Startup Resources

It can be tough starting a business, even more so in the entertainment field. Below are useful hints, tips and more for those interested in starting a digital entertainment business in Utah. If you have additional resources to add please email us at info@utahden.org and we will be happy to include them here.

Why Startup?

There are many reasons why you might want to start your own digital entertainment business;

  • You have a brilliant idea and you want to bring it to market;

  • You believe you can do so much better than the place you work at right now;

  • Maybe you can't find the right job where you want to live;

  • You want to be your own boss;

  • You would like Mark Zuckerberg's money;

  • ...lots more possible reasons!

Whatever the reason, you should make sure to go into this with "eyes open".  Don't rush it, understand what is involved.

The Basics:

A few of the initial considerations you should have will include:

How much money will you need before your new business is making money? (investment)

  • You'll have bills to pay while you get your business started, while you build your first product - so how much do you think that is?

  • Consider not only costs to build, but also launch costs - marketing, travel - and how long before the product actually generates revenue

Where will your initial investment come from?

  • Bank loan?

  • Severance payment from your last job?

  • Your savings?

  • Loan from family?

  • Other colleagues joining your startup putting their own money in?

  • Funding from an investor - these typically want a slice of your business (shares/equity) and some control

Banks

How many people do you need? How will you pay them?

  • Investment can also come from not paying, or paying reduced amounts, in return for services. So your business partners might work for less money (or even no money) in return for a share of the business (sweat equity)

What type of business entity do you need?

How can I choose a lawyer? What about an accountant?

  • Perhaps you have heard horror stories of people being ripped off by 'professionals'? This isn't a reason to not use one!

  • There are disreputable people in all industries - bad managers, sloppy programmers, lazy artists, untrustworthy directors - not everyone holds your high standards! So what do you do in your line of work? You interview, you check references, right? Do the same thing when choosing a lawyer or an accountant. It's no different than hiring a sub-contractor.

  • Ask other people in the industry who they use - personal recommendations matter

  • Ask a prospective lawyer or accountant how many people in your industry that they work with - and ask for contact details so you can get references

  • There are many to choose from in Utah but choose carefully nonetheless

  • These professionals have given their time to help UDEN, so if you need a starting point, here are a couple: but don't just take our word for it - take references to satisfy yourself with these or any other people you work with.

  • John Briggs - CPA, Incite Tax - http://www.incitetax.com/

  • Our thanks to Chris Baker for this suggestion for a good option for new startups as well: https://stripe.com/atlas

Healthcare

  • You'll need it. Don't overlook this; you falling ill is a key risk to the success of your business.

  • There are many vendors who can sell you a range of packages. Utah's health insurance marketplace is designed for small businesses - http://www.avenueh.com

  • A cost-effective route is to take out a good core package with a healthcare vendor, then add critical health insurance on top - meaning that if your core package won't pay in the event of a critical illness, the top-up insurance should.

Business Insurance

  • Whatever business you are in, you are required to carry a minimum level of business insurance. Your lawyer, or insurance agent can advise you on specific needs

Business Plan 

  • See column on this page

 Administration

  • This will cover anything that is not directly related to making your product - things like book keeping (accounts), employee regulations, contracts, other regulations. As a small business you can manage these yourself (it's a question of your time and expertise), but many will prefer to outsource this to a local provider for an agreed fee until such time as the business can afford someone full-time to handle it.

Office Space

Working from home can be great to get started, but it isn’t ideal for teamwork or collaboration. Most landlords require big commitments for office space - multiple year leases and security deposits. You’re probably not ready for that right away, so consider an incubator (if you’ve seen Silicon Valley on HBO, this is the idea, but not someone’s house!).

There are a few local incubators where you can rent desks and facilities by the month, secured by a credit card. It’s a really cheap and effective way to get started. Other advantages include professional meeting rooms where you can meet investors or clients, high-speed internet, a real street address, business services plus there are other startups just like you with whom you can share or even collaborate.

Here are a few to consider; each has a slightly different mission and vibe, so check them all out to see who has space and which will be the best fit for your needs: (note - these were correct prior to the COVID-19 pandemic, so availability and terms may have changed)

Downtown SLC

Sandy/Cottonwood Heights/Midvale:

 Financing

Culture

An important consideration for you, should  be the type of company you want to build. No doubt you want yours to be the best company ever, but what will make it become that? Your business is more than you and your product. You will probably have employees - so what do you want your company to be like for them? Creating a vision statement and a mission statement, can help you think about what you want your company to become, and making a list of your company’s core values will inform your company’s culture - and so what working for your company should be like for your employees. But pause for careful thought here -- values aren’t simply words on a page to make you feel good or to show your ideals — you and your management team should demonstrate these values in the way you work every single day, and you should insist on these for all managers and employees. Don’t sign up for something you can’t deliver.

Diversity and inclusion should be an important principle in your company culture - see Why Diversity and Inclusion Are Good for Business by the University of North Carolina at Pembroke

Check out these UDEN meetings too:

Your Business Plan

You'll need to put one together; this can feel overwhelming but it's actually quite straightforward and doing one will help you better understand what you're about to embark upon. You may not know all of these answers upfront, but getting down on paper what you do know and what you still need to figure out will be a huge help for you, your partners and any investors.

Below are the things we suggest you include:

Summary

  • Begin with a visionary statement about your business and the products you will make. See this link for details about vision and mission statements.

  • Be sure to mention where this could end up - this is the think big moment!

  • When you have finished the entire document, revisit this statement - make sure everything is aligned and consistent!

What are you going to make? (product)

  • This should be the easy part!

  • Describe what you’re offering! Service, product, movie – whatever!

What do you need to be able to make it?

  • Detail your resources - time, people, equipment

How long will it take? (timeline)

  • In months, map out the key events/milestones you anticipate; i.e. start making the product, testing, final, approvals, launch, revisions, etc.

  • Suggest you plan the period through launch plus 2 years.

How will you make money? (business model)

  • Are you selling to consumers via a third-party - if so, how do you make money, how much money does your channel of distribution take from the sale? (example, app stores typically take 30%, a distributor or publisher can take upwards of 50%, a local movie theater might take a % of the proceeds after costs, etc.)

  • Are you selling directly to consumers - perhaps you'll have an online store of your own, or maybe a retail storefront? What is the cost of the sale (example, credit card transactions attract a % fee per transaction, and your cost of the store itself has to be factored in somewhere)?

Who are your customers? (demographic)

  • Who will buy and/or use your product? Typical age range? Gender?

  • Where are they located?

  • You should be able to Google a bunch of free market data to help with this (try searching (name of industry) market data)

What is your distribution plan?

  • How do you get the product to your customers? E.g. app stores, movie theaters

What is your product? How will customers know about it? (marketing)

  • What makes your product unique? (unique selling points)

  • Why will a customer want to buy it? (features)

  • How does it compare to the other products in the market? (competitive analysis - side by side feature list, why is yours better?)

  • What do small groups of potential customer think of it? (focus group feedback, any insights learned)

  • How can you describe your product in as few words as possible in a way that helps the customer understand what you're selling (positioning statement)?

  • How will potential customers know about your product when its ready? (advertising, social media, trade shows, consumer shows; maybe you'll hire a specialist company to handle this - if so, how will they get paid?)

Cash flow

If you can balance a check book, you can create a cash flow

  • Make a spreadsheet and list by month all of your expected outgoings (bills, expenses)

  • Above this, add one or more lines that show what money you'll be bringing in and when (revenue)

  • At the bottom, by month, subtract the expenses from the revenue - this is the profit

  • Under that make a cumulative summary of the profit or loss by month - a running total; negative numbers will help you see the projected investment you'll need to fund each month

  • Add totals at the end of each calendar year by each line item, including a grand total at the bottom

Most spreadsheet programs have pre-existing templates for cash flows, each of which will give you a version of the above with varying levels of complexity - but the above is what you need to get started so don't be overwhelmed!

Financing (investment)

  • A few words about how you plan to finance your business (loans, find an investor, sweat equity etc.)

Risks

Of course your new business will be the most successful startup ever, Mr/Ms Zuckerberg! However, there is a very high probability of failure if you don't identify and keep an eye on the things that could de-rail your otherwise brilliant plan!

Risks will be specific to your business, project, business model etc. but might include things like:

  • Product takes longer to build than planned;

  • A key relationship you were relying on went bad; perhaps a key employee died;

  • A competitor beats you to market and you have to pivot on your plan;

  • You can't hire the right people;

  • Your product fails to meet regulatory or other necessary approvals;

  • You get sued by someone who has trademarked the same name, has a patent on a process you're using; accuses you of plagiarism etc.;

  • You always have risks in business - you need to quantify these, in writing, in terms of probability - anything high probability needs to have your fullest attention until it lessens or goes away.

  • For every risk you should also identify a mitigation - if this happens, here is what the impact would be, here is what we would do if it did

Summary of opportunities -v- risks (SWOT analysis)

  • Draw a 4 quadrant grid

  • In one box, write 'Strengths' - and list the main strengths of your project and/or business

  • In the adjacent box, write 'Weaknesses' - and list the main weaknesses you can think of

  • Below strength, write 'Opportunities' - and list the areas that will open up for you as a result of building this business

  • In the remaining quadrant, write 'Threats' - list the main things that could de-rail your plan

Other Resources

Please email us with any links you have found useful info@utahden.org