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Old 30th September 2007
Hate to be the party pooper but:

-If you're intending to work on anything other than demos for bands where you're the sole engineer/producer, realistically you're going to need some form of Pro-Tools. An HD1 is the cheapest professional way to go (I've heard reports of $5-6k from ebay if you already have the mac to put it in) - you don't really want to be messing around with buffer sizes etc with paying clients.

-There's more to setting up a studio than being a great engineer. Everything from room design, what gear is going to be the greatest client puller (if you're attempting to lure freelancers to your room), the day-to-day management of a space, getting and maintaining clients, business plans etc.

-Does your area (or the area you're looking to work in) really NEED another low-mid level studio? if there are bands clamouring to book time, then great - otherwise you're going to be competing with all the other owner operators out there for band demos/indie label work. Check out the rates others are charging for their time and see if you can establish a business on these prices.

A much BETTER idea would be to find someone with an already established room that you can bring clients into. This frees you up to do what you want to do - engineering and producing. Spend what cash you do have on some nice pieces of gear that complement what already exists in the space, and enough time spent working this way should teach you enough about running a studio to know if you want to set up your own place - without the huge risks involved.

It's my firm belief that anyone who wants to open their own studio should already have worked professionally in that field - that way you can learn the way things already work, avoid mistakes others make and hopefully bring some of your own business ideas to the party.