How did you finance your build?
Old 27th December 2012
  #1
drake.ch
 

Thread Starter
How did you finance your build?

I am interested to know how people are financing their studio builds?

I have plenty of ideas that I would like to develop, built of course money is always a stumbling block.

Is it really a case of either working and saving for 20+ before you can realise your dreams, or having wealthy family?
Old 27th December 2012
  #2
Moderator
 
narcoman's Avatar
 

Luck. Big record deal, money in publishing and success by accident. Same as mOst
Old 27th December 2012
  #3
Gear addict
 

Real talk: Behind many a "recording studio", lies a "medical growing" operation. Well, the ones with nice gear anyway.

I'd like to say that statement was 100% kidding, but I've seen it be the case too many times. Me personally? I had a real job once upon a time.
Old 28th December 2012
  #4
3 + infractions, forum membership suspended.
Over here if you have 10+ years of experience, and a business account that can prove that, the banks don't give you a very hard time. But I always say, keep external financing at the lowest possible level.
Old 29th December 2012
  #5
Work at a music store and scoop the sweet deals that come through.
Quote
1
Old 30th December 2012
  #6
Gear addict
 

To be honest, nowadays the only real reason you'd want to open a facility (if you are sane) is because you are working out of other peoples' places and spending more money and time and effort hiring those places than it's worth. There are so many studios about that starting your own place hoping it will pull in clients is reasonably unrealistic.

Thus, you should be a reasonably successful freelance engineer by the time it comes to investing in your own place. If you can spend your years putting by a bit of cash from each project you should be able to put a fair chunk of the money in yourself and reduce the amount needed from loans or investment.

Until such a time as you are so busy that using other studios is becoming a pain, doing that is a far better option because the expenses weigh on somebody else. If you're charging proper rates for your work, by the time that you really do need to build your own place, you should have enough cash to get started.

It is a fair point as to why drug habits are a bad thing.
Old 3rd January 2013
  #7
Gear nut
 

I sort of agree with TC Live. I've had numerous studios since 1987, but they've all been capitalized based on whatever personal work I've been doing at the time. In 1987, I built a 2", 24 track overdub room inside a larger studio because that model fit what I was doing. I was able to do vocals and instrumental overdubs (at least half of most of the records I was doing) and charge a reasonable rate back to the client along with my engineering and production fee. That made a certain level of studio feasible, but no more.

In 1992, I built a pretty nice home studio with live room, machine room, 3 ADATS, and an AMR 24 based around a publishing deal I had that had a demo budget of $750 and required me to submit 24 songs per year. So I knew that just by fulfilling my contract, assuming I paid the (then) going rate of $100 bucks for a singer and did the rest myself, I would have about 25 grand over the first couple of years to put into the studio without worrying about clients. If someone wanted to work with me in a spiffier environment, then we would go somewhere else. I wasn't going to chase after gear-lusting clients when so many great studios were going under or charging peanuts with amazing rooms and large format consoles.

My model has always been to charge for my time and experience and make the studio a loss leader, since clients have been moving away from caring about gear and studios in and of themselves. I'd rather work at home anyway, so if people want to work with me, we can work at my place for my rate, or we can work somewhere else if they want to pay an additional studio rate. I buy the gear and do the build that suits me for my regular work, and if it fits a client's needs, then great. If not, they can go somewhere else or work with someone else. And I don't owe a nickel on my gear or my build.
Old 3rd January 2013
  #8
Quote:
Originally Posted by beautyfish View Post
I sort of agree with TC Live. I've had numerous studios since 1987, but they've all been capitalized based on whatever personal work I've been doing at the time. In 1987, I built a 2", 24 track overdub room inside a larger studio because that model fit what I was doing. I was able to do vocals and instrumental overdubs (at least half of most of the records I was doing) and charge a reasonable rate back to the client along with my engineering and production fee. That made a certain level of studio feasible, but no more.

In 1992, I built a pretty nice home studio with live room, machine room, 3 ADATS, and an AMR 24 based around a publishing deal I had that had a demo budget of $750 and required me to submit 24 songs per year. So I knew that just by fulfilling my contract, assuming I paid the (then) going rate of $100 bucks for a singer and did the rest myself, I would have about 25 grand over the first couple of years to put into the studio without worrying about clients. If someone wanted to work with me in a spiffier environment, then we would go somewhere else. I wasn't going to chase after gear-lusting clients when so many great studios were going under or charging peanuts with amazing rooms and large format consoles.

My model has always been to charge for my time and experience and make the studio a loss leader, since clients have been moving away from caring about gear and studios in and of themselves. I'd rather work at home anyway, so if people want to work with me, we can work at my place for my rate, or we can work somewhere else if they want to pay an additional studio rate. I buy the gear and do the build that suits me for my regular work, and if it fits a client's needs, then great. If not, they can go somewhere else or work with someone else. And I don't owe a nickel on my gear or my build.
I agree totally with this. If you are not tracking drums day in and day out then why build a space for it. Rent a studio for a couple days and move on. Bill the client for the space and get you main environment set up beautifully for what you need
Old 6th January 2013
  #9
Lives for gear
 
latestflavor's Avatar
 

Quote:
Originally Posted by jimdrake View Post
.

Is it really a case of either working and saving for 20+ before you can realise your dreams, or having wealthy family?
yes. financing a studio when rental rates are below cost is not an ideal way to pay back a loan. for money purposes, treat it like any other money pit hobby (even if it is, or you intend it to be your career).

never before has renting a great studio been such a steal. for a new build today, you can pretty much bank on losing money. most people i know have money of their own or from a benefactor (i live in the land of trust funds)

why not team up with a lawyer, doctor, banker etc. someone who plays and has $$ (ie they love the viagara jam session commercials), always wanted a studio, and become partners. they could record whenever they want and you can run the "operation" the remainder. it would prob. lose money (vanity project), i'd pitch a two-part solution: invest in a space at the bottom of the RE market, and you could both run the studio of your dreams, until he/she decides to monetize the RE and move on.
Old 6th January 2013
  #10
Gear nut
 

Quote:
Originally Posted by latestflavor View Post
i'd pitch a two-part solution: invest in a space at the bottom of the RE market, and you could both run the studio of your dreams, until he/she decides to monetize the RE and move on.
Given how much time, effort, and money it would take to design, build, and equip a decent studio, I'm not sure I'd go this route. By the time you pour slabs, drop ceilings, float everything, and do the build according to all of the correct principles and with all of the correct materials, you could easily spend 100-200K on a decent sized control room with large studio and one or two booths, and you're not going to get this money back when your partner the doctor needs to sell the place. I think what this post gets right is the "partnering up" part, whether it's with yourself or someone else, maybe a couple of someone elses. I see a lot of this.

First, as I said before, I wouldn't build a damn thing without knowing that cash flow from existing work would become a primary "client" to the proposed studio. In my case, it was my production career or my publishing deal. For someone else, their freelance engineering career. Whatever. I can't see building a studio without knowing IN ADVANCE that 25% of its hours were going to be booked. Nobody needs the pressure of having to fill every single hour of a newly constructed studio from nothing.

Next, I would be looking to team up with like-minded businesses that would benefit from proximity and want to share basic costs like rent, utilities, maintenance, personnel. Find a mastering guy, an A/V company, an artist services company (what we used to call record labels), management, whatever. Music-industry related small businesses that need space. You can all share the basic shell of the space, share the kitchen, the bathrooms, the single receptionist, the lounge, and the natural spill that happens when a bunch of music businesses occupy the same building. Your clients will need mastering, label clients will need recording space, there be will some level of synergy that could help you raise your profile and get some of those "over the transom" clients.

I think mostly, though, the previous posters have it right. With studio time such a devalued commodity, it's crazy to build a studio if your business model is strictly a commercial "time for money" one. You have to have something to bend that a little. The only other thing I can think of is that your proposed studio offers something incredibly unique that a lot of people would want AND doesn't cost you an arm and a leg to provide. If you already happen to have a huge collection of vintage guitar amps and drums, that would be cool. I don't know if that's enough to get many clients, though. I see a lot of studios with vintage gear. So many people are driven by rates, and rates are very low, as has been said.

I think studio owners need to shift the paradigm away from "fee for service" to other ways of thinking. People will still need studios and engineers. We just need to be more creative about how to capitalize these ventures. Perhaps crowdsourcing is the wave of the future............
Old 7th January 2013
  #11
Gear interested
 

Interesting thread as we are just embarking on a new project. We are relying on alternative and existing income streams. We currently have a retail shop where we pay premium rental rates. We teach guitar and store lots and lots of cardboard there. We are building a teaching academy where we will migrate our c150 music students and our storage. This allows us to build a modest studio that can steadily grow supported by existing revenue streams. First brick gets laid today!!!!
Old 10th January 2013
  #12
drake.ch
 

Thread Starter
Some great points!

I am particularly interested in cases where people share a building.

One idea I would like to persue is sharing with a restaurant or hotel where clients for the studio means rooms and food etc.

I don't forsee myself being able to fund things through publishing deals.

I do have some unique things to offer.
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