hardest thing(s) about opening your own studio?

[snuffinthepunk]

I'm guessing it's getting clients. I'm not planning on opening one myself, but I just had a convo with my dad and it seems that my grandfather thinks it'd be a good idea to open a good one in this area (as it's very attractive to high profile clients) and I'll probably talk to him about it soon. I don't want him to try to get into something he can't handle, so really I'm lookin for reasons NOT to open a studio here haha (although it would almost fulfill my dreams to live here and be in a nice studio) cuz I know it's not easy and I don't want anyone to waste their money. So, what do you think are the hardest things?

[joelpatterson]

When I was starting out, I got what I considered a critical insight, and it was just the tossed off comment of my mentor, a guy who ran a studio in the area.

He called these people "customers," not "clients."

I thought it really put a perspective on all of it, even though you might think it's a trivial distinction. "Customers" are free to patronize anyone. "Clients" are somehow commited to you, with less freedom to split.

It made me realize: this is a service I'm providing, in competition with lots of others, and to make it I had better have a superior quality of service and a real commitment to my customers. Given that this is an emotionally charged business, I'd better have a real feel for all the nuances... and be someone who's fun to be with!

This "advice" served me well. No doubt, starting out, without a track record, you need to establish who you are and what you can do, and treat everyone you work for like they are very special and very lucky people. I don't think it's really all that different from any service-oriented business.

[cgarges]

Not to be dark or anything, but...

I think that would be an excellent question for any of the people who've been seling studios in Florida for the past few years. Have you seen how many ads there are in the back of trade magazines for complete studios for sale down there? Lots and lots. And lots.

What would make the difference with another studio down there?

Just out of curiosity, how does your grandfather plan on obtaining a steady client base? Better yet, how does he plan on actually getting clients there to begin with? What constitutes "high profile clients" and why would they want to come record at your grandfather's place, once it's open? Most importantly, why does your grandfather want to do this? Surely it's not to make a profit, right?

Chris Garges
Charlotte, NC

[Professor]

I would say the best advice for talking someone down from this endeavor would be to just approach like any other business and talk about return on investment. There may well be "high profile clients" available, but in this business, those individuals will be looking for "high profile studios & engineers" and will have the ability to travel anywhere they might choose to go. He has to understand that this isn't something where just having a bunch of wealthy people around means he will have "high profile clients". If he were selling luxury cars, then yes, having a lot of wealthy people living in or moving to the would be encouraging. But this is a very narrow target market, kinda like trying to sell your services as a horse-whisperer to the good people of Manhattan - there just ain't a lot of horses on the island.
So if you grandfather has $1,000,000 to invest, he could easily put that into a good mutual fund and get a return of roughly 10% per year. For a studio or any other business to produce the same 10% profit return, it has to generate maybe 20% gross sales, figuring that the first 10% would cover overhead like engineer salaries, rents, utilities, advertising, etc. and then have 10% left over for profit. But to make $200k a year at any business means bringing in almost $4,000 a week, and that's really hard to do when servicing such a narrow market. Sure that's an $800 a day room, but it would need to be booked 5 days a week for 52 weeks a year.
Well OK, so let's figure half that initial investment - only $500k. Now to make a 20% gross and 10% net you only need to produce $100k per year. Building a room that could justify $400 a day is somewhat easier, and keeping it booked could be easier, but it's still not something that would be easily supported by recording demos for local rock bands. I mean, we're talking about 100 local bands each doing a $1000 demo or EP project and averaging two groups per week. Or 50 bands willing to part with $2000 and running one project per week. The trick is that while the profit could possibly still be in the 10% range, keeping the overhead in that 10% range would be tricky because now that only adds up to $50k. And $50k may be enough to cover rents and utilities and advertising and maintenance, but what about a salary for an engineer? It might just about make it at $50k while still returning a 10% profit to the investor.

And of course, if you try to run the numbers below that and you could almost forget it. OK, at a $250k investment you could still build a kick-ass studio, but it will be trickier to attract a "high profile client" willing or able to throw down $1000 a day. Well at least, you're not hiring in a well-known architect and installing a shiny new SSL, but you could still build a nice room and put in a $50k console, $50k worth of recorders, $50k worth of outboard and mics, $50k worth of construction & installation expenses, and leave $50k worth of instruments, furnishings & start up costs. And with a room like that you could easily return the 10% to the investor (which is now only $25k) but you're overhead would likely still be up in the $50k range or more. So you would still be responsible for turning about $75-100k in profit which now figures as a 30-40% gross profit. Of course if he's expecting to invest only $100k you'll still need to return upwards of $60k per year to cover overhead plus 10% and you see how much more difficult this would become. Not many $1000 a day clients that will be arriving at a $100k facility.

Now OK, I know you're thinking that this is some serious doom & gloom while there are real people out there that are making a living running studios that cost way below $250k total.
Yes, there are, but those folks are running their own studios that they have built up slowly over time. Many of them worked (or still work) day jobs that allowed them to make the investment and build the customer base slowly over several years. And of course, many times the overhead is lower, perhaps because the studio is located in their home and most certainly because they are not trying to turn a profit for an initial investor. At that point, to make a $30k a year "salary" for the engineer and cover the overhead only amounts to maybe $50k total business which is still ambitious, but much more manageable.

Of course, I've not included factors such as diversification of business like supplementing your revenue through CD duplication or making radio advertisements pursuing audio forensics or sound design work, or mny other areas where you might find profit. But I kinda understood the question as 'how do I talk grandpa out of this?'
Hope that helps.

-Jeremy

[joelpatterson]

Or he could diversify even further and do MP3 duplication.

[snuffinthepunk]

thanks for the replies guys. yeah, Jeremy, it was a "how do I talk grandpa out of this" question, just in case we happened to talk about it. He can be a very ambitious guy....heck, he started a multi-million dollar furniture store by selling accessories out of the back of a van on the side of the road. =) I don't think this is gonna happen though, as we haven't talked about it at all. Thanks for the responses

[r0ck1r0ck2]

0.02 cents

why on earth would your grandfather want to open a studio....?
surely he knows better....!??!?!!
no good musician types as his coustomers.?

it makes me think this a dream of his...?
in that case i say let him go for it....
he's your grandfather...he's earned a few flights of fancy...

after all "no dream is worth being underachieved"

[gregnrom]

What's hardest thing about opening your own studio?

Wiping the blood off your clown suit.

[AnalogElectric]

Wow.... well....

I had a studio out of house, initially. Then several years later I bought/took-over the Amphetamine Reptile Records Recording Division building. That was right before the analog vs home DAW debacle. My dad was curious about me running a business and he knew nothing about recording studios until I ran one. In fact, he was the one that warned me about the possibility of home studios leeching from pro studios. Well, it was early enough in that debate where I was willing to take that bet.

I did pretty well but I later got sick of keeping up the overhead for a building and my own home. I also started to notice the shift between home studios and pro studios after a few years. Also, when I went "pro" I noticed how cut-throat the business was with other pro studios in town. Sure, we were all "friends" but I was more casual than most others. I had some clients going into my venture and I built up more and more clients as I went along but I couldn't help but take it personally when a band came in for a tour would go elsewhere.

Even though I had the "find the place you wanna go to no matter what", I couldn't help but feel cheated. I guess that's the emotional side of it cuz I've never really been a suit-and-tie guy.

Now if someone were to be investment-centric and open a studio, there'd have to be a lot of clout behind it. The mentality of "if you build it, they will come" isn't realistic, not anymore. I find that bands I work with don't really like a sterile environment. Sure, they wanna work with someone that knows what they're doing but as far a equipment goes, most of them are in the dark. Most of them go on a tour to feel out the place and the staff... that's if the place doesn't already have a reputation.

Also, it's about who you know in the biz. If he'd want top-artists to come in, it better be THE place to go. Producers like Bobby Z (here in Minneapolis) have their own studio and have those connections. They're apt to see some big-name artists come in due to reputation and connections.

He could have an uber-studio but without a hard push and the right staff I'd believe it to be a money-pit.

Since 2001 I've been working out of my house (again--but with better gear) and even though I'm booked most of the time, my overhead is lower, and I barely make enough to get by (pay my bills--but not enough to save up for new gear).

-- Adam Lazlo

[Seventh Wave Studio]

First, I have to say, when Joel or Adam speak, I listen. You should too. I cannot tell you how much I respect those two.

Most people (at least were I am) who open studios are so detached from the real world of music it is sad. People assume they can open a place, spend buckets of money on an HD3 system, take out an ad and expect the place to fill.

Where I am, there are at least six places who have more than $200,000 in their studio who sit empty all week. They make probably $1200 a month. I am set up in my house and I already have 9 projects on the books (4 of which are over 5 digits).

Why? I did not buy an HD3 system with the biggest control surface Dgidesign makes. All the mentioned places use crap outboard and their engineering experience is bar band demos. But because they bought HD3 systems and raised their overhead beyond recouping, they will close.

Someone on here once said something really great...

1. ears
2. technique
3. gear
4. format

So many places do that list in the opposite manner. Then they wonder why they have stoner engineers doing bad demos for $400. Nothing good comes out of the studio, therefore noone who is serious goes there, and the wheel keeps spinning.

I bought a Nuendo system, and I only have 10 outboard mic pres (but I have Neve/API), and a couple of great compressors and that is all I need.
I can do anything big places can, but better because I can spend more time and I can get to know every artist and give them a hell of an experience. Word spreads fast.

My place has no lava lamps, no leather couches, no high ceilings. While places that have all that stuff in my area are bleeding money every month, at my humble place within a couple months I have worked artists from The Dresden Dolls and Muse. (Amanda Palmer sat in my backyard under my tree).

It is easy for a studio to do well in 2006, but artists in 2006 are different.

[ryanlikestorock]

First, I have to say, when Joel or Adam speak, I listen. You should too. I cannot tell you how much I respect those two.

Most people (at least were I am) who open studios are so detached from the real world of music it is sad. People assume they can open a place, spend buckets of money on an HD3 system, take out an ad and expect the place to fill.

Where I am, there are at least six places who have more than $200,000 in their studio who sit empty all week. They make probably $1200 a month. I am set up in my house and I already have 9 projects on the books (4 of which are over 5 digits).

Why? I did not buy an HD3 system with the biggest control surface Dgidesign makes. All the mentioned places use crap outboard and their engineering experience is bar band demos. But because they bought HD3 systems and raised their overhead beyond recouping, they will close.

Someone on here once said something really great...

1. ears
2. technique
3. gear
4. format

So many places do that list in the opposite manner. Then they wonder why they have stoner engineers doing bad demos for $400. Nothing good comes out of the studio, therefore noone who is serious goes there, and the wheel keeps spinning.

I bought a Nuendo system, and I only have 10 outboard mic pres (but I have Neve/API), and a couple of great compressors and that is all I need.
I can do anything big places can, but better because I can spend more time and I can get to know every artist and give them a hell of an experience. Word spreads fast.

My place has no lava lamps, no leather couches, no high ceilings. While places that have all that stuff in my area are bleeding money every month, at my humble place within a couple months I have worked artists from The Dresden Dolls and Muse. (Amanda Palmer sat in my backyard under my tree).

It is easy for a studio to do well in 2006, but artists in 2006 are different.

I couldn't agree more. I think we're both coming from a similar place.

[bannerj]

For all that might be said about a debate between large studios and project studios (this seems to be turning into a debate about that somehow). What Seventh Wave Studio is talking about is actually encouraging. I like the idea of music becoming more about an experience with people sharing a series of creative moments together. Its not that that cannot be done in bigger studios. It is just that in a project studio we are freed by lower overheads and lower cost which means that there is a chance there is less label pressure and less "business" about the experience. I am thinking back to that interview with Aaron Espinoza in Tapeop awhile back where he was surprised initially to get to work with people like Kim Deal because is was a lower cost and "safe" enviornment to goof around having fun making music. He said for that reason he tried to keep his overhead low. Sorry if this is getting too much off topic, but I think this is a pretty great way to spend the day with other artists.

[Russian Recording]

What's hardest thing about opening your own studio?

Wiping the blood off your clown suit.

ding!

[Professor]

My place has no lava lamps, no leather couches, no high ceilings.

blasphemy!!!

A studio without a lavalamp?

-Jeremy

[Russian Recording]

ok, ill be serious.

the hardest thing about owning studio is to not end up in the hole at the end of the year.

next is to have time to spend with your girlfriend

next is to keep everything working all the time

next is to be relaxed

overall, the most challenging thing about owning a studio is preventing yourself from not owning one.

i love owning a studio