If you are an independent animator, work with a small team of other independent animators or own a full-fledged animation studio, chances are you’ve struggled financially from time to time — or even hit an earnings plateau. Before taking out a second mortgage on your home to pay for a business consultant firm to attempt to save the day, be aware that there are only three ways to grow a business:
1. Increase the Number of Projects
If you earn an average of $10,000 profit per project (gross sales are largely irrelevant), the first way to grow your business is to land more projects. If you do absolutely nothing different other than increasing your overall marketing efforts proportionate to the number of new projects you would like to land, there is a good chance you will see results.
For example, if it costs you an average of $5,000 in total costs (labor, meetings, proposals, schmoozing, etc.) to land one gig per month but you’d like to double your results to two gigs per month, subsequently double your marketing efforts. That could mean hiring another marketing director or having your current one working overtime and having others pitch in.
Work out the math down to the penny on how much it costs on high-average to win a project. If you’d like to bring in twice as many projects, simply doubling the same successful marketing efforts and strategies you’ve been utilizing might be all it takes. At minimum, it’s a good place to start.
2. Increase Your Ticket Sales
The second way to grow your animation business, and quite possibly my personal favorite, is to increase your invoice amount per project. That is, the total amount of money you bill your clients for each project.
This increase can simply be an across-the-board price boost for the exact same services you currently provide. Chalk it up to inflation, or maybe wanting an increased perceived value for your animation, or maybe you feel it’s time to make a price adjustment based on current animation trends, or maybe your reasoning is simply but confidently enough: “because we’re that good.”
Whatever the case may be, if you increase your baseline prices for all services by, say, 50% across the board, your potential profit per project may also increase by 50%, going from $10,000 per project to $15,000 (based on the example above), without doing any additional work whatsoever.
True, you may experience attrition if your services take a sudden, steep price hike. However, if you work out all the metrics, you may find that even if you experience a 25% loss in new projects due to people shying away, you’ll still probably come out ahead — and, amusingly enough, from doing less work.
In addition to jacking up your rates, another great way to increase your invoice amounts is to offer complimentary services and add-ons. What other services peripheral to animation could you offer your clients? What about suggesting a few add-on animation clips or smaller tasks? Making this part of your standard operating procedure could see your $10,000 per project profit jump up to $12,500, $15,000 or more – simply by asking if there are other ways you could serve your clients in addition to their initial request.
3. Increase Your Efficiency
The last and all-too-often overlooked way to grow your business is to work smarter, faster and most cost-effectively. Take as much time as needed to tear apart each and every production pipeline, marketing tactic, particle system, render farm, modeling technique, workstation motherboard and every other nut and bolt of your entire operation to see what can be replaced with better performing, more cost-effective systems.
The fiscal impacts of efficiency cannot be overstated. Imagine spending $40,000 out the door to produce a project that nets a profit of $10,000. Now, imagine finding a dozen things in your business that can be streamlined if not completely eliminated, thereby making your cost to produce the same project $30,000 vs. the previous $40,000. Suddenly, your profit just went from $10,000 to $20,000, effectively doubling your earnings without increasing your rates, landing more projects or doing more sales.
Regardless of your company’s size or its target demographic, these are the only three ways to truly grow your business. Doing any one of them will grow your business geometrically. Doing two or three of them will grow your business exponentially, with the ironic possibility of maybe not even being required to do any significant additional work.
Martin Grebing is the president of Funnybone Animation Studios. He can be reached at funnyboneanimation.com.