Studio Business in Sydney – A Questionnaire

We got a questionnaire from Dane this week about the business, so with his permission we’ve posted the answers here.

Hi Jack,

My name is Dane and I am currently studying a diploma in Small Business Management. Having previously studied and worked in 3D Animation my theoretical Business Plan is a start-up animation studio that would be looking to target the advertising, television and games industries.

You at Well Placed Cactus have definitely proven that a studio in Sydney is a viable business however I was wondering if you would be happy to provide any further details to help me gather information for my theoretical business plan.

Firstly, the marketing and promotion of your company is a difficult thing to gauge in this industry. Generating clients is, as far as I can tell, done mostly through good networking and forming ongoing business relationships with clients. How does Well Placed Cactus generate their clients? Is it primarily through return customers and referrals? How much does the online space impact your promotion, and how integral is your image as a business throughout all those avenues of promotion?

We don’t reject any possible source. We’ve found success on seek, linkedin, elance, forums, twitter and facebook. Once we noticed that we were getting so many diverse points of interests we started to look into the analytics and found that we weren’t getting a good flow through rate to our site. Rather than trying to move people around more, we decided to streamline the site and link directly to our services page and ensure that all our online presences were professional including facebook. We love repeat clients and big projects but we play a numbers game and we’ve found that as long as we apply for enough contracts we get enough contracts. Image certainly plays an important role in those applications. It is important to be professional when operating as a contracting company.

Additionally, determining the correct pricing structure seems equally difficult. Obviously every project will be negotiated with respect to the work involved and the relationship with the client, however I assume you have some sort of guideline or minimum requirement that must be met to ensure all your work is adequately profitable. What aspects of your business influence this amount/how did you arrive at it?

We still aren’t sure we’ve locked this down exactly right. We crunched numbers for sick days and holidays, time spent trying to get contracts or in meetings etc… and came up with a rate that would pay us all sufficiently including ongoing business costs. We prefer larger contracts but we take on any and all work that meets our minimum fee.

Lastly, the course requires that I assess theoretical competitors and evaluate their market share. With respects to your target market, what do you feel your market share is?

We strongly believe that other businesses in our field are a boon to us because it grows the industry. We’ve never worried too much about other companies working the space, though obviously we try to learn from their successes. The only caveat to that is that we don’t like hobbyists passing themselves off as businesses and offering prices far below reasonable wages or sometimes even working for free, we feel that devalues the skills we’ve spent years working on. We work in a global market, just this week we’ve been talking to clients in Sydney, the Gold Coast, Austria, Spain, London and Holland. There is far too much work for us to ever take control of the market, so we encourage everyone to get stuck in, we’re happy to help however we can.

Thank you for your time and I greatly appreciate any information you can provide me. It is great to see that there are successful studios within Sydney that I can one day aspire to.

Many thanks,

Dane