How to Create a Budget and Organize Finances for Your First Film Project

Today on the Dream Work Film Podcast I have the luminous Ashley coming on to ask me questions about how to create a budget for your first film project. This includes getting your finances organized, how to handle payment for your crew and cast, and much more.
IRS Website for 1099 - www.irs.gov/uac/About-Form-1099MISC
IndyRed.com - www.indyred.com/
Top Sheet Budgeting Example - www.filmbudgetpro.com/wp-content/upl…-TOP-SHEET.pdf

1. How do you budget the money and where does it go? For example, how much money goes to food, potential location costs, back up money in case of equipment failure, etc. I have to ask for a specific amount of money for the grant and have no idea where to start. I'm guessing I would feel this same way if I was doing crowdsource funding.

• Set up a Google Drive Spreadsheet
  • Include along the top separate columns in BOLD
    • Craft Services
    • Actors
    • Crew
      • DP
      • Sound
      • Lighting
    • Location Fees
    • Insurance Fees
    • Equipment or  Rental Fees

​From there you need to figure out how many days you will be setting aside to film the entire project. By having a day rate for each of these categories it helps break everything down to a manageable level.

• For Craft Services will you be providing a meal or just snacks and refreshments? It depends on what time of day you are filming and for how long. My rule of thumb is:
  • Three hours or less:
    • If you start early morning - provide coffee, water, and snacks (granola, apples)
    • If you start in the the mid afternoon - provide coffee, soda, water, snacks
    • If you start in the evening - provide soda, water, chocolate, snacks, and wine if you want to celebrate when you wrap for the day!
  • Three hours to six hours:
    • Provide at the very least a 30 minute break for people to go grab lunch or dinner
    • Provide a meal and beverage (Chipotle is great!)
  • Six hours to 12 hours:
    • Provide at the very least two 30 minute breaks for people to grab food or a snack
    • Provide a meal and a good size snack
    • Provide two meals

So this now comes down to how many days of shooting, how many hours shooting, and then you break it down to individual food cost for every day. Trader Joes is the absolute best for snacks that people love but are also affordable. Starbucks sells cartons of coffee for $14 and they serve 12. Super cheap! I did this for our early shoots on The Dreamers.

• For Location Fees it depends solely on the studio you are renting from. I’m assuming you are using a studio as your location as you will be filming interviews? 5 hour rates (half day rates) can be any where from $250 to $600. Did you like the studio we used for head shots? He charges $325 for 4 hours. ​
  • If you want to use as much natural light as possible, shoot between 10am and 3pm for filming times. 
  • If you want that dramatic interview-feel, you can use lighting equipment any time of the day
  • You can also do this in the comfort of you own home or a friend’s home for free. It all depends on the look and feel you want out of these interviews. Using lighting in these situations can be a bit more challenging. Be sure to spread out the lighting plug ins to different fuses so you don’t blow a fuse!
• If you are having trouble visualizing the look and feel of these interviews - get your butt on pinterest and create a vision board. ​

So again, from here it breaks down to how many days of filming and how many hours. Depending on the length of your interviews of course.


2) How do you know what to pay people? How do you pay your crew - Cash? Check? How did you keep track of it?

I paid people with either check, Venmo, or Chase Quick Pay. 

• Checks 
  • great because you have a physical receipt of the check slip in case you forget how much and the date it was written.
  • bad because they cost money, $25 a book
• Venmo - Free App for iPhone and Android
  • great because you can pay with credit card, or out of your checking account
  • bad because they do charge a processing fee of 3% if you pay with a card
• Chase Quick Pay
  • great because CHICAGO, so many people bank with Chase, it’s also nearly instant payment
  • bad because it isn’t a universal option if you want to keep everything uniform
• I never paid in cash because there was so way to keep track of it incase I forgot the amount or the date paid. 

As for how much, a great way to start is at minimum way. This is what I did for Season 2 of THE DREAMERS. In IL it’s $8.25 an hour. Honestly though a base rate of $10-$12 is more reasonable.

• You can also do a half day rate (4 -5 hours) or full day rate ( 8-12 hours). Some people you are looking to hire already have a set half day and full day rate. Just ask! It’s all a sliding scale of how long they have been out of school, how experienced they are, and if they have their own equipment. 
  • DPS - With their own equipment - half day rate $50 - $200, full day rate $100 - $400
  • no equipment - half day $25 - $100, full day $50 - $200
• Sound - same
• Lighting - same
• Google spreadsheets all the way. Do one sheet per shoot day to keep track of hours and payment. In one column list the title of the crew member, then their name, then the rate (per hour or per hd/d) then the total for the day, and finally the form the payment was in.

3) How do you keep track of your expenses in general? From your podcast, I'm guessing excel and receipts?


Google Spreadsheets again! You should be reporting this on your taxes, so dividing things up by their tax category is what works best personally, but there isn’t a tax category for “Craft Services”. So dividing it up by top sheet category is best for grant writing. A top sheet is the summary of a film’s budget. I’ll send you an example of The Dreamer’s top sheet for Season 2 to help you visualize. 

Be sure to keep all your receipts for things over $25. Those are what you will need if you were ever to get audited. You must keep your receipts for up to six years. Honestly the chances of you being audited as a budding filmmaker are slim, but better to be safe than sorry. 


4) What do you do with all of that? Is it for tax purposes?

YUP! And for yourself to learn more about where you could under budget or over budget.


5) Does a grant count as earnings on your taxes? Do you claim it?

Grants and awards that an artist receives are taxable.

• Before 1986, you got a $300 a month exemption for grants. But in 1986, that changed. Now there’s no exemption and you’ve got to declare all your grant money and depending on how you declare your grant, you then take expenses.
• For a grant this size it would be IMPERATIVE to keep track of your expenses. I would most certainly hire a CPA to help you come tax time. Go and listen to my tax podcast to help get yourself organized, which in turn will help your CPA.

6) Do you need to write a contract if you're paying people? What if you're not an LLC and you're paying them?

Do you plan on making money on this web series at some point? Or is this purely for fun? Do you plan on continuing down this road of production or are you unsure? If you want to turn this into a career then you absolutely must become an LLC and protect yourself. You can check out my podcast on becoming an LLC for all the info on that. 

Let’s start with saying you are an LLC and you want to hire someone to work for you. You would be hiring them as an independent contractor. You should create a contract that states this. 

Taxes: For payments to contractors, you will get to take a deduction. But you also must abide by some regulations, such as issuing 1099-MISC forms for those who have annual payments of at least $600. Copies of the 1099 must be sent to the contractor as well as the IRS. If the payment is under $600 for the project, then you don’t have to file anything. It’s basically not enough for the IRS to care about.

No matter how much you pay them you should absolutely have a contract that clearly states they are being hired as an independent contractor. Literally call it an “Independent Contractor Agreement” (at the top of the document!) In fact, this is important evidence if there is an IRS audit.

Part of the language should clearly note that:

• There will be no federal withholding or benefits
• The terms and information shared are confidential
• There should be a right to terminate the contract if the work is substandard, violates terms of the agreement or there are missed deadlines.
• In the contract, you should also have a clause that grants all ownership of the independent contractor’s efforts. This is especially important in the film industry space.

It is also critical to be detailed about the requirements. Often disputes arise over the mismatch of expectations of the parties. So in the contract, more detail is probably better — and also have specific dates for deliverables, on things like the final edit, color correcting, audio correcting.

As for the payment, it is important that it be on a of fixed basis. If not, the IRS may think there is really an employee relationship involved.


7) Do they need to fill out any paperwork?

Yup the contract and the 1099 if it’s over $600.


8) Did any money go towards social media marketing or festivals?

TONS. I spent $2000 on marketing and $1200 on festival fees. 

Marketing was for Facebook campaigns and boosts. When you start a page you have to pay to get seen in the newsfeed. Getting organic likes and shares is only possibly up to about 5% of your audience. How else do you think Facebook is worth so much? It’s because people know that’s where you can get out in front of people. 

You also can pay for reviews on certain sites. 

Festivals can average between $35 to $300 per category. It adds up fast.


9) Does it cost money to showcase a web series online? I know it's free on youtube, but not sure about vimeo, and I know youtube has premium accounts (what are the benefits). Beyond the website, where did you host your web series?

I am only familiar with Vimeo. I pay $60 for the plus account which allows up to uploads of 5GB of storage per week and up to 250GB of storage per year. They have a Pro account for $200 a year with 20GB of upload storage per week and 1T a year. This all depends on how much output your project will have. 


10) What template did you use to put together the budget? 

I used a budget proposal template. See in the show notes above!