This is definitely the kind of thread that needs to show up more on these kinds of forums but seldom does. Even if it does, there is seldom a person willing to put it all out there for people to really learn from. Much respect, Steve.
Lots of people look at these boards and want to start a studio. It's easy to pick a lot of cool gear, spend all kinds of money on a space and a bunch of toys, but actually running a business is a different story. You need a plan and some projections. This could be in the traditional sense where you write it all down in a somewhat formal document, or it could just be chicken scratches on a sheet of paper to make sure you understand the nuts and bolts and the numbers balance. The writing of the more formal plan can be realy helpful, so don't discount its value. Once you start looking at all the expenses you'll have each month, from rent/mortgage, to utilities, to insurnace, to debt service on the equipment, you can compare that to reasonable (I said reasonable!) expactations of your income based on your market and your rates. It can become clear pretty quickly that you are overspending and can't make ends meet. That lets you tailor your plan and startup costs to allow your business to survive.
The other thing people sometimes forget when starting a studio business are the boring things you must do up front, or the yearly expenses as opposed to the monthlies. You will need to get your business license, you'll need office supplies, media, refreshments, and all that boring little stuff. You'll need to do some marketing coming out of the box because if nobody knows you're there, how will they be able to use your services? There will be business income taxes every year and license renewal, and probably a busines property tax as well. This is when they add up the value of everything in your space from the console to the paperclips and you pay a percentage of it to the government. All these little things need to be taken into account. They aren't free.
For those considering tackling a business plan, it will typically include these basic subjects:
1.Executive Summary (a brief introduction/summary of your business)
2.Nature of business (what services do you offer?)
3.The Market (who will your clients be?)
4.Competitive analysis (who is your competition and how will you compete?)
5. Marketing Plan (How will you attract business and get the word out?)
6. Operations (the daily nuts and bolts - where, when, how...)
7. Management (a bit about the owner and who will be running things)
8. Risk analysis (what could go wrong and how are you preparing for it?)
9. Conclusion (um... I think this goes without saying)
10. Financial projections (out several years - show how both income and expenses will grow (more on the income hopefully) and demonstrate an understanding of running a business and all your financial responsibilities)
This is the kind of plan you can take to a bank, investor, or potential partner. Even if you aren't using the plan to secure startup or expansion capital, it still can be a very useful exercise that really will help you understand your business and develop strategies for success. You learn a lot about your business and are forced to think rationally about things you may have just been taking on faith previously. Writing the plan usually turns out to be modifiying the plan, but in the end you have a much better grasp on the whole thing and the numbers are more likely to work out. Give it a try!