Global Animation & VFX represented a $156 billion industry in 2020, still growing in 2022. But to catch a part of the market, you need to grow as an artist, perhaps by starting your very own animation studio.
At CGWire, we know what it feels like to carve your own path in life because we’ve been there. Creating your own company is thrilling. It’s an opportunity to shape the way you work while discovering an entirely different world, which can be frightening at times. But fear not: we come with solid hints to help you create your studio from our experience dealing with dozens of animation studios that started just like you.
In this article, we will consider the simplest situation: you are the sole member of your studio, and you work as a freelancer.
What’s An Animation Studio
An animation studio is a company creating animated media―films, series, ads, or even video tutorials. Animation is everywhere!
An animation studio typically involves a variety of activities like script writing, storyboarding, style framing, drawing illustrations, modelization, rigging, animation, compositing, 2D/3D image editing, voice-over recording, and sound design.
Why Start Your Own Animation Studio
The primary advantage of starting your own studio is the possibility to choose your own lifestyle―shape the way you work, choose who you want to work with, and impulse your own creative vision. It is only natural when you evolve in a studio that, at some point, you might consider you can do better by yourself. After all, you are a professional with your own relations and the necessary experience to evaluate your deliveries.
Then, there is the financial freedom of being your own boss. Animation studios are in high demand, but whether you’re an employee or a freelancer, you are going to have to deal with the uncertainty of finding paid work. The only differences are you’ll get to choose your projects, to a certain extent, and increase your rates without having to wait around for a middleman.
Lastly, starting your own studio will allow you to develop new valuable skills. Even if you fail, you’ll acquire knowledge that will make you a better artist. The world of animation is fierce and competitive―having experience marketing your skills, delivering projects, and dealing with stakeholders will help you stand out.
8 Steps To Start Your Indie Animation Studio
I. Research & Define Your Personal Brand
First, you’ll need to find your niche―the type of animation you’d like to produce. As a one-person business, you can’t afford to tackle everything because there is not enough time in a day. Focusing on a niche allows you to target an audience, and knowing your audience is key to providing the right services, acquiring customers by knowing where they hang out online, and ultimately making your business profitable.
Once you list down potential niches, you can research them to assess their potential and pick one:
- How competitive is the niche?
- How much does it pay?
- Is there enough work to sustain my business?
As a freelancer, you can focus on a niche that has low competition and high demand, but also that you’ll enjoy working in. Character rigging for pre-school TV series for example. Ultimately, you’ll want to align your personal brand―the way you present your company―with your niche audience, so choose your studio’s brand identity accordingly.
II. Register your business
Once you find a name for your company, you need to register it. Like any traditional company, you’ll need to open a professional bank account and fill up a company creation form.
As a freelancer, you can start as a sole business owner for less than 1,000 euros depending on your country, sometimes for free.
With the rise of neo-banks like Revolut, Wise, or N26, your bank account will cost between 0 and 9 euros/month. It’s a lot more if you open a traditional business bank account.
III. Upgrade your hardware
Registering your animation business allows you to bill customers, but you’ll need to invest in equipment to deliver projects.
Animation, rendering, compositing, or video editing takes up a lot of computational resources, so your first item on the list is a powerful computer with a professional GPU and a large amount of RAM. You can expect to spend anywhere from 1,000 to 5,000 euros depending on how complex your projects are.
You also need to think about data storage and backup. Your storage must be accessible from your client’s office to shorten feedback loops. The best long-term solution is a Network Attached Storage (NAS) that can store terabytes of data for about 1,000 euros, but you can get started with premium cloud storage services for a monthly subscription.
Lastly, you’ll need a fast, reliable internet connection for business video calls and video downloads and uploads (50 euros per month). You can expect your work-from-home setup to add an extra 100 euros per month.
Overall, to have the proper hardware, you should expect to spend around 7,000 euros in initial costs, and then 150 euros per month in bills.
IV. Choose Your Software
Now that you have the proper hardware to work on, you must choose the right software tools for your project! Aside from the operating system, you’ll need different tools for each step of production.
It’s likely you will spend 3,000-5,000 euros per year on your software, as the following breakdown of the most popular CG tools shows:
Operating system
Windows (130€)
Modeling
Autodesk 3dsMax (2940€ / year)
Autodesk Maya (2940€ / year)
Blender (0€ / year)
Shading
Adobe Substance (20€ / month)
Quickcell suite (400€ / month)
Adobe Photoshop (70€/ month)
The Foundry Mari (54€ / month)
Sculpt
Pixologic Zbrush (40€ / month)
Autodesk Mudbox (150€ / month)
Motion Design
Maxon C4D (126€ / month)
FX
SideFX Houdini (269€ / year)
Fur/Cloth
Marvelous Designer (1700€ / year / user)
Autodesk Maya Ncloth (39€ / user)
Autodesk 3dsMax Ornatric (599€ / user)
Environment
Itoo Software Forestpack (60€ / year / user)
World Machine (119€ / year)
Planetside Software Terragen (38€ / month / user)
Rendering
Chaos Group Vray (60€ / month)
Pixar Renderman (595 € / user)
Autodesk Arnold (645€ / month)
Corona Renderer (25€ / month)
Mercenaries Guerilla Render (700€ / node)
Redshift (300€ / node)
Otoy Octane (700€ / year)
Blender Cycles (0€ / year)
Lookdev
Isotropix Clarisse (2300€ / year)
Foundry Katana (7500€ / user)
Mercenaries Guerilla Station (2000€ / nod)
Sketchfab (249€ / year)
Marmoset Toolbag (189€ / user)
Animation
Autodesk 3dsMax (2940€ / year)
Autodesk Maya (2940€ / year)
Toonboom Harmony
TVPaint
Blender (0€ / year)
Mercenaries Rumba
Compositing
Foundry Nuke (1349€ / user)
Blackmagic Design Fusion (269€)
Editing
Magix Software Vegas (359€ / user)
Avid (1299€ / user)
Blackmagic Design Davinci Resolve (299€ / user)
Adobe Premiere (included with the Photoshop suite)
Production Tracking and review
Kitsu (29€ / month)
Frame.io (19$ / month according to reviews)
Ftrack review: (10$ / month according to reviews)
And of course, another option, if your customer doesn’t have any software requirements, is to rely on open-source software. It requires some additional training, but the cost reduction can prove to be worth it:
- Operating system - Linux
- Modeling / Animation / Rendering - Blender
- Digital Painting - Krita
- Production Tracking - Kitsu
V. Start Your Online Presence With A Portfolio
Now that you have everything you need to deliver productions for your clients, you will need to get the word out to win contracts: having a portfolio is the first step to showcasing your work to the world.
Knowing your audience is key to understanding where to host and distribute your online portfolio. If your customers like to hang out on Instagram, post your work as Instagram reels. If your niche is about Tiktok animated tutorials, post on Tiktok. If you’re not sure where to start, it doesn’t hurt to experiment with different platforms like Linkedin, ArtStation, Youtube… or whatever social media you prefer, but in the end, you want to prefer quality over quantity when it comes to your online presence.
In any case, having your own portfolio website is always a sure bet.
VI. Find Your Pricing
You now receive offers from bigger studios or small agencies and it’s time to send them a quote, but how should you go about pricing? You need to consider several factors for your daily rates:
- How much money do you need to recoup your initial investments - hardware, software, and living expenses
- How much time do you need to deliver the project―don’t forget to include retake time!
- How big of a return on investment you are providing to your customers
It’s obvious you should be able to at least make a living from your job―cover your business costs, and your living expenses, and still make a profit to re-invest somewhere else! As a reminder, here is a breakdown of the expenses you should budget for:
But it would also be a mistake to limit yourself to strictly covering your costs, you shouldn’t be afraid to ask for more if your work is likely to bring a huge return on investment to your customer. Developing a profitable business is not only your duty as a freelancer but also the only way to be sustainable.
When sending your quotes, you should be precise about the scope of the project―what is expected from you. It will prevent you from dealing with too many additional requests. Another good practice for long projects is to ask for a percentage of the total payment upfront to give yourself room to breathe. Then, depending on the length of the project, another in the middle, and the rest upon delivery.
VII. Invest In Customer Acquisition
Customer acquisition is the activity that consists in identifying and approaching potential customers. Keeping your pipeline of customers full is important to make your income more stable, so you need to stay open to new opportunities:
- Update your portfolio regularly - An aging portfolio doesn’t show your best side to a potential client: the more work you can feature, the more experienced and trustworthy you look!
- Create new content on social media - Content creation, no matter which platform you choose, ensures more customers become aware of your existence.
- Send out project proposals on a weekly basis - Sometimes, all you have to do is study companies you think can be a good fit for your profile and explain to them how you can help them.
- Nurture your network - Go visit your former colleagues at the studio. If you can't see them directly, send them emails to update them about your situation.
- Go to events - In the same vein, participate in events like festivals or meetups. It will allow you to meet new peers and grow your network.
VIII. Focus On Retention: Deliver On-Time And On-Budget
Customer acquisition is time-consuming as you’ll soon find out, so it’s extremely important to prioritize customer retention―your ability to retain customers for recurring work―above everything else. More precisely, you’ll want to focus on the following key elements:
- Deliver your projects on time and on-budget - Do not make your client deceived.
- Over-communicate with your stakeholders - Gather feedback and use Kitsu as a production management tool to keep all stakeholders updated in real-time.
- Deal with scope creep accordingly - Be careful if a client keeps on demanding extra stuff for your creation (like additional FX, props or animations). It may end in an unfeasible project.
Activities to nurture customer retention should be performed on a daily basis to deal with risks and conflicts early.
To conclude
If you want to manage your time and set your artistic direction, one of the best solutions is to create your studio. But building a new business requires investments, so be aware you will have to buy hardware and software licenses, as well as cover extra costs like legal paperwork, internet connection, and electricity. Having a clear idea of your costs will help you define your pricing and build a sustainable partnership with your customers.
We dedicated this blog to CG Production Management and CG Pipeline. Additionally, we run a Discord community where you can discuss your problems or solutions and learn from others. We are already 1000 members to share tips and ideas. Join us―technical directors and production managers from all over the world will be super happy to welcome you!
Photo by Rubén Bagüés on Unsplash
