BUSINESS PLANS: THE BEGINNER'S CRASH COURSE IN ATTRACTING INVESTORS TO YOUR FILM

For most, especially those who don't have a solid track record of making films that make money, or at least break even, a solid business plan is the number one way to attract investors to your film. This five-part series for beginners explores that concept.

Part 4: Setting A Strategy for Recouping Your Investor's Money Before They Invest

Why set a plan for recouping your investor's money before presenting your film for their consideration? Cause it makes it a very persuasive argument for investing in your film. And, from a business standpoint, it just makes sense.

Again, look at it from the investor's point of view: which would you be more partial to invest in? A film with a solid plan in place for seeking and hopefully acquiring distribution, real sales projections for your film in today's marketplace, and, as a result of your research and planning, a tentative timeline and plan for recouping the investor's money? Or would you opt to invest in the film where the filmmakers have given little thought to distribution, aren't clear on what their ultimately want from the film, and haven't thought about how they'll pay you back if you were to invest? If you're answering honestly, I think we both know the answer.

Yes, we all know investing in film is a huge financial risk. And the investor may see no return on their investment. That's a given and the reason why it's so difficult to find film investors!

Your investors know the risk. And you and they both know that things may not play out the way you all would like. There are absolutely no guarantees. If an investor doesn't understand that, they really shouldn't be investing in film.

But filmmakers have to understand that here's a big difference between finding someone who will finance your dream with no thought to the potential financial loss and someone taking a chance on investing in your dream. A very big difference. While you may find a few willing to do the former, more often then not, you will run into the latter.

If you're asking someone to give you cash to play with, it's ethical and necessary to have thought through how and when they will be paid back. And when they might even expect to see a profit. After all, the basic idea behind investing is putting money in to get more money back.

It comes down to this: they have the money. And you need to make a compelling and persuasive argument so they will invest that money in you. They will make the decisions, you can only plead your case. Plead the best case possible for both of you.

Now how do you set a plan for recouping investor's money?

Come up with a realistic, tentative timeline With your distribution strategy and sales projections in hand, you'll start to have an idea of when you might start making sales and how much you'll make off those sales.

If you're planning on using a sales agent or producer's rep, take their fees and commissions into account. Their fees will have to be paid back before you or your investors see a dime. Personally, I'd shy away from promising an unrealistic timeline for payback. A lot of times all this does is lead to a lot of very bad blood between filmmakers and investors. Many investors know what they're getting into and will appreciate your giving recouping of their funds such weighty consideration.

But strategizing as early as possible can get you on the road to acquiring distribution that much faster. And that potentially means paying back your investors faster.

Think about presenting a Plan B If you're hoping for a theatrical release, that's great. I wish you the best of luck. But since so few indies actually get a theatrical release, I'd also suggest having a Plan B in place as well. If you present these scenarios to your investors and they see you've seriously considered in advance how they will be paid back, this will make you that much more attractive to them. That, and obviously, having a good movie that they see as having a chance at success.