Congratulations on having the courage to write a business plan! It''s great that you have the entreprenurial spirit that moves you to create your own company. As someone who is currently growing a business, I have a bit of advice to share. I am involved in a high risk venture, which involves biotechnology at Marshall University in the US. We are making DNA molecular size markers for laboratory use and forensic DNA kits for high school students as our first products. We have currently secured about $100,000 in funding for the company since starting on campus a few months ago. This is all grant money as well, meaning that we don''t have to pay any of it back.

Here are some things that I have learned which may or may not be applicable to your situation...

1. Try to establish strategic partnerships with academia. This will enhance your credibility and give you access to a wealth of IT knowledge. If you''re still in college, work for one, or know the right people at one who would be interested in partnering with you, check on getting university support and spinning it as an economic development initiative (though you might need to start out as a typical IT company first, but remember you''re in this for the long haul). Through University aid, you will probably be eligible for grants and federal money.

2. If you''ve got the reputation, you might consider a partnership with an existing developer. The only question is... what do you have to offer them? You''d need some unique piece of technology or an infrastructure/people that they wanted to get anyone to bite on this. For example, we''re partnering with a biotech company to attain funding to finish the construction of our novel technology.

3. Don''t pay your employees more than you pay yourself or lead artist / coder. This will only hurt morale and decrease productivity. Trust me ;-)

4. Don''t spend any money until it''s in the bank. You''ll meet a lot of people with big promises, but make sure they actually deliver on them. In a world of "soft money" it''s really hard to get this right, but try not to ramp up anything until the money is actually there.

5. If you really need an expensive piece of equipment / software, buy it. Avoiding it will only cost you frustration and time, and time is money.

6. Establish open communication lines as early as possible. Clearly define everyone''s role in the project. Set up regular team meetings so that everyone is on the same page.

7. Document all research. Give everyone a notebook so they can write down their ideas for gameplay, engine enhancements, etc. By documenting their ideas and findings, you''ll have documentation that approximates how valuable they were to the team. Additionally, you''ll have proof for court if you want to patent some kind of algorithm or software that one of your employees creates. Speaking of that, you''ll want a company IP (intellectual property) policy in place from the beginning as well. Ours basically says that anything invented at the company belongs to the company and can only be transferred to the inventor if the company writes a letter saying that we don''t want it.

Along with the other things, I think For a start up company the devlopment cost minimization is also needed to be considered. so that some money is left for other purposes. But how it is possible? The another way I think is - Outsourcing/offshoring. if u make a good business relation with an offshore company by hiring them, you get two bonuses

i)cut doun ur development cost dramatically. (see the cost calculation later)
ii)and both company get the credits on their particular perspective. ur own company gets the credit for a succesfully released game and on the other hand the offshore company get the credit of another successful offshore project.

Although offshoring has also tradeoffs but many companies are doing so overcoming the tradeoffs to minimize development cost.

An Example cost calculation of a one year project is as follows here in Bangladesh where I live.
[comparing to your cost plan]


[All amonunts are in Bangladeshi tk and assuming 1 £ = 84 tk]

1. Equipment cost (6 pc, desk,chair etc.)
--------------------------------------------
total equipment cost = 1,80,000 tk (2,143 £)
----------------------

2. Operating cost
-------------------------------

Salary cost (monthly)
-----------
One lead programmer/manager =50k tk
Two assistent programmer 12k x 2 =24k tk
One lead level Designer=15k tk
one assistant level designer=12k tk
One texture/ui/Illustrations/package cover artist=12k tk
One Modeler/animator=12k tk

total monthly salary cost = 50k + 24k + 15k + 12k + 12k + 12k = 125k tk (1,489 £)

Misc cost (monthly)
-------------
tel, electric, office rent,internet, damage hardware replacement,entertainment =10k tk (120 £)


Total operating cost
--------------------
Monthly = 125k + 10k = 135k tk (1,608 £)
Yearly = 135k x 12 = 16,20,000 tk (19,286 £)
-----------------------


3. Total Cost (1 year)
---------------------------------
Equipment cost + Total operating cost = 1,80,000 tk + 16,20,000 tk = 18,00,000 tk (21,429 £)
------------------------


Perhaps u think 12k tk (143 £) monthly is low for a quality work, but it is not. 12k tk is enough in entry level for most average job here because the cost of standard living is not so high.

seeing another active topic may be worth: http://www.gamedev.net/community/forums/topic.asp?topic_id=225819


with best regards
Topu Reza
www.trimatrik.com