Thinking of starting a studio. Talk me out of it!

[sargentpilcher]

Hello everybody, thank you ahead of time for your input here.

My love has always been music. I started playing bass guitar when I was about 13, and have since then expanded my horizons and collected a respectable amount of gear through the years (Not NEARLY as much as many of you!), enough in my mind to start a very basic studio. Just trying to give you some background to prove I'm not some idiot who has no idea what he's doing walking into this situation.

Currently, my band pays for a practice space in Oakland, CA, and my share for that space is 60$. I just noticed today, that the space next door is available for 350$ a month. So for 410$ a month, I could have both spaces, use one as a live room, the other as a control room.
Currently I have enough gear to suit all the basic needs of any stupid teenager wanting to make a record, or any serious musician wanting to make something real. I have an 8 input computer interface. Pro Tools (For the rock bands, or folk, or whatever.), and FL Studio (For the hip hoppers and the electronicers). I have enough mics to mic up a full drumset (Limited to 8 of course), an sm58 for vocals. I have a drumset, ampeg bass stack, and marshall guitar stack at my disposal. In my parents garage, my brother had built an isolation booth, which my parents would be happy to be rid of if I moved it to the new place. A very zippy computer (Only a core 2 duo, but upgrading to core i7 soon).

So my running costs every month would be 410$ plus some renters insurance. I'm thinking I would just have a trial run type thing, where I sign a lease for 3 months, front the cash, and then just try my damndest to make it work, and if it didn't work, worst case scenario I'm out 1,200$ knowing that I tried.

Now for the part I'm not so sure about. Would I need to get a business license for something like this? What are the risks involved if I don't get one? Would I have to charge tax? How much should I charge? Currently I make about 15$ an hour at my job, so I would be happy to be making as little as 15$ an hour. I've heard figures thrown around here upwards of 40$ an hour charged! I know a question like this would be respective to my general area though, and it would be hard to say, I'm just looking for a general idea.
I was even thinking of some alternate business ideas. Like, offer to do some groups for free if I thought they were good enough to make any money, and take a cut of their record sales. Or like a bulk package deal where I can record, mix, and master for a discounted rate. Or even let them use my beats for free if they book studio time. How many people have tried this? Or am I just being unrealistic, and I would be lucky if I broke even? I know the music industry is crumbling beneath our feet, but I know a market is still there! Albeit much smaller.

Let me know your thoughts please!

[Sugarnutz]

Owning a studio is like having junkie for a girlfriend. You never know how much it's gonna cost you or what you're gonna catch. Does that convince you?

[drBill]

Originally Posted by sargentpilcher

Or am I just being unrealistic, and I would be lucky if I broke even?

You're new here. Welcome!!

We have a search feature. It's near the top, just under the top white bar. This topic has been discussed directly and indirectly at least a hundred times in the last year.

There is lots of info in a search for you.

But if you want a quick answer, the answer is you're being unrealistic. Studio's are ALWAYS a romantic business decision. Why? Because it's next to impossible to make them end up in the black on a P&L sheet.

If you have to ask what a P&L sheet is, you need an accountant to tell you no instead of us. Bottom line, it's EXTREMELY competitive, and there is less work every week.

you choose, but as the saying goes.....choose wisely. Good luck.

bp

[ChampionAudio]

Also remember that the $15/hour you would be happy to make is actually $15/hour after expenses. You have to pay the rent and insurance, hopefully treat your room a bit, and make an occasional gear purchase, not to mention all the little nickel and dime stuff like blank discs and cables that very quickly add up. For any company that provides a service, the labor rate/billing rate the company charges its customers has to be much higher than the hourly wage of the person doing the work. Depending on the industry it can be 3 times higher or more.

I'm not trying to discourage you, I think the trial run is definitely worth it. You should ruthlessly pursue every revenue source you can think of, and when you've done that, do some research and find more sources. This is often the most creative part of operating a small studio. The studio I'm vested in with two partners is currently doing some voice-over work to keep the lights on while we do some other projects for free up front, then when they're done, we control the CD manufacturing. When the artist comes to us to purchase copies of their CD to sell at shows, that's where we earn the revenue. It's not easy to sustain this over a long period, but it's a definite stepping stone .

Good luck! And like Bryan said, make sure EVERYTHING you do with a client is documented on paper.

[solo-bration]

Originally Posted by sargentpilcher

any stupid teenager

[emdub123]

You say you make $15/hr. You may be thinking that by charging $30/hr you would double your income, but what you may not be thinking about is how many hours/week you work. If you work 40hrs/week at your current job, that's $600/week. If your studio overhead is $100/week, then you'd need to work at least 23hrs/week at $30/hr to make what you make now. Can you bring in at least 23 hours/week in business? If so, go for it!

[sargentpilcher]

Originally Posted by ChampionAudio

we do some other projects for free up front, then when they're done, we control the CD manufacturing. When the artist comes to us to purchase copies of their CD to sell at shows, that's where we earn the revenue. It's not easy to sustain this over a long period, but it's a definite stepping stone .

Just out of curiosity, what's to stop them from ripping the CD, and making the copies somewhere else?

Also, thank you all for your comments! I know it is a bit of a pipe dream. I have no idea how much business I could pull in.

Assuming my rent is going to be 350$ a month. If I bring in 25 hours worth in a month (About 6 hours a week.) I would break even. Everything after that is profit. The only problem is how much, if any. Also, considering it's in Oakland, the odds of getting robbed are substantially increased. I'm thinking of saying no hip hop in the ads. Even though I like hip hop, it's not worth the risk.

[drBill]

Originally Posted by sargentpilcher

If I bring in 25 hours worth in a month (About 6 hours a week.) I would break even. Everything after that is profit.

That's not a plan for success. It's one that doomed for failure. You need to think better than that. Get outside the box. Find revenue streams. You can't operate a business for "close" to breaking even on the rent. A class on small business at a local community college would be a good start, and give you some ideas about what kind of income you need to bring in vs. your expenses. Good luck.

[frans]

As long as you spend more money than you earn you don't need a business license.
If it makes you happy, go for the trial period. Assuming you really know what you are doing, can bring clients in and make them happy ...it all depends on LUCK after that. Keep in mind a lot of folks ten times more able than you failed and folks worse than you were successful. There are rules and common sense and then there is reality.

[The Byre]

You stand absolutely no chance of getting anything per hour whatsoever, let alone $15 - not even now and then!

Sorry, but that's the way it is!

There are very many very good studios around your area that are really well equipped and cannot get any meaningful trade, so your chances of getting anything with an equipment budget well below that of an ambitious home recording set-up is precisely nil.

There are very, very, very few gaps in the studio market and they are all in the high-end segment. Everybody and their mothers-in-law has got a home recording set-up, so you have to offer the market something that they do not have.

The average turnover for a demo room (i.e. investment less than $50k) is less than $100 p.a. in the US.

[ChampionAudio]

Originally Posted by sargentpilcher

Just out of curiosity, what's to stop them from ripping the CD, and making the copies somewhere else?

A signed contract

[craig9045]

Originally Posted by Sugarnutz

Owning a studio is like having junkie for a girlfriend. You never know how much it's gonna cost you or what you're gonna catch. Does that convince you?

hahaha, so true.

[lagavulin16]

Originally Posted by sargentpilcher

Currently, my band pays for a practice space in Oakland, CA, and my share for that space is 60$. I just noticed today, that the space next door is available for 350$ a month. So for 410$ a month, I could have both spaces, use one as a live room, the other as a control room.

Let me know your thoughts please!

I think Dirty Dave will just raise the rent on you.

[cajonezzz]

I guess it's all relative-- but just remember, that if your ass is in the chair working all the time SOMEBODY needs to be out selling the next gig.

assuming your a hip hop guy, so this may not apply-- but:

if it were me-- I'd put together a banging little mobile rig, enough I/O to do 24 tracks.

a couple sweetheart channels of pre etc.

case it up so it fits in the back of a compact or small van, with stands and all the extras.

decent split snake.

Go do live recordings in other bands rehearsal spaces. or the occasional school choir. Or whatever. go aggressively hawk your skills to folks.
Do package pricing. never hourly. prepare to always work to do the best job you possibly can no matter what your charging.

have a dedicated mix rig, and ability to overdub two tracks of whatever-- at home or at your little studio.

as you grow and begin to EARN a rep for your ability to deliver great results regardless of WHAT and WHERE you record on.. raise your prices.

if you get a bigger gig, hire out local bigger rooms ... ( fantasy? 880? ) and up your game.

I would not personally, under any circumstances, build a room out if I didn't have the immediate demand for it. NO reason at all to do that given the ability to do so much at home, or utilizing other more interesting or established spaces.

Less is more.

[ButchP]

In my best Willy Wonka vox
"No stop ,don't....

BP

[balanceman]

We already have a plethora of the kind of studio you are talking about here in Oakland.
My assistant runs one. My carpenter. my electrician. the HVAC guy. The postman. Arrowhead water guy. PG&E meter guy.....

In 1990 I was doing the same thing you are doing. I was going to rent a small rehearsal space for $400/mo. and record other folks to cover the rent so I would have a place to work on my own stuff paid for by other people.

I ended up bumping into a local studio owner at the videostore I was working in. He invited me to come and intern at his place and use it during off hours for my own stuff in return.

I never rented the space and moved all my gear into his studio. They started using my gear on projects and began calling me for tech support all the time. I started getting engineering gigs there and over time became the lead engineer of the studio leaving him frr to focus on business.

Through that experience, I began freelancing at at various studios around town + landed an assistant gig at a bigger facility. That turned into engineering proper albums with great mics/ etc...

So, I guess I'm saying - it's muddy water at the level of studio you are talking about. Maybe try reaching out to more established studios around the Bay (there are a lot!) and get an assistant position. You will learn a lot about the studio business and it may push you in a direction you never previously thought about..

There's nothing wrong with recording rappers for $15/hour (this is Oakland + that IS who will call). But it can be a huge pain in the ass. Esp. w/ the usual liqour and weed involved! You may learn a bit about interpersonal relations, but it will be tough to learn what goes on at facilities with a long track record an client list..

If you just want a place to work on your own stuff- get a job to pay for it- you will want to be there all the time when you're not working the job. If you try to make the studio pay for itself, it may just turn you off on being there entirely...