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Old 1st February 2012
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crying1986's Avatar

Thread Starter
Close to opening...


I have partnered with a couple of people and we are in construction right now and are planning on opening in about a month.

I have a few questions regarding how you guys handle the distribution of money.

a couple of my business partners have separate production companies and they will be using the studio as a place to record their clients. In a situation like this, do we decide on a rate that the studio costs and they can charge what they want on top of that...then we each get the percentage of shares that we own in the company?

How do we decide who is who's client?

Basically, how do the three of us work together yet separately under a common name yet at the same time under the names of ones own production company name.

Sorry if this is worded strange...i'm tired, I've been running tie lines all day!
Old 1st February 2012
Lives for gear
andyspiller's Avatar

Hi There

Its been a while for me but when I was in partnership the solution was divide the costs by the number of hours/partners. In my case that was by 2 and I took half the time. I also purchased at unit cost price additional time from my partner (he was only ever in on the graveyard shift) and then I made my money on hiring the studio plus me as an all-in cost. (We had previously tried to make it work through Income generation as a team but through my own foolishness and putting faith in "Friends" over the business, I screwed that up and caused a lot of pain).

My partner subdivided his time into 2x6 hour blocks and rented half of his time long term which covered his costs, thus he got "free" studio time without the pressure of having to generate the costs at commercial rates (which would have been tough). This also allowed me to earn a reasonable income and claim all the associated costs against my business as a sole trader, and the business was a standalone shell that covered its own costs without trying to be an out and out commercial facility.

Of course I also brought in an equitable share in Equipment and any new items were individually purchased for the common good.

I think ultimately if you are considering the base unit cost to generate profit over and above the baseline number, it needs to be achievable by all concerned. Also does the unit cost cover depreciation, repair, replacement, assistants etc etc? If your partners are doing a lot of pro bono work, will you be happy being asked to get charged an unequal share as you have the paying clients? Are you also getting equal access to studio time?
I wish you luck with your opening and hope you can find an amicable arrangement which works for all of you.

Best regards

Old 5th February 2012
Lives for gear
crying1986's Avatar

Thread Starter
Thank you for your insight Andy. I will keep trying to determine the most sensible way of going about this. Your experience is much appreciated.
Old 5th February 2012
Lives for gear
Andy seems to have covered most of the bases.

Still, here's my 30 cents worth - you guys really have to sit down and discuss this and discuss, as Andy points out, all the other costs that perhaps you have not thought too deeply about, like replacement costs, contingency costs, service and repairs, heating, lighting, insurance.

Possibly the best is to just divide the costs by the time spent in the studio. And if one of you guys books it and does not end up using that time, I would say 'Tough! You still have to pony up your part of the costs, including time booked but not used!'

As for identity - give the animal a name!

As you can see, we have a studio, built on the site of an old cattle byre, so we called it The Byre. If it had been an old factory, I would have called it The Factory - and so on. Give it an identity that people will be able to relate to and leave it at that.

The identity of the studio is very important and I would avoid diluting it with other names attached. Getting a level of recognition is hard enough as it is, without customers getting confused by daft add-on names. They'll realise that there are three separate companies using the one facility when they ask for the invoice!

Oh, and good luck BTW!
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