Making money at running a small home studio

B

banjo71

New member
I wasn't sure where to post this - I've got a situation where I own Pro Tools and a small computer, a couple of good mics, and that's it - and I have a good enough ear to mix and edit some simple acoustic situations. So I turned it all into a business, and I've recorded projects for about 12 people or so. In the process, I recorded a guy who took up some time, coupled with my editing/mixing hours, he owed me $700 for his small project. And being a close buddy to me, I felt like that's way too much. I was charging $25/hr for my work. I tried to not take all the money, but it mathematically worked out to that, so I took it.

I don't know why I have a problem with it, but I either lack the confidence to own a business, (although I'm confident of my work) or maybe I over charged him. What do you think?
 
While you may or may not have confidence - the real determination if your services are worth $25 per hour will be your customers. If they feel they received their moneys worth they will likely express it in one one three ways - paying you with no complaints, offering you return business and/or recommending you to others (word of mouth is normally what brings in studio business).

A reasonable hourly rate is normally dictated by a few things: your skills, the quality of your equipment, the quality of the fiinished product and the local competition (what are other local studios charging and what do that offer). Other factors that also come into play could include: are you easy to work with? do you offer a comfortable/creative work environment? do you offer amenities? how do those intangibles compare to other local studios.

I you have concerns that you hourly rate ends up costing you customer too much - you could consider discounted block rates. At $25 per hour - the $750 project would have been 30 hours. If you offered say 10 hour blocks for $200 - a 30 hour project could have come in at $600 (vs. $750) - if that would make you feel better.
 
It's best to avoid work for friends - they're never really customers in the same way that customers can never really be friends. Either limit your availability to record him in preference to paying customers or be frank with him and say that you had thought he would be paying for your time and there seems to be a misunderstanding. Unless you want to lose his friendship, don't push for the money - just stop the bleeding. If he wants you to record him in the future, ask him to pay up-front so he has skin in the game.
 
Most studios in my area charge hourly rates up to about 5 hours, then they do block rates from then on. Full day is about 6-8 hours, and 10 hour blocks are what I see on average around here. When you break the pricing down, they tend to be $35per hourly and between $30-$32 depending if its a block or a full day. I use to only record friends in my home studio, but it was practice for me so they always paid with beer, cigs, and dinner. One thing that can make a friendship go sour is a debt. Another thing, most studios ask for at least 50% up front on block rates. At least the 2 I worked at did, and full price for the day.
 
Your buddy knew what the rate was up front. It's not like you bid the project as a entire job and went over on hours and are asking for something that wasn't already specified up front. If he is happy with the result you obviously earned the $700. If he isn't happy with the result you may have still earned the money and his expectations may be out of whack. If you have 12 satisfied customers in a row I would say you are doing something right so keep up the good work.

My wife has mentioned a few times over the years that I should look for some clients for my little studio but I don't like the idea of total strangers casing my home. Every once in a while she gives me this rap that somehow this expensive hobby should be paying for itself. As if!
 
And keep in mind that if you actually start doing this regularly, $25 is really around $15 after taxes - BEFORE fees, before local licensing, before insurance, before (etc., etc., etc., etc., etc.).

It's a bit of a double-edged sword -- If you don't run it like a "legitimate business" you're opening yourself up to a whole world of trouble and liability. If you do, a whole world of taxes, fees and regulations.

And all you need is for one person to either ask for a receipt or otherwise attempt to write off the expense to potentially open yourself up to scrutiny from particular agencies you don't want to ever knock at your door...

Long story short, $25 is not too expensive.
 
50% of the people I work with are friends or become friends by me doing projects with them in the past. I also know a lot of people due to being heavily involved in the music scene locally. I charge my clients, if they are friends or not the same rate, I have an hourly rate and a block rate if the project is going to be over 10hrs long (this can be split over 2 sessions). How I deal with charging is that if I feel that the project was a bit longer then planned I will sometimes give them and extra hour or 2 depending on if it went over due to worthwhile musical creativity or if it went over due to messing around and them not being rehearsed. Also be very clear about using time, explain to the client that we are behind schedule and that it may cost more before the bill arrives at the end.

Don't worry about recording friends, 90% of my work comes from client/friends recommendation.

Alan.
 
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