Creating and adhering to a realistic budget is important to the the success of any videomaker’s project.

But just how do you compute that magical figure, arrive at an amount low enough to attract investors but large enough to get the job done? It’s not easy. Thousands of people labor in Hollywood as budget wizards; not even they get it right very often. So many variables and details can go wrong or astray; it’s impossible to plan for every contingency. Most often, you just have to guess.

Still, in this article I’ll offer a number of useful guidelines vital for budget preparation. Videomakers who absorb these lessons will at least have a reasonable grasp of the basics of financial planning.

Reasons for Budgets

Video budgets both attract investors and allow you to exercise control over a production.

Since the budget is the foundation of any presentation to investors, it should be specific and accurate. Realism is also a good idea. It’s an admirable goal, applying Lucas Film-like effects to a dry-cleaning commercial, but hardly feasible when the video must come in at $499.

Most projects begin underbudgeted and underscheduled. It’s easy to understand why. A project will certainly seem more attractive to investors if you can convince them you’ll finish the video for less money in less time than the competition.

But this shortsighted method of easy financing will eventually cause you suffering.

Projects underscheduled and underbudgeted leave you with but two options once the show begins:

1) the project goes over budget, or 2) quality goes into the dumper.

Say you tell a client $300 will do to create a training video. Then during shooting rain pours down; you must shut down the shoot, bring back and pay talent for a second day. You’ve now spent an extra $50, money intended for post. So will you skip the original scoring, budgeted at $50, choosing instead to give the client canned tunes? Or jettison the spiffy title effects for hand-lettered cards?

Sticking adamantly to an unrealistic budget forces you to continually compromise, leading to a loss of quality.

There’s a minimum budget for every project, a certain amount necessary to produce a video meeting reasonable standards of quality. Determine your video’s destination, then calculate the smallest amount of money needed to reach it. If the available financing is less than this figure, change the project.

Keep budgeting until you have a video you can afford to make.

Step by Step

It’s important to give equal emphasis to stages of production, from writing and principal photography to music and editing.

It’s easy to get exciting about the shooting stage of a video project. Here is the place for lights, camera, action, Just don’t make the mistake of creating an excruciatingly detailed budget for production only to carelessly slop but a few dollars to post. You’ll pay dearly.

Become familiar with the functions and costs associated with every step of the production process. Talk to the people responsible for the script, the shooting and the effects. Without such intense research you may neglect such costs as B-roll tape, music copyright fees and catering charges.

Actual working budgets vary in size. Major Hollywood studio budgets may end up as two-inch-thick tomes, while an independent thirty-second cable spot can come in a tiny one-pager.

Regardless of size, most every budget consists of two sections: costs above-the-line and below-the-line. The former includes cash for producer, writer, director and talent. These costs are usually fixed, set amounts. Below-the-line costs include everything else associated with production. Each line item contains many separate details contributing to the total cost. I’ll examine each in an attempt to explain what makes building a budget so tricky.

Over the Line

The first above-the-line item concerns screenplay and story rights.

If your production uses an adaptation of existing work, you’ll have to purchase the rights. These can be costly for a known, popular author’s work, or nonexistent lithe story comes from a rookie simply seeking screen credit.

Unless you come up with it yourself, you will have to pay someone some amount for either an idea or an actual screenplay. Even for thirty-second commercials, people get paid to write scripts.

Hidden costs included in this item can include photocopying, script breakdowns and rewrites, copyright registradon and legal fees associated with purchasing work.

The producer is the one who generally runs the show; and, yep, often expects payment, too.

A producer is responsible for finding story, actors, crew, equipment, locations, props, wardrobe and investors. This requires an enormous amount of time, even for a small, one-day shoot. A producer’s talent lies in the ability to make and keep contacts; that’s what you pay for. Obvious expenses include phone charges, travel expenses, lunches, postage, contracts and legal fees.

In Hollywood the director is paid for overall vision. On smaller productions, director may be you, the camera operator or even the client. With very low budgets you can skip this item; there isn’t enough discretionary cash available to afford a director.

Talent includes lead actors, supporting cast, stunt people, voice-over artists and models. In budgeting talent, keep in mind daily or hourly rates. These usually vary according to how often the person works.

As an example, you might hire talent from the local actors union for $200 a day, $150 for two days or more. Read the small print; often contracts demand the two or more days be worked consecutively. If you work your talent on Monday and Wednesday, you’ll spend $400, not the planned two-day rate of $300.

For details on this intricate subject, consult Ralph Singleton’s indispensable Film Scheduling.


Under the Rainbow

In an ultra-low budget affair you may spend little or no money above the line. But every production-large or small-incurs production expenses.

Depending on circumstances, production staff may or may not require significant expenditures. When the local car dealer hires you to shoot a thirty-second spot, you discover the script calls for a night shoot requiring a two camera set-up and live sound. What began simply now demands additional camera operators, lighting people, sound recorders and probably three or four grips to jockey cables and equipment.

On the other hand, your sixty-minute documentary on the mating habits of waterfowl requires only you and your camera.

Obviously, a project’s length bears little relation to total costs. It’s the script details that matter.

On most projects of whatever size the key staff members are the camera operator, sound recordist, lighting technician and makeup artist.

Support positions include dialogue director, script supervisor, electricians, dolly operators, boom operators, art director, costume designer, model builder, prop maker, set decorators, hair dressers, special effects technicians, carpenters, painters, still photographers, animal handlers, security people, first-aid crew and publicist.

Set operations, like staff, can demand either a large or small chunk of cash, again depending on the project. If you already own a camera, lights and sound equipment and all your locations currently exist, operation costs may be few. No need to buy or rent gear or build sets.

If your video seeks to portray a sci-fi world, get ready to dole out the dollars. The set builder needs wood, the wardrobe manager gold lam, the makeup artist latex and the gaffer colored gels. The set operations segment of this budget requires great detail; include every imaginable associated cost.

It’s not neurotic to include such costs as the tissues actors will need for their noses during chilly outdoor shoots. It’s these little things that throw a project into disarray. Don’t overlook such “obvious” items as nails, screws, bolts and glue; gasoline for automobiles and generators; rentals and permits; duplicate sets of clothing; bottles, cans, books and plants; and, of course, tape.

Again, talk to your people, learn what they require. Sometimes it’s not a bad idea to ask your support staff to create their own budgets; these you can incorporate into your final.

Postage and telephone fees can add up quickly. It’s amazing how many long-distance calls people make in the middle of a production. And if you’re on the road with a cellular, cash outflow can grow quite frightening. Same for postage and shipping expenses. If your client lives in another town and insists on dailies, you’ll go broke if you haven’t budgeted properly.

To cast and crew, the most important cost is catering. Believe me, you don’t want to face down fifteen hungry people with nothing but a jar of peanut butter and a loaf of bread.

Post Funds

The last formal segment of the budget concerns post-production-audio and video editing.

Those who own their own editing equipment will find costs fairly minimal. If forced to rent, the prices can get steep. Don’t underestimate the amount of editing time. This will depend on such variables as length of script, timing, client approval and number of effects.

If you’ve shot footage for a thirty-second spot requiring only five or six edits, an hour may be enough. If that same spot requires a rapid assault of images and sounds, you may spend two or three days in the edit bay.

You usually reserve editing time by the hour, day or week, with price breaks for longer periods. Other post-production costs include music, graphics and titles creation, special visual effects, dubbing, time-coding, audio mixing, looping, sound effects and extra tape.

A final cost to consider is the promotional expense associated with selling and marketing. Final product should be presented in a professional form, all videos properly labeled and packaged. You don’t want to hand a client a VHS copy in a cardboard sleeve with masking tape crookedly proclaiming the title on the spine. A nice hard-shell package with a printed label is the only way to go; include these costs in your budget.

If you want your production to reach the masses, think about hill-color packaging costs like artwork, layout and printing. Any worth while marketing effort includes mailing promotional copies to potential distributors and buyers. Estimate photocopying, postage and duplication Costs.

Don’t forget advertising. Magazines, radio, TV, billboards, classifieds, flyers, telemarketing, direct sales, door-to-door, conventions and trade shows-whatever form you plan requires cash. Obtain quotes for ad rates during the time your ad will appear. Remember, your commercials will probably air more than a year after you’ve assembled the budget.

Because so much can go wrong, add a 10 percent contingency amount. This allows for unpredictable events, and lets investors know you’re handling the project in a professional manner.

It is not easy to create budgets. It is harder yet to stick to them. But with preparatory research, thought and an eye kept on spending throughout the production, you could still find change in your pockets when the credits roll.

Mark Bosko, a Videomaker contributing editor, is vice president of marketing for a commercial production business.

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