So you want to start an indie game studio?
First thing’s first:
You need a business plan.
In this post, you’ll find a comprehensive indie game studio business plan to use in starting your own game company. I’ll give you a few options, as well as some important resources to get you going with your new business.
Let’s get started.
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Why do you need a business plan?
You need to realize one thing:
Creating indie games is an extremely tough business.
Most games will fail.
That’s right. Read it again.
No matter how good your game is, chances are that your game will not make back whatever time or money you put into it.
And that’s okay, if you’ve planned for it.
Check out this talk by Rami Ismail of Vlambeer for some serious truth about the indie games business:
A business plan will help you to figure out just how you’re going to deal with the realities of the indie games business.
- You’ll explore how much your business will cost to run, so you know how much you need to make back
- You’ll delve into the possible revenue streams and feasibility of them
- You can get some plans in writing for researching the target market and how you can sell to them (something most indie devs don’t bother doing)
- Other issues are addressed, like what makes your game unique (be honest with yourself), whether you need some funding or investors, whether you’ll be seeking a publisher, and more!
The business plan also serves as a template that you can always refer back to when questions come up during development.
It should also be a living document that is updated throughout development as the situation changes.
Indie game studios – why they are unique and why they’re not
Indie games are different.
They’re different than other businesses:
- Very different from the local mom and pop store
- Quite different than your average tech startup
- Extremely different than a big-budget AAA game
But just because there are many differences in the realities of the indie game business, there are a ton of things that are exactly the same.
In fact, most businesses have many things in common.
- Most businesses fail.
- Most businesses struggle to have working startup capital.
- Most businesses can benefit from some market research up front.
As with most creative businesses, figuring out whether the audience wants your game or not is extremely difficult for indie game developers. It’s a hit-driven business, which means that there’s usually some kind of creative “spark” that draws audiences in.
However, if you understand market research, marketing, and public relations, you can better yourself for appealing to a certain audience and selling directly to them.
Startups usually thrive by finding a problem that people have, and providing them a way to solve it (hopefully in a way that they pay for). Or they see a hole in an industry that is not being properly served, and fill that hole.
Others try to outdo a competitor, making a better product. But that’s a much more difficult task.
What can indie studios learn from this?
Looking at the market that’s out there and seeing what actual players are looking for is a great place to start. While many developers start with the idea, this is putting the cart before the horse.
Creating a product and hoping that there’s an audience for it is the opposite of how most successful businesses work.
There’s a very good reason for this:
It doesn’t make much sense.
You’re putting a ton of time, money, and effort into creating something that you don’t have any clue if it will be even moderately successful.
On the other hand, if you know the industry, know what players are looking for that they’re not getting, and can provide that experience to them (in a form that has engaging graphics, fun gameplay, and other great aspects), I believe that you’re enhancing your chances of finding an audience.
All of this can be addressed in a business plan, as we’ll see below.
Different models for business plans
There are any number of business plan models out there, so which one you choose is entirely up to you.
The main ones are:
The Lean Canvas
This is a one-page business plan based on the book The Lean Startup. You can download a template here. Honestly, it’s my preferred method of business planning, because it gets right to the heart of the important stuff:
- What problem are you solving?
- Who are you potential customers?
- What is your unique selling proposition?
Rather than messing around with Executive Summaries and other stuff, you have the ability to pump out a plan in 20 minutes and adjust accordingly as you research, develop, and market your game.
A traditional Business Plan
For a more traditional plan, you generally have 8 sections:
- Executive Summary (an overview/summary of the business plan)
- Description of the Business (Information about your business and why you are unique)
- Market Analysis (who are your potential customers?)
- Organization and Management (the legal structure and who’s in charge of your company)
- Your Product (describe your product, including customer benefits)
- Marketing (how will you market and sell your product?)
- Funding (do you need to raise any funds or will you fund the business yourself?)
- Financials (project your business’s financial future)
It’s much more formal and in-depth than the Lean Canvas method, which makes it a little more difficult to iterate on.
The Small Business Administration has some templates and examples on their site that should help you out.
Working with partners – what are your expectations?
There’s one more important step:
Whenever I have clients who are working in a partnership or multi-owner business, I like to have them fill out a short questionnaire.
Meaning, they each have to fill it out without discussing the answers with each other first. This helps me ensure I’m getting the honest answers.
If they do match – that’s great!
If they don’t match, it means that there could be some serious issues and expectations that need to be aligned before moving forward.
What are the questions? Something close to the following:
- What is the proposed business model? How do you plan to actually make moneywith the business?
- Is fundraising going to be necessary? Is there a plan in place for that fundraising?
- What day-to-day responsibilities will you have in the business? What time commitment will that involve?
- What day-to-day responsibilities will your partners have in the business? What time commitment will that involve?
- Is there any plan to add other people to the business? What are the conditions for that happening?
- What’s your exit strategy?
Those are the most important questions as far as overall strategy goes.
Some of these things (#1 in particular) will be dealt with in writing up the business plan, but it’s still important to make sure you’re all on the same page.
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What are some resources you can use to learn about starting running a business?
Still feel like you’re clueless?
Luckily for you, there are a bunch of great resources out there to help new businesses.
Here are some of my favorites (some of which I mentioned before):
- The Small Business Administration website
- Your local government’s business site – many local governments have checklists and walkthroughs about the specific steps to take in starting a business in that particular place.
- Running Lean (you can start with The Lean Startup, but I feel that Running Lean is more “actionable”)
- Rachel Presser’s The Definitive Guide to Taxes for Indie Developers
- My podcast, The Legal Moves Podcast, which has a ton of interviews with indie devs who have been where you are now
- My blog!
Hopefully the advice here is helpful for you!
If you have any questions about setting up your indie game company or anything else games-business related, feel free to contact me. You can also check out my Indie Game Jumpstart Bundle here, for everything you need to start your studio in one package.