This Business Plan for an animation startup was made with my friends Shreshth and Shishir during our engineering at Delhi College of Engineering (2002-2006). This was presented at multiple platforms within and outside DCE at a national level. This won multiple awards at various competitions.

1. “Animating reality, creating dreams”
Submitted by:
Shishir Jain
Shreshth Sharma
Siddharth Saxena
1
siddhart
h
Digitally signed by siddharth
DN: CN = siddharth, C = IN,
O = dce
Reason: I am the author of
this document
Date: 2002.01.30 23:34:01
+05'30'

2. EXECUTIVE SUMMARY
“Life is a venture tough to defy,
being on the land aspiring for the sky.”
Animation is regarded as a part of the creative or content industry as
artistic or creative effort is essential to the process of developing
animation. India is gradually positioning itself as a significant provider
of animation production services.
The country’s strengths and edge in the market include the following:
A vast base of English speaking manpower
Low cost of animation
India’s large entertainment sector
Heritage of traditional literature
Mirage as a company would focus on a wide spectrum of animation
related services. Initially we are placing ourselves to get hold of the
local market by taking a dip into a lucrative and ever expanding
market of designing and advertising. We intend to provide high end
customer centric animation products whose demand is going through
the roof. It is such a big market that even the big software companies
have started to take note of it.
Analysts predict that in the longer term, the slower economy and
tighter budgets augur well for increased offshore production — that
bodes well for Indian computer animation companies and we tend to
place ourselves to fill this space.
Its three founding members, who could not have ignored the vast
opportunity that the animation world entails, have conceptualized
Mirage. One of them is an engineer with rich experience in field of
computer graphics. The other is a MBA specializing in financial
sector, and the third one has been in the advertising and marketing
field for many years. The common vision of the founding members
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3. brought them together to create this enterprise and explore the
uncharted waters of animation world.
The company will have a marketing concept with consumer as a
controlling function and marketing as an integrative function. With this
approach we will be able to deliver better quality and customer
specific products. The company will deliver superior value with the
highest quality by taking a truly global approach.
Market Analysis
The Global Scenario
The total global animation production figures, according to the
NASSCOM Animation report, range between US$ 16-31.5 billion for
the year 2000. Statistics for 2001, stand anywhere between US$ 25
billion and US$ 38 billion. Analysts estimate that the global animation
production rose to about US$ 45 billion in 2002.
($ billion) 2000 2002 2005F
Total global animation
production 31.5 45.0 51.7
Demand from Entertainment
Sector 22.7 32.4 37
Demand from Non
Entertainment Sector 8.8 12.6 14.7
Animation Production by India 0.6 0.9 1.5
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4. 0 10 20 30 40 50 60
$(Billion)
Total global animation
production
Demand from
Entertainment Sector
Demand from Non
Entertainment Sector
Animation Production
by India
Demand Figures
2005F
2002
2000
F- Forecast
Source: NASSCOM Animation report
Some of the other estimates of the NASSCOM report on animation
indicate the following:
• The global entertainment market will generate a demand for
animation production services of the order of US$ 37 billion by
2003 (forecasts by Pixel Inc.)
• In the non-entertainment segment the demand for animation
production services will touch US$ 14.7 billion by 2005
(forecasts by industry source)—
• The global film/TV program production market will create a US
$ 17.5 billion revenue opportunity for animation production
houses (forecasts by Pixel Inc.)
• On the gaming side, according to an ICT industry leader, the
demand for animation production services was of the order of
US$ 5 billion in 2000
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5. Indian Animation market
India is waking up to a host of global opportunities that promise a lot
of “action” for the country’s leading design specialists. The forces that
are shaping the development of the animation industry in India
include technical manpower to meet the 2-D and 3-D animation
requirements, lower costs of animation production, the expected
demand from domestic Indian television channels and the formation
of domestic animation studios and training centers.
The Indian domestic market is throwing up revenue generation
prospects for ICT solutions providers specializing in this market. The
requirement by the burgeoning Indian television segment for
animation and special effects related work is also giving a fillip to this
segment. The industry is also witnessing the arrival of training houses
that are dedicated to building skilled manpower for this market.
By all accounts, the animation production industry in India has the
potential to grow into a major export engine for the country. Indian
design studios are gradually establishing their credentials in overseas
geographies, gaining valuable experience and building their skill sets
in this high potential global market. With some incentives provided to
this segment, India can not only catch up with competitors such as
the Philippines, Korea and Taiwan, it can easily exceed their
potential.
Advantage India
The Indian animation industry also has a good outsourcing
opportunity. In Asia Pacific, India has been emerging as important
outsourcing destination due to its obvious benefits such as large
English speaking base, availability of animation capability with 12
animation studios, presence of a successfully entertainment industry,
heritage of traditional literature to facilitate content-based partnership
and state-of-art computer hardware and software platforms. Another
primary advantage is that the cost of animation production in India is
the lowest compared to other destinations like Canada, Korea,
Taiwan and Philippines
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6. Rates of production of a half
hour animated program
Countries Cost (US$)
US and Canada
$250,000-
400,000
Korea and
Taiwan
$110,000-
$120,000
Philippines
$90,000-
100,000
India $60,000
Competitive Analysis
The Market
The animation market in India today is characterized by the presence
of multiple players including:
Crest Communications, TATA Elexi, Maya Entertainment, Silvertoon
Studio, Pentamedia Graphics, Color Chips, Toonz Animation, among
others. These companies are spread across cities such as Mumbai,
Chennai, Bangalore, Hyderabad and Thiruvananthapuram.
Market Trends
Most of the market players are targeting to get the pie of the
outsourcing deals which are originating from the west. Though being
established they still haven’t woken up to the immense potential,
which the Indian market has to offer. They haven’t been able to build
up market for themselves, instead have just become the back office of
the big animation studios.
PRODUCT DESCRIPTION
New businesses such as ours have an edge over larger concerns.
Small-scale entrepreneurs are close to their customers and can learn
much more quickly about their buying habits. Small business owners
have a sense their customers' needs from years of experience.
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7. Our strategy will be to divide demand into manageable market niches.
Small operations can then offer specialized goods and services
attractive to a specific group of prospective buyers. Our focus and
thrust will be on the areas which until now have not been explored
fully by the existing players. Apart from these we would also focus on
the traditional segments such as advertising and movies.
MIRAGE
Teaching Aids
Movies
Medical
Simulations
Advertisements
Designing
MEDICAL SIMULATIONS:
The need for medical graphics whether in the form of medical
animations or medical illustrations, is no longer restricted to education
in the scientific sector. Teaching students as well as patients, legal
issues, research agencies, journals, magazines, newspapers,
television programs, and museums all require medical animation and
illustrations. These fields may not be directly related to the healthcare
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8. sector, but the growing demand for the production of high quality
medical animation and illustration is phenomenal.
Here is some of the of the medical animation and illustration work,
which can be outsourced to India:
• 3D Medical Animations - to depict medical processes or to
illustrate a concept. 3D medical animations are visually striking
as they create the illusion of depth and aid in comprehending
difficult processes or concepts. It is ideal for demonstrating
complicated relationships or realist subject matter. 3D medical
animation can depict what is impossible to illustrate through a
camera.
• 2D Medical Animations- This sort of animation also produces
striking imagery. It is useful in explaining anatomy, treatment
processes, physiology and other health related areas.
• Medical Illustrations - detailed and accurate depictions that are
of instructional value and are useful in documentation. They can
be used in fields both directly and indirectly related to the health
and scientific sector.
DESIGNING:
• Company Logos
• Company Broachers/Posters
• Animations for websites
• Visiting Cards
We hope to penetrate the lucrative but yet untapped field of
professional designing of the above stated products for local
market. With our focus on solutions specific to the region,
language, culture and above all our consumer. We intend to
develop loyalties and grow our designing business by the word of
mouth publicity.
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9. TEACHING AIDS:
With large number of institutions endeavoring in their thrust to
provide quality education are more and more tilting towards
modern methods of teaching. So there is a huge market which is
ready, to explode which we intend to tap. Apart from this we also
intend to target the publisher community who these days are more
inclined to develop graphic aided CD’s for their technical books.
We intend to design teaching aids specific with demands of
teachers (for example making a 3D model of organic compounds.
ADVERTISMENTS:
Though it’s a very competitive sphere, we will focus on a totally
different segment which has not been exploited to the fullest. With
the increasing reach of cable TV, more and more small enterprises
are trying to promote their products and services on local cable
channels. But there is a lack of service providers catering to this
market of low cost quality advertisements. As we get established in
this field, in the very near future, we hope to acquire contracts for
big budget ads.
MOVIES:
One of our long term objectives is to get established as a leading
house in field of animation movie design. Initially we will
concentrate on training and developing our workforce to get
equipped with skills needed to handle movie projects. With
increasing interest of Indian audiences towards, there is a flurry of
animation related channels. These companies are looking to
develop animated serials showing the folk tales and the stories
which we all have grown up listening. Characters like Teanali Ram,
Humaman ect have been huge successes with the Indian masses.
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10. STRATEGY AND IMPLEMENTATION
HR Plan
HR structure
The startup would be jointly owned bye the three founders of the
company who are skilled professionals in their respective fields.
One of them is an engineer with rich experience in field of
computer graphics. The other is a MBA specializing in financial
sector, and the third one has been in the advertising and marketing
field for many years. The common vision of the founding members
brought them together to create this enterprise and explore the
uncharted waters of animation world.
Initially we intend to hire seven employees out of which two are
creative professionals who have rich experience in the animation
industry. The rest four will be talented and motivated individuals
having good technical skills and one will be sales professional.
NAME
Marketing Head Technical Head Financial Head
Creative HeadCreative Head
(Designing) (Animation)
Team of four Technical Experts & one sales person
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11. RECRUITMENT
India has several training institutes that cater to the demand of
training animation professionals. Chief among them are the
National Institute of Design (Ahmedabad), J.J. School of Arts, Zee
Institute of Creative Arts (ZICA), Mumbai, Industrial Design Center
(IIT Mumbai), IIT Guwahati, C-DAC’s National Multimedia
Resource Center (Pune), Zee Institute of Creative Arts (ZICA) in
Hyderabad.
With so many institutes throwing up quality professionals, finding
skilled and talented workforce is not too difficult. We wish to
develop a small pool of highly equipped professionals who can
face up to the challenges of modern animation industry.
Talent hunts would be conducted in leading technical colleges
looking for bright young students specializing in computer graphics
and animations. They will be given scholarships and training with
our experts. Later on these students can be given small works like
logo designing and good ones may even be recruited full time.
EMPLOYEE BENEFITS
Our employee benefit plan will protect our employees and their
families from economic hardship brought about by sickness,
disability, death. It will provide a system of leave or time off from
work. Our comprehensive benefit plan would include health
insurance, disability insurance and life insurance. The working
hours will be flexible and the developers will have the option of
even working from their homes. They will be provided financial
incentives for quality work.
COMPANY VALUES
In this competitive era it is very easy to hire quality workforce but it
is very difficult to retain it. So we intend to develop loyalty with our
employees so that the professionals we have developed and
trained stick with us. Our company structure will be very
democratic in nature so that each employee has its say.
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12. MARKETING
The company will have a marketing concept with consumer as a
controlling function and marketing as an integrative function. With this
approach we will be able to deliver better quality and customer
specific products.
Marketing Objectives:
To get at least five small advertisements, five logo and brochure
designing projects in the first quarter and to continue growing these at
a minimum of 12% for next seven quarters. In the first three quarters
the marketing team will strive to achieve a minimum of one teaching
aid per quarter and one medical project per annum.
MARKETING STRATEGY
Here is Mirage’s game plan:
Target market: Teaching aids, local ads, medical simulations,
designing.
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13. Positioning: The most cost effective and high quality animation
Design Company.
Sales Promotion: Run ads in cable and local papers to attract local
ads and do direct marketing focusing on companies which have
designing work.
Research and Development: Use better and advanced soft wares like
real flow after second year.
Marketing research: Getting extensive feedback from present
customers and conducting surveys on prospective customers.
ACTION PROGRAM:
Movies and Animated
Medical
Teaching
Designing
Movies and Animated
Medical
Teaching
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14. FINANCIAL PLAN
Initial Startup Up Expenses
Computers 500000
Computer Accessories 100000
Software 100000
Furniture/setup 50000
Company Brouchers 10000
760000
Monthly Mixed Expenses
Monthly Rent 15000
Pay@average salary Rs15000*10 150000
Advertisements 20000
Electricity Bills 4000
Phone Bills 2000
191000
Quarterly Fixed Expenses 573000
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15. Quarterly projected contracts for each service
Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8
Logo Designing 3 5 7 9 11 13 15 17
Brochure Designing 4 6 8 10 12 14 16 18
Advertising 5 7 9 11 13 15 17 19
Teaching Aids 0 1 1 1 1 1 1 1
Medical Tools 0 0 0 1 0 1 0 0
Cash balance on startup 2500000
Initial Startup Up Expenses 760000
Remaining Balance 1740000
Revenues
Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8
Logo Designing 9000 15000 21000 27000 33000 39000 45000 51000
Brochure Designing 38000 57000 76000 95000 114000 133000 152000 171000
Advertising 65000 91000 117000 143000 169000 195000 221000 247000
Teaching Aids 0 48000 48000 48000 48000 48000 48000 48000
Medical Tools 0 0 0 500000 500000 1000000 500000 500000
Total Sales 112000 211000 262000 813000 864000 1415000 966000 1017000
Quarterly Expenses 573000 573000 573000 573000 573000 573000 573000 573000
Quarterly Operating Profit -461000 -362000 -311000 240000 291000 842000 393000 444000
Cash Balance 1279000 917000 606000 846000 1137000 1979000 2372000 2816000
Total Sales(in Lakhs) 1.12 2.11 2.62 8.13 8.64 14.15 9.66 10.17
Profit(in Lakhs) -4.61 -3.62 -3.11 2.4 2.91 8.42 3.93 4.44
Cumulative Revenues 112000 323000 585000 1398000 2262000 3677000 4643000 5660000
Cumulative Expenses 1333000 1906000 2479000 3052000 3625000 4198000 4771000 5344000
Note: Revenues from sales of medical equipments have been divided into three
quarterly installments.
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16. Selling Price of Services
Logo Designing 3000
Brochure Designing 9500
Advertising 13000
Teaching Aids 48000
Medical Tools 1500000
-500000 0 500000 1000000 1500000 2000000 2500000 3000000
Rupees
Q1
Q2
Q3
Q4
Q5
Q6
Q7
Q8
Quarters
Cumulative Cash Chart
Cash Balance
Quarterly
Operating
Profit
Total Sales
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17. Break Even Analysis
0
1000000
2000000
3000000
4000000
5000000
6000000
1 2 3 4 5 6 7 8
Quarters
Cumulative Revenues
Cumulative Expenses
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18. SWOTAnalysis
•Small Entrepreneurial setup makes
the company more efficient.
•Understanding customer needs.
•Good knowledge of the local
culture and market.
Strenghts
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•Lack of resources as compared
to existing players.
•As a new brand we will take
time to get established.
Weakness

19. •Presence of well established
companies in the movie and serial
market.
•Instability in the international scenario.
Threats
•Huge growth potential in
local market.
•Great international focus on
Indian firms.
•Huge pool of talented and
motivated workforce available.
Opportunities
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20. CONTINGENCY PLAN & RANDOM SCENARIOS
1. DOWNTURN IN THE INTERNATIONAL MARKET:
Since we as a company is placing ourselves both in the local as
well as the international market any major downturn in the
international scene is going to impact us but not to an extent
that we cannot rise against the tide. And as we tend to focus
equally on the local market we think we can fight the downturn.
2. LOWER THAN EXPECTED HIGH YEILDING CONTRACTS:
Even though we have been very conservative in our estimation
of high margin contracts it might happen we don’t even get
those. But as our product description shows that we are placing
ourselves with a much wider base we can surmount any
scenario.
Benefits for the investors (VCs and bankers)
1) Though the management control will be mainly with the founding
members, the investors would have a representative who can advice
and guide the management team.
2) All immovable assets of Mirage be the sole property of the investors.
3) Major portion of profits of the company, a small fixed percent to the
founding members, would go solely to the investors.
4) All services of Mirage would be provided at reduced prices to any of
the investors or their associates.
By offering all of the above benefits we hope bankers and VC’s invest
in our company and idea.
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21. USP
The USP of the company is delivering superior value with the highest
quality by taking a truly global approach. Our services are most
illustrated by our motto:
“ Animating reality
Creating dreams”
Our foray into the into the niche segments with a aim of providing
customized and region specific solutions for all our customers.
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