Business planning for impact
Business planning is often neglected by indie video game studios, who are more focused on getting this game out the door than making plans for the next. On top of that, most game studios are not explicitly oriented around social outcomes, so they may be less rigorous in analyzing their long-term goals. A business plan is a critical document for impact-oriented studios because you’ve set some concrete goals (and if you haven’t, start here), and need a realistic way to go after them.
With a business plan in hand, the information you share with potential clients, partners, investors, and the public is backed up by values, goals, and social and financial diligence.
We will provide a starting point if you have never created a business plan or have already written one and need to reframe it for your intended social impact.
So let’s break down the what, the why, and the how!
What’s a business plan?
In traditional corporations, a business plan is a guide that lays out how the company intends to make money. It’s both a map for the company’s strategy and a way to get investors hyped.
A business plan does something a little different for a social purpose organization (SPO), whether for– or non-profit, co-op or hybrid. It’s a road map that shows how the organization wants to make a positive change over the next few years. It describes the nuts and bolts of how you will achieve your ultimate outcome – and produce social returns on investment (SROI) – in a financially sustainable way.
Your plan should be a true expression of what you intend to do. Yes, you may need it for investor pitches and bank meetings, but its real value is as an internal tool. And authenticity is key to it being actually useful to you as you work towards your short-, medium-, and long-term goals.
Why plan?
So why do you need a plan? With it, you can create the tools and reports you need to seek financing and report to your community. As an impact-oriented studio, these are crucial outputs.
Let’s recall the foundational elements that will form the basis of your plan. Make sure you’re comfortable with the core tools in your social impact kit, including financial tools, results flow, and your impact measurement framework.
These social impact tools feed into your business plan, which you can then draw on for:
- Crafting pitch/capabilities decks for investors and partners
- Designing one-pagers for media, partners, and clients
- Preparing funding applications, including arts/industry grants
- Submitting loan, debt, and credit applications to banks
- Reporting to boards, members, and stakeholders
Building on your results flow to develop your business plan will allow you to show the detailed logic behind how you intend to achieve your target outcomes. This, in turn, aids in decision-making, from daily operations to long-term strategies.
The business plan is a crucial tool for fundraising (targeting impact investors, foundations, government, sponsors, and donors) and may be required by accelerator or incubator programs. And because it summarizes your impact measurement framework (IMF), it’s the go-to document for stakeholders looking to gauge your performance.
In addition, your business plan helps you:
- Evaluate the viability of your ideas. A well-considered business plan allows you to test and validate your concepts against reality. Is your game resonating with your target audience? Are you able to hire and train developers from a specific community reliably? If your outcomes veer from your planned course, you know you need to change your strategy – and how.
- Highlight your team’s strengths. Your plan showcases your team members’ collective expertise, values, and skills. It shows how each person’s strengths align with and drive your studio’s mission forward.
- Outline your strategies for both business and social impact. You can hope you have a hit on your hands, or assume you’ll have impact if you’re a creator from a marginalized background making a game that represents your experiences. But a plan lays out, step-by-step, exactly how you will ensure your studio is sustainable and impactful.
- Keep your work aligned with your goals. With a clear plan in place, you can check in on your progress against your goals. In tandem with your IMF, reviewing and updating your plan means that every decision and action aligns with your studio’s ultimate outcome.
The how
Planning to plan
We’ll repeat it: Before you get to keyboard clacking, complete your results flow and impact measurement framework. They are essential resources for your plan. And having them will make certain sections a snap to write!
Another consideration is who should be included in the drafting, editing, and finalization processes.
If you’re a small team with little hierarchy (maybe a co-op?), everyone should be included at some point. Do a draft, then pass it to the team for their edits and feedback. Consensus is a must.
The CEO or founder(s) may write the first draft in a larger studio. Engaging the development team, marketing and community managers, board members, legal and compliance folks, financial specialists, or business analysts is still crucial. If you have the budget, it’s worth considering hiring external advisors such as impact consultants, diversity and inclusion specialists, or industry experts.
Feeling daunted? We’ve created a template with section checklists you can use to get started. No one likes staring at a blank page. Check it out here.
The Core Elements
There’s no shortage of business plan how-to articles that prescribe more sections or more detail than what we recommend here. Consider this a minimal starting point that covers all you definitely need when approaching social finance investors. At the end, we’ll suggest some additional sections you may want to include based on the audience for your plan.
The elements we’ll cover here are your mission, team, operations, SWOT, market, money, and measurement.
Mission
Your mission can be written as a summary of the branches of your results flow, positioned as what you do, followed by a restatement of your ultimate outcome (a description of the changed state of the world should you be successful).
Example:
At Quixelate, we champion LGBTQIA+ narratives through our games, ensuring players not only enjoy diverse characters but also develop empathy and become advocates for inclusion. Beyond the screen, we’re cultivating an inclusive community where every member feels seen, heard, and valued. Through our educational initiatives, we aim to share LGBTQIA+ experiences with the wider public, turning passive participants into active allies. Our mission is a world where LGBTQIA+ identities are understood and accepted in games, mirroring a society that celebrates diversity and inclusion.
Team
Who do you have on board? Describe the experience and skills of each member. Keep the bios short – just a sentence or two – with a straightforward accounting of their unique capabilities that connect directly to your needs.
Who (what expertise) is missing? Identify any gaps in personnel and how you intend to fill them – and whether they are contractors, employees, members (in the case of a co-op), or consultants.
Describe your collective capabilities. Describe your established partnerships, any key technologies or intellectual property (IP) you’ve developed, and access to special resources such as relationships with platform holders, distributors, and publishers.
Operations
How will you deliver your games? Your business model is your plan for generating revenue. Will you sell games directly to players, rely on in-app purchases, or try a subscription model? Consider post-launch support, updates, and community engagement events that can add longevity to your games and encourage player loyalty.
Describe how you will fund your projects, team, and mission. For an impact-oriented studio, there’s a delicate balance to strike between social outcomes and financial objectives. Without financial sustainability, you’ll be hard-pressed to achieve your ultimate outcome.
How does your structure support your model? Your studio’s legal and organizational structure plays a huge role in how you operate and pursue your social goals. Are you a sole proprietorship, partnership, traditional share corporation, co-op, or non-profit? Learn more in our article Business Structures for Impact.
SWOT
A SWOT analysis identifies the strengths, weaknesses, opportunities, and threats that apply to your studio.
| Category | Description | Examples |
|---|---|---|
| Strengths | Internal positive attributes of your studio that give you an advantage over others. | Strong brand identity, unique art style, financial security. |
| Weaknesses | Internal challenges or shortcomings that may hinder your success. | Tight budget, platform dependency, skill gaps. |
| Opportunities | External factors you can capitalize on. | Growing market in a specific region, collaborations, community engagement. |
| Threats | External challenges that could negatively impact your studio. | Oversaturated market, economic downturn, changing player tastes. |
Identify and SWOT comparable studios. Select two or three studios whose structure, games, or success reflect your aspirations, and conduct a light SWOT analysis on each of them. Look at Steam pages, web sites, social media, and industry tools like VG Insights. No need to write paragraphs – a succinct point for each category is enough.
SWOT yourself. Conduct an analysis on your own studio. Identify two or three key points for each category.
Summarize your position amongst your peers. What gaps did you identify, and how will you fill them? How do your strengths stack up against your dream studios’? This assessment will provide a clear understanding of your competitive landscape.
Market
This section, unlike the rest, focuses on your game(s) in-development rather than your studio overall. No matter how important your mission is, it can’t overcome a lack of market knowledge and real demand for what you’re creating.
Who will buy your games? Get to know your target audience. What are their preferences, needs, and desires?
What external validation drives your decisions? Before launching, test your concept – even on a small scale. Conduct beta tests, gather feedback via surveys and interviews, and adjust accordingly. Describe your testing strategy here.
Include indicators that show demand. A thorough market analysis of your currently in-development game will provide insights into the demand for your style, genre, and price point. Look for trends, surveys, or studies that indicate a gap in the market that your studio can fill. (If you’re a Weird Ghosts investee, we have an article and template for market analysis on our Vault site.)
Articulate what sets your studio apart. In 2022, over 12,000 games were released on Steam1. Why should players choose your games? What experiences or narratives do you offer? How do you engage with your community, and why should players return to your games? What is special about your studio?
Include rationale for your pricing strategy. Lastly, your pricing strategy should reflect the value you offer and be sustainable for your studio. It’s essential to balance accessibility to your audience and ensuring you’re making enough so that you can continue to deliver impact.
Example Market Analysis Summary:
Quixelate’s primary audience consists of players who appreciate narrative-driven experiences with a focus on diversity and inclusion. Our market research indicates a strong demand for such games, with an average sales estimate of approximately 124,751 units per title on Steam alone. The average net revenue from Steam sales for games in our genre and style stands at a promising $1,447,906. This is further validated by the success of titles like “My Time at Portia,” which has over 29,000 reviews and an estimated 1 million sales, translating to a net revenue of over $15 million on Steam.
Money
What do you need to start up? Every studio needs some capital to kickstart operations and scale. You might be bootstrapping, or benefiting from generous friends and family. Outline what you have, what you need, how you’ll allocate the funds, and your repayment strategy.
Make realistic revenue projections. Look to your market analysis to forecast your game’s financial performance, and factor in other revenue streams and future games.
Provide an overview of your expenses/costs. This includes production costs, marketing expenses, overhead, and other costs contributing to revenue generation. These apply to your studio as a whole – not just your currently in-development game.
How will you become financially sustainable? You do not need to show massive growth – if your goal is simply to pay yourself and your collaborators a living wage, that’s fine! Outline how you plan to achieve sustainability, ensuring the business remains operational and true to its mission.
How will your performance be measured? Social investors typically want a blend of financial and social returns. Your plan must describe the potential social return on investment and a framework for assessing social performance (detailed in your IMF).
Attach financial statements. If you have already started up, note here that additional financial information is available in the appendix. You may want to include your one-year cash flow, profit and loss, and balance sheet.
Measurement
Provide an overview of social outcomes. You have defined your desired outcomes in your results flow, and detailed the indicators you’ll use to track progress towards them in your IMF. Provide a succinct overview of them here.
Describe the role of indicators in tracking progress. Your indicators provide tangible data points that can be measured and analyzed over time. Describe the key indicators you’ve chosen and why they’re relevant to your mission and studio business.
What tools and techniques will you use to gather data? This could involve surveys, feedback forms, analytics tools, or even in-game metrics. Also, provide an overview of how often you’ll analyze this data, whether monthly, quarterly, or annually.
For a deeper dive into the intricacies of the impact measurement framework and how to effectively implement it in your studio, refer to the IMF article.
Executive summary
This should be the last thing you write, but the first page of your document. It’s a rich, compelling summary of your whole plan. You want to draw the reader in so they want to read the rest of the document. Make sure each section of the plan is succinctly summarized.
Appendix
Label and attach additional documents, such as financial projections, pitch deck, or other evidence for any of the elements of your plan. Be sure to include a page or section number where any document is referenced in the body of your plan.
Additional sections
You may consider fleshing out your plan with some of the following sections, depending on your audience:
- Technology and tools used in game development.
- Intellectual property protection.
- Marketing and community engagement strategies.
- Diversity and inclusion initiatives.
- Sustainability efforts.
- Risk mitigation strategies.
- Exit strategies.
Service-based business
Tweak your lens if you’re a studio focused on service work or clients. Anchor around a key technology or approach, seek clients who can access social finance, or partner directly with an investor and operate as an agency that supports social-purpose organizations. Treat yourself as a client and prove your model with a prototype to generate evidence for your IMF.
A cooperative approach
Experiment with the format.
It doesn’t have to be a dry Google doc! We know some folks love Notion, and other tools like Canva and Miro can help you visually lay out your plan. Keep in mind who you aim to share it with and make sure the format is accessible and readable for them.
Reward and make collaboration frictionless
It’s not just for the bosses. Consider how easy it is for your team to access and make changes to it. Invite regular feedback and updates and make it a pleasant experience. We use shared a shared vault in Obsidian, and track Markdown files through Git.
Build review cycles into your internal schedule and processes.
It’s only useful if you use it, and that means updating, changing, and adding as you learn what is working and not with your studio. We recommend reviewing your plan every three months, and updating your Measure section with data from your IMF.
Consider radical transparency.
Make it public. Publish it and show how it has changed over time. Allow others to clone or fork it on Github!
Finally…
The most important question we’ll leave you with is: What do you hope to get from your business plan? Your answer will lead the way if (when!) you get lost in the details. This process is, first and foremost, for you and the impactful studio you are building. We’d love to see your plan! If you want to share it with us, email us at hello@weirdghosts.ca.