Archive for category Recording Studio Business
Let’s think about the business of operating a recording studio. All businesses operate on one basic equation: Income minus Expenses = Profit.
This sounds easy, and in fact, with some pre-planning and diligent follow- through, it is easy. However, the failure rate of small businesses is extremely high, due primarily to poor planning. So lets start with the basics:
1. Choose a legal structure; sole proprietorship, partnership, corporation, etc. Now is the time to seek professional advice from a tax adviser and maybe an attorney.
2. Research state and local laws that will affect your business. Do you need a business license? How about a federal tax ID or sales tax ID number? Do you need to establish a d.b.a?
3. Open a business checking account. Pay your business expenses out of it, receive your studio income into it.
4. Set up an accounting system. Basically accounting is about tracking sales, cost of goods and expenses. Understand the various tax requirements for your business.
5. Protect yourself with insurance; health, property, liability and possibly even disability.
6. Know your competition. Check out the other studios in your area. How are you different? What are your strengths?
7. Set up a budget. Know your hard costs, and break-even point. Write down your financial goals.
8. Decide on a price list. How much will you charge for a studio session per hour? Will you charge extra for an engineer? And will there be an additional fee for the use some of your special equipment?
9. Set up a marketing plan; establish relationships with people in your local music community, set up a website, distribute some quality product and advertise. Read the rest of this entry »
Think back 20-30 years ago. Some of us weren’t even alive then. Maybe that’s why today’s recording industry seems so normal. But trust me – this isn’t the way it’s always been. Things are changing for recording studios and for the music business. I’m not talking about Napster and the file-sharing crisis of a few years back. Actually I’m referring to home recording studios, which are having a huge impact on the big time studios in your town.
In the 1970s, what did a band do if they wanted to record an album? Or even just a demo? It was a difficult process, and unless you wanted to settle for absolute junk – you had to go to the big recording studios. They monopolized the music industry. Bands that could get into the studios were heard. A band that had no money, no label representation, and no fan base were screwed.
But home recording studios began to spring up more and more through the 1990s. And with advances in computer technology, anybody and everybody can own a nice little studio. The price tag today? A couple hundred bucks. And the quality of your recordings will not be too shabby. With a little practice, your home studio can churn out competitive tracks. And the music business doesn’t like that fact. You are armed with a studio that can compete. And more bands are starting to hop onto the home studio trend.
Here’s the interesting part: a home studio owner today has a unique opportunity to cash in on the industry. Labels are hemorrhaging money, unknown bands are getting famous through MySpace, and recording at home is becoming a profitable business. It’s as simple as picking up the pizza boxes and beer bottles in your studio, bring in some local bands, and closing the deal. When you show a band what your home studio has to offer, and how much money they can save by avoiding a bigger studios, you will win the sale. You could record one band a week and have some extra pocket change to buy new gear. How many bands would you need to record before you made enough money to quit your day job? That’s how powerful this new movement is, and I would encourage you to look at the possibilities. Read the rest of this entry »