How To Manage Your Animation Production Budget

Your budget is your animation studio’s lifeline: you need to take care of it because your team’s livelihood depends on it. In this article, we list 9 points to consider to make the most of your animation budget!

9 months ago   •   7 min read

By Gwénaëlle Dupré
Photo by Towfiqu barbhuiya / Unsplash

Your budget is your animation studio’s lifeline: you need to take care of it because your team’s livelihood depends on it. In this article, we list 9 points to consider to make the most of your animation budget. These best practices originate from our own experience as well as our customers, so we hope you find them useful. In the last section, we also give you tips on how to raise more funds. Without further ado, let’s get straight into it!

1. Careful project management

Your animation budget is proportional to the time required to complete the production: careful project management is crucial to staying on time and on budget.

By defining the project scope, objectives, and timeline in advance, you can accurately estimate costs and prevent unnecessary expenses. Good planning also helps avoid scope creep. Regularly tracking the budget against the plan provides early insights into any deviations, allowing for adjustments and successful delivery of the animation project within budget constraints.

(Of course a production tracker like Kitsu is ideal to set tasks and manage expectations :))

Proper feedback and communication loops are also key to decreasing both stress and costs: when you know exactly what needs to be done and when there is less guessing and overthinking. The artists talk to the supervisor, who talks to the director, generating data and increasing productivity. This allows production managers and accountants to do their jobs better, which in turn enables the artists to work better. As a result, the director can push the boundaries further, ensuring the data is up-to-date and accurate. This virtuous cycle leads to budget optimizations that wouldn’t be possible otherwise.

Your team’s hourly rate is the main budget cost so it’s crucial to keep things flowing at all times. A culture of transparency with all stakeholders can also come in handy to raise more funds as needed, as we’ll see in the last section.

2. Include error margins

10% of the budget should be allocated to risk management. Identifying potential risks during the planning phase allows for the creation of contingency plans reducing the likelihood of budget overruns due to unexpected challenges.

Including a margin for error is essential to maintain control over your animation project budget. No matter how well you plan, unforeseen challenges and uncertainties can arise during the project's execution― These might include unexpected technical difficulties, long revisions, client feedback, or production delays. Incorporating a margin for error creates a financial cushion.

It also provides flexibility and room for adjustments without compromising the overall project quality or timeline. It allows you to handle unexpected costs or changes without having to scramble for additional funds or sacrifice important aspects of the project.

3. Avoid retakes

Retakes occur when parts of the animation need to be redone due to errors, revisions, or client feedback. Each retake consumes additional resources, including time, labor, and potentially new assets. These extra iterations can significantly increase production costs and cause delays.

Good planning is half the battle. Effective communication with clients or stakeholders throughout the project can also minimize the need for retakes. By ensuring alignment on project goals, creative vision, and deliverables, you can avoid misunderstandings that may lead to costly revisions.

Planning more time for pre-production also reduces the likelihood of retakes: thoroughly reviewing storyboards, animatics, and thumbnails can help identify potential issues early on, allowing for corrections before full production begins. Also, make use of adding comments and notes to remove guesswork.

Begin with the end in mind too: if you already know a character will only be shown for a split second with its back facing the viewer, you probably don’t need much details.

It’s a good idea to include retakes in your planning as they help make the production more flexible when a change arises. Just limit the number of retakes to a reasonable amount and price them accordingly to avoid going over budget.

4. Work with several studios

If you outsource work, sending a request for proposal (RFP) to different animation studios is a strategic approach to gain insights into the different services, pricing structures, and capabilities available in the market. Comparing the proposals allows you to make informed decisions based on budget considerations: You can assess the cost estimates provided by each studio and select the one that aligns best with your financial constraints while meeting your project requirements.

The competitive nature of the bidding process encourages studios to offer competitive pricing, potentially leading to cost savings for your animation project. The process also helps you gain a clear understanding of the services included in each proposal, preventing any hidden costs or surprises down the line. It ensures transparency and accountability from the selected studio, reducing the risk of unexpected budget overruns.

You can also work with several studios to leverage their unique strengths. Kitsu made several multi-studio collaboration works in the past by simply allowing directors to keep track of all deliverables in real-time. It doesn’t matter if the animator works in-house or not, as long as you are aligned on what needs to be done.

5. Use a render farm

If you do 3D animation, using a render farm is a cost-effective strategy. Rendering is a resource-intensive process that can be time-consuming and expensive when done on individual workstations. With a render farm, you can distribute rendering tasks across a network of powerful servers, significantly reducing the time needed to complete the rendering process.

The accelerated rendering time allows you to meet tight production schedules, avoid delays, and potentially save on labor costs associated with extended rendering periods.

Render farms also provide scalability, enabling you to handle large-scale projects without the need to invest in expensive hardware upgrades. This flexibility ensures you can efficiently allocate resources as needed, avoiding under or overprovisioning.

6. Don’t throw more people at a problem

More isn’t always better: adding more human power to a late project isn’t going to help if you run over budget and people delay each other’s work:

  • Adding more team members can require time and resources for training and onboarding, which can initially slow down the production process.
  • Larger teams lead to communication challenges and coordination issues, resulting in inefficiencies and reduced productivity.
  • Increasing the workforce without proper planning can result in a lack of clear roles and responsibilities, leading to duplication of efforts or gaps in production.
  • A larger team requires increased managerial oversight, which can divert attention from the creative aspects of the project and impact its overall quality.
  • More people means increased overhead costs like office space, equipment, and benefits, which can strain the project's budget.

Before hiring more people, focus on effective team management, streamlined workflows, and optimal resource allocation. Once you get those right, hire more people if needed.

7. Use stock models

A large portion of an animation budget goes toward modeling and rigging so using stock models can significantly reduce animation costs with pre-made, ready-to-use 3D models or character rigs that can be incorporated into your animation projects.

Stock models save time and resources that would otherwise be spent on creating custom models from scratch or hiring artists to design them. They are typically more affordable compared to commissioning custom models, which helps keep the budget under control, but they are also often high-quality and professionally designed, ensuring a polished look for your animation without compromising on the final output.

Animators can then focus more on the creative aspects of the project rather than spending excessive time on repetitive modeling tasks, using stock models as a base. This efficiency leads to faster production times and enables quicker project turnaround.

8. Keep it simple

Complexity in character and location design requires more time and resources to create, animate, and render: highly detailed and realistic elements demand more intricate modeling, texturing, and lighting, leading to extended production periods and increased costs.

By adhering to the 80/20 rule―focusing on the essential details that contribute to the narrative or visual appeal and avoiding unnecessary intricacies―you can allocate resources more efficiently.

Creating more characters will result in more models and more budget spending, so you also need to watch out for those. Prioritize what needs to be done to push the story forward, then work on nice-to-have details depending on the remaining budget. For an animated series, you can alternate between complex and simpler-to-make episodes to stretch your team workload over a longer period to avoid burnout.

9. Choose the appropriate animation style

Using the right animation type is crucial for keeping your budget under control because different animation techniques have varying levels of complexity, time requirements, and costs associated with them with specific skill sets, tools, and resources needed.

Choosing an animation type that aligns with your project's scope and budget constraints is essential. For example, 2D animation might be more cost-effective and faster to produce for certain projects compared to 3D animation, which typically demands more people with specialized skills.

Bonus: Increase the budget -  How to raise more funds or request additional funding

There are often alternative income sources you can leverage to avoid running out of budget:

  • Crowdfunding through platforms like Kickstarter or Indiegogo can attract support from a broad audience.
  • Seeking additional investors like individual backers, production companies, or studios, is another option.
  • Researching and applying for grants, scholarships, or funding programs from government agencies, non-profits, or artistic foundations.
  • Selling pre-sale rights or licensing deals to distribution platforms or broadcasters
  • Partnerships with brands for cross-promotion in exchange for financial support is another avenue
  • Selling related merchandise on platforms like Etsy or Teespring can generate additional income.

When dealing with third-party entities like investors or organizations, remember to showcase the value and potential of your animation project with concrete data-driven evidence, and be prepared to provide detailed plans for how the additional funds will be used to complete the project.

For example, Kitsu helps demonstrate the progress made since the initial investment and highlights achieved milestones, showing how investment has contributed to the project's advancement and the potential for further success with additional funding. You can also showcase the market potential, your financial projections based on your animation pipeline data, your team’s productivity, and your portfolio of past projects.

Conclusion

Managing an animation budget can feel overwhelming when your team depends on you, but having the right methods and tools drastically reduces risks. Plan and track your expenses as you go to keep things manageable: you can’t control what you don’t measure.

By applying best practices you will avoid most of the pitfalls and make sure that any situation can be managed. Your producer and your team will spend a better production and your studio will get higher margins. It will create a virtuous circle allowing you and your team to handle more ambitious projects.

Make sure to join us on Discord if you need additional help with budget strategies or just want to hang out with 1000+ animation experts from all over the world!

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