Cost per hour of the average studio

[tyler657recpro]

What do people usually charge for an hour of time in an average studio? Let's say that average means about 350g invested in equiptment and instruments, etc.

[Michael Jones]

Why, are you building a 350,000 dollar studio?
If you are, then I'd have to assume you've already put together a business plan, decided on and researched your target market, looked into advertising, and checked out the competition, their rates, and their facilities.

But to answer your question:
You charge whatever the market will bear.

[Dan Merrill]

350g's!! dude, this is home rec. we all wish we had "average" studios.

[ausrock]

Gawd Tyler, last time I saw one of your posts, you were talking 10g in your parents garage.

[TexRoadkill]

Originally posted by tyler657recpro
What do people usually charge for an hour of time in an average studio? Let's say that average means about 350g invested in equiptment and instruments, etc.

As much as it costs to finance 350K worth of gear plus other expenses divided by the number of hours you expect to book for any given time period.

Assuming you had 3 years to pay off that amount and no interest you would need $60/hour at 40hrs per week just to pay for the gear. If you are a trust fund baby and profit isn't an issue (like most bigger studios) than you charge whatever you can and let daddy pay for the rest.

[RichHead]

He never actually said HIS studio would be a $350K studio.....

[detuned6]

Having all that "nice" gear with little experince $20-40 hr.
Having all that "nice" gear with good ears and experince $50-80 hr.
we all know what talent can do with budget gear. Like when you see some dude shredding on $350 guitar, but some other dude w/ a custom $1,100 guitar w/ HORRIBLE technique.

$350,000...?...this is "homerecording" !

[tyler657recpro]

Originally posted by Michael Jones
Why, are you building a 350,000 dollar studio?
If you are, then I'd have to assume you've already put together a business plan, decided on and researched your target market, looked into advertising, and checked out the competition, their rates, and their facilities.

But to answer your question:
You charge whatever the market will bear.

That means $65 an hour then. I have put together a business plan. Decided on and begun researching my target market, and looked into advertising, and began checking out the competition. I've also done my taxes for the first year and figured out I could net $140k in the first year with three employees under me and all bills paid. I've also looked into investing in the foreign currency market in order to come up with some moeny to get a down payment for all this shit. By the way, I wouldn't pay for a loan like that in three years. That'd just be stupid with interest rates as low as they are. It'd be like paying cash for a car! I mean, who is fucking stupid enough to do that? Oh screw this. I'm insane anyway. I seriously think I have some problems. But this could really work.

[Michael Jones]

Originally posted by tyler657recpro
That means $65 an hour then. I have put together a business plan. Decided on and begun researching my target market, and looked into advertising, and began checking out the competition. I've also done my taxes for the first year and figured out I could net $140k in the first year with three employees under me and all bills paid. I've also looked into investing in the foreign currency market in order to come up with some moeny to get a down payment for all this shit. By the way, I wouldn't pay for a loan like that in three years. That'd just be stupid with interest rates as low as they are. It'd be like paying cash for a car! I mean, who is fucking stupid enough to do that? Oh screw this. I'm insane anyway. I seriously think I have some problems. But this could really work.

Oh really?
Well let's look at it:

$350,000 at a modest interest rate of 6.5% for 20 years will run you $3,885.71 a month.
You have to insure this studio, that'll cost you an add'l $600 per month.
You have to pay property taxes on it too. On a Property valued at $350,000 it'll cost you about $11,000 per year.
Well use $900 per month.

You're going to have 3 employees? I assume they aren't going to work for free right? So you're going to pay them a salary.
let's just say $35,000 per year per employee.
That's $105,000 per year. Or $8,750 per month you have to fork over in salaries alone, and that doesn't include benefits. There's a multiplyer on salaries of about 1.25 to 1.5 for a fairly standard benefits package, but, we'll for go that for now.

This studio's going to have electricity right? I'm mean it's not solar and candle powered right?
Figure $600 per month for utilities. And that Generously low!

OK. Let's add up your monthly costs:
Loan payment: $3,885.71
Insurance: $600.00
Property Taxes: $900
Salaries: $8750.00
Utilities: $600
There's a ton of other incidentals, but we'll use those for now.
Ok, that's a total MONTHLY operating cost of $14,735.71.
That's what it costs you to open the door and turn on the lights for one month! (We'll use $15,000.00)
Multiply that by 12 to get your Annual Operating Expenses:
$180,000.00

In a 40 hour week, for one year, there is a total of 2080 billable hours.
Most studios consider themselves successful if they can book anything over 20 hours a week. But, hell, Tyler's a recording pro! He'll probably book 35 hours per week.
That's a total of 1820 billable hours per year.

Given that, it equates to $98.90 per hour that you'd have to charge just to break even! And, You haven't paid YOURSELF a dime yet!
And only if you can book 35 hours a week, every week, for 20 years.

So don't tell me you've researched it, when it's obvious you don't know the first thing about a break even analysis.

If you want help. Ask. But be realistic.

[c7sus]

Commercial insurance is $600/month on a biz that size???

Are they redlining because of the nature of the biz?

FUCK!

I'm opening c7sus-fly-by-night insurance.

[Michael Jones]

Ya gonna insure a $350,000 building, and equipment, and instruments for fire, theft, libility and comprehensive to a place that's open to the public for less?

Maybe its a tad high, but I thinks that's average.
Hazard insurance for a home is about $100 per $100,000 valuation, per month. A business is significantly higher because people aren't there as much as they are home. Also liability issues to a business are more of a factor than they are to a residence. If you use the residence rate, Tyler's still looking at $350 per month, which only reduces his Annual Operating Expenses by $3000.
Additionally, I didn't put in ANY money for advertising, marketing, equipment upgrades, break downs or employee benefits.
So, in our simple analysis, we can afford to be high there.

[trickless]

OUCH!!

Money (lack of) sucks!! I think you could get started with a lot less than 350g's. You'll just have to lower your expectations a little bit.

I say start investing in the lottery market and if that works out for ya, then open the studio!!

Good luck though!
Pat

[rushfan33]

Oh Tyler? We're waiting!

[tyler657recpro]

ok first of all, 65 bucks a month x 35 hours a week x 52 weeks a year is 118300 dollars. I dont see where you're getting your math from. That'd be insane for anyone to do. so far, I've done all my math based on a two room facility, chargin 65 bucks an hour for each room. I need to check up on this, but I've done everything based on that i can fill 10 hours 6 days a week. I'd be hiring 2 engineers and 1 manager. the engineers at 57k a year. and the manager at 30k. all with benefits which i've included. I'm not workin in the studio. it'd strictly be an investment. i'd be leasing a building so i wouldnt need to worry about property taxes. it doesnt matter tho. i fucking know what im doing. maybe i'll need to charge more. i told you im not done with research yet. if a studio only fills 35 hours a week, there's no way they charge 65 bucks an hour. so that'll have to change. but dont tell me i dont know about operating expenses and shit. I'm not an idiot. seriously. and i know how to calculate interest. i dont have to friggin round off. basically i gotta clear about 385k in total a year to make it work. If i cant work it out, then fuck it. so dont gimme this shit about not knowin what im doin. you all think im stupid for some reason. IM NOT! especially when it comes to doing stuff like this. i asked a simple question. no one can ever give me a simple answer around here. we always gotta see if we can find all tyler's faults. where the fuck did you get three years from on the loan payments? you dont pay off things that quickly. YOU are the stupid one. you invest that money and earn more than what you're paying in interest. in this case, the investment would be the studio. You're just trying to make the numbers seem bigger to make me look stupid. you dont pay for your house in 3 fucking years do you? anyway...as i said, i know what im doing.

[toadies]

if you know what you are doing, then why are you on a homerecording site asking whats the cost per hour at a studio?

[LocusLarsen]

All this validifies my want to be a Producer that is hired to come into studios and simply produce

[tyler657recpro]

Originally posted by LocusLarsen
All this validifies my want to be a Producer that is hired to come into studios and simply produce

That's where the money is anyway...

[jrosenstein]

MichaelJones assumed you would pay it off in 20 years, not 3.

and it seems to me the difference is how many hours you can expect to book in a week. you seem to think you can book 60, and he said 35 would be optimistic.

what professional is going to work for you, making $30k for 60 hours/week?? that's less than $10 an hour.

[tyler657recpro]

Originally posted by jrosenstein

what professional is going to work for you, making $30k for 60 hours/week?? that's less than $10 an hour.

Thats the studio manager. Besides, that'll prolly change anyway. I think the price will be much higher and hours much lower. So that will increase their pay.

[Blue Bear Sound]

Originally posted by tyler657recpro
i fucking know what im doing....
...blah, blah, blah...
anyway...as i said, i know what im doing.

Yeah - it shows...

Originally posted by tyler657recpro
Besides, that'll prolly change anyway.

Banks don't generally give loans to people who can't spell the word "PROBABLY."

[Michael Jones]

Tyler, look, I gave you a very generous Annual Operating Expense of $180,000.
By your own admission, you expect to bring in $118,300
Your 3 employees salaries alone total $144,000!

i'd be leasing a building so i wouldnt need to worry about property taxes. it doesnt matter tho. i fucking know what im doing.

Your talking about leasing a building? OK. That's fine, but it's going to cost you more, in the short term, to lease than it is to build and buy in the long run. You want to run two rooms? That means 2 control rooms, 2 live rooms, I'd say 4 iso booths, restrooms, break rooms, reception... common area.... You"ll need a MINIMUM of 3000 sq.ft. Probably more.
$20/sq.ft/yr That's a pretty average rate for lease space, unless you want to be next to the railroad tracks or airport? That's $60,000 per year in leasing fees.
You just fore went $11,000 in property taxes for $60,000 in lease fees, and you have NO Equity. What a great business man you are!

ok first of all, 65 bucks a month x 35 hours a week x 52 weeks a year is 118300 dollars. I dont see where you're getting your math from.

35hrs/week X 52 weeks/yr = 1820hrs/yr
180,000 dollars/yr (divided by) 1820hrs/yr = 98.90 dollars/hr

i fucking know what im doing. maybe i'll need to charge more.

Ok, then why come in here and ask for help? You haven't EVEN figured out how much to charge yet! You have NO idea of how to put together a break even analysis. Your a kid living at home with his parents who's probably never even had a CAR loan!

I need to check up on this, but I've done everything based on that i can fill 10 hours 6 days a week.

Oh, OK. So you're going to book 60 hours a week?
If both of your rooms are full, 10 hours a day, 6 days a week, for tracking, when are your $57,000/yr engineers going to do their mixing and mastering?

if a studio only fills 35 hours a week, there's no way they charge 65 bucks an hour.

No. Wrong again. What has to change is your Annual Operating Expenses. You'd need to lower your over-head.

dont tell me i dont know about operating expenses and shit. I'm not an idiot. seriously. and i know how to calculate interest. i dont have to friggin round off. basically i gotta clear about 385k in total a year to make it work.

Operating expenses and "shit"?
The only thing I "rounded off" was your monthly expenses. And only by a couple hundred bucks. If you can't float a couple hundred bucks a month, then you're in real trouble!
You say you need to clear $385,000/year? But 60 hrs/week @ $65/hr x 52 wks/year is only $202,800? That statement alone proves beyond any shadow of a doubt that you DON'T know what the fuck you are doing!!!!!!!

You're going to work your engineers 10 hours a day for 6 days a week? Yeah, I'd say fuck you buddy! What are you going to do when one of your engineers is sick? Or on vacation? With 2 engineers, thats a total of 6 weeks out of the year that your booking time is cut in half!


Have you ever ran a successful business? I have, so I can tell you emphatically, that I DO know what I'm doing, and DO know what I'm talking about! So don't jump down my throat because your piss poor business plan wont hold water.

Like I said, you want help. Fine. Ask for it. But your "pie-in-the-sky" business plan is a total flake!

[Blue Bear Sound]

Originally posted by Michael Jones
Like I said, you want help. Fine. Ask for it. But your "pie-in-the-sky" business plan is a total flake!

Agreed!

Michael - give Tyler a break... you know - all that "math 'n shit" is really hard!! Besides - he just wants be "in the business" - who needs math for that????????

Tyler - stop being such a fuckin' dipshit again.........

[HangDawg]

I like Blue Bear's new Avatar

[laptoppop]

Originally posted by Michael Jones
By your own admission, you expect to bring in $118,300
Your 3 employees salaries alone total $144,000!

And that's just the part of the salary that is paid to the employee! What about the employer's share of FICA? In many states (ALL?) - state disability insurance? Health/dental/life insurance? (57K a year employees expect that) 401(k) plan?

And even if you lease your facility, count on a heavy duty set of insurance policies -- both liability (oops! I slipped!!) and damage and theft (you'd be amazed what can walk away after a late night session!).

-lee-

[Blue Bear Sound]

Originally posted by HangDawg
I like Blue Bear's new Avatar

New studio, new avatar... you know -- marketing...!