and how you choose to form your business entity, there will be different steps involved in the process. Think big and think long term. It can’t hurt to set up your entity poised for growth. If you’ve taken the step to form a business entity, then you’re serious about making your project a success. Don’t second guess that confidence. Form your organization as though you reach the full potential that you envision.
Each state has its own requirements and steps in order to form a legal entity. Rather than focus on the details here, it’s worth thinking through your business goals and your production ambitions. In the end, a large reason for a business entity is to properly account for your finances and to protect the producers and investors. Make sure that you receive an expert opinion before forming a legal entity. Below are some business operations considerations before filing your paperwork with the state:
One Film - If you have a great idea for one film and you have no vision beyond that one film, it might be worthwhile to form a business entity that is specific to the project. If you only intend to use that entity to conduct business for a specific for that project.
Episodic or Series - If your ambition lies in creating a multi episode series, then make sure your business entity is set up to keep funding consistent across your various production activities. This may seem like more of an accounting issue, but if you think about it from the start, you’ll be happier down the road.
Various Different Production Activities - Will you be making short films, feature films and documentary films under the same entity?If your ambition is beyond just one project, then create the legal entity that way.
Employees vs. Contract Labor - If you plan to be large enough to hire full time employees or if you plan to just hire contractors is an important consideration. Even if you have a team of your friends, you’ll need to consider:
How you’re going to pay them
How you’re going to pay taxes
- How they’re going to pay taxes and what forms will you supply to them if you pay them
Next Month: Getting Ideas Down on Paper, Forming your Initial Strategy
If you are starting a project and would like to discuss our experience, don't hesitate to reach out to me at Justin@whentodie.com