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The short answer
Build it in this order:
- List the days: prep, shoot and post. Days drive almost every other line.
- Cost each phase: pre-production, the shoot crew, talent, equipment, locations and travel, and post.
- Add the percent lines: payroll fringes if you employ anyone, then contingency.
- Add fixed overhead for the job, like production insurance.
- Add your production fee. That is your margin, and it is not optional.
- Round to a clean number and write down what the price assumes.
Then, once the job starts, track every line's actual cost against its budget. To start from a spreadsheet, use the free video production budget template.
The categories
| Category | What goes in it |
|---|---|
| Pre-production | Producer and director prep, scouting, casting, the script or treatment |
| Shoot crew | Director, director of photography, camera assistant, gaffer, grip, sound, hair and makeup, production assistants |
| Talent | Principal and background talent, voiceover |
| Equipment | Camera, lenses, lighting and grip, sound, a drone, media and drives, expendables |
| Locations and travel | Location fees, permits, a studio, catering, flights, lodging, mileage, per diem |
| Post-production | Edit, color, sound design and mix, motion graphics, music licensing, stock |
| Percent lines | Payroll taxes and fringes, contingency |
| Job overhead | Production insurance |
| Your fee | The production fee or markup |
Commercial producers in the US often lay a bid out in the sections of the AICP bid form. A small brand film does not need every section, but the order is a good checklist.
A worked example
Here is a sample two-day brand film with one interview subject, a small crew and a five-day edit. The rates are made up for the example. Use your own and your market's.
| Line | Sum | Amount |
|---|---|---|
| Producer | 3 days at $600 | $1,800 |
| Director prep | 1 day at $1,000 | $1,000 |
| Location scout | 1 day | $400 |
| Pre-production | $3,200 | |
| Director | 2 days at $1,000 | $2,000 |
| Director of photography | 2 days at $900 | $1,800 |
| Gaffer | 2 days at $650 | $1,300 |
| Sound mixer | 2 days at $700 | $1,400 |
| Production assistant | 2 days at $300 | $600 |
| Shoot crew | $7,100 | |
| Talent, principal | 2 days at $800 | $1,600 |
| Camera package | 2 days at $600 | $1,200 |
| Lighting and grip | 2 days at $500 | $1,000 |
| Sound package | 2 days at $150 | $300 |
| Equipment | $2,500 | |
| Location fee | Flat | $1,500 |
| Catering | 12 people, 2 days, at $35 | $840 |
| Ground transport | Flat | $300 |
| Locations and travel | $2,640 | |
| Edit | 5 days at $800 | $4,000 |
| Color | 1 day | $900 |
| Sound mix | 1 day | $800 |
| Music license | One track | $400 |
| Post-production | $6,100 | |
| Direct cost | $23,140 | |
| Contingency | 10% of direct cost | $2,314 |
| Production insurance | For the job | $750 |
| Total cost | $26,204 | |
| Production fee | 20% of total cost | $5,241 |
| Price | Rounded | $31,500 |
The crew here are freelancers paid on invoice, so there is no fringe line. If you put people on payroll, add payroll taxes and fringes as a percent of their wages. Ask your payroll provider for your real rate.
Two choices in this example are worth copying. Contingency is a line the client can see, so an overage has somewhere to come from. And the fee is calculated on cost, so the margin grows with the job instead of being an afterthought.
Cost is not price
| Cost | Price | |
|---|---|---|
| What it is | What the job costs you | What the client pays |
| Who sees it | You and your producer | The client |
| Where it lives | The budget | The proposal |
| What it includes | Every line, contingency, insurance | Cost plus your fee, rounded, shown your way |
You do not have to show the client your budget. Most small studios present a price, or a few packages, with the deliverables and assumptions written out. See how to price video production and how to write a proposal.
Budget against actual
A budget is only useful if you check it. Once the job starts, track four numbers for each line:
| Figure | What it means |
|---|---|
| Budget | What you planned |
| Actual | What you have spent: approved expenses, crew invoices, rentals, purchase orders received or paid |
| Committed | What you have promised but not paid yet, such as an open purchase order |
| Estimate to complete | Your honest guess at what is still to come |
The estimated final cost is actual plus committed plus the estimate to complete. The variance is budget less estimated final cost.
Here is the example, after the shoot and two days into the edit:
| Line | Budget | Actual | Committed | To complete | Final | Variance |
|---|---|---|---|---|---|---|
| Shoot crew | $7,100 | $7,750 | $0 | $0 | $7,750 | -$650 |
| Equipment | $2,500 | $2,200 | $0 | $0 | $2,200 | $300 |
| Post-production | $6,100 | $1,600 | $400 | $4,200 | $6,200 | -$100 |
The crew ran into overtime on day two, which cost $650. Equipment came in under, and post is tracking a little over. Net, the job is $450 over on these lines, well inside its $2,314 contingency. That is what contingency is for.
Mistakes that eat the margin
- No prep days. A shoot day usually comes with prep and a load in and out.
- Forgetting overtime. Budget a 10-hour day and say what happens past it. The crew day rate calculator works it out.
- Post at half its real length. Count review rounds as edit days. See how many revision rounds.
- Counting a cost twice. A rental with a purchase order and an expense for the same invoice is one cost.
- No contingency, so every surprise comes out of your fee.
- Never looking back. Compare the final cost with the budget on every job, and your next budget gets better.
Doing it in Cutvey
Each project's Money page has a budget. Start from a template (a commercial in the style of the AICP form, corporate video or event coverage), from the lines of the signed proposal, or from a budget you saved. Percent lines handle fringes, contingency and your fee. Actual cost fills in by itself from approved expenses, crew invoices, rentals, purchase orders, mileage and your team's time at cost, and open purchase orders show as committed. With Books in double-entry, each project also gets a cost report with an estimate to complete and the variance. See Budget a project and track its costs.