It takes a bit of time to work 'how much a small animation studio costs to run?'
Thanks for stopping by our site all about the business of animation with tips, articles and video courses helping aspiring animation entrepreneurs to launch their own animation studios.
Below I share a quick answer to the question of studio costs, before looking at how you would arrive at a more accurate and bespoke figure to help guide your own studio plans.
How much does a small animation studio cost to run?
A small animation studio of 3 to 5 people, in the UK costs between £6k to £20k to run per month.
There are of course wide variations depending on staff experience and whether they are permanent, part-time or freelance. Studio location can impact rental or mortgage costs. Stop-motion typically requires a larger space. Where as digital animation opens up the possibility of remote working which can reduce overheads. Also a studios niche and the competition can impact the amount of marketing spend required to sustain animation studio enquiries.
Stormy Studio, a successful animation studio I founded myself back in 2014, typically costs around £7k per month. This is with a small permanent staff, cool coastal studio space, regular marketing spend and scalable freelance team. This approach ensures we are able to take on large projects on an adhoc basis and continue to steadily grow the business.
I setup this site, startastudio.com to help others plan and launch their own animation viable startups.
How do I figure out the cost of running a small animation studio?
Whilst we answer lots of this in our advanced start a studio course, and some in our free mini video course. I've also shared the key steps to figuring out how much it costs to run a small animation studio below.
Plus at the end you can grab our own Ultimate Checklist PDF to start planning and ticking off key steps to start your own viable animation company.
How much does it cost to start a small animation studio?
1. Figure out your animation studio setup costs
First up, you need to work out the costs of starting your own animation studio.
What one off hardware and software costs might you have, what are the company registration costs, one off domain name costs, required insurance costs, can you initially work from home, or given the Covid-19 pandemic does it make sense to work with a remote team for ever? If you need help with this or other steps then our Advanced start a studio course might be of interest.
2. Work out your running costs
Next, work out the expected day to day running costs for your animation studio. Electricity, heating, software subscriptions, insurance, webspace, cloud storage. If not working from home initially what rent, and buildings insurance is there. If you're planning on bringing on an employee or freelancer straight away include this cost. What marketing costs do you expect to have?
3. What are your living costs?
It's a simple thing but takes time to sit and work out properly. Whilst, I'm sure you could make do with eating a pot noodle once a day and ignore every social occasion for the next 5 years. It's probably sensible to assume you might want to maintain a certain quality of life eat a take away pizza and see some friends once in a while.
Figure out what your own living costs are. This not only helps with planning your studio but help you weigh up when the time is right to take the leap and start your own studio.
4. Add it all together
Now take all the above, broken into monthly or annual figures. Add it together and you'll have a good indication of the amount of revenue your studio needs to generate for it to be sustainable. i.e. the amount needed to run a viable animation studio.
This will then provide some insight into the bare minimum your studio should charge for your animation studios services. It of course takes time to figure a viable approach that ensures your business can grow. As a quick reference I'd take your expected daily costs and multiply it by 2.5 to give a good starting point for your studio day rate.
I do however, recommend you aim to market and win business for your studio due to expertise in a niche and quality of work rather than competing on price.
5. Business plan template
As you'll see from the above steps, figuring out an answer to 'how much does a small animation studio cost to run' takes a bit of time and effort. To make it easier for those serious about planning and launching a studio, I created a bespoke 10-page business plan template and online video course.
The studio business plan template and video course is to help aspiring studio owners solve this and other startup questions. The business plan includes example figures. Plus the first few modules of the course steadily walk you through the completion of the business plan, so you can quickly arrive at a realistic answer to the running costs of your own studio.
You can checkout the Advanced animation studio startup course here (including the business plan). The course also covers animation studio setup tasks, marketing, sales, and team building.
If you're not quite ready for a paid course you'll also get a good deal of insight from our free mini course on how to start a low cost animation studio.