How teams make commercially viable creative decisions.

Do you budget? If your financial tracking amounts to creating an estimate then reconciling timesheets, there’s one more thing you could be doing.

Over many years producing in different companies, I’ve observed a massive delta in how studios track the profitability of projects.

Mostly, producers inherit the estimate a biz dev or EP put together during the sales process when assigned a project. If they open it again, it’s to determine how many days they have left so they can beat the devs into submission.

Some go a step further and reconcile timesheets against the estimate to deduce how the project is tracking to budget, which is fine if you are tracking or underburning. But neither approach is helpful if you are overburning because the money is already gone by that point and the entire purpose of financial tracking is to prevent overburning. Otherwise, why bother?!

Budgeting is the additional step that great production teams use to visualise that potential to overburn before it happens.

To budget:

• Use timesheet data to do your reconciliation as usual, then:
• Estimate the time and resources you think you need for the remainder of your project (just like you did at the start) based on the current planned activity/approach
• Add this planned activity to the reconciliation for future days and weeks (known as a forecast)
• Observe how your planned activity will affect the profit margin, and then this is the significant bit:
• Adjust your plan or approach if it’s going to screw your margin.

Producers wear two hats: a commercial hat and a creative one. If you take creative decisions without first understanding the commercial implications, you’re not producing. You’re guessing, and you’re hoping. Budgeting gives teams data to make more strategic and commercially feasible creative decisions.

When there is even a sniff of change in your project, you revisit your timing plan to plot how that change will impact the delivery date; well, you need to use your budget in the same way.

Whenever the team wants to try something risky or go in a new direction, open the budget and plot out (using the steps above) what the impact of that approach will mean for the margin.

This exercise is about more than making money. Well-financed teams can take risks that poorly-financed teams can’t. Creativity is all about trying something new, exploring the unknown, and embracing uncertainty. The more commercially viable your project is, the more creatively ambitious you can be.