resources for the business end of opening a studio?

[pulse_divider]

I'm thinking about making the plunge and opening a commercial studio.
I know that it's a tough market, but I think I could fill a pretty specific niche. Even if I fail, I'm thinking it might be worth it to try because I can't imagine doing anything else. I know it's tricky to make money, but I'd be doing it as a labor of love and hopefully just be able to eat and pay my bills as a result.

I've been reading threads in the archives about this, but was wondering if anybody knew of any specific resources I could find regarding the business aspects of running a studio? I'm looking to find out about general overhead (insurance, taxes, etc) in addition to the usual gear and building costs, and whether there is some sort of general formula people use in figuring out whether they are going to stay afloat.

Feel free to tell me I'm crazy for even thinking of it, I'd like to hear un-edited opinions.

Thanks.

[chillhouse]

well, you have to do it for the love. sounds like you are.

i did it. i rented (built out) space for some years and then bought a building (also built out) with another guy. i don't think there is a general "formula" as such. it's like setting up any business as far as insurance, etc. goes. are you buying space? renting? is it built out or do you have to do this? what and how much gear do you own? what kind of place (size and gear-wise) do you plan to open?

all i can say is keep your overhead as low as possible. don't go into a lot of gear debt and don't incur a lot of additional expense servicing this debt. do something that you can handle, and buy more gear as your business grows.

if you rent space taxes shouldn't be applicable. you can call any insurance agency for a quote on renter's (or owner's) insurance. you can ballpark your gear value and get a rider for this gear (if needed). if you buy a property, you have a whole other set of requirements insurance and tax-wise.

buildout is usually prety expensive if you want to do it right. i don't know of a specific resource, but when i was thinking about buying raw space and building it out, i consulted with a local (boston) studio architect/builder who came and looked at the space with me. he gave me some options and prices. you could try this. i also recently saw some posts here from someone who was in the process of a buildout.

hope this helps!

[cgarges]

Even if I fail, I'm thinking it might be worth it to try because I can't imagine doing anything else.

That's such a refreshing thing to hear and why I wish you all the best of luck in this kind of difficult endeavor.

I don't know of any one specific resource, but that's probably a good thing. Look for as many different ones as you find so that you can develop your own balanced perspective that will fit your situation and its needs.

There are a few helpful thoughts here:
http://messageboard.tapeop.com/viewtopic.php?t=27906

Not sure if you checked that out or not.

Chris Garges
Charlotte, NC

[kayagum]

I'm not sending this along to be a killjoy, and you have to remember this is coming from Steve Albini, but this is a classic for band and record-making economics:

http://www.negativland.com/albini.html

If you're doing this for love, and you don't flirt with debtor's prison (I'm a banker by trade, so I can concur), I think you'll make it work.

Keep us posted on this board- lots of great advice from people who have made it work.

[pulse_divider]

Thanks for the tips, everyone.
cgarges, I'd found a couple of threads regarding this stuff but not the FAQ you posted and that's pure gold. I read every post and it's a huge help.
kayagum, that's a great article and one I show to every person I know who gets excited when they have label interest.
chillhouse, thanks for sharing your experiences.

Aside from learning the day-to-day stuff that keeps a studio afloat (billing, deposits, getting customers, etc) it sounds like I just need to get the right info from the Small Business Administration and it will be just as applicable to my situation as to opening a restaurant or store.
But yeah, my idea is to get a nice big space that sounds great and that I can live in and start with the gear I have now (which is pretty decent). If I sell my house and use the proceeds to cover the space, I can start it up with little to no initial investment. Basically I'd just be trading my house for a place that is set up better to record, with a huge live room. If I did need a loan, I could keep it very small. And roll any profit back into gear as necessary, though I think I would just need to spend some money on acoustics and cabling/installation at the start. I've also been talking to my musician and label-owning friends about what they want in a studio and I think I could get some good medium-profile business right off the bat.
Well, I should find out more about the feasibility of this within a few days. I have some friends checking out the space I'm interested in and will go ahead and travel to check it out myself if it sounds good.
Thanks everyone.

[Toddf]

Go to the library and get regular books about how to start and run a business. Read at least 10 of them even better 20.

See if your state has a small business guide.
You need to appoach this as any other business.

I did this and have been at it for almost 2 years now. We are lucky and stay booked pretty solid. We do work at it hard though constantly. We have nice gear, rooms etc. API Console, Studer 2", Protools etc. Not cheap.

I did though have 10 years experience being a Chief Engineer and working at studios before that.

Of course this business is different than most but you still have the same things, loans, rent, taxes etc. The recording specific issues is where you get to use your personal knowledge of engineering.

Good Luck
Todd

[DGoody]

Don't fuck with the IRS!!! That's my best advice. They'll always get you, and they love busting "artist's" balls, or some such biological incarnation!

[@?,*???&?]

Having just opened my place in October, I can say what I'm up against is that everyone knows someone who will record and mix their record for free- in their basement! With the prevalence of DAWs out there right now. Quality or not, free is free.

It's funny how many questions need to get answered before a band will spend $4000 on making an album (in addition to mastering, pressing and artwork). Most bands haven't thought any of this through typically before I speak to them and thus I also play educator for them.

Third Monk has been covering it's bills fine, but there has been an awful lot of sticker shock and slightly less gigs than I had hoped for. Still, I have a place to do my own projects when they happen and I have taken on a student engineer for the cheap gigs so I don't need to wade through the crap.

Of the gigs that have been in, the selection of guitar amps I have has been a draw as rentals.

[jmoose]

Back in the day, around '97 or '98 when I split from Showplace and decided to open my own shop I bought this book...at the time the second edition;

http://www.amazon.com/gp/product/159200 ... e&n=283155

After reading good chunks & perusing the rest of the stuff that wasn't really relevent to a one man shop...whuddaIneed with an "employee manual"?!? I took a $15K loan out & opened up in the empty B room of an SSL shop and man...I probably had better odds in Vegas!

Anyway, the book is filled with ALL kinds of stuff that's great to know and lots of stuff you either didn't know about, or didn't WANT to know about. Much of the important stuff is the latter...the financial end...the WHOLE business end of it, that was pretty ass-kicking, especially for a guy like me who can barely keep a checkbook balanced!

Anyway...looking back on it...it wasn't the smartest business move. Really, I'd have been WAY better off taking that initial $15K loan and opening something that's useful to society...like a drycleaners or deli.

I mean let's really be honest...the concept of making money from a recording studio is ludicrously FUBAR from the start.

You get money from people that traditionally...have no money.

'Yer basic Catch 22.

But, I've been working in & around the industry for about 10 years & can't ever imagine doing anything else. I've done some fairly odd things & some stuff that I NEVER would've expected (like working Allman Brothers shows from a remote truck) and have traded that for something that I might never really "have". The financial security of having a ?real day job? with paid benefits, a ?week of paid vacation? and ?8 sick days a year? and all that stuff. Both of my brothers & my parents have it & they just can?t really wrap their craniums around what I do, well?maybe they?re starting to come around.

Anyway...read that book from cover to cover & absorb it all. Realize that it's not just a job but a lifestyle. And if you're cool with that and everything that it traditionally brings, living week to week or month to month...feast or famine in most aspects...if that doesn't bother you & you KNOW you can make it work...

Take the plunge.

Peace, [/i]