Fellow Franklinite here. It is a rough business around here... owning a studio. However, indeed real estate is blowing up like crazy here in Williamson County... especially Franklin!! I live in a house my wife and I bought around 5 years ago for $115,000. It was just appraised for $205,000... and this bubble still has a LONG way to go before it starts to level out. The Nissan announcment REALLY helped too.

All that to say... hey George... can you PM me a link, or where I can go to get more information??

Thanks.

oops, misread, i thought someone brought a house into the mix...either way, my advice about viewing houses as investments still stands

Well said

what?
it's been made very clear that will not happen.

Wow, Mr. Jaded-no. I'm glad I don't work at the places where you work.

DITTO!!!!

Geez....

Do not put a value on "keeping the old clients". This is not something anyone can promise - even with a truly commercial room that's just changing owners. People assume all sorts of things and may not bother to call based on those assumptions.

I do think there is some value in buying a place that's built out, in that you can start right away and you don't have to worry about delaying you're opening due to the build out taking an extra six months.

The fact is that I worried too about that when I bought the room 9 yrs ago. Not only did we keep the majority of those clients, but added a lot of new ones and have maintained that. We continued in the same spirit and tradition that the room was built on and tried to make it even better by adding new modern gear and offering the same and even more services than before. I would hope the next owner would do the same, but that is not a guarantee either as to how a new owner WANTS to run the room. Lot of variables on their part. It just so happened that I wanted to continue it much the same way....

A lot of this is just the way we operate in Nashville. We have lots of regular companies calling all the time to book us. I turned down several days this month already just because we were already booked. It always seems everyone wants the same days. We have been blessed to have a lot of great clients who support us. But they buy the room and what we can offer for them...And we have clients from all over the country. Not just Nashville. People come to Nashville for the talent pool, both in musicians and singers as well as a wealth of great engineers and producers and arrangers. One of our best clients is from Dallas. He produces many projects a year for national and international companies. We are doing a big project in July for an arranger from Colorado who is hiring our room and all local talent, both music and technical to do a project for an artist from VA. We have had clients from as far away as Switzerland come in to do days of tracking with great players. I could go on, but I think you get the idea of how we operate....

Lynn could back me up on this since he has done a wealth of those national and international projects with us. It is not unusual for us to do say a rhythm few days and then the producer hops a plane to Europe and does orchestra and then back to us to do vocals. We do a LOT of orchestra also....

Personally I wouldnt buy it, I'd get my own thing going.

Let me start by saying what some of these other guys said. Take away the gear, then price the land, and the building to see where it appraises at. Then, add in the gear and most importantly your clientel. Something you might not take into consideration right away, but building clientel for a business, especialy a pro studio, can be VERY hard. If the figures work out in your favor... by all means, swoop that thing up and roll with it. Good luck and let us know what you have decided to do.

The basics of real estate and building value are that not hard and there are rules of thumb for buying a business also, like Tangible assetts which are land, building and fixtures, inventory or in this case equipment and then the intangible assets, business good will or in his case clientele, This is called Blue Sky its called that for a very good reason.

1. get your self a realestate agent or do the reserch yourself for the comparative land value , there will be a range of value for similar property of the same size and location.

2. try to find out about the construction type, size and matierials etc. of the building this will give you a $ Per Sq. ft. figure for value or cost of building a new one. Try to figure any cost for needed repairs or needed cosmetic upgrades

3. look at the equipment inventory list and try to figure what works for you and what doesn't

4. This stuff is mostly just straight forward addition and subtraction if this adds up close to the sale price. There is a lot to be said for not having go through the construction process for a new start up, its a hassle and always takes much longer than you expect.

. the only tricky part is this thing called Blue Sky. Be very carful how much you pay for Blue Sky the thinking of most good business people is, pay very little or nothing for it.

Good luck Kev

Agree....

Comps have already been done on this place which are indisputable I would assume. They are on the same street. Appraisal was done last summer for refi rate reduction and equity draw out. It even shocked the bank what the real estate was worth. It had doubled since I bought it....

One thing you have to remember about an existing business vs a start up. I have been in business around 30yrs. I walked into the bank in Franklin in 1997 and they did not know me from Adam. But I had a great financial history and that coupled with the history of this place was a no brainer for them. They would have loaned me even more than I needed. I have ran several million dollars through this place since then. How many startups in THIS industry can say that?

I would not even attempt to build a new place right now in this age. Just building materials alone after all the past year's disasters are worth not doing that on specualtion alone. We did a remodel and acoustic overhaul of the control room in 1998. It is one of the better sounding rooms in town I am told by many who work there. Lynn would not do his mic/pre comparisons there if it sounded bad. Ask him.

As for Blue Sky? I completely understand, but there is something to be said and some value to what I have worked to build and maintain. I should not have to give that away. Build someone a business and give it away? I don't think so. We have world class and renowned players, singers, arrangers, producers and engineers and national known artists working there all the time. How many startups can say that and what value do you put on that? Definetly worth something...

I am reasonable though...

I'm not saying that it won't happen, just not to put a value on that when deciding whether or not to purcahse it.

The reason clients stayed is unknowable. It coule be a reflection of the room, of them or of you. The latter is the biggest issue.

Also, what was the market like 9 years ago? Were there more sessions that needed a studio like yours than were available? (That's rhetorical, btw)

The point is it's to variable an factor to be knowable, so the prucahser's business plan shold be made assigning that value to be $0. THen any cleints who stay put you ahead of the plan.

Another factor in all this is the value of the NAME, LOGO, WEBSITE, etc. All of those are established entities of value in a business along with the goodwil. If you went to buy say Coca Cola, would the NAME, LOGO etc not be a HUGE factor in the value of the company. And I am not that huge of a factor in the value of the clients staying. Until recently I was rarely there. I live 150 miles away. I had someone running it...

George please don't misunderstand, when I was talking about Blue Sky I was not
suggesting that its not worth something.
Also I am not saying that you, should not wan't or don't deserve equity on all aspects of your business. I was advising the original poster that the land, building, and inventory are easier to get numbers on. The numbers on business income and expences are basic and certianly play a part in the purchase equation. But there are always intangible assets that are more difficult to assess, he should look at this part of the equation very carefully and from a business stantpoint not an emotional one.

But to further clarify. Since I am not commerical studio owner or employee and also not there in Nashville I certainly cant claim any expertise on this particular situtation.I was only making genral business suggestions, not definitive statements.

Lastly just so you know, If I was in Nashville, I might very well be interested in your studio. Best of Luck Kevin Roche. Jackson Hole Wy.

Lynn, and George-
First, thanks for specifying exactly what the studio IS and IS NOT. If I were looking to buy a studio, I'd be fighting to get a foot in the door (and I'd also get my lawyer and accountant involved for due diligence) and put in a bid.

And so that no one else thinks that I have either suffered all this crap myself, my post was not only MY last 16 years of experience in this business after finishing grad school and arriving in NYC thinking I knew everything , but fortunately, my post actually represents those sad experiences of everyone I know who has been a) unfortunate, b) had poor business judgement, c) ran headlong into a brick wall without enough backing or financial support, d) let themselves get taken advantage of by a co-worker, friend, or e) trusted the WRONG person.

I have tried to learn not only from MY mistakes but also from others. If I had suffered the slings and arrows I describe all myself, my personal studio would have beeen liquidated a decade ago and I'd be dreaming about Germaniums, Tridents, vintage Neumanns and new Porticos instead of looking at them above a sea of track sheets, deal memos and notes.

People are on this board for advice and opinions, which can be good and bad since sadly everyone has one, just like everybody's lower orifice. Sometimes I want to be the voice of reason, sometimes I'm the gearslut urging people to "BUY BOTH!", but when someone asks "should I plop down almost a million bucks" I urge caution, and to think thru the deal.

I'm sure that both George and Lynn EXPECT, not only want, a good buyer who understands the business and could grow or maintain it with aplomb, and not let it run into the ground or make those easy mistakes I have seen with HOW many start-up studios in NYC, LA, Miami, Toronto, Tampa, Orlando, Atlanta, Chicago, Boston, Philly (I never got a gig yet in the American Northwest, sorry!) but as a client who books studios around the country, I've seen some DOOZIES! I hope your buyer is not a first time studio owner, but a decent, knowledgeable, up & coming/moving from the city talent who manages to be HONEST and GOOD at what they do. The biz is hard enough as it is without another scumbag ruining the few nice, high-end places left to work. Can you tell I mourn almost a dozen dead and gone studios in NYC? Great places to work...just history. A shame!

Anyway...I hope that NONE of us experience everything I wrote (even SOME of it is bad enough, but the parts I went thru -those make me laugh, NOW!) and I hope you do not take anything I wrote personally as obviously, it was written as a point of caution before either of you had an opportunity to outline said studio's position, history, or facts, let along your personal stakes in the venture.

Much respect to both of you and best wishes,

Jim "Mr. Jaded" vanBergen
PS: never been the intern, but I'm still irritated by experience of finding the pile of speed on the coffee table. No class at all!

That changes things a bit.

However, if I was buying the studio, every but of finiancial projections I'd make would be based on having none of the old clients.

I'm not saying that I don't believe the studio is likely to succeed, that's just how I'd make my projections.

So it's not JUST a "studio" for sale...

It's a real, functioning business?

That's a whole different animal then plunking down for some real estate and "tangible materials"...aka equipment.

That is correct.....

can you really buy a relationship in this business?

a nice sounding space is definitely worth something, the rest is a sum of the parts.

am i missing something?

i think blue sky is worth something the question is what and how do you calculate it.
how many customers can you count on and in this market it is getting somewhat more difficult to count on anything.
this is the gamble of a business you buy.
but you can try to build up a business and still you will have to roll the dice.
so what will you be more comfortable with.