How to open a television studio?
There's no doubt that starting a television studio requires a lot of work, but with expert planning, you'll be well on your way to creating a profitable business venture.
This guide will give you a low down on all of the major steps involved, from choosing a legal structure to creating a financial forecast and registering your business.
We will also walk you through the process of checking whether or not your idea can be viable given market conditions.
Let's embark on this exciting journey together!
What is the business model of a television studio?
Before thinking about starting a television studio, you'll need to have a solid understanding of its business model (how it generates profits) and how the business operates on a daily basis.
Doing so will help you decide whether or not this is the right business idea for you, given your skillset, personal savings, and lifestyle choices.
Looking at the business model in detail will also enable you to form an initial view of the potential for growth and profitability, and to check that it matches your level of ambition.
The easiest ways to acquire insights into how a television studio works are to:
- Speak with television studio owners
- Undertake work experience with a successful television studio
- Participate in a training course
Speak with television studio owners
Talking to seasoned entrepreneurs who have also set up a television studio will enable you to gain practical advice based on their experience and hindsight.
Learning from others' mistakes not only saves you time and money, but also enhances the likelihood of your venture becoming a financial success.
Undertake work experience with a successful television studio
Gaining hands-on experience in a television studio provides insights into the day-to-day operations, and challenges specific to the activity.
This firsthand knowledge is crucial for effective planning and management if you decide to start your own television studio.
You'll also realise if the working hours suit your lifestyle. For many entrepreneurs, this can be a "make or break" situation, especially if they have children to look after.
First-hand experience will not only ensure that this is the right business opportunity for you, but will also enable you to meet valuable contacts and gain a better understanding of customer expectations and key success factors which will likely prove advantageous when launching your own television studio.
Participate in a training course
Undertaking training within your chosen industry is another way to get a feel for how a television studio works before deciding to pursue a new venture.
Whichever approach you go for to gain insights before starting your television studio, make sure you familiarise yourself with:
- The expertise needed to run the business successfully (do you have the skills required?)
- How a week of running a television studio might look like (does this fit with your personal situation?)
- The potential turnover of your television studio and long-term growth prospects (does this match your ambition?)
- The likely course of action if you decide to sell the company or retire (it's never too early to consider your exit)
At the end of this stage, you should be able to decide whether opening a television studio is the right business idea for you given your current personal situation (skills, desires, money, family, etc.).
Can your business idea be profitable?
Just enter your data and let The Business Plan Shop crunch the numbers. We will tell if your business idea can generate profits and cash flows, and how much you need to get started.
What is the ideal founding team for my television studio?
The next step to opening your television studio, is to decide whether to assemble an ideal team or venture solo.
The failure rate for business start-ups is high: almost half don't make it past the five-year mark, and setting up a television studio is no exception.
Starting with a group of co-founders helps reduce this risk as each of you brings complementary skills and enables the financial risk to be spread on multiple shoulders.
However, managing a business with multiple partners comes with its own set of challenges. Disagreements among co-founders are quite prevalent, and they can pose risks to the business. That's why it's essential to carefully weigh all aspects before launching a business.
To help you think things through, we recommend that you ask yourself the following questions:
- Do you need more co-founders for this venture?
- Do you share the same vision and ambition as your potential partners for this project?
- What is your plan B?
Let's look at these issues in more detail.
Do you need more co-founders for this venture?
To answer this question you will need to consider the following:
- Are there any key skills missing for which you would rather have a business partner than recruit an employee?
- Do we have enough equity? Would the company benefit from more capital at the outset?
- Will the proposed number of founders make it easy to make decisions (an odd number of partners, or a majority partner, is generally recommended to avoid deadlock)?
In simple terms, co-founders bring skills, money, or both to the table. Having more partners is beneficial when there's a lack of either of these resources.
Do you share the same vision and ambition as your potential partners for this project?
One of the main sources of conflict between co-founders comes from a lack of alignment on the long-term vision.
To avoid any risk of disagreement, it is advisable to agree on ambitions from the outset and to provide an exit mechanism for one of the partners in the event of disagreement.
What is your plan B?
We hope your television studio takes off and thrives, but it's smart to have a "plan B" just in case things don't go as expected.
How you tackle potential failure can vary broadly depending on the type of co-founders (close friend, spouse, ex-colleague, etc.) and the personal circumstances of each of them.
For example, launching a family business with your spouse might seem exciting, but if it fails, you risk losing all of your household income at once, which might be stressful.
Likewise, starting a business with a friend might strain the friendship if things go wrong or if tough decisions need to be made.
Before diving in, make sure to thoroughly think about your choices. This way, you'll be ready for whatever might come your way when starting up.
Is there room for another television studio on the market?
The next step in starting a television studio is to undertake market research. Now, let's delve into what this entails.
The objectives of market research
The goal here is straightforward: evaluate the demand for your business and determine if there's an opportunity to be seized.
One of the key points of your market analysis will be to ensure that the market is not saturated by competing offers.
The market research to open your television studio will also help you to define a concept and market positioning likely to appeal to your target clientele.
Finally, your analysis will provide you with the data you need to assess the revenue potential of your future business.
Let's take a look at how to carry out your market research.
Evaluating key trends in the sector
Market research for a television studio usually begins with an analysis of the sector in order to develop a solid understanding of its key players, and recent trends.
Assessing the demand
After the sector analysis comes demand analysis. Demand for a television studio refers to customers likely to consume the products and services offered by your company or its competitors.
Looking at the demand will enable you to gain insights into the desires and needs expressed by your future customers and their observed purchasing habits.
To be relevant, your demand analysis must be targeted to the geographic area(s) served by your company.
Your demand analysis should highlight the following points:
- Who buys the type of products and services you sell?
- How many potential customers are there in the geographical area(s) targeted by your company?
- What are their needs and expectations?
- What are their purchasing habits?
- How much do they spend on average?
- What are the main customer segments and their characteristics?
- How to communicate and promote the company's offer to reach each segment?
Analyzing demand helps pinpoint customer segments your television studio could target and determines the products or services that will meet their expectations.
Assessing the supply
Once you have a clear vision of who your potential customers are and what they want, the next step is to look at your competitors.
Amongst other things, you’ll need to ask yourself:
- What brands are competing directly/indirectly against your television studio?
- How many competitors are there in the market?
- Where are they located in relation to your company's location?
- What will be the balance of power between you and your competitors?
- What types of services and products do they offer? At what price?
- Are they targeting the same customers as you?
- How do they promote themselves?
- Which concepts seem to appeal most to customers?
- Which competitors seem to be doing best?
The aim of your competitive analysis will be to identify who is likely to overshadow you, and to find a way to differentiate yourself (more on this see below).
Regulations
Market research is also an opportunity to look at the regulations and conditions required to do business.
Ask yourself the following questions:
- Do you need a special degree to open a television studio?
- Are there necessary licences or permits?
- What are the main laws applicable to your future business?
At this stage, your analysis of the regulations should be carried out at a high level, to familiarize yourself with any rules and procedures, and above all to ensure that you meet the necessary conditions for carrying out the activity before going any further.
You will have the opportunity to come back to the regulation afterwards with your lawyer when your project is at a more advanced stage.
Take stock of the lessons learned from your market analysis
Market research should give you a definitive idea of your business idea's chances of commercial success.
Ideally, the conclusion is that there is a market opportunity because one or more customer segments are currently underserved by the competition.
On the other hand, the conclusion may be that the market is already taken. In this case, don't panic: the first piece of good news is that you're not going to spend several years working hard on a project that has no chance of succeeding. The second is that there's no shortage of ideas out there: at The Business Plan Shop, we've identified over 1,300 business start-up ideas, so you're bound to find something that will work.
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Choose the right concept and position your television studio on the market
The next step to start a television studio is to choose the company's market positioning.
Market positioning refers to the place your product and service offering occupies in customers' minds and how it differs from how competitors are perceived. Being perceived as a high-end solution, for example.
To do this, you need to take the following considerations into account:
- How can you make your business stand out from your competitors?
- Is it better to start a new television studio or acquire one that is already up and running?
- How to make sure your concept meets customer needs?
Let's look at each of these in a little more detail.
How can you make your business stand out from your competitors?
When you decide to start your own television studio, you're facing an upward challenge because your competitors are already ahead. They have a good reputation, loyal customers, and a strong team, while you're just getting started.
Opening a television studio offering exactly the same thing as your competitors is risky and potentially doomed to fail: why would customers take the risk of choosing a newcomer rather than a company with a proven track record?
This is why it is advisable to avoid direct confrontation by adopting a differentiated market positioning wherever possible: in other words, by offering something different or complementary to what is available on the market.
To find a market positioning that has every chance of success, you need to ask yourself the following questions:
- Can you negate direct competition by serving a customer profile that is currently poorly addressed by your competitors?
- Can your business provide something different or complementary to what is already available on the market?
- Why will customers choose your television studio over the competition?
- How will your competitors react to your entry into their market?
- Is the market sufficiently large to allow you to set up a new independent business, or is it better to consider another avenue (see below)?
Is it better to start a new television studio or acquire one that is already up and running?
A way to benefit from a proven concept and reduce the risk of your project is to take over a television studio.
Buying a television studio allows you to get a team, a customer base, and above all to preserve the balance on the market by avoiding creating a new player. For these reasons, taking over a business is a lot less risky than creating one from scratch.
Taking over a business also gives you greater freedom than franchising, because you have the freedom to change the positioning and operations of the business as you see fit.
However, as you can imagine, the cost of taking over a business is higher than that of opening a television studio because you will have to finance the purchase.
How to make sure your concept meets customer needs?
Once you have decided on your concept and the market positioning of your future television studio, you will need to check that it meets the needs, expectations and desires of your future customers.
To do this, you need to present it to some of your target customers to gather their impressions.
Explore the ideal location to start your television studio
The next stage in our guide on how to start a television studio: choosing where to set up shop.
Setting up your business in the right location will have a direct impact on your chances of success, so it's a good idea to think things through before you launch.
To help you decide where to set up your business, we recommend considering the following factors:
These criteria will need to be refined according to the specific features of your project.
After weighing the factors mentioned earlier, it's crucial to focus on your startup's budget. Look for a location that suits your business needs while being affordable, especially in the short term.
One of the issues that will also come up is the long-term future of your location, particularly if you opt to rent your premises rather than buy. In this case, you will need to consider the conditions for renewing the lease (duration, rent increases, etc.).
Lease agreements vary widely from country to country, so make sure you check the terms applicable to your situation and have your lawyer review your lease before you sign.
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What legal form should I choose for my television studio?
The next step to start a television studio is to choose the legal form of your business.
The legal form of a business simply means the legal structure it operates under. This structure outlines how the business is set up and defines its legal obligations and responsibilities.
Why is your television studio's legal form important?
Choosing the right legal form for your television studio is important because this will affect:
- Taxation: your tax obligations depend on the legal structure you choose, and this principle applies to both personal income tax and business taxes.
- Risk exposure: some legal structures have a legal personality (also known as corporate personality) and limited liability, which separates them from the owners running the business. This means that the business would be liable rather than the owners if things were to go wrong (lawsuit, debt owed in case of bankruptcy, etc.).
- Decision-making and governance: how you make key decisions varies based on the legal form of your business. In some cases you might need to have a board of directors and organise general assemblies to enable shareholders to influence major decisions with their voting rights.
- Financing: securing funding from investors requires you to have a company and they will expect limited liability and corporate personality to protect them legally.
- Paperwork and legal formalities: the legal structure you select determines whether certain obligations are necessary, such as producing annual accounts, or getting your books audited.
Popular business legal forms
The specific names of legal structures vary from country to country, but they usually fall within the two main categories below:
- Individual businesses
- Companies
Individual businesses
Individual businesses, like sole traders or sole proprietorships, are made for self-employed entrepreneurs and freelancers rather than businesses which employ staff.
They benefit from straightforward administrative requirements, minimal paperwork to start, simpler tax calculations, and streamlined accounting procedures.
However, the downside is that there's typically no legal distinction between the business and the person responsible for day-to-day operations. This means the owner's personal assets are at risk if the business faces problems or goes bankrupt.
There is also no share capital in such a structure, meaning that individual businesses cannot raise equity from investors which seriously limits funding options.
Companies
Companies are versatile structures suited to projects of all sizes in terms of number of founders, number of employees and amount of capital.
They are a bit more complex to operate than individual businesses with more formalities, stringent accounting requirements, more complex tax implications, etc.
In return, they offer stronger protections to their shareholders. They usually benefit from having their own legal identity and limited liability, meaning co-founders and investors can only ever lose the amount of money they have put into the company.
For instance, if things were to go south (the company files for bankruptcy or there is a legal issue), the company would take the hit, safeguarding the personal assets of the founders and investors.
How should I choose my television studio's legal structure?
Deciding on a legal form is easy once you've estimated your sales, decided whether or not you need employees and figured out the number of co-founders joining you.
It's essential to remember that a solid business idea will succeed no matter which legal structure you pick. Tax laws change regularly, so you can't rely on specific tax advantages tied to a particular structure when starting a business.
A proven approach is to look at what legal structures your top competitors are using, and go with the most common option as a working assumption. Once your idea is mature enough, and you're getting closer to officially registering your business, you can get advice from a lawyer and an accountant to confirm your choice.
Can I switch my television studio's legal structure if I get it wrong?
Yes, changing your legal structure later is possible, though it may involve selling the old entity to a new entity in some cases, which adds further expenses. If you want to save on such costs, it makes sense to pick the correct legal form for your business the first time around.
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Assess the startup costs for a television studio
The next step in creating a television studio involves thinking about the equipment and staff needed for the business to operate.
After figuring out what you need for your business, your financial plan will reveal how much money you'll need to start and how much you might make (check below for more details).
Because every venture is distinctive, providing a reliable one-size-fits-all budget for launching a television studio without knowing the specifics of your project is not feasible.
Each project has its own particularities (size, concept, location), and only a forecast can show the exact amount required for the initial investment.
The first thing you'll need to consider is the equipment and investments you'll need to get your business up and running.
Startup costs and investments to launch your television studio
For a television studio, the initial working capital requirements (WCR) and investments could include the following elements:
- Television cameras: These are essential for capturing footage in a television studio. They come in various types and prices, but it's important to invest in high-quality cameras to ensure high-definition and clear footage.
- Lighting equipment: Proper lighting is crucial for producing high-quality television content. This includes studio lights, spotlights, and other lighting fixtures that can be adjusted to create the desired lighting effects.
- Audio equipment: Good audio is just as important as good visuals in a television studio. This includes microphones, sound mixers, and other audio equipment to capture and enhance sound quality.
- Editing software: Post-production is a crucial part of creating a television show. Investing in high-quality editing software will allow you to edit and enhance footage, add special effects, and create a polished final product.
- Studio set design and construction: A visually appealing and functional studio set is important for creating an engaging and professional television show. This may include building sets, purchasing props, and designing a layout that works for your show's needs.
Of course, you will need to adapt this list to your business specificities.
Staffing plan of a television studio
In addition to equipment, you'll also need to consider the human resources required to run the television studio on a day-to-day basis.
The number of recruitments you need to plan will depend mainly on the size of your company.
Once again, this list is only indicative and will need to be adjusted according to the specifics of your television studio.
Other operating expenses for a television studio
While you're thinking about the resources you'll need, it's also a good time to start listing the operating costs you'll need to anticipate for your business.
The main operating costs for a television studio may include:
- Staff costs, including salaries, benefits, and bonuses for production crew, directors, camera operators, and other employees
- Accountancy fees for financial and tax planning services
- Insurance costs for liability, equipment, and property
- Software licences for video editing, animation, and other production tools
- Banking fees for processing payments and managing accounts
- Rent or lease for studio space, offices, and equipment storage
- Electricity and water bills for lighting, equipment, and facilities
- Equipment maintenance and repair costs for cameras, lighting, and other production equipment
- Marketing and advertising expenses for promoting shows, events, and the studio itself
- Travel expenses for location shoots and attending industry events
- Legal fees for contracts, copyright and trademark protection, and other legal matters
- Cost of materials and supplies for sets, props, and costumes
- Telecommunications expenses for internet, phone, and video conferencing services
- Catering costs for providing meals and snacks for cast and crew during long shoots
- Professional development and training expenses for staff to stay current with industry trends and technologies
Like for the other examples included in this guide, this list will need to be tailored to your business but should be a good starting point for your budget.
How will I promote my television studio's?
The next step to starting a television studio is to think about strategies that will help you attract and retain clients.
Consider the following questions:
- How will you attract as many customers as possible?
- How will you build customer loyalty?
- Who will be responsible for advertising and promotion? What budget can be allocated to these activities?
- How many sales and how much revenue can that generate?
Once again, the resources required will depend on your ambitions and the size of your company. But you could potentially action the initiatives below.
Your television studio's sales plan will also be affected by variations in consumer demand, like changes in activity during peak holiday seasons, and the dynamics within your competitive environment.
Can your business idea be profitable?
Just enter your data and let The Business Plan Shop crunch the numbers. We will tell if your business idea can generate profits and cash flows, and how much you need to get started.
How do I build my television studio financial forecast?
Let's now look at the financial projections you will need to prepare in order to open a television studio.
What is a television studio's financial projection?
Your financial forecast will help you budget your project so that you can evaluate:
- Its expected sales and growth potential
- Its expected profitability, to ensure that the business will be viable
- Its cash generation and financing requirements
Making your financial forecast is the only way to determine the amount of initial financing required to create your television studio.
There are lots of business ideas out there, but very few of them are viable, and making a financial forecast is the only way to ensure that your project makes economic and financial sense.
Creating a television studio financial projection is an iterative process, as you'll need to refine your figures as your business idea matures.
You'll start with a first high-level version to decide whether or not to continue working on the project.
Then, as your project takes shape, your forecasts will become increasingly accurate. You'll also need to test different assumptions to ensure that your idea of starting a television studio holds up even if your trading environment deteriorates (lower sales than expected, difficulties in recruiting, sudden cost increases or equipment failure problems, for example).
Your financial forecast will be part of your overall business plan, which we'll look at in more detail later. Your financial partners will use your business plan to decide if they want to finance you.
Once you've launched your business, you can compare your actual accounting figures with your forecasts, to analyze where the discrepancies come from, and then update your forecasts to maintain visibility over your future cash flows.
Financial forecasts are, therefore, a financial management tool that will be with you throughout the life of your company.
What does a financial projection look like?
Your television studio forecast will be presented using the following financial tables.
The projected P&L statement
The projected P&L statement for a television studio shows how much revenue and profits your business is expected to generate in the future.
The projected balance sheet of your television studio
Your television studio's projected balance sheet provides a snapshot of your business’s financial position at year-end.
The cash flow forecast
A projected cash flow statement for a television studio is used to show how much cash the business is expected to consume or generate in the years to come.
Which solution should you use to make a financial forecast for your television studio?
The easiest and safest way to create your television studio forecasts is to use an online financial forecasting software, like the one we offer at The Business Plan Shop.
There are several advantages to using professional software:
- You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
- You have access to complete financial forecast templates
- You get a complete financial forecast ready to be sent to your bank or investors
- The software helps you identify and correct any inconsistencies in your figures
- You can create scenarios to stress-test your forecast's main assumptions to stress-test the robustness of your business model
- After you start trading, you can easily track your actual financial performance against your financial forecast, and recalibrate your forecast to maintain visibility on your future cash flows
- You have a friendly support team on standby to assist you when you are stuck
If you are interested in this type of solution, you can try our forecasting software for free by signing up here.
How do I choose a name and register my television studio?
Now that your project of launching a television studio is starting to take shape, it's time to look at the name of your business.
Finding the name itself is generally fairly easy. The difficulty lies in registering it.
To prevent this guide from being too long, we won't go into all the criteria you need to take into account when choosing a striking name for your television studio. However, try to choose a name that is short and distinctive.
Once you have a name that you like, you need to check that it is available, because you cannot use a name that is identical or similar to that of a competitor: this type of parasitic behaviour is an act of unfair competition for which you risk being taken to court by your competitors.
To avoid any problems, you will need to check the availability of the name:
- Your country's company register
- With the trademark register
- With a domain name reservation company such as GoDaddy
- On an Internet search engine
If the desired name is available, you can start the registration process.
It is common to want to use the trading name as the name of the company, and to have a domain name and a registered trademark that also correspond to this name: Example ® (trading name protected by a registered trademark), Example LTD (legal name of the company), example.com (domain name used by the company).
The problem is that each of these names has to be registered with a different entity, and each entity has its own deadlines:
- Registering a domain name is immediate
- Registering a trademark usually takes at least 3 months (if your application is accepted)
- The time taken to register a new business depends on the country, but it's generally quite fast
How do I go about it?
Well, you have two choices:
- Complete all registrations at the same time and cross your fingers for a smooth process.
- Make sure to secure the domain names and trademarks. Once that's done, wait for confirmation of a successful trademark registration before moving on to register the company.
At The Business Plan Shop, we believe it's essential to prioritize securing your domain names and trademarks over the business name. This is because you have the flexibility to use a different trading name than your legal business name if needed.
Regardless, we suggest discussing this matter with your lawyer (see below in this guide) before making any decisions.
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Develop your television studio's corporate identity
The next step to launching a television studio: defining your company's visual identity.
Your corporate identity defines how your company's values are communicated visually. It makes you unique and allows you to stand out visually from your competitors and be recognized by your customers.
Defining your corporate identity can easily be done by you and your co-founders, using the many free tools available to generate color palettes, logos and other graphic elements. Nevertheless, this task is often best entrusted to a designer or agency to achieve a professional result.
Your television studio's visual identity will include the following elements:
- Logo
- Brand guidelines
- Business cards
- Website theme
Logo
The goal is to have stakeholders identify your business logo quickly and relate to it. Your logo will be used for media purposes (website, social networks, business cards, etc.) and legal documents (invoices, contracts, etc.).
The design of your logo must be emblematic, but it's also important that it can be seen on any type of support. To achieve this, it should be easily available in a range of colors, so that it stands out on both light and dark backgrounds.
Brand guidelines
The brand guidelines of your television studio act as a safeguard to ensure that your image is consistent whatever the medium used.
Brand guidelines lay out the details like the typography and colors to use to represent your company.
Typography refers to the fonts used (family and size). For example, Arial in size 26 for your titles and Tahoma in size 15 for your texts.
When it comes to the colors representing your brand, it's generally a good idea to stick to five or fewer:
- The main colour,
- A secondary colour (the accent),
- A dark background colour (blue or black),
- A grey background colour (to vary from white),
- Possibly another secondary colour.
Business cards
A rare paper medium that continues to survive digitalization, business cards are still a must-have for communicating your television studio contact details to your customers, suppliers and other partners.
In principle, they will include your logo and the brand guidelines we mentioned above.
Website theme
Likewise, the theme of your television studio website will include your logo and follow the brand guidelines we discussed earlier.
This will also define the look and feel of the main visual elements on your website:
- Buttons
- Menus
- Forms
- Banners
- Etc.
Understanding the legal and regulatory steps involved in opening a television studio
The next step in opening a television studio is to take the necessary legal and regulatory steps.
We recommend that you be accompanied by a law firm for all of the steps outlined below.
Registering a trademark and protecting the intellectual property of your television studio
The first step is to protect your company's intellectual property.
As mentioned earlier in this guide, you have the option to register a trademark. Your lawyer can assist you with a thorough search to ensure your chosen trademark is unique and doesn't conflict with existing ones and help select the classes (economic activities) and jurisdictions in which to register your trademark.
Your lawyer will also be able to advise you on other steps you could take to protect your company's other intellectual property assets.
Drafting the contractual documents for your television studio
Your television studio will rely on a set of contracts and legal documents for day-to-day operations.
Once again, we strongly recommend that you have these documents drawn up by a lawyer.
Your exact needs will depend on the country in which you are launching your television studio and the size of the company you are planning.
However, you may wish to consider the following documents at a minimum:
- Employment contracts
- General terms and conditions of sale
- General terms and conditions of use for your website
- Privacy Policy for your website
- Cookie Policy for your website
- Invoices
- Etc.
Applying for licences and permits and registering for various taxes
The licenses and permits needed for your business will depend on the country where you are establishing it. Your lawyer can guide you on the regulations relevant to your activity.
Similarly, your chartered accountant will be able to help you register for taxes and take the necessary steps to comply with the tax authorities.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast and write a business plan to help convince investors that your business idea can be profitable.
Create a business plan for your television studio
The next step to open a television studio: put together your business plan.
What is a business plan?
To keep it simple, a business plan comprises two crucial components:
- Firstly, a numerical part, the financial forecast (which we mentioned earlier), which highlights the initial financing requirements and profitability potential of the television studio,
- And a written, well-argued section that presents your project in detail, aims to convince the reader of its chances of success, and provides the context needed to assess whether the forecast is realistic or not.
The business plan will enable you to verify the coherence of your project, and ensure that the company can be profitable before incurring further costs. It will also help you convince business and financial partners.
As you can see, your business plan must be convincing and error-free.
How to write a business plan for a television studio?
Nowadays, the modern and most efficient way to write a television studio business plan is to use startup business plan software like the one we offer at The Business Plan Shop.
Using The Business Plan Shop to create a business plan for atelevision studio has several advantages :
- You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
- You are guided through the writing process by detailed instructions and examples for each part of the plan
- You can access a library of dozens of complete startup business plan samples and templates for inspiration
- You get a professional business plan, formatted and ready to be sent to your bank or investors
- You can create scenarios to stress test your forecast's main assumptions
- You can easily track your actual financial performance against your financial forecast by importing accounting data
- You can easily update your forecast as time goes by to maintain visibility on future cash flows
- You have a friendly support team on standby to assist you when you are stuck
If you're interested in using this type of solution, you can try The Business Plan Shop for free by signing up here.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast and write a business plan to help convince investors that your business idea can be profitable.
Financing the launch of your television studio
Once your business plan has been written, you’ll need to think about how you might secure the funding required to open your television studio.
The amount of initial financing required will of course depend on the size of your television studio and the country in which you wish to set up.
Financing your startup will probably require you to obtain a combination of equity and debt, which are the primary financial resources available to businesses.
Equity funding
Equity refers to the amount of money invested in your television studio by founders and investors and is key to starting a business.
Equity provides your company with stable, long-term (often permanent) capital. It also demonstrates the commitment of the company's owners to the project, since these sums can be lost in the event of bankruptcy.
Because the equity invested by the founders may be lost if the project doesn't succeed, it signals to investors and other financial institutions the founders' strong belief in the business's chances of success and might improve the likelihood of obtaining further funding as a result.
In terms of return on investment, equity investors receive dividends paid by the company (provided it is profitable) or realise capital gains by reselling their shares (provided they find a buyer interested in the company).
Equity investors are, therefore, in a very risky position. They stand to lose their initial investment in the case of bankruptcy and will only obtain a return on investment if the business manages to be profitable or sold. On the other hand, they could generate a very high return if the venture is a financial success.
Given their position, equity investors are usually looking to invest in business ventures with sufficient growth and profitability potential to offset their risk.
From the point of view of the company and its creditors, equity reduces risk, since equity providers finance the company and are only remunerated in the event of success.
From a technical standpoint, equity consists of:
- Share capital and premiums: which represent the amount invested by the shareholders. This capital is considered permanent as it is non-refundable. In return for their investment, shareholders receive shares that entitle them to information, decision-making power (voting in general assembly), and the potential to receive a portion of any dividends distributed by the company.
- Director loans: these are examples of non-permanent capital advanced to the company by the shareholders. This is a more flexible way of injecting some liquidity into your company than doing so as you can repay director loans at any time.
- Reserves: these represent the share of profits set aside to strengthen the company's equity. Allocating a percentage of your profits to the reserves can be mandatory in certain cases (legal or statutory requirement depending on the legal form of your company). Once allocated in reserves, these profits can no longer be distributed as dividends.
- Investment grants: these represent any non-refundable amounts received by the company to help it invest in long-term assets.
- Other equity: which includes the equity items which don't fit in the other categories. Mostly convertible or derivative instruments. For a small business, it is likely that you won't have any other equity items.
The main sources of equity are as follows:
- Personal contribution from the founders' savings.
- Private investors: business angels, friends and family.
- Crowdfunding campaigns to find investors or collect donations (usually in exchange for a gift).
- Government initiatives such as loans on favourable terms to help partners build up their start-up capital.
Debt funding
Another option for partially funding your television studio is to borrow.
By definition, debt works in the opposite way to equity:
- Debt needs to be repaid, whereas equity is permanent.
- Lenders get a contractually guaranteed return, whereas equity investors only generate a return if the company is a success.
When a company borrows money, it agrees to pay interest and repay the borrowed principal according to a pre-established schedule. Therefore, lenders make money regardless of whether the company is profitable and their main risk is if the company goes bankrupt.
To limit their risk, lenders are usually conservative and cautious in their approach. They only finance projects where they are confident that they will be repaid in full.
Companies borrow in two ways:
- Against their assets: this is the most common way of borrowing. The bank finances a percentage of the price of an asset (a vehicle or a building, for example) and takes the asset as collateral. If the company cannot repay, the bank seizes the asset and sells it to limit its losses.
- Against their future cash flows: the bank evaluates the company's financial forecast to estimate its borrowing capacity and assesses the conditions (amount, interest rate, term, etc.) on which it is prepared to lend, taking into account the credit risk posed by the company.
It's difficult to borrow against future cash flow when setting up a television studio, because the business doesn't yet have historical data to reassure lenders about the credibility of the forecasted cash flows.
Borrowing against assets is, therefore, often the only option available to entrepreneurs. What's more, the assets that can be financed with this option must be easy to resell, in the unfortunate event that the bank is forced to seize them, which may limit your options even further.
In terms of possible sources of borrowing, the main sources here are banks and credit institutions. Bear in mind, however, that each institution is different, both in terms of the risk it is prepared to accept and in terms of how the risk of your project will be perceived and what items it will agree to finance.
In some countries, it is also possible to borrow from private investors (directly or via crowdlending platforms) or other companies, but not everywhere.
Things to remember about financing a television studio
There are various ways you can raise the initial financing you need to open your television studio. A minimum amount of equity will be needed to give the project credibility, and bank financing can be sought to complete the package.
Launching your television studio and monitoring progress against your forecast
Once you’ve secured financing, you will finally be ready to launch your television studio. Congratulations!
Celebrate the launch of your business and acknowledge the hard work that brought you here, but remember, this is where the real work begins.
As you know, 50% of business start-ups do not pass the five-year mark. Your priority will be to do everything to secure your business's future.
To do this, it is key to keep an eye on your business plan to ensure that you are on track to achieve your goals.
No one can predict the future with certainty, so it’s likely that your television studio's financial performance will differ from what you predicted in your forecast.
This is why it is recommended to make several forecasts:
- A base case (most likely)
- An optimistic scenario
- And a pessimistic scenario to test the robustness of your financial model
If you follow this approach, your numbers will hopefully be better than your optimistic case and you can consider accelerating your expansion plans. That’s what we wish you anyway!
If, unfortunately, your figures are below your base case (or worse than your pessimistic case), you will need to quickly put in place corrective actions, or consider stopping the activity.
The key, in terms of decision-making, is to regularly compare your real accounting data to your television studio's forecast to:
- Measure the discrepancies and promptly identify where the variances with your base case come from
- Adjust your financial forecast as the year progresses to maintain visibility on future cash flow and cash position
There is nothing worse than waiting for your accountant to prepare your year-end accounts, which can take several months after the end of your financial year (up to nine months in the UK for example), to realise that the performance over the past year was well below the your base case and that your television studio will not have enough cash to keep running over the next twelve months.
This is why using a financial forecasting solution that integrates with accounting software and offers actuals vs. forecast tracking out of the box, like the financial dashboards we offer at The Business Plan Shop, greatly facilitates the task and significantly reduces the risk associated with starting a business.
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Key takeaways
- This guide outlines the 15 key steps to open a television studio.
- The financial forecast is the tool that will enable you to validate the financial viability of your business idea.
- The business plan is the document that will enable you to approach your financial and commercial partners to convince them of the strengths of your project and secure the financing you need to launch your business.
- The real work begins once you've launched your business, and the only way to maintain visibility of your company's future cash flow is to keep your forecast up to date.
- Using a financial planning and analysis platform that combines forecasting, business planning and actual vs. forecast tracking and monitoring, such as The Business Plan Shop, makes the process easier and reduces the risks involved in starting a business.
We hope this guide has helped you understand how to start a television studio. Please don't hesitate to contact us if you have any questions.
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Founder & CEO at The Business Plan Shop Ltd
