The business of running a small studio?

DanielJohn said:
But if it's your hobby anyway, and you enjoy recording and love doing it, then you might as well just do it. Probably best solution is from your home.
-DAN
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It would be nice to think that, but when you become dependent on the revenue generated, its no longer a hobby, it is indeed a business, and that in itself takes on a much different conotation.

Sure, you love the creative process, and the engineering, but when it becomes your business, those 2 aspects are really miniscule in the grand scheme of running a profitable business. You'll find that you end up doing much less engineering than you initially thought you would!

Doing it out of your house is not impossible, but there are many legal and liable issues to overcome.
Many cities, local governments, and even homeowner's associations have laws and rules against running a business, thats open to the public, out of a residence.

In addition, do you really want a 4 piece rock band draggin' ass through your home? Hmmm, I don't believe I do. Plus, I have kids that play and make noise, and have fun.. not an environment condusive to recording; while I can work around those distractions, someone thats paying you $50/hr is not going to put up with that!

While a home recording studio works very well for our own, independent projects, it simply is not a professional environment, and exuding an aire of professionalism is paramount to running a successful business.

Finally, no matter what you do to your home, it just isn't constructed in the way a "proper" recording facility would be. How many recording facilities have you seen that have windows in the tracking room? How many have lawnmowers running outside below those windows? Or an ice cream truck running down the street!

Given that, doing it from your (my) home is not an option for a recording studio that plans on having multi-track sessions as its primary source of revenue.

Just some thoughts.
 
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I've learned that the people who work by the hour, generally don't make any money. It is people who work on commision, by the project, make a deal...whatever...are the ones who succeed much better financially.

Get out of just thinking the income will be booking hours. Make package deals, that allows you to make money on CD duplication or whatever. Jingle writing and recording is VERY lucrative, IF you sell the final product and just don't book hours to some Ad agency.


a very tough row to hoe, however...that's for sure.
 
mixmkr said:
I've learned that the people who work by the hour, generally don't make any money. It is people who work on commision, by the project, make a deal...whatever...are the ones who succeed much better financially.

Get out of just thinking the income will be booking hours. Make package deals, that allows you to make money on CD duplication or whatever. Jingle writing and recording is VERY lucrative, IF you sell the final product and just don't book hours to some Ad agency.


a very tough row to hoe, however...that's for sure.
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I agree whole heartedly. The hourly rates are just ball park figures to have a sense of revenue vs. overhead. But to be able to offer a package deal, you have to have some sense of what your time is worth, and how long you'll spend on the deal itself.

For instance, let's say your going to offer a "5 song Demo" for .... what? say $300?

5 songs is probably about 20 minutes of music. Can you set-up, record, track, mix, master, and duplicate to CD, 20 minutes of finished music in 6 hours? Well, I can't!, but to achieve our minimum profit margin, you'd have to. Or change the rate for the 5 song demo package. So , you see, its imperitive to know what your time is worth.
 
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what is even more financially mind boggling to me, is the world class studio that has the SSL, Neves, etc. Some serious equipment overhead...I guess, most likely owned by the bank. ...and some with hourly rates well under $100/hr. How do they survive?

I once had an opportunity to go to Long View Farms in Massachusetts. Their rates at the time where on the order of $10,000/wk...but it was a full service, live in studio...complete with all meals, etc. That seemed ungodly expensive at the time, but a years bookings wouldn't even cover their equipment costs. But...I see they are still alive after all these years.
 
Michael Jones said:

I agree whole heartedly. The hourly rates are just ball park figures to have a sense of revenue vs. overhead. But to be able to offer a package deal, you have to have some sense of what your time is worth, and how long you'll spend on the deal itself.

For instance, let's say your going to offer a "5 song Demo" for .... what? say $300?

5 songs is probably about 20 minutes of music. Can you set-up, record, track, mix, master, and duplicate to CD, 20 minutes of finished music in 6 hours? Well, I can't!, but to achieve our minimum profit margin, you'd have to. Or change the rate for the 5 song demo package. So , you see, its imperitive to know what your time is worth.
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I understand.. My point was that you charge 2 grand for duplicating CDs to a client, while your cost are only $1500 to do so. So...15 minutes of ordering makes you 500 bucks. Graphics you say??...I'll do them for an additional $200 (for 3 hours time...hopefully). I'm running out of ideas fast, but that's the idea. My idea of "package" wasn't necessarily "block" time, or the "demo package" ...But..maybe the studio that can provide backing tracks for vocalists looking for demos...hey...the singer spends a half hour making tracks for 5 songs. The "studio band" is HOT and can come up with tracks almost "live". The 5 or six hours becomes a VERY REAL reality then.
 
mixmkr said:
what is even more financially mind boggling to me, is the world class studio that has the SSL, Neves, etc. Some serious equipment overhead...I guess, most likely owned by the bank. ...and some with hourly rates well under $100/hr. How do they survive?
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I know one way they generate revenue with rooms like that, is to rent out the control room itself to other qualified engineers for their mixing, mastering projects.

Obviously, there are numerous revenue generating sources, the trick is in finding the demand, and filling that particular niche.

And, ya know, a lot of these "World Class" facilities have their own Artist and Repitior (A&R) departments. They develop artists, spoon feed them to the masses, all wrapped up in a nice neat little package, and sell a gazillion CD's to 12 year old girls that have an infatuation (this week) with the latest boy band!
So the actual recording facilities generate only a very small portion of their revenue, so they are able to spend the big mega bucks on studios we can only dream of!

You're absolutely right when you imply that one has to "think outside the box" and not just rely on "studio time" or "block time" to be successful in this biz!

Great discussion here!
 
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I think this is a great thread. If I may add some extra info that may have been mentioned.

As a business operating with customers, there needs to be a decent accounting ability on handling costs as well as paying someone to help when tax time rolls around. You are probably going to need a business license to operate and insurace that businees oriented. There are programs (software) to help you maintain your financial records and whatever else you need for accounting. There are other types of equipment that business' need for day to day operations that do not fall under recording gear. You need either a zerox machine or a decent flatbed scanner and a credit card machine, there are some pretty cheap point of sale systems with credit card sliders and cash registers. You will need invoices for billing too. Multiple phone lines. The list goes on.

SoMm
 
What about horror and success stories?

Does anyone have some real-life stories to share on this thread? There have to be people reading this who know someone, or experienced this first hand. We'd all love to learn from your experiences.

How about resources, links or other materials that discuss real life studios and how they're making a successful financial go of it?

Where are the lessons learned and the best practices to be found?

Or are we just all getting too serious for this forum, given that this is a "home recording" bbs? Perhaps we should take this over to rec.audio.pro? Where else might we have a good discussion on this?

-ElSilva
 
Jeesh...this is a very intense thread! The finances of all this are confusing at best, devastating at least...

Here's what we are working on: Since we live in a dual-zoned area, running a business out of the house seems to be the status quo around here. We are looking to have a dedicated to audio building erected on the property, complete with separate entryway, restroom facilities, etc...completely contained on pre-existing property. Benefits include: 1) increased value of my existing property; 2) dedicated separate facilities for the business; and 3) won't have to far to walk to work.

The only real downside I can see to this is the increased cost in the way of taxes and mortgage...but win, lose, or draw, the place (and everything in it) would still be mine.

The old adage holds especially true in this line of work: you gotta HAVE money to MAKE money...
 
I've looked into erecting a separate building on my property as well. It would end up being a sort of post production facility, and not so much a studio open to the public or a select clientiel. This would overcome the zoning regulation of having a "commericial" facility in a residential district. But it would limit the type of work I could legally do from it.

Again, I'd be looking at a 1200 sq. ft. facility. Construction costs for a slab-on-grade shell (weathered in with electricty and HVAC) would run some where in the neighborhood of $40/sq.ft.
That comes to $48,000.
Finish out, I'd do myself, and could roughly figure an additional $10-$15/sq-ft. Adding roughly $12,000 more dollars, for a grand total of $60,000!

I could do some more of the work myself (I do have pretty good carpentry skills), but I think I'd still be looking at around $50,000, roughly.

For $50,000 I might as well lease a space in a commericial district, be in the same area as other studios, (there's a good reason that Burger King is across the street from McDonald's) and not have to limit the type of work I could do. Or, I could scale back the construction, maybe do it in phases, and get out for around $25,000.

At any rate, it ain't cheap. :(
 
Excellent points, Michael...is 1200 sq ft set in stone, or could a smaller, more ergonomic space be designed? We're trying to maximize each square inch of space, and even though my first attempt came up to 1425 sqft, we have gotten it down to around 925...I hope...

Lessee..you're in Austin, I'm in Midland...Lets meet in Brady and combine forces!
 
LOL, I'm not sure Brady has much of a music scene.

1200 sq.ft. is not set in stone by any means. It depends on what kind of a facility I want to focus on. I already do some post production like scoring music to film, and would like to focus on that. But if I could offer multi-track sessions to bands, I could diversify a little, and not be so dependent on one type of clientiel.
Obvisiously I wouldn't need 1200 sq.ft. to do post as I'm already doing some from my project studio.

I too, have done a few lay-outs with an attempt to maximize space usage in a "smarter" way. I looked at some lay-outs about half that size, and just couldn't get them to work with both market niches in mind, so, my findings are similar to yours and about 900 - 950 sq. ft. is about the bare minimum. That still puts me in around 36 grand for just a shell on my property. Plus, my rear property line is the city limits, and marketing may prove difficult, given the location.

If it didn't work out, it would make one hell of a nice club-house next to the pool though! (That's my argument for the wife anyway!). :D :D

I'm lucky in one sense, I have Willie Nelson's daughter living across the street from me, and as she is fairly successful in the music biz, has given me numerous tips on marketing. Nice to have an "insiders" point of view.
 
Re: What about horror and success stories?

Does anyone have some real-life stories to share on this thread? There have to be people reading this who know someone, or experienced this first hand. We'd all love to learn from your experiences.
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I have tons. Since the age of 15, I've always had a home studio, a pro studio, been involved in a pro studio, and several of my close friends have home studios. I have enough stories to fill the BBS's hard drive and bore you all to tears (I believe moisture is not good for hard drives either :))

How about resources, links or other materials that discuss real life studios and how they're making a successful financial go of it?
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Where are the lessons learned and the best practices to be found?
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For me, lessons learned are in my head. I need to change that, but never get around to it.

Or are we just all getting too serious for this forum, given that this is a "home recording" bbs? Perhaps we should take this over to rec.audio.pro? Where else might we have a good discussion on this?
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Well, if you want us pro-wannabe's to shut up, thats fine. However I will say my first "real" home studio was built based on what I learned from "pros".

Keep in mind that a home studio, is nothing more than a pro studio thats on a small budget, in your house :)
 
thank you

Thank you for all of your wisdom and advice. The electronic community has been a great source for learning for me, and I recommend anyone interested in transforming their hobby into a business to spend time and money researching, especially on the internet. I have gained much insight in the Home Recording BBS, www.harmony-central.com and many other sources. I have found the trick is to stay realistic enough yet be able to let your imagination GO!!
 
The studio I'm in the process of building is 1200 sq ft. Originally, I had planned on 900 sq ft but just couldn't make it work on paper. My main concern was size of the control room. At 30' x 30' I just couldn't convince myself that I could have an adequate size control room. The final size was 30' x 40'. This is also a dual use building so compromises had to be made. It will be used for recording my son's band (and others) but also for his band's rehearsal twice a week.

Recording is something I always look forward to doing (even though it was in the kitchen!). I'll be happy making enough recording others to pay the electric bill and buying necessary toys like better mics, etc. At this point I don't consider it a business and don't have to rely on it for income. I guess that's the definition of "home studio." Still, I wouldn't have invested in this building without considering operating it as a business one day. This might happen sooner than I had planned on since I have 4 bands waiting to record in the new building :eek: . I have 10 years left until retirement so I want to use this time to hone my mixer/engineer/producer skills in the hope that it will provide a good second income. I also plan on adding additional square footage to the studio during this time. Hell, I haven't even finished it and I'm already talking about additions
: :rolleyes: .

DD
 
This might happen sooner than I had planned on since I have 4 bands waiting to record in the new building :eek: . I have 10 years left until retirement so I want to use this time to hone my mixer/engineer/producer skills in the hope that it will provide a good second income. I also plan on adding additional square footage to the studio during this time. Hell, I haven't even finished it and I'm already talking about additions
: :rolleyes: . DD [/B]
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Very cool... good luck with your endeavor. I'm in the process of doing the same - except the building I picked up is 1/2 rented out to a machine shop, the other 1/2 will be my recording studio. The machine shop pays most/all of the bills based on what I charge them for rent.

its all good :)

And I'm with you - retire and do what you love and are passionate about. Its the only way to live happy.
 
Why not cut out the middle man, dig a big pit, put all your money and any money you can borrow in it, soak with kerosene and drop a match?

I am one of the many folks on this board who have cool studios because we have day jobs to support them.
 
I had one band pop open a fire exit to buy pot. Nice, huh?
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:eek:

Now that is funny! I hope they at least gave you a puff.... J/K
Your lucky the next knock on the door wasnt the fedarales...

It's just not like musicians to want to smoke weed in the studio eh? Common problem up here too in Canada.

Anyhow, Frederic, I find your posts to be very,very informative. When I finally get out to take shots of my studio space I will sure hope you chime in. I tired posting the designs here but they are obviosuly of no use to anyone. Maybe I will try to bump them up.
 
BigHighLonesome said:
Anyhow, Frederic, I find your posts to be very,very informative. When I finally get out to take shots of my studio space I will sure hope you chime in. I tired posting the designs here but they are obviosuly of no use to anyone. Maybe I will try to bump them up.
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I must have missed them.... sorry..... where did they go?
 
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