Writing a Business Model and Business Plan for an Indie Company

[NothingLikeit]

Hello,

For those of you have businesses (not just for a hobby although there's nothing wrong with that) did you set up think about your business model or did you just start coding?

what things did you have to consider (businesswise)?

How much did a sample business plan help you?

I appreciate any and all advice you can provide into this matter. I also apologize if this has been covered before.

[GBGames]

I wrote a simple business plan, and I just recently rewrote it. When I first started, I knew that a lot of the variables would be unknown. How much will I make in a quarter or a year was hard to guess, although $0 actually didn't seem like a bad guess at all.

Still, I think the point of a business plan is to provide you a guide, not a destination. Yes, it might be nice if you can accurately foretell everything that could happen to you, but you can't. You can, however, write down a plan that you will follow, and if you think about doing something that isn't on the plan, you can see whether or not it will be a better choice than what you already said you would do.

If you make a plan to work on casual games, and you get an opportunity to make an MMORPG/RTS, you have to decide if it is worth changing your plans.

I based my business plan on Steve Pavlina's "To Plan or Not To Plan" article, which you can find at http://www.dexterity.com/articles/planning.htm

Like I said, you may not have all of the variables known, but you can make some conservative (or not) estimates to start. A few months into it, you may decide to change those figures, but that's fine. Your plan should be easy to update and easy to read. You don't want to write a couple hundred pages that you will stick in a drawer, after all.

[KNau]

A simple plan is the best plan. I made the mistake of dealing with my local small-business association when I first started out and they stuck me on some huge 50+ page format that was completely pointless.

There's that old saying, "No plan survives first-contact with the enemy". The same applies to business - no plan survives first contact with the marketplace. Anything longer than 3 - 5 pages of your core ideas is a waste of time since it's just going to have to be rewritten once the unknowns are filled in.

[Escapee]

I heard the guys that started youtube did not have any business plan . they just "do it" with love. Made something that ppl want to use (ease of use , upload movie FOC) and then the rest is history.

[NothingLikeit]

Just do it is nice... But it's a rare occurence. It's a crap shoot either your idea is so unknown and unthought of that you can get away with no Business plan. Or you fizzle out. More often than not those businesses without a plan crack under the weight of themselves. I think some organization is better than none.

What kind of research should I do?

[lakibuk]

Out of curiosity - what are you guys writing in these plans?
Somethink like: "Oh, i think i will sell 50 copies / month. Then i will go to the portals and make $20.000 royalties."

[NothingLikeit]

Yeah Labukik asked a question simmilar to what I was after.

What kind of stuff did you put into your business plans?

Did you bother to do a Financial Forecast or a P and L sheet?

I've been meaning to reread steve palina's articles but are there any other good sources of indie or game dev business insight out there? I've read Make it Big in Games and Steve's site already,

[GBGames]

Now, my business is still in its infancy. In fact, it's just barely out of the womb. Basically, take what I say with a grain of salt. One of those huge ones on the side of margarita glasses.

I separated my business plan into sections based on Pavlina's article.

In Sales, I wrote what I would like to make within the next year. I try to be optimistic, yet realistic. I wrote down a dollar figure, making it about 1/4th of what I make at my day job. I figure it is a nice chunk of change that could get me on the path to independence from a day job, but it is also kind of a large figure. I can't make it by keeping my money in my savings account. I need to be able to make in a month what I make in a week at the day job.

Then I wrote the various means to get there. I don't have my own product to sell yet, but there are other means, such as affiliate sales and ads on my website.

Then I wrote what I would need to do to increase or create sales to the point that they make me that money. Things like a payment processor, a better website and webhost (with links to various hosts and notes on what I am looking for specifically), bandwidth, and games to sell. The last one here actually gets fleshed out a bit since I have various ways of obtaining a game to sell. Making a game is just one of them.

In Cash Flow, I simply list various expenses and possible income. If I know a number, I put it in. If I don't, I either leave it blank or make a ranged guess. These are meant to be updated as I figure out what I actually need.

In Product Development, I outlined my current estimated schedule for the next few projects.

Etc.

Basically, I outline what I know or what I think may be needed. In marketing and promotion, since I don't really have anything to market or promote, I simply made a listing of the things that I could do, such as press releases, advertising, and game reviews/previews/interviews, among other things. I do something similar for quality assurance.

Is it the best plan in the world? No, obviously there are a few gaps. Since I am not looking for venture capital, I don't need those gaps filled any sooner than I personally need them filled. Once I need to know more than my plan can tell me, I can learn about it, put it in the plan, and keep going.

For instance, a year ago I didn't have any info on what kind of revenue I will be seeing if I put ads up. Since I put them up in July, I now have a number to work with.

I hope this information helps. Just know that a guess, no matter how bad, is better than not planning at all. The plan gets updated as it needs to be updated, so don't worry if your numbers are off. Correct them, and keep flying to your destination.