Winning great jobs is a balance between a strong creative treatment and equally strong budget.
In this article, we'll run through best practice tips to budgeting your commercial and prepare the bid to share with a client or agency partner using software like Actual. For this example, we'll refer to the industry standard AICP bidding template commonly used in advertising production budgeting.
What's included within a budget proposal or 'bid package'?
The bid package includes a number of documents outlining your team's approach to bringing a creative vision to life. Typically, that includes:
- Bid Letter - a document outlining high level assumptions & approach
- Title Page - including company information, commercial titles, and personnel
- Top Sheet / Cost Summary - a 30,000 ft view of expenses grouped by category
- Cost Breakdown - a detailed outline of costs grouped by category and line #
- Calendar - a proposed schedule of key dates & deadlines leading up to a shoot
- Treatment - the director's vision, including casting, story, technical ideas
Breakdown Your Projected Expenses.
The first step you'll want to take in breaking down your expenses is to run a side by side comparison of the creative needs of the job, and the anticipated costs to deliver on that vision.
Every expense should be broken out by category, and itemized by line item. For example:
Location Fees = Line 114 "Location Fees"
Camera Rental = 193 "Camera"
The AICP template includes a number of cost categories, each containing a range of line items attributed to costs:
A - Pre-Production & Wrap Labor
B - Shooting Crew Labor
C - Pre Production Expenses (Casting - Vehicles - Working Meals - Scout Fees)
D - Location & Travel (Location - Catering - Craft Service - Trucking - Kit Rentals)
E - Makeup, Wardrobe & Animals (Costumes, Makeup Kits, Animal Talent)
F - Studio & Stage Expenses (Studio Rental, Power Fees, Security)
G - Art Department Labor
H - Art Department Expenses (Props, Set Dressing, Trucking, Set Construction)
I - Equipment Costs (Camera, Sound, Light, Grip, Production Supplies)
J - Film & Development (Hard Drives, Transcodes, Film, Processing)
K - Miscellaneous (Shipping, Messengers, Special Insurance)
L - Director / Creative (Labor Rates for Director or Photographer)
M - Talent Labor
N - Talent Expenses
O - Post Production Labor
P - Editorial & Finishing Costs
This breakdown and cost assignment should be granular. For example, if your treatment mentions filming on location at a house and a restaurant, you'll want to include costs to include fees for both locations, permits, basecamp or crew parking, along with any location protection costs you might expect.
Tools like Actual will provide you with the flexibility to change the name of certain lines, and create new cost categories should the standard template not include a cost you expect.
Assign a Production Fee
Be sure to include a production fee (or markup) on your budget.
On most productions, you'll apply a production fee calculated as a percentage of the production budget. From time to time, you may need to create unique production fees for different sections of a budget. A few common examples:
- Fringes or P&W - on occasion, a client may ask that payroll expenses be carried 'below the line" at a reduced production fee.
- Travel - may sometimes be carried with a reduced production fee.
When using a platform like Actual, you can create a unique production fee to apply to a specific section. To do this, select the + Fee Button and input the production fee intended for a specific section, and select the section it should apply to.
Bid Calendar
An often overlooked but key component of the bid package is the calendar.
A productive calendar will outline all of the key events starting with the award, and leading up to the commercial shoot. Those events will often include:
- Award Date
- Casting Timeline
- Location Scout Dates
- Wardrobe Prep
- Art Department Prep
This schedule will keep your production on track, and help support your budget costs and propose approach.
Draft a Bid Letter.
The bid letter is drafted to help an agency or client partner understand how you plan to bring the director's vision to life.
This may include anything and everything from notes on travel to production location to type of camera or specialized equipment you intend to use to bring an idea to life.
The Treatment
Of course a strong treatment. The treatment is the creative bible for a shoot. It outlines everything from casting and character breakdown, to lighting and camera technique, to location ideas and script proposal.
These documents are a hybrid of text and visual narrative.
Production
Once you're in production, it's important to use tools like Actual to track costs to ensure the shoot is both a creative, and financial success.
Active productions will often include three versions of phases:
- Awarded Estimate - the awarded production budget
- Working - as costs shift throughout the course of a production this version is used to track committed and available funds.
- Actual - this phase aggregated costs spent, and typically populates via the purchase order or payroll log.
With Actual, costs are aggregated via the Purchase Order Log & Payroll Log, and can also populate directly from expenses paid using our integrated P-Card solution. This unique tool provides production teams with real time visibility into spending, and allows for an easier wrap of costs.
Learn More
Actual is an integrated production budgeting and payments platform, allowing production teams to work collaboratively and issue payments. If you'd like to learn more about how Actual can improve your workflow, contact us.