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Can one make money with a pro Studio today?
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Hattrick
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#1
11th March 2007
Old 11th March 2007
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Can one make money with a pro Studio today?

I live in SLC, Utah and am looking into either purchasing a small commercial property or renting one. Renting is a pretty good being I can rent a 700 sq.ft. room in SLC for about a $1.16 per square foot. This would be my studio for both recording and rehearsal for my band/self. My question is does anyone have a general idea if one can make money in a small off site studio today being so many people are finding inexpensive recording solutions to record at home today? Any thoughts?
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11th March 2007
Old 11th March 2007
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I am writing a series of articles on this subject for a well known magazine.

Obviously I cannot give you ad hoc advice here and now without knowing more about your circumstances, but generally, rented studios do not make money.
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11th March 2007
Old 11th March 2007
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the real estate that your studio is on is the greatest asset that your studio has. long after all of your equipment is worthless and obsolete, your real estate will be worth a fortune more than what you paid for it.

One of the founders of McDonalds was quoted as saying that he was in the real estate business, not the restaurant business. the burgers and fries were away for him to generate and income that would pay for the real estate, and that the real value in mcdonalds was in all of the real estate they owned. genuis huh? i never looked at it that way, but it's a fantastic way to look at it.

if you can find any way possible, buy a little plot. Especially in a place like SLC where growth is moving at an unbelievable rate.

as to the bigger question - you can make money but it is hard. you need to find a niche and fill it, and you need to create an identity. finally, you need to figure out how to work WITH the home studios, rather than compete against them.

good luck.
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11th March 2007
Old 11th March 2007
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I'll share some pretty dismal advice I received once upon a time. Not to say being profitable is impossible, but this may force you to think realistically.

Only you know your market, but typically if you have to ask the question you pose, the answer is "no."

So your rent is $800/mo. Add $200 for utilities and another $120 if you want phone and high speed internet. Now you're over a grand per month before you even bought one microphone or paid for insurance or any incidentals. How do you make this money back? At $50/hr you have book at least 20 hrs per month, and YOU have to be the engineer/receptionist/cleaning crew. Sure that is only 5 hours per week, but can you get that much work today? If not, why not? Chances are your space isn't the limitation. Then, assuming you can book 20 hours per month, how many of your clients actually pay (and pay on time)?

If you can expect to get $50 per hour you had better be a pretty good indie producer/engineer, be known in your area, or have a nice gear setup. These days bands will turn and get a computer interface and go the DIY route.

Those are the realities you face. Also 700 sq ft isn't enough to give potential clients any wow factor - another lost selling point.

That said, good luck ~ it can be done, just be smart with your money and trust your skills.
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11th March 2007
Old 11th March 2007
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It is my suspicion that quite a few of the guys here who have huge amounts of gear made the money some other way, are trust fund babies or inherited the money.
#6
11th March 2007
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All real estate theory aside (which is valid), I have a studio built in a rental space in Philadelphia, and while I don't live high on the hog, the studio is supporting me and my girlfriend, and it continues to grow.

It's been building, however, for about 10 years, and the only thing I can attest to as far as financial planning goes is that we own all our gear. We are not paying off loans or credit. That's not to say we are sitting on top of gear "assets", but we have bought gear only when we could afford it.

The other undeniable factor is that we have a modest, yet subtantial enough clientelle in our city. So, besides the fact that we started out cheap, grew in terms of our own talent and the quality of our facility, and worked to be as debt-free as we could be the whole time (for a decade), there has been a steady supply of work the entire time, too, and that makes it all possible.

I would suggest doing an assessment of what kind of demand there is for your services in your area. Make a list of bands, target commercial clients, and other potential sources of income in SLC, and if it adds up it's POSSIBLE you could make it work. If it doesn't, then consider how much you are willing to pay for the space given the use you will get out of it as a musician. From there, maybe occasional work will offset your expenses.
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11th March 2007
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I would STRONGLY advise not to get into a rental (or a large mortgage) situation until you have spent years building up a LARGE clientbase and good reputation as an engineer in the area and are ABSOLUTELY 100% POSITIVE that you can keep the studio booked solid every week throughout the duration of your lease or mortgage.

It's true, a lot more bands are tracking at home, but that just generates more mixing gigs for you! A lot of my business comes from bands who are "doing the DIY thing" but want a professional to mix their tracks. It's not a bad thing.
#8
11th March 2007
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Making a living? No way money.

Quote:
Originally Posted by The Byre View Post
I am writing a series of articles on this subject for a well known magazine.

Obviously I cannot give you ad hoc advice here and now without knowing more about your circumstances, but generally, rented studios do not make money.
I think that the encroachment into this business by "Education, education, education" and the incredible number of Music Technology Students along with the Government sponsored schemes aimed at hug a hoodie policy's make even the property owning businesses very scared for the future at any level in Britain.
Every School in the Land now has a purpose built studio run by teacher's that seeks to bring in Local Artists and even commercial TV companies at well under the market rate even sponsored by a major Supermarket today. Yes I know its price fixing and illegal but hey this is socialism and we are the privileged land owning Lords of the music industry ripe for the guillotine. Hey why don't Tesco's run a voucher scheme to get kids free clothes and bicycles instead of giving microphones and musical instruments and recording equipment to teachers.
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11th March 2007
Old 11th March 2007
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I think you really have to think about what kind of business you want to build.

If you're going to run a facility, it'd best be very good, with some great gear, a nice tracking room, decent lounge, etc. And you're going to want to get a few other engineers involved. You really are trying to maximize the number of hours you can book, then raise your rate as you get busier.

Having a niche is a good thing. I've known lots of studio owners who kept their heads above water by doing repair work on gear for others, doing voice over stuff, phone on hold messages, etc.

If, on the other hand, you want to be a name engineer or producer, invest in a small mix rig with great monitors, and work as a freelancer. Find bands, and work with them. You may have to do the tracking for free (that is, the band pays whatever studio rent is), then charge the band for the mix. You have to build a rep, a good name with the bands in town, and with the studios.

If you want to have a facility to practice in, that can be another thing, but just do that. Find another band or two to split the rents with and just operate as a little practice space.

I'm just throwing ideas out there, of course, but I think you can see my point. Operating a restaurant isn't the same thing as being a chef, and being a studio owner isn't the same as being an engineer.
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11th March 2007
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That won't work here either

Quote:
Originally Posted by John Suitcase View Post
I think you really have to think about what kind of business you want to build.

If you're going to run a facility, it'd best be very good, with some great gear, a nice tracking room, decent lounge, etc. And you're going to want to get a few other engineers involved. You really are trying to maximize the number of hours you can book, then raise your rate as you get busier.

Having a niche is a good thing. I've known lots of studio owners who kept their heads above water by doing repair work on gear for others, doing voice over stuff, phone on hold messages, etc.

If, on the other hand, you want to be a name engineer or producer, invest in a small mix rig with great monitors, and work as a freelancer. Find bands, and work with them. You may have to do the tracking for free (that is, the band pays whatever studio rent is), then charge the band for the mix. You have to build a rep, a good name with the bands in town, and with the studios.

If you want to have a facility to practice in, that can be another thing, but just do that. Find another band or two to split the rents with and just operate as a little practice space.

I'm just throwing ideas out there, of course, but I think you can see my point. Operating a restaurant isn't the same thing as being a chef, and being a studio owner isn't the same as being an engineer.
The government run arts council, the european union social fund and all local councils are spending millions and millions of public funds providing free rehearsal facilities to all.
Schools and community education facilities do not employ chefs they have catering operatives.
My fully equipped rehearsal facilities now make less per hour than a Latvian Hotel cleaner with his own bucket.
#11
11th March 2007
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If your band is good, and they will do for hire work, you can make money.

Make some busines cards up and head out to the local karaoke bars. Find the karaoke queens and tell them how great they are and that they can be a big star...all they need is a demo. I've seen these people pay upwards of $2000 for a single day in the studio to get a 1 song demo of a cover song. Keep a camera and 8x10 photo printer around for "publicity shots"

Now, if you want to actually keep your integrety...then be prepared to sleep in the studio and eat dehydrated noodles for a while....and don't quit your day job just yet.
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11th March 2007
Old 11th March 2007
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The model of, "if you build it, they will come," has expired, but that doesn't mean a studio can't be profitable. You need to have a real plan, and a way to differentiate yourself from the competition, and unique ways of keeping the place busy.

If you are an engineer with a clientele, or have a couple engineers on staff with regular clients, this can do it for you. If you have a production company, management company, or some other related business attaced that can feed the studio work, this is another avenue. If you have a specialty which is in demand, but not offered in your area, this is another way.

You can also diversify your services (ads, composition, voice-over etc.), and not just hope to make records all day, every day. The studio business is a business, a reality many seem to forget or ignore. It's easy to understand why, since many studio businesses are vanity operations that are well-funded and need not actually operate in the black. If you want to operate it as a business, so a real business plan with realistic projections, accurate competitive analysis, and a concrete plan for attracting work and sustainin cash flow.
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#13
11th March 2007
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I know the secret of how we will be able to make money with the studio in the future....but it's a secret

sacificaq erom yub
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11th March 2007
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In my experience you'll do bettter running a voice-over, karaoke, and video post business with band recording sold as a sideline operation.
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11th March 2007
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Define "money".
#16
11th March 2007
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Quote:
Originally Posted by Hattrick View Post
I live in SLC, Utah and am looking into either purchasing a small commercial property or renting one. Renting is a pretty good being I can rent a 700 sq.ft. room in SLC for about a $1.16 per square foot. This would be my studio for both recording and rehearsal for my band/self. My question is does anyone have a general idea if one can make money in a small off site studio today being so many people are finding inexpensive recording solutions to record at home today? Any thoughts?
There are 3 golden rules for opening a Business....Location, Location, Location. If you give good services in a CLEAN enviorment at a reasonable price, people will come. Start small, think big and progress as your studio does. I've been told that if you can get a pizza delivered to your location, others will find it too. Also, make sure you can offer something that bands/clients can't do/find at ones home studio. Remember....KEEP IT CLEAN & REASONABLE!
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11th March 2007
Old 11th March 2007
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Quote:
Originally Posted by gainstages View Post
the real estate that your studio is on is the greatest asset that your studio has. long after all of your equipment is worthless and obsolete, your real estate will be worth a fortune more than what you paid for it.

One of the founders of McDonalds was quoted as saying that he was in the real estate business, not the restaurant business. the burgers and fries were away for him to generate and income that would pay for the real estate, and that the real value in mcdonalds was in all of the real estate they owned. genuis huh? i never looked at it that way, but it's a fantastic way to look at it.

if you can find any way possible, buy a little plot. Especially in a place like SLC where growth is moving at an unbelievable rate.

as to the bigger question - you can make money but it is hard. you need to find a niche and fill it, and you need to create an identity. finally, you need to figure out how to work WITH the home studios, rather than compete against them.

good luck.




Great response from all but I really took stock in this one. I think I will be pesuing owning a property to have my new studio verses renting though it does seem cheap their could be some variables that I would not be able to control and the the whole lot could be a huge loss. Thank you so much!

Last edited by Hattrick; 11th March 2007 at 09:09 PM.. Reason: Wrong area
#18
11th March 2007
Old 11th March 2007
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If making money is your primary objective, taking the money you have to invest in gear and leveraging it in real estate will make you a multi millionaire in 20 years. After 20 years in the studio business, you'll have had to put in much more $$$ and will most likely end up with a bunch of gear that's broken down and not worth what you paid for it. (With the exception of your vintage Neumanns and 1073's.) Money wise it's a no brainer. If a bank won't think your business plan is worth it, then it isn't. That is unless you can't possibly live without doing it. Then, maybe, just maybe, it will be worth it. But financially it will still be a loss. Dollars leveraged at 10 or 20 to one will beat it our ten times - even in a bad market of appreciation.
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