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advise on taking a loan to pay for gear Digital Converters
Old 2nd January 2011
  #31
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doug hazelrigg's Avatar
In my opinion (after 25 years helping run a multi-million dollar family business), the issue is somewhat moot. No financial institution, either now or ever, is going to loan you $100,000 to start a recording studio. I don't mean to be blunt, but I am 100% sure about this.

SBA loans don't come from the government, they also come from financial institutions; the gov't simply guarantees repayment. Because of this, the requirements are quite stringent -- especially for a business just starting out. Not only is collateral required, but a detailed business plan and earnings projections must be provided. Do you really have a firm grasp at this point in your mission of what those figures will be?

A few people mentioned a 10% of income limit. I've never heard this. Accepting this as true, I assume it's referring to 10% of BUSINESS income -- NOT personal income. So this wouldn't apply to you just starting out. In any case, there isn't any limit to a loan for an established business, other than proven ability to repay. Our business for example borrows millions every year roughly EQUAL to our gross earnings, but this is because we have a long relationship with the bank and proven reliability to repay.

The only viable option I can come up with is, do you own your home, or have substantial equity in it? If so, you can borrow a bit over the amount of that equity in either an equity loan, or a equity line of credit. Your home would be the collateral in this case. BTW, it also assumes you have reasonably good credit score.

But in the end, as others have said, why borrow so much money in the first place? A number of MAJOR studio's have shut down in recent years -- the prospect of starting a new one is at best highly risky. Also, as others have said, if you're aiming at the big time, $100,000 is WAY too little. But if you're wanting to just carve out a niche for yourself, it can be done for far less than that amount of money.

In my locality of 80,000 (situated a couple hours from Chicago), there are 3 or 4 serious studios in business (not to mention a plethora of small, unofficial home-based studios), and all 4 are busy. A couple are exploring numerous avenues for making money -- including working on any number of demo songs the owners themselves have written, and produced using area talent, and are hoping to score either the elusive "hit" record or obtain soundtrack placement. The hope/wish/prayer is that with just one moderate hit, they can expand and improve their facilities.

I hope I haven't burst your bubble, but in any case I want to encourage you: don't give up your dream! I firmly believe that you can make it a reality eventually if you start out humbly and small and make of it what you can. Don't stop performing, if you're a performer. I'm 49, and I still play regularly in a Metal band (guitar) and -- completely opposite to that -- martini bar jazz piano. I love it. I consider myself very fortunate in this regard.

Good luck in your mission!
Old 2nd January 2011
  #32
Lives for gear
 

Quote:
Originally Posted by TLR View Post
Brilliantly said. The age of the Project Studio has started, but the position might shift back to the bigger studios when the popular music medium moves from Stereo to Surround.
might have to wait for:
a) a significant amount of people who care about audio quality
b) humans to develop 5 ears (for 5 earphones)

first
Old 2nd January 2011
  #33
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Jeff16years's Avatar
 

Quote:
Originally Posted by Jeff16years View Post
Sorry if this is a little off topic but I assume some of you guys have done this and/or are researching this.....

So if I were to start a new audio business and I wanted to get a small business loan for $100,000. Any idea what kind of terms you get? As in how long a loan like that would be, interest rate, monthly payment, etc.

i've been trying for 2 hours to get this info thru a google search, it's a nightmare.

I need to step up my gear and my studio.
Thanks guys.
-Jeff
Hi guys.
I just read every response, thanks for taking the time to reply.
I definitely left out a lot of details about the business and for now i still can't talk about the details. But I will say this:

1-
I totally agree with what you guys are saying, but again i can't mention the details that might make my case a little more clear.

2-
I do own my home and have more equity in it than the amount of the loan I'm looking for.

3-
I was actually not looking for advise on whether or not I should do this (but I did read your advise, and I appreciate it) I was more wondering if any of you know details about these kinds of loans.

thanks again.
-Jeff
Old 2nd January 2011
  #34
Deleted 86c3d96
Guest
Quote:
Originally Posted by Jeff16years View Post
Hi guys.
I just read every response, thanks for taking the time to reply.
I definitely left out a lot of details about the business and for now i still can't talk about the details. But I will say this:

1-
I totally agree with what you guys are saying, but again i can't mention the details that might make my case a little more clear.

2-
I do own my home and have more equity in it than the amount of the loan I'm looking for.

3-
I was actually not looking for advise on whether or not I should do this (but I did read your advise, and I appreciate it) I was more wondering if any of you know details about these kinds of loans.

thanks again.
-Jeff
There is no "these type of loans." You to have capital to invest since there is typically no real business model any financial institution will find an acceptable risk.

Apparently, you have the capital in your house. So, you have already answered your own question. You need a Cash Out Refi or a HELOC. It is the only way you will get that amount of money without some idiosyncratic method for raising money.

I would be much more interested in your very well thought out business plan and revenue model which would justify risking the family home.

This is a largely a commodity, low margin business with very low barriers to entry, and even lower cost alternatives. Most successful recording studios are not selling studio time, but professional services and/or room. (edit: a very special room, but even those are few.)
Old 2nd January 2011
  #35
Gear Guru
 
drBill's Avatar
Quote:
Originally Posted by harry_seldon View Post
Most successful recording studios are not selling studio time, but professional services and/or room.

Bingo. thumbsupthumbsup

I used to sell studio time. Now I can't give it away. BUT, people come and use ME at my studio. I sell myself. I happen to have gear HERE, but if I go to THEIR studio, I charge the same. They get my studio for free if they come here.

Jeff, if people are not paying for YOU - RIGHT NOW, there is little hope they will pay for you WITH gear. I know, it sucks, and I don't know the answers, but I do know the realities. There was a time when that worked, but we are long long past that now. Harry nailed it. The only saleable thing any more is experience and credentials. If you have a studio, that makes it easier to sell yourself, but you're still selling yourself, not studio time. Having 100K of gear without the ability to sell yourself will only lead to oblivion.
Old 2nd January 2011
  #36
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Aisle 6's Avatar
All that has been said is true and correct. If you want a studio business. Strike up an arrangement with an existing studio and build your own client base through them. You will probably make more net profit this way anyway. Then when your client base/profit is ample to justify the expense. Build your studio then.
Every studio that I have seen go out on a big spend with someone else's money is not here now. The other mindset is that when it is your money, backing yourself, you will put your balls out there like never before. I guarantee it.

Good luck with your project.
Old 2nd January 2011
  #37
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I go bak to my first response:

Quote:
Originally Posted by therealbigd View Post
Question 1: Are you getting so much work as an engineer, that your continued use of somebody else's studio is costing you more than it's worth?

If the answer is "No", there is no point buying gear. Why? Because you will not get any more work by having your own studio. Well, maybe a tiny bit. But not drastically. So ONLY if you're getting so much work that using somebody else's place is costing you more than it'd cost to build your own place of the same standard.
And the point remains the same. If you're not getting so much work in somebody else's studio that it's become financially inefficient to do so, you will not get any more work by building your own place, you will simply strike up more overheads.

I'm perfectly happy with my setup. I have 3 studios - 2 in London, 1 in Cornwall, where I take all my work. The Cornish one is my favourite. The studio owner takes 60% of my earnings in a day, but on the flipside, on the days when I'm not in there working, I'm not spending any money keeping the desk switched on or getting stuff serviced or installing upgrades or keeping the Pro Tools system up to date or whatever. I just give up 60% of my cash and it all gets sorted.

When it gets to the point that with all those 60%s each day added up it really would be cheaper to build my own place, I will do. But I will expect to have sufficient cash to do it alone by then, and the sufficient knowledge of what kit I want to do it by myself, and not have to ask on an internet forum.

So my 'play the game' answer is what I've said above. But my proper serious answer is that if you come on Gearslutz to get financial advice you are not ready to start a business, and if you intend to further come on here to spec your equipment and room, you are not ready to start a business in the audio profession. There are people employed full time to give such advice, and there is a reason why people pay them money to do it.
Old 2nd January 2011
  #38
Lives for gear
Quote:
Originally Posted by therealbigd View Post
. . . I just give up 60% of my cash and it all gets sorted.

When it gets to the point that with all those 60%s each day added up it really would be cheaper to build my own place, I will do. But I will expect to have sufficient cash to do it alone by then, and the sufficient knowledge of what kit I want to do it by myself, and not have to ask on an internet forum.

So my 'play the game' answer is what I've said above. But my proper serious answer is that if you come on Gearslutz to get financial advice you are not ready to start a business, and if you intend to further come on here to spec your equipment and room, you are not ready to start a business in the audio profession. There are people employed full time to give such advice, and there is a reason why people pay them money to do it.
Quite honestly, that is the best advice you are going to get around here.

The one big mistake that 95% of all business micro-start-ups make, is not facing reality. Sorry, but that's the way it is!
Old 2nd January 2011
  #39
Lives for gear
Well, it sounds to me like the OP is pretty convinced he wants to do it.

So taking it from there. I don't think there is a snowballs chance in hell you will get a business loan in a corporet name. Or if you do there will be a personal guarantee. Rates are low right now, so thats not too bad. But I don't think you will get a long term, so the payment is still going to be substantial when tagged onto the cost of the space, utilities, insurance, and ...oh yeah, people.

You might be better of just maxing out your mortgage. If things go well, you can always pay it down early. But trust me, you want to reduce your monthly nut as much as possible. Mortgahes are low right now. If you can find a fixed grab it. The more predicable your nut is, the better off you are.

Buy used. See if you can find a studio folding and make an offer on the whole thing, or as much as you need.

Best of luck. You will need it.
Old 2nd January 2011
  #40
Lives for gear
 

Quote:
Originally Posted by Jeff16years View Post
Sorry if this is a little off topic but I assume some of you guys have done this and/or are researching this.....

So if I were to start a new audio business and I wanted to get a small business loan for $100,000. Any idea what kind of terms you get? As in how long a loan like that would be, interest rate, monthly payment, etc.

i've been trying for 2 hours to get this info thru a google search, it's a nightmare.

I need to step up my gear and my studio.
Thanks guys.
-Jeff
First of all, it should be quite easy to get a loan right now, because the FED is influxing a great deal of money into the market. This means interest rates are at all time lows, I mean like 0%. Still, you probably need a collateral or no one will loan you.

(Well usually it would be easy to start business in recession as there is lot of money and opportunities - this time it is pretty big mess.).

Anyway whatever you do take a interest rate that is fixed, even if that is higher. With the coming inflation and interest rates hikes, that are IMO a certainty at this point, you might even win by taking a very long fixed rate loan. The banks for some reason often don't see the necessity of rate hikes /inflation coming so they foolishly might give way too cheap loan if you take fixed and long term loan. Of course at first it may appear like you are paying more, but it is way safer too.

That is my 2c in this issue, but there are always risks in taking loans so remember that.

You won't find the terms in google, go to couple different banks and negotiate with them. They change a lot depending on the interest rates and all kinds of variables. Most important is to go to many different banks and make them compete, also go to there with the mindset that "you are not going to BS me". Also it doesn't hurt to have a solid proof that you can pay back.

I also think that you should act quickly, because the rates I think have just started to raise which means banks maybe waking up to the coming hikes in inflation and thus interest rates. This means you won't get even close as good deal in a fixed rate loan. Of course anything can happen though.

Anyway I kind of agree that no one is going to probably give you 100K to build a studio, unless you have a very good plan, and proof that you are going to get the money back. The future does not really lie in this industry I think...
Old 2nd January 2011
  #41
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cdog's Avatar
Quote:
Originally Posted by Jeff16years View Post
I was actually not looking for advise on whether or not I should do this (but I did read your advise, and I appreciate it) I was more wondering if any of you know details about these kinds of loans.

thanks again.
-Jeff
The details are this: you arent getting one and you probably dont know nearly enough about the business if you are even considering this.

Let me ask you a personal question, sir. How much money, have you made, total off music in your lifetime? If its over $1M in less than 10 yrs then maybe this makes some sense. Otherwise, it probably doesnt.

You can put together a sick setup for a quarter of that price or less. Theres no need to spend a small fortune on gear in 2011, other than maybe for showing off.

The mentality of "I need to spend $100K for my studio to be awesome" is inherently flawed. You dont. Making great albums is about the right space, the right time, right people, not just spending cash on $5k mics.

Nobody buys an album because you used a $5k mic.
Old 2nd January 2011
  #42
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kennybro's Avatar
Quote:
Originally Posted by dreamsongs View Post
In any case, 100k doesn't even sound like close to enough for a serious studio that would draw away the big fish.
True. Just about anything you could do with a 100k studio, you could do with a 25k studio, gear-wise, that is. And you really couldn't build much of a room with the 70-75k you'd have left over, if that was the plan. You'd end up with a really expensive and mediocre project studio.
Old 2nd January 2011
  #43
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dreamsongs's Avatar
 

If you are dead set on doing this and "you do have" equity on your house, then get a home equity line and pay yourself. Why get an outside loan ?

Then you can manage how much to pay yourself each month. But I warn you, 100k in gear sounds great and romantic but without all the other components needed to succeed, you're doomed right out of the gate...
Old 2nd January 2011
  #44
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MicDaddy's Avatar
 

don't do it

"...the borrower is a slave to the lender" (Proverbs 22:7)
Old 2nd January 2011
  #45
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djmukilteo's Avatar
I'm sure if you have enough equity in your house you could refi or get a home equity loan. In the US it's not a terrible time to do that because the rates can be low as long as your credit rating and regular employment are good.
This is different from starting an actual business and getting a business loan for sure!
Sounds like you might have something going on business or partnership wise because of your non-disclosure statements, so if that's the case I'm not sure why you would come on a forum to discuss it or ask questions.
I would think you would be better served discussing this with your lawyer and accountant.
I have friends who have taken out home equity loans or are retired and take their 401k money and buy and build custom hotrods. I think this is a great analogy to the recording and playing music. Were all looking to spend money on something...we create cottage industries with our different interests.
For the most of them it's a hobby and they buy all the tools, some expensive tools some semi-pro. Some spend $50k on an engine block. They build a garage structure with really nice tiled clean floors and expensive lifts and grease bays. That's there thing.
I see it everyday and recording studios and playing music at the local cafe open mic is a lot like that.
Some of those people think they can make a business out of it and build custom hotrods or bikes for lots of other people because somebody liked what they did on their machine and want one too. It happens all the time.
The big question is if you enjoy it as a hobby, why in the world would you want to run it as a business?
Making a business out of it just ruins the hobby which was supposed to be fun!
Business isn't fun!...it's about making money, profit and a living..
Old 2nd January 2011
  #46
Moderator
 
narcoman's Avatar
 

Quote:
Originally Posted by cdog View Post
The details are this: you arent getting one and you probably dont know nearly enough about the business if you are even considering this.

Let me ask you a personal question, sir. How much money, have you made, total off music in your lifetime? If its over $1M in less than 10 yrs then maybe this makes some sense. Otherwise, it probably doesnt.

You can put together a sick setup for a quarter of that price or less. Theres no need to spend a small fortune on gear in 2011, other than maybe for showing off.

The mentality of "I need to spend $100K for my studio to be awesome" is inherently flawed. You dont. Making great albums is about the right space, the right time, right people, not just spending cash on $5k mics.

Nobody buys an album because you used a $5k mic.

I agree and disagree. You couldn't even get a decent room for that money - yet you could furnish it with all kids of eye/ear candy. So - whilst it feels like a serious investment - it's not going to attract major clients (hah - the few that are left). To do the eye/ear candy thing - even a quarter of the money would do. To do the full high end room thing - it's just not enough.
Old 2nd January 2011
  #47
Gear Addict
Interesting dilemma, if you can afford to pay back the loan and have multiple contingency plans, then go for it. it is amazing everyone is dead against it but if you can afford it why not. Remember the most important thing is your business plan.
Year one is write off year anyway you are most likely never going to make profit in year one. Also whilst not the best reason if you choose you gear wisely i.e secondhand then the dump it quick pain wont be too sever than if you bought them new. If you build a quality studio you can always rent the room out provided it is isolated from your home.
If you can afford the repayments and they are not too long no more than 5 years you can tough it out anyway.
Now for all you guys the average home studio spends well over 20k in 3 years ooooppps .......

Ok ill get some heat for this but seriously cost it all out Computers, Software, Upgrades, Outboard, Protools HD or equiv.

I was shocked when i audited my rather small studio obviously we buy and sell also but cost it out it is much more expensive than you think even for an average bedder studio.
If i tell you all the gear that have come and gone it is staggering HOWEVER in my case I always tended to ditch any big item that clearly was going to drop substantially in value before it did phew.
I'd say keep an eye out on the latest tech and ditch any costly gear if a newer more efficient one turns up. So all you Apogee AD16 DA16 owners start selling quick, because soon it will be sub 1k. Please let me know when you are selling at that price lol.

Seriously $100k is £65k pounds sterling maybe not that much for a really big studio but plenty for a project studio. Get the room done well and you can build from there buy secondhand wisely or if new get something that does more than one thing e.g Zed gsr24 for your console takes care of 4 things already.

Mixing desk
DAW Controller
Audio I/O
Monitoring
for about $9k probably, just need secondhand outboards and your done.

OR get a secondhand HD rig with control 24 secondhand perhaps that may come in at about $9k then you get monitoring for about $0.5k

Anyhow as i said room first then cost the rest after.
GOOD luck but plan well with at least alternatives to pay the loan if business is well dead e.g second job, understanding other half willing to put her shift in too.
Old 2nd January 2011
  #48
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doug hazelrigg's Avatar
Quote:
Originally Posted by Jeff16years View Post
I just read every response, thanks for taking the time to reply.
I definitely left out a lot of details about the business and for now i still can't talk about the details. But I will say this:

1-
I totally agree with what you guys are saying, but again i can't mention the details that might make my case a little more clear.
Then quite frankly you're wasting our time. Although... this IS greaslutz -- we're ALL pretty much killing time as we browse this place. But my point is: the devil is in the details. The details could make a big difference in the advice you get.
Quote:
2-
I do own my home and have more equity in it than the amount of the loan I'm looking for.
I still think this is your only option. I'm not a realtor or a banker, but having been through this, keep a few things in mind:

>you'll need good credit history

>you'll need to provide proof of income for the previous 3 years

>your debt to income ratio needs to be at or less than 50% (it used to be much lower than this, in the 30% range, but easy credit and the surge in house prices have made this a bit more liberal)

>there's an "80%" rule (for most equity loans): the banl will have your house's value appraised, then they will loan you up to 80% of the value MINUS whatever you still owe. So if your house is a $200,000 house, but you still owe $100,000, the bank will loan you $160,000 minus the $100,000 still owed for a net maximum of $60,000

Personally, I don't think I would re-mortgage my house to start a business, but that's your call.

I also just want to restate: NOBODY is going to loan you $100,000 for this type of business EVEN IF you have collateral, unless the collateral is equal to the loan amount (this is just my opinion, but it's based on experience... I'll elaborate if you want via PM).

In your particular case, there are several types of collateral you could offer:

>property
>automobiles
>stocks, bonds, or other liquid assets like gold

Somebody said earlier that nobody is going to accept the musical gear as the collateral. I think that's right -- such equipment would be a PITA to liquidate. However, many businesses DO in fact use their machinery and equipment as collateral, but I don't think musical gear qualifies (I could be wrong about this)
Old 2nd January 2011
  #49
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doug hazelrigg's Avatar
BTW -- another option -- the one I would pursue -- is building your dream studio incrementally by purchasing quality gear a piece at a time using signature loans. A signature loan doesn't require any collateral, can be paid off in a year or two, and establishes your reliability with the bank. It might take you awhile to assemble want you want/need by doing this, but it's FAR safer than an equity loan or HELOC.

When I was younger and didn't have the income I do now, I took out quite a few signature loans --in fact, mostly to buy gear! Do NOT go to a "mouse house" -- one of those high interest loan places -- go to a bank where you can get a reasonable rate. As usual, you'll need good credit -- as a home owner, you've probably already established your reliability to repay

Good luck!
Old 2nd January 2011
  #50
Gear Guru
 
drBill's Avatar
Quote:
Originally Posted by digi882 View Post
Interesting dilemma, if you can afford to pay back the loan and have multiple contingency plans, then go for it. it is amazing everyone is dead against it but if you can afford it why not.
Why not? How about studios that have been in biz for 20 years with amazing credits and client lists failing every other week. That's just for starters...... If he had said, I've got a trust fund and can afford to loose it all, then I suspect the responses would have been different. But then, he wouldn't have been asking for a loan would he?? heh

Quote:
Originally Posted by digi882 View Post
If you build a quality studio you can always rent the room out provided it is isolated from your home.
That is no longer a viable business model. If you think it is, then we are living on two different planets.

Quote:
Originally Posted by digi882 View Post
Ok ill get some heat for this but
Only from people who have actually been in the biz for years. From newcomers wanting in, you'll get pretty much unanimous support.


Quote:
Originally Posted by digi882 View Post
GOOD luck but plan well with at least alternatives to pay the loan if business is well dead e.g second job, understanding other half willing to put her shift in too.
It better be one hell of a contingency plan to pay off $100k + interest over 5 years. Good luck indeed. And yeah, let us know what your wife thinks about the contingency plan of her taking on a second job to pay off your gear.
Old 2nd January 2011
  #51
Moderator
 
narcoman's Avatar
 

nobody can afford it if it involves sucking the equity out of your property - at a time when interest rates are set to hike enormously over the next 4 years. If you've got the money in the bank - go for it. If it involves cashing in your equity - that's madness. Buy a second house - rent it out.... use THAT profit to put up as equity against a new studio. Rent is far higher than any mortgage/building loan.
Old 2nd January 2011
  #52
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cinealta's Avatar
 

Don't do it.

What you're talking about is called a "personal unsecured" loan. If you don't have the cash/ CD to "secure" it, the interest rate will be exorbitantly high. This is really meant as an emergency, short-term "bridge" loan, not a long-term loan.

I wouldn't take a "home equity" line of credit out on a start up business proposition. Why risk your home, and personal credit for a very risky business venture. And yes, a startup studio is considered "very risky," not only in this economic climate, but given the state of the music industry. You can't use your gear as "collateral," they are not liquid instruments or securities. It is considered worthless to the underwriters. Maybe if you owned the building.

If you don't have a CPA-certified Pro Forma, balance-sheet and projected earnings/costs for 6 years out, forget about a business loan for a recording studio. The underwriters will crush you (no more zero-documentation in the U.S.).

If you were starting a film/video/game post studio in a large market, AND you already had clients committing to the first 3 years of earnings, it would be a different story (easier), but that's not your case.

The above guys are correct. Why not build your studio incrementally, as you can afford it? I think Allen Sides started with only $6k of gear and now look at him. The most important thing you need are clients. Only your room, not gear, will attract them.

Good luck!
Old 2nd January 2011
  #53
Gear Maniac
 

Quote:
Originally Posted by Jeff16years View Post
Sorry if this is a little off topic but I assume some of you guys have done this and/or are researching this.....

So if I were to start a new audio business and I wanted to get a small business loan for $100,000. Any idea what kind of terms you get? As in how long a loan like that would be, interest rate, monthly payment, etc.

i've been trying for 2 hours to get this info thru a google search, it's a nightmare.

I need to step up my gear and my studio.
Thanks guys.
-Jeff


wait wait wait wait wait wait

You are looking to have 100k in your pocket and you're planning on chucking it all into the sinking platform of music biz?

As has been said before and again ''If you have to ask.''
Old 2nd January 2011
  #54
Gear Addict
DRbill Please don't tell me you are suggesting because studios are failing he should give up and not bother.....we may as well all give up then.

One man's failure is another man's success in these days we need to be more innovative. Let me tell you that in a country (that I know very well indeed) that is far poorer than the US the youngsters with no prospects, no hope are setting up small baby sized project studios.

The studios (not even comparable to a modest project studios) are cropping up and people are making music in droves.

As a result the Music industry which by the way forget about royalties is booming because everyone adapted instead of relying on royalties they use their records which btw hardly anyone buys, videos and youtube to build a fan base and then do live gigs which their fans attend in large numbers and then charge flat rate with the promoters to get paid. It ain't easy but its the best they've got.

Please that is the problem here narrow minded view points, too much negativity the dream is killed before he even starts for goodness sakes.

Bet Donald Trump, Richard Branson, Bill Gates all had the approach ah businesses are failing boys lets not bother...NOT!!!!!!!

If he wants to take a risk let him that is what the American dream is all about right or did i hear wrong, please correct me.

btw so you know i have been in the music making business over 20 years so I know what i am talking about thank you very much. Its not all about making money y'know most of us if we are honest haven't made millions have we.
Old 3rd January 2011
  #55
Moderator
 
narcoman's Avatar
 

..... neither is it about getting his house repossessed when the inevitable happens and his $100k equity becomes $50k of recalled liability.
Old 3rd January 2011
  #56
Gear Guru
 
drBill's Avatar
Quote:
Originally Posted by digi882 View Post
DRbill Please don't tell me you are suggesting because studios are failing he should give up and not bother.....we may as well all give up then.
First, many are giving up and have given up. I'd call those the fiscally SMART people. The people who had means and interests other than music which could yield a decent living. It saddens me to the very core of my being, because many of them were dear friends and associates that I miss dearly. The shrewd entrepreneurs realistically are getting out or more likely have been out for years. I'm not in this for the money. I'm in because I've got too much time and money invested, am too old to completely re-invent myself, and really, I have no idea of anything else I could be as successful at as I am with music.

I could seek work in the fast food business, maybe push shopping carts at the local grocery store. What other avenues of business reward a grammy awarded engineer with extraordinary music production skills and arranging / composing chops? If I KNEW of an avenue that could/would utilize my skillset that paid a real living, I'd be all over it - while doing my own music for the pure love of it in my spare time. I think if there WAS such a venue, many of use would go back to doing music for FUN instead of PROFIT.

The reality of my personal situation, is that I tossed "selling studio time" in the dumpster years ago, and am pursuing a more pleasurable existence of producing projects / music that I see fit to. It's a long term gamble. 5 years will tell if I am a fool or not. heh Selling studio time is a complete waste of time. It just doesn't work anymore. If this is "news" to you, honestly, you must be somewhere in the world that I don't know about.

As for what myself (and most others on this thread) are "suggesting" is that his odds of making good on the loan based on traditional recording studio balance sheets are worse than if he takes the money to Vegas.

There are OTHER ways that would offer much better odds of long term survival than taking out a $100k loan. Many have been suggested on this thread, and even a mini-cursory search of GS would reveal a wealth of info.

Let the smart man listen read up and listen.....
Old 3rd January 2011
  #57
Lives for gear
 
djmukilteo's Avatar
digi882:
I think you're confusing people buying audio equipment with a business recording people in a studio and making a living from that.
This is one of the reasons why it's a bad idea to think you can build a studio with $100k of high or even mid end gear and make a business or living out of it!
The current goal and trend in the world is to manipulate and motivate wannabe recording stars (100,000+ American Idol auditioner's) with disposable income to buy hobby grade recording interfaces and computer software and make recordings of themselves at home to put on their iPhones and Mac's on YouTube.
Like you described, they can and are buying that stuff themselves now.
There is no conventional studio business model to support that trend!
Now if you have a new piece of software or some new app or some magic electronic box that will turn the masses into rock stars, well now were talking possibilities!
Guitar Hero's think are wii
Old 3rd January 2011
  #58
Gear Addict
Come on please, man oh man some of you guys make me laugh. You all probably have credit cards right, probably got loans too. I am sure this chappie is not stupid he asks a simple question what sort of loan do you recommend and off course some prophet of doom gurus who somehow can predict the future for this person they do not know personally,

rather than say if you plan well, say get a low interest loan, heck say even if you have to get it secured on your house plan plan plan for as many scenarios ensure you can cover the loan even in a downtime with maybe another job, or say have a sensible business plan then you can succeed with guts and determination.

INSTEAD they are suggesting it is inevitable he will have his house repossessed.

Honestly this place has gone lala now.

Please Note I am not talking about the sensible suggestions on the type of loans as some people have contributed this is aimed at the overtly negative "ah mate you will fail" types......
Old 3rd January 2011
  #59
Gear Guru
 
drBill's Avatar
And yet, it makes one wonder doesn't it? If so many professionals are saying "don't do it"....why would that be? Oh yeah, they're probably all scared about loosing business to the new $100k startup guy. heh heh

EVEN if that was true, it would be telling in and of itself. If so many established people are scared of a startup, what does THAT tell you about the biz?

I say if the guy has rich parents, a trust fund, or a secret plan (as alluded to), has good self esteem that won't be crushed by a lack of clients, and doesn't need to cash flow positive, GO FOR IT!!! You only go round once.... stikestike

Plus, the gear pimps need the biz. Buy new!!!
Old 3rd January 2011
  #60
Gear Addict
Quote:
Originally Posted by djmukilteo View Post
digi882:
I think you're confusing people buying audio equipment with a business recording people in a studio and making a living from that.
This is one of the reasons why it's a bad idea to think you can build a studio with $100k of high or even mid end gear and make a business or living out of it!
The current goal and trend in the world is to manipulate and motivate wannabe recording stars (100,000+ American Idol auditioner's) with disposable income to buy hobby grade recording interfaces and computer software and make recordings of themselves at home to put on their iPhones and Mac's on YouTube.
Like you described, they can and are buying that stuff themselves now.
There is no conventional studio business model to support that trend!
Now if you have a new piece of software or some new app or some magic electronic box that will turn the masses into rock stars, well now were talking possibilities!
Guitar Hero's think are wii

Seriously this is comical a little perspective here, there are no guarantees in life on anything heck my multi billion $ company i work for may go bust tomorrow, in the meantime i am still doing what i love doing making music for myself and others yes i make money no it is not huge amounts but it all adds up.
What on earth do you mean by business recording studio I have mentioned how in seriously poor countries studios there are making good music with as little as an alesis usb mixer they are not doing it for free i can tell you aren't they a business?????

The issue here is that the OP has already planned and decided he needs to spend $100k the OP clearly mentioned he could not divulge any more details for whatever reason. $100k is a lot about £65k I am sure if he gets a good room for say $25k or even $45k he probably wont need to shell out $55k in gear if chooses wisely i.e gets gear that does more than one thing like ZedGsr24 and then goes secondhand for the rest.

Lets give the guy constructive advice not shoot him down in flames and whilst we are at it if you really what to have a go have a go at studios who have Protools HD rigs and then shelled out $100k on an extremely overpriced Icon setup that are nothing more than a massive eye candy mouse, Digi did rather hoodwink a few on that one. I'd rather go to a studio that invested in an SSL desk than an Icon which btw will depreciate extremely badly, there is no such thing as vintage controller mojo is there lol. Case in point Procontrol oh dear you cant get more than $2k for 2 Procontrols, yet they cost nigh on $15k when new for 2 off course.

Now if Icon had at least 24 AD/DA converters and you didn't need digi 192 maybe i'd respect it more.

Sorry but if studios are failing it may well be that they over stretched themselves and never adapted when it was clear bedroom studios were booming to such an extent, that they were suffering some studios i went too wouldn't even negotiate with me even though i told them i could bring loads of business their way.

Here in the UK the really big boys that charge £1500 per day are only ever for brand x super nova artistes. So SSL release AWS900 at £40k suddenly we get studios that charge £400 per day then we get even more experimental studios that entice bands do packages give freebies heck whatever it takes to get them in the door. They are still around inspite of the downturn in the economy

It is true there are loads of studios going bust hopefully they are limited companies and yes it is very sad too but the upshot is the gear gets sold at auctions and you and i can sometimes get a great deal too that inspires us to become innovative set up a studio locally charge modest amounts and get by.

The OP is such a person he want to have a go.....let him do just that. Until he expands on his circumstances please lets not assume he is daft and doesn't know what he is doing.
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