Originally Posted by Greg Curtis
Let's build a studio! I know L.A., so let's build there...
Land. You want mulit-room, so let's just do 2 to keep costs down. Once you build things out, with isolation, machine rooms, bathrooms, janitor closets, office(s), employee room, lounge, kitchenette, emergency exits, plumbing, fire panels, fire riser, tech room, you are left with some space to record and mix in. For 2 decent control rooms, one larg-sh tracking and one drum/overdub room I would say the minimum size would be a 7,000 sq foot lot, which is the common 50x140 foot lot size in L.A. You want to entice clients to come there, so you must build in a decent part of town. So, for example, a 7,000 sq ft lot with a cool brick building just sold 3 doors down from me for $850,000.
Now. Time to fix the place. New roof, new basic electric service, repair plumbing, seismic retrofit. $75,000. (real numbers from my neighbor. this just gets it ready to be used as a vacant warehouse).
Time to call some designers, get a design going for 7,000 sq ft of studio. Design fee downpayment> $25,000
Plans are done, time to pay the architect, engineering (HVAC), and plumbing design fees. $25,000
Go to the city. Submit plans for approval, make revisions, meet with the urban planning devision. Wrangle, wrestle your way through city hall (pay extra for timely reviews, waivers). You will need to pay your designer for his time spent shepherding you through the system. The review fee is based on your projected budget, and it isn't cheap! $25,000
$1,000,000. and you now have an empty building waiting for something to be done.
Now you are ready to go. Phase one is turn the place into a suitable structure for recording. Walls opened, roof opened, city services tweaked.
$1,100,000. if you are very good with keeping costs down.
Now you can build! 7,000 sq feet @ $500 per foot. $3,500,000.
Now, buy a used 48-channel Duality. $130,000 Install it.
B-room gets a Rupert Neve 5088 32 channels. $100,000.
Tech integration, 2 rooms, 2 live rooms. $100,000. includes installing consoles.
Electrical contractor: $125,000
Fire sprinkler $50,000
Extras (city fees, mob payoffs, etc...) $25,000
Now, pay your designer!! $125,000
Outboard Gear! Mics! Stands, chairs, cue systems! 2 ProTools HDX rigs!!
OK. Now you can open your doors. Oooops! You want to park your car? Well, you could buy an empty lot to park 30 cars if one is available and turn it into a lot, so add $1,000,000
There you go! Now get out there and sell some time! What is the best going hourly rate at a studio that can hold a full band? $150/hour?
What is the best going rate for a stereo mix room/overdub room? $75/hour?
So, the best you can get, if everyone pays full book rate per hour is $225/hour.
$225/hour multiplied by 2,000 hours a year: $450,000 a year gross.
Let's say you got a business loan for the $6.5M. A decent loan rate would give you a monthly mortgage of $37,000 per month for a 30-year mortgage. So that's $444,000 a year on the loan.
Pay wages. Studio manager is $50-150,000 a year. Head engineer, $50-100,000 a year. Second $25-$50,000 a year (x2), runners $20,000 a year. So let's say $225,000/year in salaries.
Utilities are approx $2,500 a month. $30,000 a year
Taxes, insurance, depreciation. $25,000
Your yearly costs are $725,000. The most you could ever hope to make is $500,000 in a year.
After 10 years you will have lost $2million just to keep the doors open.
Sound like a plan??
I like imaginary calculations like that but paying almost 200k for studio design? 100k for tech integration? 25k for HVAC plans? 3.5 mil for just the infrastructure inside? Are you planning for walls made out of silver? etc. etc.
Let me have a go at your list:
850k for building - sounds about right, no need for 7000 square feet as you don't a whole team of people there, it's not 1966 so can go for higher quality building instead.
500k for infrastructure including plumbing, electrical, walls, ceiling... - the only part of it that needs to be studio quality are the live rooms and the control rooms, ISO booths can be easily had for 10-20k a pop and can even be deliver on a lorry if not built in, floating floor only makes sense in live room, rest of building can be A or just B quality office space with well thought out decorating.
100k extra maybe for HVAC including plans, again only special HVAC needed for studio, no need for that in rest of building and no need for an integrated system for the whole place apart from studio area, you can have a simple wall mounted hvac in office rooms with outside walls, same as you can have a little water heater in bathrooms instead of a dedicated boiler room, think smart.
35k for detailed plans based on your specification - it's not black magic, point a finger at something that is already standing and works and ask to have the same thing with your own colour scheme kind of deal. I have some experience with custom plans and seriously, custom plans do not have to cost 200k, you are not building a mansion and trying to make a statement. No need to hire a studio design guy to design you the same studio he designed 20 times before, if you have space to adjust, get plans freely available out there and have someone look them over instead of drawing them up from scratch and arriving at the same conclusion for the 50th time - no need to run research for a writing device either, pencils available cheap from the local store.
25k for city - no idea but sounds a bit low tbh, then again it is an already standing building!
120k for an ssl - sure why not.
100k for neve - yeah go on
12k for audio workstation - 4 refurbished mac pros at 3k a pop (i'm dealing a bit in the market and that is easily done over time)
50k for PTHD hardware + other software
20k for office hardware/software/printers etc. - you can have an Imac galore with used imacs for 1k per Imac
40k for furniture for the whole place
500k on gear - that is a load of money and you can easily have an incredible amount of outboard and mics for that - the whole talk about how much gear is worth is usually just speculation since it's not being sold, most of it - any of those old guys trying to sell everything fast would not net as much as everyone likes to appraise that stuff for. Most of your gear needs to be workhorse and can be new from the many companies out there, you don't need to buy old dingy classics like the fairchilds people are trying to push around on ebay unless you are a hoarder instead of a businessman.
40k on minimal landscaping around the building and concrete for parking - planning rarely allows for buildings to touch boundaries but nothing says you can't have a concrete slab all the way to the boundaries from the end of the building, if it's 5m to boundary, and the wide part of the building is facing the road then you can easily fit 10-20 cars on there if not more - just pick a building with space on the road facing side for that.
That is 2.392.000 $ so go ahead and add even 112.000 for unexpected costs and extra technical integration (I don't see while your hired engineer can't do the tech integration on his own for that whooping 100k you pay him a year.
So 2.5 mil be it - sure it could be 5 mil but that is cost of building not tech integration or plumbing or changing the roof 3 times and buildings can go even to 25 mil for a piece of crap when you look at it properly so the sky is the limit anyway.
You are the studio manager or otherwise why the hell would you build a studio? No new business would work if the entrepreneur him/herself would not be doing 12h days managing it all. Also even business that are not in a dying industry take at least 3 years to establish themselves.
Hedge funded business often don't turn a profit for many years. No salary here - we include 40k in costs for keeping you alive on some economical middle class level, all clear net profit that you don't reinvest are a boost to that after you start turning a profit.
Engineer - 60k, you are not making a guaranteed legendary facility even with 10 mil invested necessarily so just going straight for someone who gets paid 100k a year on a regular salary is crazy. Get someone with 10 years of experience and decent credits for 60k or work with freelancers per project - make the engineer earn more credit there and actually make himself worth the 100k you're going to pay him in the future.
If you have one main live room and are not running to tape then why have 2 assistants? Get one for 20k a year straight out of some technical college with a promised boost to 30k after a year and then get interns to do other tasks. Have you seen real unemployment figures recently? It's staggering, it's a buyers market for employers, you can employ a college graduate any day for minimal wage.
It's a 1 live, 2 control, maybe more than one booth place, you don't need "runners".
Between You, The engineer and one smart, with no future in the devastated economy, college graduate you can easily handle it.
So, including your sustenance, around 130k a year in salaries. 30k for your quoted bills. say 40k in insurance and other running costs.
2.5 mil investment, 200k running costs.
Starting this kinda business on a bank loan is out of the question so say 1mil of your own money + 1mil angel investment + 0.5 mil mortgage on your house.
Sure if someone does not know shit, does not want to work at all in the place, has no connections etc. etc. then nothing is possible, wether it be studio or even selling potatoes.
If you could make 500k a year as you say (note that we actually spent more on what is important in my calculation) then even with loans on un expected minor events you still could turn at least 200k a profit.
Keep living for 10 years on the 40k allowance and you could pay of the 7 year mortgage and get a return for the angel investors if you are lucky. The next 5 years you possibly make back your own investment. If you started by age 35 you are now 50 and have your savings again and your salary now can be maybe 100k since everyone else who slaved there need raises along the way as well. The abused college kid is now giving the head a run for his money and there is a young office assistant taking care of day to day menial stuff.
If you can't make 1 mil $ in LA of all places by the age of 35 then you probably should not be thinking about trying to start a few million dollar studio as a business in the worst economic depression that has ever happened in the US.
Positive outlook: the biggest companies that exist today where started or got into their own during the great depression.
My outlook: why start a million dollar studio in LA at all, there are studios there already, go somewhere where there are not many studios and build a million dollar facility that costs you 100k a year without any loans or mortgages and where you work yourself as the second engineer.
It's all silly and made up numbers but it's based in reality and it's good to think about stuff like this.
Here is an even more sensible approach:
Get 300k of your own money for gear and upfront costs,
Lease an already suitable studio building without gear for 10 years (as are available sometimes in London for instance, no idea about the US) with quarterly payments.
Spend 200k on gear working your ass off to buy it smart second hand a year before you actually start your lease ending up with 250k worth of it instead of the other way around.
Work the place as a producer and as an engineer, forget a large ssl or a whole array of neve preamps - where are you going to use all the preamps in that many million dollar one live room place anywhere? How many microphones are you running at the same time in that solitary room?
Hire an assistant who you know personally part time and pay them minimal wage - so many people on minimal wage, college graduates, award winners. A multitude of formerly session musicians on welfare...
I don't really know the circuit and how it works around in the US but I know enough about numbers to say that counting on just running a mercenary studio where you sit back and wait for people to rent your place is a weak idea today.
If you don't produce or engineer and can't make a name for the place then even with a million dollar facility who would want to come to you over legendary studios, especially in a legendary location.
If people stay famous without going out of their garage for recording the new album then maybe the idea of a dedicated facility has no sense out of the abstract of studio designers and gear hoarders. Sad but possibly true.
Boost those air frequencies all you like with 3 different eq's for that special colour while so many producers and engineer do so much with so little - start there, get a floating floor once you can afford it as a luxury.
It always makes my brain overheat this whole business thing. I always was primarily interested in contemporary instrumental and "classical" recording with the occasional poet with a song where a floating floor is a godsend yet it's always the never ending pursuit of some 60ties folk heros "sound" that necessitates 500k in outboard and a huge live room in a climate where most pop people are literary unable to work in an ensemble and require overdubs. Pop music is made in ISO booths nowadays without outboard most of the time - is it business then we are going fantasy football about or living out fantasies about the past?
Just having a loud think in-between ebay stunts.
The fantasy of these multi million dollar facilities grew up in an economical bubble and we probably will not return to that way of doing things out there in the trenches for the next 40 years or so.