Producers Guild of America's 4-part guide to "Sizzle Reels":
Part 1 - http://www.producersguild.org/?sizzle
Part 2 - http://www.producersguild.org/?sizzle2
Part 3 - http://www.producersguild.org/?sizzle3
Part 4 - http://www.producersguild.org/?sizzle4
Good overview of the basics of creating a sizzle reel, and definitely some valid info here (particularly RE feeding the crew, locking in your talent, and what to expect once you actually have an offer). There are some minor points that I'm not sure are always "must-do," like the necessity of using a sound crew. I can hear my sound guy buddies groaning, but I'll still say that my experience has always been that a sizzle can (and maybe should?) seem rougher than you'd expect a finished show to be, especially when it comes to audio. Like anything, this depends on the situation and the content, but if you're doing interviews or OTFs in a space that's reasonably good for audio and your camera isn't 200' away from the subject, you can probably get by just fine with a camera mic. Its also important to remember that many sizzles (especially the "Rip-O-Matic" ones) wind up using lots of VO with only occasional SOTs, and captioning can get you out of any really bad audio jam-ups (plus: production value!). At the end of the day, you always want to show off your talent and craftsmanship, and produce the best quality sizzle you can - but if money is an issue (and when isn't it?), saving +/- $500 is a big help.
Speaking of savings, I've found that its always best if you can pay your crew something, even if its just $50-$100 for their time, gear, and talent. They're likely working for you on a day they could be earning their day rate, and asking for favors can bite you back in ways you wouldn't expect, even from your best friends. Obviously you should avoid paying the talent for their work on the sizzle, since they're likely partners with you on some level and probably have as much to gain or lose as you do. If you absolutely have to pull free-labor favors, try to find some way to make it work for everyone. Let your DP shoot some special set-ups you don't usually have the time for, or encourage them to break out that new time-lapse slider rig or the 4K drone they haven't quite mastered yet. You'll get more production value (to offset your bad audio - ha!), they'll get some killer b-roll for their reel, and everyone comes out ahead. Granted, they could shoot b-roll without you, but then they wouldn't also have the warm, satisfying feeling that comes with helping out a friend. Now you're giving them TWO favors, and only asking for one in return! Who can say no to a deal like that?
Another savings tip: save on headaches and broken friendships by not quibbling with co-creators over titles and percentages. Until there's money on the table, you're talking about sharing a meal that might never even get served. And: never leaving a potential buyer with anything they could use to pitch the show without you knowing it. Whether its a DVD with your sizzle, a paper one-sheet, or a log-line pasted over some clip art, its still a sales tool and its still yours until the deal is done. For better or worse, the entertainment industry in general is full of people who enjoy the idea of getting paid for someone else's hard work, and I'm not necessarily talking about agents.
Lastly, I'd encourage anyone making a first time sizzle to manage expectations - those of the talent, the potential buyers, and even especially their own. Don't over-sell, either in terms of what you can deliver or in terms of what you've shot. Plenty of sizzle producers fall into the trap of using VO that breathlessly describes "death-defying stunts by drop-dead gorgeous models" paired with MOS footage of some ho-hum looking mopes hiking through a field of wildflowers on a beautiful Summer day. If you say something is never-before-seen, or frighteningly dangerous, or even just "real," then you need to make sure what you're showing actually looks like that. Telling a potential buyer at a network or production company that you'll actually shoot the aforementioned amazing content once you go into production defeats the whole idea of showing someone what they can expect.
Before I put the final period on this unintentionally long comment, I should add a piece of advice shared with me by a long-time mentor who was talented (or lucky) enough to turn some amazingly simple ideas into amazing TV series that generated thousands of those elusive watercooler moments EPs are always raving about.....and that is: don't sell past the close. Once you get to "yes," don't keep rambling about why yours is the best idea since The Real World, or how it will draw in a criminally underserved phantom TV audience that everyone else has overlooked or ignored. Accept your "yes" with graciousness and turn the conversation to something else. If you're lucky, you'll spend the next few years of your life talking (and talking, and talking) about this subject, so enjoy the moment while you can!