Business Description :

Using animation technology to meet client requirements for designing, modeling and other
allied animation services in the areas of movies, serials, corporate advertisements,
architecture, medicine, sports, gaming, etc.

Business Overview :
Providing designing and modeling services to various companies ranging from movies to
medicine to sports. Animation technology is being widely used in any business where visual
imagination and depiction is important. Advertisement, architecture, medicine, education
and sports have a huge potential to leverage on the benefits of animation, apart from the
conventional areas like movie, cartoons, games, TV serials etc. Such companies frequently
require a cost effective source to model their designs, products and demos.One can also
target businesses that may not require hard-core animation services, but need animated
models for internal business purposes.

Product Service Description :

Creating character designs, visual effects, motion graphics, customized models and movies
etc. to meet the business requirements, of both conventional industries like movie and
gaming and other industries that may require animation models and movies for internal
business purposes.All the products would be based on 2D and 3D animation technology
Market Opportunity
The global animation industry offers a tremendous growth opportunity. The industry size
was $55 billion in 2005 and is expected to touch $75 billion by 2009.The gaming industry,
which heavily uses animation technology, was worth $19 billion in 2005 and is expected to
touch around $36 billion by 2009. Thus gaming has the potential to provide great business
opportunity.The growing need for visual depiction of concepts has resulted in increasing
demand for animation services. Newer technologies have only made such services more
affordable.While a chunk of animation projects do get outsourced to places like India, small
and custom projects, turn out better when handled in close proximity with the client. This
area is a potentially good market.
Competitive Analysis
Animation is a growing field and has significant competition. Some potential competitors
are:http://www.hybridmedicalanimation.com/http://www.medicalanimatics.com/flash-site/
http://www.suite42.com/who.htmhttp://www.moving-picture.com/
http://www.martestudio.com/
Marketing Strategy
>>Creating a website for promoting the business.>>Apart from providing other
information, the website would host a few animation videos that would serve as examples of
the quality of work.>>Sending emails to potential clients.>>Affiliate programs could turn
out to be an effective mode of advertisement.>>Placing advertisements in magazines
related to the targeted industries.
Sales and Distribution Strategy
Sales would be based on projects and contracts that the business generates from clients.
 Thus the key to growth in sales would be networking with potential clients like local
filmmakers, game developers, medical schools and companies, big sports clubs and top
educational institutes.Key strategies should include focusing on small organization that
cannot afford big animation companies.One could also provide ancillary animation services,
to expedite the completion of full-fledged animation projects undertaken by bigger
companies.Your USP would be your ability to deliver high quality customized animation
products, at costs that are lower compared to other animators.
Operations Strategy
Quality would drive sales. In order to ensure quality and handle demand, one would require
three or four skilled animators in the beginning.
Financial projections

Pricing: The average price of 3D animations ranges between $90 and $350 dollars for every
finished second. Whereas the production price of 2D animation would range between $50 to
$250 dollars for every finished second. Price calculated on the basis of a day’s work may
vary between $1,200 and $3,000 per day. The cost of a scene in 3D animation may average
around $1000.The cost of an average 40-second animation may vary from $4000 to $5000.
Pricing differences are based on the complexity of design, modeling, animation, rendering
etc.If one can bag 30 projects having an average of 4 – 5 scenes each, and if each scene is
priced around $1000, then for the initial year, the expected annual revenue would be
around $150,000. By giving discounts to maintain price competitiveness, annual revenue of
$125,000 would make for an attainable target.

Category Year 1 Year 2 Year 3 Comments

Revenue $ 125,000 $187,500 $234,375

Cost of Goods sold - - -

Gross profit $125,000 $187,500 $234,375

Expenses : -

For 2 highly skilled salary would

be around $35000 per annum
and other staffs $15000 is
Payroll $75,000 $100,000 $125,000 reasonable

Rent $10,000 $10,000 $10,000 Rent for 800 square foot place.

Advertising $5,000 $4,000 $3,000

Telephone $1,000 $1,200 $1,400

 This includes depreciation for
equipments, maintenance of
Miscellaneous $10,000 $12,000 $15,000 equipment etc

Total Expenses $101,000 $127,200 $154,400

Net operating Income

Other Income

Net Income / (loss) $24,000 $60,300 $79,975

Capital Needs Analysis

Asset Year 1 Year 2 Year 3 Total

Equipment $ 15,000 $ 1,000 $ 2,000

Staff $ 25,000 $ 20,000 $ 25,000

Cash $ 2,000 $ 3,000 $ 3,000

Maintenance $ 2,000 $ 2,500 $ 2,000

Totals $ 44,000 $ 26,500 $ 32,000 $ 1,02,500

Risks and Challenges
• The primary challenge is to live up to the quality standards of the client. Since the work
would involve building customized models, any quality breach would mean a lost
client.
• As a start-up, maintaining cost-effectiveness would be another crucial challenge.
• Emergence of improved technologies would mean regular investment into the new
technologies and that would result in a higher investment cost.
• Since animation is a growing business, competition from established companies, as well
as new entrants, could mean squeezed profit margins.
Exit Strategy
Since the business would be focusing on meeting customized needs and catering to an ever-
increasing business demand, one should wait atleast for the next 10-15 years before
exiting.
Tips for Success
• Networking with clients
• High quality of service
• Focuson markets that are not catered by bigger animation companies
Books

ISBN NO Book Title

978- Serious Business: The Art And Commerce Of Animation In America From Betty Boop
0306809187 Story

978-
Creating 2D Animation in a Small Studio (Gardner's Guide series)
1589650077

978-
The Animation Business Handbook
0312284282

978-
Exploring 3D Animation with Maya 6 (Design Exploration)
1401848187

978- Running a 21st-Century Small Business: The Owner's Guide to Starting and Growin
0446696180 Company

Web Resources

Resource URL

http://www.animationmagazine.net/

http://usa.autodesk.com/adsk/servlet/index?id=7635018

http://www.adobe.com/products/aftereffects/gallery/

http://www.sba.gov/

http://www.geocities.com/danny_su/dec8art.htm

http://www.marketresearch.com/product/display.asp?productid=1659893