How to build a film budget for your next production

You could argue that in video creation a production budget is as important as the script. Without either, you’re going to have trouble completing you project.

If you’re doing video production because it’s a wonderful hobby and you’re okay with spending your own money to make your video creations, you probably don’t need to read any further. But if your plans include providing video production services, or at least recovering the costs of your next indie movie, please read on to learn how to build a film budget. Creating a budget is the most important part of pre-production planning.

Building a carefully thought-through film budget — and sticking to it once you’ve built it — can keep your shooting schedule on track. Knowing your resources will prevent you from making ill-advised production decisions. A budget helps you head off unforeseen cost overruns before they bring your film to a screeching halt.

You could be making a business video for a client, applying for documentary funding or launching a crowdsourcing campaign to get your short fiction film made. We’re talking about film budget here, but regardless of the genre, the line items in your budget will be very similar.

Before getting to the details of what needs to be costed in a production budget, let’s begin with the scope of your project, your concept, the script and how that affects the numbers.

Scoping it out

Whether you’re raising money for an independent film or spending a clients money on a corporate video, every penny needs to be accounted for. Clients, investors and business partners want to know what you’re spending their money on.

When a client asks you how much it costs to make a video, your answer should always be the same: That depends on the script.

A film script or screenplay is usually one of the first line items in a budget. In a corporate video production workflow, the script is the first item that requires approval before production goes ahead.

In both instances, the budget is determined by the script and your approach to it as laid out in pre-production.

Adjusting to budget constraints

Once an independent producer owns a script, he or she can do whatever they like with it. For example, they can re-write all those scene descriptions of the actions that take place in exotic, out-of-state locations. Instead, the events could unfold in one or two easy-to-get-to places locally. This shaves days off the production schedule and translates into significant savings on equipment rental, crew and performers.

Similarly, a business video that tells the story of your client’s organization can be given a treatment that suits a particular budget. One approach might be to do it in photographs and voiceover testimonials with text overlay. If well done, there’s nothing wrong with that and it can be very effective.

Or, the project can be given the full documentary treatment. A large enough budget can support interviews with department heads and workers on the shop floor, actuality and visuals of people doing their job, archival footage of the company’s history and flashy animations that show how the company’s widgets are made. You could even tie all these elements together with professional narration and an original music score.

Ask your client what kind of money they have set aside for the project.

How do you know which way to go, high or low? Ask your client what kind of money they’ve set aside for the project. If it amounts to barely enough to produce option one — photos and voice-over — tell the client upfront about the limitations of their budget.

This is a typical scenario whereby the independent producer works backward, from the amount of money a client is prepared to spend and come up with a creative treatment that fits the client’s wallet. But, with convincing video samples at the ready, you might be able to upsell your client and have them order up something between options one and two.

Whichever way the creative goes, once the script is in place, it’s time to show them the money — how you intend to spend it.

Breaking it down

In movie production, there is an important intermediate step between screenplay acquisition and building the budget. A line producer, assistant director or production manager will break the script down and physically mark it up scene by scene to identify all the elements in the story that need to be costed and budgeted for.

Entered into script-breakdown software, these production items will produce a spreadsheet that identifies at a glance what items are required for shooting a scene on a given day: Locations/sets, actors, props, wardrobe, set dressing, vehicles, special equipment and crew.

Special equipment can be any piece of gear you don’t normally use. It could be an extra camera, special lighting, a smoke machine or a sync box that eliminates the rolling bars when shooting video off a TV screen.

Once you know what’s required for every scene in the script, you can begin to make up the production schedule. The schedule provides an itemized plan of what will be shot, where, when and for how many days. It has obvious implications for production costs.

There are production scheduling programs for that and the idea is to make up a schedule that is as efficient as possible. For example, shooting scenes in the most logistically efficient order according to locations and the availability of actors is standard practice. Like scenes that take place over the course of the script but in the same location are best shot in a grouping of days with all required resources at hand.

Your production schedule is the springboard for building the actual budget.

Show me the money

In video and movie production, what you pay for is skill and experience. Obviously, you will pay more for the highest skilled and the most experienced production workers and crew.

Conversely, if you are the production service provider, you have to position yourself in the marketplace accordingly. This doesn’t mean that if you just hung out your production company’s shingle yesterday you charge next to nothing to get the gig because you’re just starting out.

What you want to do is get a handle on what your client needs and wants, confirm the creative approach, the script and get it signed off, or, if you’re making an indy, own the screenplay. When the script is as locked as it’s going to be, do the research to deliver a realistic, market-value budget that reflects your commitment to the professionalism required to do a first-class job.

There are many variables at play when putting a production budget together. For example, will you hire union or non-union actors and crew? Will there be special deals made with equipment providers or even with actors for deferred payment?

Regardless of the fluidity when building a budget, the production activities, the line items that need to be paid for are constant.

If you’ve never created a budget before, the best thing to do is to first become familiar with reading budget documents. Google film production budgets and a myriad of samples and templates will tumble onto your desktop. Study them and notice the variety of budget structures, but also notice how line items are pretty much the same across budgets.

The big picture

In a major motion picture film budget, there are hundreds of line items. It’s a dizzying prospect to get your brain around. But once you’re familiar with what is called a budget top sheet, your head will stop spinning and you’ll understand where all these items belong.

A top sheet is a summary or subtotal of the costs estimated for different budget categories, which are also called departments or accounts. A top sheet gives you a great first overview of production activities that need to be accounted for. These categories are universal and many can also be applied to budgets for business video and short indie film production.

Departments, or budget categories, might include a camera, sound, make-up, transportation, set construction, office expenses, test shoots, location expenses, special effects, travel and living expenses and data capture.

Some budgets are structured according to pre-production, production and post-production activities and the top sheet will give you subtotals for each of these.

A budget top sheet is also where you will find the familiar yet frequently misunderstood concepts of above-the-line and below-the-line expenditures.

Above-the-line costs are fixed costs. Writers, directors, actors and producers who are paid a contractually pre-determined fee. Whether it’s a percentage of the total budget for a producer or the market rate for the screenplay and story rights, these costs are fixed and are typically the first categories listed on the top sheet. Below this line, which is a summary or subtotal of these fixed costs, are listed all the budget categories whose costs are not fixed. Below-the-line costs depend on the going day rates of production professionals and equipment rentals and on the number of shooting days.

And now the details

When you turn over the top sheet of a film budget, a budget summary displays the subtotals of all budget categories. The rest of the document is a detailed item by line-item accounting of each department and how those subtotals were arrived at.

For example, to arrive at a camera department total you might have to consider the following:

  • Size of the camera crew, which can include the DP, an operator and a camera assistant
  • Calculate each of the crew-member’s day rate and multiply that by the number of shooting days
  • Be prepared to figure in overtime depending on union agreements and other rules, as day rates go up after eight hours of shooting. Typically the first eight hours are straight time, hours nine to 12 are paid time and a half and over 12 hours are paid double time.
  • Meal breaks on union shoots. Meal breaks must be offered every six hours.
  • Camera equipment can include a camera and dolly, video assist monitors, grip equipment, lighting and more. All items will come with a unique rental rate.

Depending on where you shoot in the US, the level of your budget — calculated in the millions for big-budget films — and the contracts signed with the camera crew, these rates can vary.

Assembling a production budget requires intimate knowledge not only of the filmmaking process and the rules of the industry, but budget building also demands that you research the many production, payroll, tax and production accounting regulations which vary from jurisdiction to jurisdiction.

Tools for getting it done

There are many reputable payroll and production resource companies that specialize in the entertainment industry. Companies like Media Services and Entertainment Partners offer off-the-shelf industry-standard production tools such as budgeting, script breakdown and scheduling software. Essential for your budgeting tool kit are labor guides for different jurisdictions and industry unions that give you current hourly, daily, weekly and flat rates for industry professionals.

Showbiz Budgeting is touted as the first and last budgeting program you’ll ever need. For $400, you can create any type of industry budget, film, TV, commercial, music video, web series and corporate video. The irresistible component is that it tracks all your expenditures, purchase orders, petty cash, payroll and how they affect your overall budget.

Hot Budget is a powerful and popular open source production tool available free online.

Final words on budgeting for video

If you’re the producer, don’t forget to pay yourself. Typically 10-15 percent of the total budget goes to the producer for pulling it all together. And add a contingency. A contingency is a buffer of about 10 percent of the total that you should add to the final budget.