How do you start a small animation business? At Escape Studios we don't just train animators to do excellent work, we help them to turn that knowledge into a successful career. And one way of dealing with the uncertainty of being an employee in the creative industries is to start up your own business.
Don't forget that today's big companies like Pixar and Blue Zoo all began life as small start-ups. But how, exactly, might you go about starting one up from scratch?
Below are the 7 Key Rules to start your own animation business.
Rule 1 - Start Small
You will most likely want to start small and gradually get bigger, slowly making a name for yourself and taking on new clients as you go along, building a brand and a reputation. Starting small reduces your risk, and allows you to test the waters - is there a strong market for what you are offering? Starting small reduces your overhead and makes it much less likely you will need a lot of capital.
Rule 2 - Work Harder
Starting your own business is very different from being an employee. By 6pm on friday night most employees tend to down tools and stop working. Small business owners aren't like that - the shop is always open. After all, it's your business, and you need it to succeed. Expect to work evenings and weekends to make it happen.
Rule 3 - Identify the kind of work you want to do
What kind of service do you want to offer? If you are in the business of making short films, make sure you understand the full pipeline of animation production, from development through to pre-production, production and post. You might think that this only really applies to big projects, but even small films need to go through the right processes, else they tend to get stuck. Watch this film on how animated films get made and, best of all, make your own short film - this is the very best way to learn how it really gets done.
Rule 4 - Find Your Team
You may well not have all the skills needed to deliver your product. As an animator, you may want to team up with a designer (unless you are good at this yourself) and, if you are making 3D films, you will need expertise in modeling, rigging, texturing and lighting. By now you will be beginning to realise that to make short 3D films requires general expertise - this is where 3D generalists come into their own. Someone will need to be editor, director - and you need a producer to manage the process. The smaller the project, and the smaller the budget, the more likely it is you will need to wear some of all of these hats yourself. If you have enough general skills, you go can go into business alone.
Remember the old proverb: "If you want to go fast, go alone. If you want to go far, go together".
Rule 5 - But Choose Your Team Wisely
Be careful who you go into business with. Even your best friend may not be a great business partner. Ask yourself if the other person complements your strengths and/or your weaknesses? Do both of you bring the same set of the same skills to the table? Ideally you want to be in business with someone with complementary skills to yourself. Overall, do you and your team see eye to eye on the big picture? Of course, there will always be arguments, but make sure you agree on the big picture, on the real purpose of your business.
Rule 6 - Create a working name
Of course, your working name can simply be your name on the door. But a good business name helps people remember you and suggest that you might be more than just a one man band. If your company name is a good one, you may will find that it helps you define what exactly it is that your business is setting out to do. As your plan grows, and things begin to take shape, the perfect name may come to you, but don't let that hinder you from getting started. You can always change it later. Create a name that you can use while you plan things out, and don't mind too much if you change it later on.
Rule 7 - Create a business plan
A business plan will helps to define what you think you need to launch your business. Inside the business plan you (which could be a single page of A4) will summarise what it is that you are trying to do in a single document. In brief, your business plan should consist of the following elements:
- The Business concept. This describes the business, what the product is and who or what the market is for its products. What will be sold, who will buy it, and why is what you are offering better than the existing competition? If you are competing on price, how will you be cheaper than others?
- Financial overview. Here you include the financial points of the business. What are your likely sales over the first year? What is the cost of doing business? Estimate the likely income and the likely expenses. Is it profit left over enough to make it all worthwhile?
- Finance - requirements. This sets out what capital is needed to start the business, and to expand. If the business is just you and a laptop, you may not need any starting capital. If you need premises, you may need money to rent an office. This section should set out in detail how the capital will be used, and how much is required. Is the money being put in equity (ie a stake of the business, or is it a loan? If the latter, when will it be repaid, and on what terms.
- Define the company's legal status. This sets out all the relevant information about the company, its legal form of operation, when it was formed, and who are the the principal owners and key personnel. Perhaps your business is just an informal grouping of friends? Or perhaps you actually want to set up a company or a partnership? Remember that someone will have to invoice clients, so a company bank account might be a good idea.
- Goals and milestones. This sets out any developments within the company that are essential to the success of the business. Have you done any marketing, or tried to find out who exactly might want to buy your product? Are you looking to develop any new technology? Do you intend to open a physical presence in an office building? Are there any contracts that need to be in place?
Don't feel like your business plan has to be perfect. You can always do a rough draft, and then work at it with some external help. There is also an excellent Wikipedia page about business plans - check out Wikipedia page here.
Finally, if you want more information about working as a freelance animator including some useful advice about project management and handling clients, check out these 16 rules of animation freelancing.
And don't forget to check out our evening class in Producing Animation, starting this June. If you'd like to understand how to organise, finance, schedule and produce animation, this is the course for you.