Business Plan Interview

In a conversation with Raindance, Carl Schoenfeld explains - amongst other things - the basic reasons for creating a business plan and how to measure the uniqueness of a project.

What are the basic reasons you create a business plan?

It’s an exercise you do first and foremost for yourself to get your thoughts down on paper before you begin your enterprise. The seedling of a business plan – which contains the genetic code for an enterprise that you will later see growing for decades and that may span across countries – can be a bullet point list of potential achievements that you assemble over a coffee, in the bath or on the train. One benefit of this process is that you see how compatible the business idea is with your environment and your personal ambitions. I have written business plans that ran over a dozen pages only to find out that I would have to do things I didn’t want to do in order to put them into effect. I think you are much better off just writing 10 pages to find that out, rather than spending 2 years and a lot of money. On the other hand, if you see the idea more clearly in your head going through this process and believe that this is a venture you want to put lots of time and energy into, a business you will have fun with, then your commitment grows and that enthusiasm will rub off on partners and suppliers and your pitches to investors.

How do you measure, or describe, the uniqueness of your project?

You can start with a few paragraphs about what the company is going to produce, how it is going achieve this and how it is going to make money. As with anything you do, you should know about your environment, so read the trades and go to festivals and networking events like Raindance to get an idea of what other people are doing. They are your competitors and your investors and their agenda is always subject to change. Hence, any analysis of today will be out of date when your product hits the shelves.

There is still an apprehension about gangster comedies now as there were a few that sunk really badly at the box office, everybody including us is doing horror now. By the time somebody reads these lines there may have been a gangster comedy that came out of nowhere doing “The Full Monty” type box office. Then everybody wants gangster comedies again. On the other hand, six months after “The Full Monty” was released there was a glut of such stories going around and I was offered “The Full Monty” set in a rock band, set in a football club etc, but such derivative projects won’t make it either. In any case, I haven’t seen these scripts going into production anywhere else. If a few of those horror projects that are currently in prep or production make it in the US, the market will ask for more. If they bomb, nobody wants to see any horror until the next “Blair Witch”.

Of course you need your projects well written, well structured and packaged, but the uniqueness and attractiveness both in creative and financial terms depend to a large extent on the flavour of the month. It is your acuteness as producer in charge that determines when and how you market your project. If you are talking about the uniqueness of the company, look at new developments. Today I would include DVD Burn and Earn, fringe cinema shows, the internet second wave, which is being developed with a much clearer approach compared to what happened in the mid 90s.

Then I was working with an internet company that had some of the best offices ever, including safe bicycle parking on the 5th floor, a desk overlooking a perfect skyline and I could take my meetings on a little terrace outside. The talk was so pretentious often mentioning ‘community building’ and occasionally involving 8 figure budgets. It was blown out of proportion, never really viable, that’s why I am glad this is over.

But right now we are facing the possibility of people buying short films over the internet, just as they are buying logos and ringtones right now. I’d gladly view a cool 15 second short on a phone, that’s why I believe this could work. As I said before, by the time your readers take in my advice it may all have gone down the terrible route of Laserdisc and Betamax. Was it Robert Towne who said ‘Nobody knows anything?’, in any case that is what makes this industry so exciting.

What are the elements that you should have in place and how do would you recommend they should be described?

Again, let the business grow. If you think all you’ve got is a short film script that, like most shorts, will never make any money, think harder. You may have friendly relatives who will let you shoot at their house during the summer holidays. Once you have racked their place with the support of a deferment only crew, they may never speak to you again, but hopefully by that time you are in a plane between Asia and the USA’s east coast, taking advantage of your invitations to film festivals. Your sister’s best friend wants to launch a career in the creative industry and will help you, making phone calls, photocopying and handling correspondence. Your local supermarket gives you a voucher, through PCR or an up-and- coming casting director, you got some ex-“Eastenders” star to play the lead etc.

As ridiculous as this list sounds now, if you are good and committed to your work the short may bring in some sales and serious prize money – perhaps enough to option a novel for your first feature. All I recommend is that you have a look at all the resources around you, and build on them.

The above list is not something you want to show to your bank manager to increase your overdraft. But the next list may include a free option from your friend’s granddad who wrote a thriller in the 50s; your full time production assistant who is signing on, a well know producer you met and who will advise you, and free desk space you managed to blag from somebody who was so impressed with your festival stories. Of course you need to think about ways to keep your own head above water as well.

How do you test market your film before you make it?

It’s always useful to pitch your friends and family. You don’t have to create an awkward role play situation with your Mum posing as a Film Council executive. But as soon as you reveal to your loved ones that you are joining the creative industries and running your own shop, they will ask you what that involves. Now you can try various approaches to make your company, your projects and yourself as desirable as possible. Do the same with your friends down at the pub, first you will feel if it sounds incoherent, then your mates will tell you. That’s how you get your first draft.

Then you present ideas to a potential team: partners, advisors, sub-contractors and employees. You’ll get some feedback and as always, some of it is depressing, some useless but there will be helpful responses. At some stage you will have to pitch for money to investors, a bank manager to increase your credit line, rich friends of friends, rich friends of your lawyer, your accountant’s rich friends etc. By now you know who responds well to which element of the overall plan, and you can face your customers: commissioning editors, heads of development or production, distributors of any kind.

Can you summarise the contents of a business plan?

In its final shape it should start with an executive summary, including a description of the company, the nature of the business and the market, key talent, securities offered to investors, and naming other investors who are prepared to share the risk. Try to see things from an investor’s perspective and think about what information you would like to see. You need to show your unique selling point and the bottom line: how much at the very least your investor will get out of your project or company. Then you go into detail. What kind of experience is involved? What is the product? Where and how can you sell it to whom? What are the risks and how will you deal with them? How and when will an investor get their money back? Once you have answered these questions to yourself and researched your market well, it’s easy for an accountant to draw up some figures.

What is the result of a good business plan, and what does it offer a filmmaker?

We have to go back here and look at what you originally wanted to achieve. If all you really want is to impress a few mates, get a few screen credits but don’t want to shoulder much risk, you are out by now. You’ll see it’s much safer to get a job as film PA or 3rd AD, learn and see what happens next. Perhaps you find that this route fits your needs much better. But if you have the determination and talent, you’ll find it’s much easier to show everybody what your activities are about if you have a plan. We have established now that this doesn’t need to be a thick glossy brochure with lots of figures – it may come to that later.

Some of my business plans I have never shown to anybody, but I use parts for various purposes. Simply by writing them I was able to anticipate problems and find alternatives. If you want to run your own company as producer or director, you should think about the story lines of your next projects but leave some time to reflect about the business.

I’m not pretending to give you the ultimate answers to running a successful business, I’m not Bill Gates and surely he can’t give you the answers that are right for you either. Only you can do this yourself by taking advice where it is useful. It’s like with scriptwriting books: Neither McKee, Seger, Daniel or even Elliot Grove has got the right answer to get the best script out of your story. Better do it like a master chef and take the sauce from here and the veg from there…

Finally, remember that Pedro Almodovar, Wim Wenders, Gary Winick and Lars von Trier are involved in their own companies that produce their films and are thus able to keep some control over their films and rights. Wenders got into quite a bit of trouble losing rights to his films, but I am sure he now wishes to understand the business side better.