Your Company

Having identified an opportunity in the marketplace, you must now prove that you and your partners/employees are qualified to turn that opportunity into a profitable business. This section will establish your credibility in this regard.

Promoters

Identify the partners who will be involved in day-to-day operations by name, and describe the skills they bring to the company.

Insist on expertise in three major areas: management, sales, and game development, in that order. [Bangs98] states that 92% of all business failures in any industry are caused by managerial incompetence or lack of industry knowledge. Bankers and investors are understandably wary of funding companies that they perceive as deficient in these areas. Also remember that most of the people who will read the business plan know nothing about the game industry, except what they might have read in the mainstream press—and that coverage is rarely flattering. Thus, to maximize your odds of securing capital, your core team should include:

• A proven business manager, preferably with a finance background.

• An experienced salesperson with solid industry contacts.

• A game designer or producer with multiple titles to his credit.

• A lead programmer, also with multiple industry credits.

Of course, it is possible to rely on the support structure described in the next section to fill a gap in your expertise, but this is the optimal combination, because investors love it when people who hold long-term stakes in the company occupy the key positions.

Support Structure

Few startups, if any, can count on promoters with all of the skills necessary to succeed. The "Support Structure" section of the business plan lists the employees and external resources that will complement the promoters' knowledge, including:

• One or more senior software engineers.

• A lead artist, if he is not among the promoters himself.

• A law firm and/or agency with entertainment industry experience to represent you in contract negotiations.

• Members of the board of directors and/or advisory committee.

• Auditors and other consultants.

• Local schools and research institutes.

• Chambers of commerce and other business associations.

• Laws and regulations that favor the game industry in your local jurisdiction.

Staffing

Then, describe your initial team in these terms:

• How many people will you hire?

• What will their jobs be, and to whom will they report?

• What salaries and benefits will you offer? Are you going to pay above or below the industry average in your area? Will you implement a stock ownership plan to minimize employee turnover?

• Can the local market provide you with enough qualified talent? If not, what type of training will you have to invest in?

Production Plan

Finally, describe how you will organize the studio's operations. Will you have a single unified team? Multiple projects based on the same engine? Three independent product lines?

Remember that generating positive cash flow early and regularly is important for investors. When seen in that light, a single group working on the same AAA game for three years is not very attractive. You might have an easier time securing capital for a larger company that can release two handheld games every quarter and a major console title every Christmas season.