How To Draft A Budget?
You cannot build a house without a blueprint.
You cannot engineer an invention without a schematic.
You cannot command an army without a strategy.
And you cannot create a film project without a budget.
I have been line producing and creating budget breakdowns for 15 years, and have broken down everything from small commercials to a multimillion dollar period piece about the Tulsa race massacre. I do budget and schedule breakdowns for hire, you can find out more at http://greaterandgrander.com/sample-page/master-breakdowns/
A budget is a planning document with all the details of your production included. How many days, how many crew, how many cast, where will you shoot and what local taxes will you pay, etc.
A budget is also a moral document that determines what resources you’ll use and the decisions you’ll make along the way. Will you go the standard route of printing call sheets and scripts, or protect the environment by using a digital alternative? Will you pay your production assistants, or will you TRY and get away with unpaid film students? And if you do pay them, will you follow minimum wage laws, or risk the production with some $100 a day favored nation argument?
There are a lot of things to know, so let’s start from a high-level.
What does a budget look like?
The good people at Tongal have provided an example budget, which is available to all on Google Sheets.
Other Tongal templates can be found here.
A budget is broken down into sections. The sheet on top, is called the “Top Sheet” which provides totals for each department. Usually, each department is assigned a broad number (ex. Story is 1200, Director is 1500, Art Direction is 2200, etc.).
Generally, there are 4 key sections to the top-sheet:
- Above the Line – This includes all expenses related to Actors, Writers, Director, and Producers. Depending on the size of your production, this could be anywhere from 10% to 50% of your overall budget.
- Below the Line (Production) – This includes all expenses for physical production, including salaries, camera & light rentals, production design, set construction, make up, location fees, boom operator & sound mixer, transportation, and second unit. Basically anything involving on-set activities goes here.
- Below the Line (Post-Production) – This includes all expenses for post-production, including salaries, edit equipment rentals & licenses, sound design, music (whether they are composers or licensed music packages), CGI & titles (which are separate departments), and final sound-mixing.
- Total Other – Some studios and production companies prefer certain sections be broken out on the top sheet, such as taxes, fringes (union payments), buffer, completion bond, insurance, and “Miscellaneous”, but not all do. Each studio and production company has a preferred budget format, so always make sure to ask how they want their budget formatted before beginning.
Underneath the top sheet, there’s the Accounts. Each department’s expenses are broken down into accounts. So if the Art Direction Department is 2200, you would break that down as the Production Designer’s salary is 2201, the Art Director’s salary is 2202, Materials & Supplies are 2212, and Art Direction facilities and workshop would be 2299.
There’s actually a separate budget section for large productions called, “Chart of Accounts” which is literally just a list of all the departments and their account numbers.
Underneath the Accounts, there are the Details. Details are a granular breakdown of the Accounts. So, if the Production Designer’s salary is 2201, you would have a breakdown of, “Prep Local” for 2 weeks at X rate, “Shoot Local” for 4 weeks at Y rate, and “Wrap Local” for 1 week at X rate. I call out local, because if your crew member travels, then often there is a higher rate, and also additional costs, like per diem.
What should I budget for someone?
Let’s say you have a small production shooting in Los Angeles, and you want to spend as little money as possible. Assuming you’ve run out of friends that you can ask, “Hey, can you help me out for a day for free?” then you’re going to have to pay someone, and that involves minimum wage laws.
First, I want to address the most common tactic people take, which is to hire volunteers and film students to work for free. Lots of producers do this, even though it is NOT legal. According to the The Fair Labor Standards Act (the FLSA), you must pay a minimum wage, and factor in overtime. Some people will argue that Film and Farm Workers are exempt from minimum wage. This is wrong. I have read the FLSA, and film workers are not exempt.
Now, how do we calculate a day rate?
Well, let’s assume minimum wage is $10 per hour. The FLSA states that it’s regular payment for the first 8 hours, then 1.5 payment for 8 to 12 hours, and then double payment for everything after 12 hours. Since the industry standard for film shoots is 12 hour shooting days, we can simplify this by multiplying the hourly rate by 14 (8+(1.5*4)), so our film worker with an hourly minimum wage rate of $10, gets paid $140 for a 12 hour work day.
You can find out the minimum wage rate by Googling, ‘What is the minimum wage in [CITY NAME]’
Most major cities are moving towards a $15/hour minimum wage, which means you should expect to pay a minimum of $15 x 14 = $210 per person, per day.
Second, I would like to address another common tactic of classifying all their workers as independent contractors. This classification status allows producers/employers to not pay taxes and fringes, that most other companies pay. This may seem like not a big deal, but what it winds up doing is pushing the burden of those taxes, and resources to the employees. This is unethical, but also, due to California passing the AB5 legislation, is now illegal. As pointed out by author Erin Pearson, it is important for business owners to know, the AB5 law gives the state Labor and Workforce Development Agency the power to fine companies $5,000 to $25,000 per violation for willfully misclassifying workers and allows the state Labor Commissioner to assess additional civil and liquidated damages. That means for each crew member you hire under the wrong classification they can fine you, on a set of even just 10 crew that is between $50,000-$250,000 fine. Other states will be passing similar legislation in the coming years.
So, if you are trying to obey the law (which I recommend you do), then that $210 per person, per day, rises approximately 24.88%, to $263 per person, per day. This can vary state by state, and if you have questions, reach out to your state government Taxes division, or just hire a certified public accountant to cut the checks.
What about Unions?
You may be saying, “I’m not going to pay that much, the Screen Actors Guild (SAG) says I only have to pay actors $125 a day.” That is correct, but there are some strict caveats to SAG’s $125 a day payment.
First, that $125 is for an 8 hour work day, so when we apply the overtime calculations, that comes out to $218.75 per 12 hour day, PLUS the taxes and fringes, PLUS additional overtime if you go over 12 hours.
Second, your budget must be under $50,000 total, and I mean total for EVERYTHING, pre-production, fees, food, rental, and all of your post-production budget.
Third, there are geographical constraints. So, if you’re outside of Los Angeles or New York City, there may be some travel, per diem, and other fees.
Fourth, with any SAG production, you have to fill out a lot of paperwork, and trust me, you do not want to get audited by SAG; they will go through every piece of paperwork you submit.
Finally, there are final distribution restrictions on your piece, and that’s a whole other complicated ball of wax.
But actors aren’t the only ones with strict union guidelines. Let’s look at a Production Designer example.
If your Production Designer is working in California, and a member of the IATSE Local 800 Union (also known as the Art Directors Guild), in addition to the salary, you’ll pay FICA 1 (6.2%), FICA 2 (1.45 %), FUI (6%), Workers Comp Below the Line (4.33%), and CA SUI (6.2%), and a CA local union dues fringe of 17%.
Also, the union Production Designer has a 5 day/60 hour week minimum guarantee, that’s around $3,800 per week, depending on various factors like the scope of their responsibilities.
So, if you want to employ a union production designer in California for your production of 5 days, the costs will break down as such:
|Workers Comp (BTL)||4.33%||$164.54|
I tell my clients all the time, every production is different, and thus has different needs.
You could do a one-day “talking heads” interview shoot where you need 1 camera person, 1 sound person, and a producer, but all your money goes into post and editing.
You could do a 10 shooting day microbudget feature, and spend every amount of your small budget on production design and crew, but then have no money left over for post-production, and your film takes 2-5 years to finish because you’re begging, borrowing, and stealing.
Or you could be doing an animation or video game project where you hire a few voice actors for $125 each for an 8 hour day, but then you spend $100,000 on your post-production pipeline over two years, and you get as much value as possible by outsourcing to places with cheap labor like Brazil, China, and Eastern Europe while utilizing resources like Blender and Fiverr.
Believe it or not, the more money you spend, the higher quality you will get. This is because people who know their job, know what they are worth on the open market, and will work on projects that pay them what they feel is a worthwhile rate. In addition, more money means more time, and more time means more shots, more coverage, more options, more props, more costumes, more editing time, more special effects render and processing time, etc.
I won’t call out every department, but here are some keys.
Writers, Directors, And Producers
Often on smaller projects, the writer, director, and producer are all the same person. So the first question the heads of the production will ask is are they going to pay themselves. One way or another, this will set the tone for the entire production.
The number one thing that will impact your budget is acting/on-screen talent. If an actor has a conflict, and can’t work on Thursday because they’re working on another Tongal project, you have to move around schedule and locations, and that could mean a massive hit to the project.
The first thing I will do to trim down the budget of a project, is cut or combine characters. If the script calls for a group of 40 extras, cut that down to 7. If the script calls for a hospital to have both a Nurse and a Receptionist, combine those into 1 part. Odds are if your characters don’t even have a first name, they’re not adding value to the production or the story.
If a script has 16 speaking roles, that’s way too many characters, and you need to start combining or cutting. Not only from a budget perspective, but if you have that many speaking characters, you wind up detracting attention from your main characters and story.
The truth is, it’s not hard to get a group of actors who will work for free or on deferred pay, even a group of actors willing to work 2 or 3 weeks for free. However, high-quality and talented actors come at a cost, and you should be prepared to pay that cost.
The number two thing that will impact your budget is locations. Or, rather, I should say, location.
The truth is, most independent films, have most of their shooting done at 1 location. Let’s take for example Quentin Tarantino’s award winning Directorial debut, RESERVOIR DOGS. That entire movie is shot at 6 locations, 2 of which are pick up shots. The overwhelming majority of that movie is shot in the warehouse, in the apartment above that warehouse, in the bathroom of that warehouse, on the roof of that warehouse, and in the alleys around that warehouse.
Why is this?
Because your locations determine everything else around your budget.
- How much travel time do you have?
- How many location fees are you paying?
- How many locations do you need to set up and break down with art and set dressing?
- How will you pay for parking?
- Are people close enough to work on setting up the next scene while filming the current one?
- Can you save leftover food in a refrigerator near set? Or do you need to throw out everything you can’t transport?
- Can you set up your equipment once, and do a walkaway at the end of every night (where you just leave everything and lockup)? Or do you have to waste time breaking down equipment, art, and materials, pack up the truck, and then unpack everything at a new location the next day?
Trust me, I’ve produced projects with 1 location, and projects with 12 locations, and I would choose the 1 location method any day.
Where else to save money?
A lot of producers will try to get discounted or free resources by saying their project will be great publicity and look good on a resume. However, nobody ever paid for rent or food with something that looked good on their resume.
Now there are good ways to get discounts. They include:
- Scheduling your project at times of the year that productions don’t normally shoot, such as after most TV shows have wrapped (in May for Los Angeles, or January in most other cities), or during the holiday hiatus (in late November through December). This allows you to get experienced labor at competitive rates, as well as production equipment rentals.
- You can also benefit from thrifty shopping. Not every piece of film equipment needs to be rented/purchased from a name-brand supplier like Birns & Sawyer. You can buy lights and cheap equipment from Lowes, Amazon, and buy second-hand via ebay, Craigslist, and sites like Sharegrid.
- Another great option for post-production is agreeing to not push a rigid timeline for completing deliverables. This is usually the best option if you don’t have a release date, or a bond company breathing down your neck.
- Another great option is, if you have a track record with your employees or vendors, and you have a confirmed project coming down the pipeline, you can bundle the costs for both projects, “If you do Project A for X price, I’ll give you Project B for Y price.”
- And of course, music can always be an issue, especially sync rights. However, on a low budget, it’s best to get music you love for a low price up front, and then use it as your “temp” track through the editing process. Greater and Grander recently wrote a great article on finding good and cheap music online. http://greaterandgrander.com/2020/08/best-sources-for-free-music-online/