APPENDIX G
Creating A 3D Business Plan
WHETHER YOU START A 3D business as a sole proprietor or as one of several partners, a business plan is arguably the most important document you and your company will ever create. Regrettably, it is also one of the most overlooked and neglected. Many professionals will succeed regardless, and many will fail regardless, but those who take the time to create a plan ahead of time will almost always be more successful and avoid many of the pitfalls and roadblocks they would have otherwise been blind to. Simply put, a business plan is a road map to success for your business. It’s a document that summarizes the steps your business needs to take to be successful.
The value of a business plan does not lie in the document itself but rather in the steps one takes to create it. If one 3D visualization company gave their business plan to another visualization company, the plan would be far less valuable to the borrowing company and be best served as a template for their own plan. A business plan is only a worthwhile document when careful thought is put into its creation by each owner of the business because the real value lies in the systematic research, planning, and thinking each owner puts into the plan.
Any veteran 3D visualization business owner will agree that starting a successful 3D business requires an enormous sacrifice in free time. So in the frenzied, hectic beginnings of a startup business, it should be no surprise that most owners are inclined to do more doing than thinking. But the fact is, planning helps you anticipate problems, capitalize on opportunities, and face some tough questions that many often overlook in the midst of all that doing.
When my business partner and I first started our 3D business, we made the mistake of doing too many projects without the aid of a legal contract. This was a decision we finally regretted one too many times and after learning some of the many pitfalls of not doing so, we now require contracts on ALL projects. We always stress the importance of contracts when we teach our 3D courses, but most students are surprised to hear us say that, in our opinion, a contract’s greatest value does not lie in the legal protection it provides, but rather in a far less conspicuous quality. When created properly, a contract’s greatest quality is its ability to delineate, without question, each party’s responsibilities and obligations. If for no other reason, 3D business owners should create a contract so the client knows exactly what the final product is, when it’s to be finished, and what their responsibilities are to help you do your job properly. A business plan works the same way. By creating an effective business plan, there should be no doubt in what lays ahead for your business and the obligation you and any other owner has to making the plan successful.
So what goes into a 3D business plan and what are some critical steps to take along the way? If you look at different sources, you are bound to see the same general steps from each source, but I would prefer a slightly different set of steps for a 3D business – one that mimics the approach I would take with a new client that is looking for 3D. These components and steps are an extremely condensed version of a good plan but can serve as a general guide that can help you navigate the much longer and more complicated plans found online.
Products and Services
Describe in great detail what all of your products and services are: still renderings, animations, branding, websites, interactive virtual reality, 3D printing, etc. When a client inquiries about 3D, the first thing I will always ask is what the final product is. Without knowing this, all other information is almost useless.
Market Analysis and Pricing
List your potential clientele and establish your pricing. By researching who your potential clientele are, you can focus your marketing energy in the right direction and achieve the best return on time and money spent. Critical to this is determining what your customer’s needs are, where they are, and how you will reach them. Unfortunately, no area in the 3D business world, or in most businesses for that matter, is more difficult to get right and less forgiving to error as pricing. Within your market analysis include a summary of your competition, profit and loss, cash flow, expenses, and your monthly budget. Always be conservative in your estimates. Just like we tend to underestimate the time it takes to complete a 3D job, business owners underestimate the costs of running a business…especially the initial one-time only costs that most never think of, such as liability insurance needed with most commercial leases. Working in 3D, liability was the last expense I would have thought about ahead of time.
Supporting Materials
Determine what materials and documents (besides your business plan) you will need to be successful. Examples of some important materials are: your contract template, marketing presentation (both with and without pricing), printed brochure, website, and demo DVD, to name a few.
Operational Plan
Explain the daily operation of the business and the daily/monthly/yearly responsibilities of each individual involved. Even for sole proprietors, listing these responsibilities is critical.
Marketing Plan
List details for how your business will market itself in all possible business climates. How will your plan change when business slows down? What are your marketing materials and when will you update them? Perhaps no part of the 3D business plan should receive more reviewing and updating than this area. When you finish a large successful project, will you immediately add the imagery to your portfolio?
Additional Suggestions
Some parting thoughts on a successful plan are:
• Think and plan long-term, but always remember that most business fail in the 1st two years. Determine how long you can go before being profitable and where you want to be after five years.
• The plan is just as important down the road as it is at the start. Review it regularly to make sure you are on course, or so you can adjust to market changes.
• Get help from others who have been through it before. Share your plan with others who can help.
• As the saying goes, garbage-in equals garbage-out. Write the plan yourself or don’t even bother making one.
• Use online resources such as SCORE (www.score.org), which offers free tools, education, and counseling for small businesses, and Palo Alto (www.paloalto.com), a leading software provider for creating business plans.