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 3: The Importance of Realistic Sales Projections

Sales projections are essentially projections of the prices distributors are willing to pay for a film.

I can tell you from first-hand experience, buyers are no longer willing to pay the inflated prices indies commanded in the 1990's. Many distributors went out of business paying high prices for independent films they never saw a return on. They will not do it and experienced film investors know this all too well.

Obviously investors want to know that they're not investing thousands or possibly hundreds of thousands of dollars into a film that has no chance of recouping that money in today's marketplace. They want to see hard, realistic numbers, based on your film. How much will it make? Which markets could it work in? Which markets won't it work in? They want to see numbers which will tell them up front how likely it is that they will or won't get their money recouped. Let them know what they're getting into up-front and it'll be much easier to not disappoint them later.

Think about it from an investor's point of view…why wouldn't they want to see numbers? Wouldn't you want to know if you were bound to lose money in advance? Wouldn't you be more prone to invest in something where the numbers suggested you would have your money recouped?

Now from a filmmakers perspective sales projections can be quite daunting. But it doesn't necessarily have to be.

After years of experience on the front lines selling independent films to worldwide distributors, I'm privy to the prices that theatrical, DVD and broadcast distributors, the world over, are willing to pay. Genre, cast, shooting format -- these all play an important part in what distributors are willing to pay for a film.

I usually like to give filmmakers two worldwide projections: a worst-case scenario and a best-case scenario. Usually, the eventual sales figures fall somewhere in between.

But getting realistic sales projections can actually serve a filmmaker quite well, too.

First, you're not forced into fudging numbers and putting stars in the heads of your investors to entice them into investing in your film, thus making their recoupment expectations completely unrealistic. And making you future dealings with them -- and there will be future dealings whether you like it or not - a nightmare. Irresponsibly raising money will always comes back to haunt.

Second, realistic sales projects can also help the filmmaker hone their project. Consider this, if your sales projections are not what you'd like them to be, it's not too late to change your strategy. Would hiring an A-list cast member for a day significantly change those numbers? How about hiring a B-actor who has an overseas following in a starring role? What is potentially the difference between making a tidy profit on your film or it never seeing the light of distribution?

Getting realistic sales projections before raising funds from investors can actually help you tweak your project so you can get it to where you want to be before going to investors.

Investors like solid, real numbers.