Why is the budget so important?

Obviously a budget is important in order for you as a producer to know much money you are going to need to make your film. The cheaper your film, the better chance of you being able to get financing, and the larger your profit margin will be; that’s a given. But the importance of a budget goes far beyond that. Your budget is the key factor in determining how much your film will sell for in the open market. Most distributors will determine the value of a film based on a pre-determined percentage of the budget. If there were two films that looked and sounded exactly the same, and film A costs ten times more than film B, film A will sell for ten times more. I know this doesn’t seem sensible but that’s the way it works in the open film market. So on one hand, you want to reduce the budget of your film in order secure financing and increase profit margin. On the other hand, you want your budget to be as high as you can so that you can sell it to distributors for the maximum price. You as a producer must decide what is best for your film.

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