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How Much Does It Cost To Start An Animation Studio?

ben marvazi 2020

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You’re ready to become an animation studio business owner, but you’re afraid of how much it might cost to open a startup animation company. Starting an animation studio can be costly, but this shouldn’t deter you from pursuing your dream as a freelance animator or studio owner.

Once you break down the costs, you'll get a better idea of how much money you need to start your animation studio business. You’ll need to formulate an animation studio business plan, to discover how to create your own animation company. It’s also helpful to learn financial tips as a freelance animator, as you’ll be able to save money for this investment.

In this blog post, we show you how to start your own animation company while using an affordable and efficient animation studio budget. 

Breaking Down The Cost To Start An Animation Studio

two people break down the cost of starting an animation studio using a laptop, calulator, and a pen

Photo by Mikhail Nilov from Pexels

An animation studio budget is only a rough estimate of how much the different aspects of opening your animation studio may cost. Your animation studio budget may differ due to other expenses and costs you have to take into consideration. 

You’re going to need startup capital for the following costs.

  • When you’re starting an animation studio business, it’s critical to register your company. You can register your company for around $700 through platforms such as OffShore Company Corp. The registration process may vary depending on the country you’re starting your animation studio in.
  • You’ll need to purchase equipment for your animation studio. This cost depends on the type of equipment you need for the content you're creating. It can cost from $8,000 to $85,000.
  • Another cost you will have is the lease for your animation studio if you choose to operate in a separate workplace, which could cost anything from $10,000 to $80,000. It's helpful to go hunting for the best location that's both suitable and affordable.

You must then take into account your operational costs. These costs will include the monthly expenses you'll need to pay off to keep your business running successfully.

  • It’s helpful as a startup animation studio to budget for three months of expenses. However, this isn’t a necessity, especially if you’re looking toward making budget cuts. You can budget around $5,000 - $40,000 depending on your bills, and whether you choose to budget for your first three months or not. 
  • Operational expenses include utilities, salaries, and subscriptions for software and satellite television.
  • As a freelance animator, you may be aware of software such as Anireel, which allows you to produce your animation content. However, animation software can cost as little as $20 per month. Additionally, there is business pricing available for some software, which gets you a discount.

When you’re learning how to create your own animation company, you should consider additional expenses. These expenses aren't a necessity, but they are valuable aspects of creating a successful animation studio business.

  • Starting a website for your animation studio can give you a platform for clients to find you on. It can cost anything from $100 and $500 to create a website. You could start a blog for your animation studio business website, as this could widen your horizon of opportunities.
  • Marketing is crucial when you're opening an animation studio, as it gets your business out there. You could pay up to $1,000 a month on marketing, depending on the marketing strategies you use. However, there are some affordable forms of marketing such as email marketing and search engine optimization. These forms of free marketing can cost almost nothing if put enough effort into it. 

Overall you’re looking at budgeting approximately $210,000 for your animation studio, at least if you’re located in California. If you’re located in a more affordable area and working with a limited budget, you can pull off a low budget of around $25,000. 

Create Your Business Plan For Starting Your Animation Studio

a man looks at a wall full of business plans for starting an animation studio

Photo by Startup Stock Photos from Pexels

When you are opening an animation studio, it's best to start by creating your animation business plan. Startupback has a template business plan that can help you to create one for your animation studio business.  

A general budget is helpful, but some specifics only relate to your animation studio business plan. You need to create your animation studio business plan so that it helps you to create a more specific animation studio budget for your animation studio. It also provides you with a place to jot down all your animation business ideas.

A business plan is the foundation of your animation studio, as it shows your goals, objectives, and plans for your business. This business plan will help you to make the necessary steps toward creating a successful animation studio. It allows you to create an animation studio budget that is affordable and specific.

When you’re creating your animation studio budget, be sure to include the following:

  • An executive summary is a short overview that summarizes what your business is and who your target audience is. 
  • The company description entails three different elements being the mission statement, company profile or history, and business objectives. These three elements describe what your animation studio aims to accomplish. Writing a vision statement is a great way to discover your objectives and goals for your business.
  • Market research. As an animator, it's crucial to do your market research. You need to be able to look at your competition so that you find ways to stand out as an animation studio.
  • Description of your service. You need to state what it is you aim to provide to your clients as a business. This should be an in-depth description of the different animation services you have to offer.
  • Determine marketing strategies. Within your animation studio business plan, it’s important to determine what marketing and strategies you’ll use to help you to succeed. These animation business ideas can help you to make your break in the animation industry.
  • Your finances. The financial part of your animation studio business plan will contain what you need to open your animation studio, your monthly costs, and the amount of money you need to earn to make a profit. 

Once you establish an animation studio business plan, it can provide many uses to you when you’re starting an animation studio business. It’s a point of reference that you use throughout your journey toward starting an animation studio.

You will put all of your animation studio business plans into action,  by following through with your business’s objectives. An animation studio business plan helps you to stay focused and goal-driven. As a freelance animator, you’ll find it easier to set SMART goals

Another purpose for your animation studio business plan is to use it to fund the opening of your animation studio. If you’re struggling to find ways to afford your animation studio budget, you can use your animation studio business plan as a proposal. Business plans are a great way to help fund startup animation studios through the use of loans and sponsorships.

How Do Animation Studios Make Money?

the cartoon character squidward tentacles is wearing a shower cap as he is showered with money from starting an animation studio

GIF from Free Money Spongebob Squarepants  via GIPHY

If you feel hesitant to open your animation studio, it is vital to consider how successful you could potentially be. You may be thinking to yourself, how do animation studios make money? However, the animation industry is a lot more lucrative and profitable than you may realize.

Startup animation studios can make up to $40,000 a year. Once you make a break in the animation industry, you will earn a good profit. The top 10 percent of animation studios make approximately $116,000 a year. Animation studios that focus on the motion picture industry earn an average of $75,000 a year.

When you’re starting an animation studio, you should use tips that help you succeed in the animation industry. As an animation studio business, it is crucial to focus on repeat clients. Repeat clients will provide you with continuous work, as well as recommend you to potential customers.

To strive for success as a freelance animator, you can also hire a salesperson who represents you best. A great salesperson can get you clients, and help you to build necessary relationships with them. 

Utilize your original animation business ideas to help you to start an animation studio business that helps you to succeed and stand out from your competition in the animation industry.

Cost of Starting An Animation Studio On A Budget

piggy bank for starting an animation studio on a budget

Photo by cottonbro from Pexels

We’ve established that starting an animation studio can be costly, so it’s worthwhile to learn financial tips that help you to save. Sticking to a daily budget is a great way to save money while still paying for your everyday needs. 

However, to be in a position where you can save money, you need to have a flow of income. This makes it valuable to find work as a freelance animator so that you have money to save each month.

The animation industry can be challenging to break into, but it doesn’t have to be impossible with the resources we provide to you. We recommend our animation accelerator program that will help you to find your feet as a freelance animator.

It’s also important to learn financial tips that help you to manage your money efficiently. Take the time to become more financially literate. When you own your animation studio, you're going to be in charge of the finances.

Although living on a budget may not be fun, you'll be so grateful you did it. It’s worthwhile to make the sacrifices now so that you can afford a future with your own animation studio business. 

In Summary - Cost To Start An Animation Studio

Starting an animation studio is not as impossible as some people may make it seem, but it can be very costly, especially if you don’t prepare for it. It's crucial to properly plan and budget for the opening of your animation studio, as this will help you make it a tangible and affordable goal.

The estimated total amount of money can vary, depending on the vision for your animation studio. A startup animation studio can be costly, but if you find an affordable location, and start small, you’ll find that you’re able to afford the animation studio of your dreams.

To afford your animation studio, it's crucial to learn how to manage your finances efficiently. Remember that once you establish yourself in the animation industry, you'll be able to afford the expenses of running an animation studio.

To learn more about how to create your own animation company that succeeds in the animation industry, you can watch our free masterclass and download a copy of our free marketing handbook

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