The Home Recording Studio Business

[oakman]

Tom, Funny that you bring this up at this time. I have considered a partnership on some level and have been offered venture capitol on a couple occasions. That would be the ticket to push the whole thing to a new level. A couple problems with it... One problem is with my own character. I really dislike feeling "beholding" to another person or persons. I'm not much of a business man and not a very good negotiator.

The other problem is time. I am a one-man shop. My clients come to me for a certain creativity that is unique to me. I am very near to having full days every day. Outside capitol would need to be justified by increased product, which I can do, but only to a point, before I run out of time. I could hire more talent I guess, but that feels risky to me as well. I could also start charging more and balance the time-income quotient a little better. That's a touchy equation that would require some time to put into place. I guess, diversifying could be an answer as well.

An ideal partnership would be someone with strengths in the areas of my weaknesses and an open pocketbook. I can be the worker on the production line and they can also contribute, not just financially, but with expertise on the business end of things, responsible, in part, for the success of their financial venture. I just have to get past the fear of failure and talk to some folks.

Many a small business men are eventually faced with two paths. Stay small, secure and comfortable, or grab life by the horns, take the risk and grasp at the brass ring. I sure wish I could foresee the outcome.

[Thomas W. Bethel]

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Tom, Funny that you bring this up at this time. I have considered a partnership on some level and have been offered venture capitol on a couple occasions. That would be the ticket to push the whole thing to a new level. A couple problems with it... One problem is with my own character. I really dislike feeling "beholding" to another person or persons. I'm not much of a business man and not a very good negotiator.

The other problem is time. I am a one-man shop. My clients come to me for a certain creativity that is unique to me. I am very near to having full days every day. Outside capitol would need to be justified by increased product, which I can do, but only to a point, before I run out of time. I could hire more talent I guess, but that feels risky to me as well. I could also start charging more and balance the time-income quotient a little better. That's a touchy equation that would require some time to put into place. I guess, diversifying could be an answer as well.

An ideal partnership would be someone with strengths in the areas of my weaknesses and an open pocketbook. I can be the worker on the production line and they can also contribute, not just financially, but with expertise on the business end of things, responsible, in part, for the success of their financial venture. I just have to get past the fear of failure and talk to some folks.

Many a small business men are eventually faced with two paths. Stay small, secure and comfortable, or grab life by the horns, take the risk and grasp at the brass ring. I sure wish I could foresee the outcome. :)

I would say that you have put a lot of thought into what you want out of your life ( and a partnership) and that you seem to be on the right track for what you want to do. I only brought up the partnering idea to see if you could get some more capital into your operation so you could grow, if you want to.

Speaking from some recent experience with a business partnership...you have to be very selective of who you partner with and make sure they are looking out for the best interest of the partnership and not only their best interest. I won't go into all the gory details but the person I partnered with recently was a person who, unfortunately for me, was looking out more for his financial growth than for the health of the business he was a partner in.

I too have been thinking and rethinking the whole growth process for my business and have come to the conclusion that it is a very risky step. If you do go into business partnership with someone there are two ways that it can go. The person can be a working partner, sharing the work load and the financial reward and or losses or they can be a silent partner who basically allows you to be the boss and only helps out in a financial way when needed but will expect to be reimbursed, with interest when you are making money.

My professor in college espoused the following one day in class "A good business partnership is like a marriage without the sex" "You have to both be able to know what the other is thinking and to be of one mind when it comes to the goal of your partnership" "you can both have very different ways of doing things and much differing views but you must come together when it counts" "You have to trust the other partner and know that they have the best interest of the partnership at heart in what ever decisions they make" If you can't find someone like this it is probably not a good idea to go into partnership with them.

As to your time problem. Hopefully a business partner will be able to do some of what you are currently doing that is not the best use of your time and allow you to do what you do best. They can also ease the work pressure by working on things like promotion and marketing when you are tied up with the clients.

Another thought....Partnerships don't have to be full time and you may find someone that is willing to put in time and contribute financially based on working part time with you if they see the rewards are worth the time envolved.

Hope some of this helps.....!

[oakman]

Success with a studio is no easy job. When I compare overhead with rates on the big studios, I can't imagine how they make it. Maintaining the "charicter" of a business is important to it's success in many cases as well. Investments and business types tend to change those things. That's one of my concerns too. Here's a little story about investors and financial games.

For 7 years I was a producer at Bill Young Productions in Houston. It's a giant studio facility that serves the entertainment industry with, mainly, audio & video for concert tours, record promotion, music video production, print and internet. The owner and, for years, sole proprietor, was Bill Young. He built it from one small studio into a facility with 8 state of the art, Russ Berger designed audio suites, 5 digital edit suites, graphics & animation, huge sound stage, etc. His philosophy revolved around service and, over the years, his presence made sure it stayed that way. He didn't play around with investors and the like. One time I asked him about financial success. He replied, "Just remember this. Credit cards are money for the mathematically impaired and never say no to a client". I remember when he upgraded the video suites to digital. We're talkin' 7 figures here... Someone talked him into a loan, for the sake of building personal credit. It drove him nuts and he finally just paid the thing off and never looked back.

A few years back Bill semi-retired and sold a large portion of the company to an organized group of investors. They leveraged into investment opportunities, played with stocks, split the stocks to leverage more investment and that kind of thing. The company became a financial puppet instead of a service driven business and in a period of 2 years, almost crumbled, due, in my opinion, to a president that was a self motivated banker type who lost sight of the true vision of the company. Finally, former Bill Young management folks pushed in and took over. They rescued the place in about a year by, selling unprofitable properties and taking the focus off investments and partnerships and going back to doing what they were meant to do... Making spots for the very well to do entertainment industry. They are now paying their approximately 35 employees and the remaining investors, with money still left for upgrades.

Maybe a unique situation and my details may not be perfectly accurate (I was not involved in the finances), but I thought it was an interesting story to share in a thread titled "The Home Recording Business". That's the way it started and going back to the hungry, home studio philosophy is what saved it.

[Thomas W. Bethel]

There are a couple of smaller studios near here that are just starting up or have been reformed and it is interesting to watch them go though the "birthing pains" of starting or restarting a studio.

The first studio is located in a very rural part of this area and is very well designed and constructed with all state of the art equipment. The studio sounds and looks great. There is a large main room and three iso rooms plus a control room. The whole layout is very comfortable and the person who runs it is a great person with really good ears and a great laugh. He started the studio two years ago as a money making venture. Before that he had been doing his recording in his house and mostly for himself. The studio is doing better every month but it has been a struggle to get it up and going as a full time money making operation. Most of the clients are acoustical musicians with some country and some classical. The owner has another, non musical business, that he was doing full time until recently when his full time business started slowing down due to the economic conditions in this area so he decided to open a studio with the hopes of supplementing his income. The owner is very easy to work with and everyone who has been at his studio so far plans to come back and do more with him. The current problem is getting enough clients in the front door to pay the rent.

The other studio is a rebirth of a studio that was gone from this area for a while. The original owner is back running his business that had been shut down for a couple of years while he worked for someone else. This studio is located in the center of a small town near here and is all state of the art in terms of equipment and sound. The owner is a very affable person with good ears and produces very well done gospel and Christian material. He too is struggling in this economy and has broadened his offerings to include song writing, graphics creation, playing and singing on clients tracks and arranging. He is doing well but needs to get more clients in the front door to pay the rent.

This is not an easy time for most smaller professional studios, more and more people are deciding to "go it alone" and do it themselves which means more and more smaller or medium size pro studios that use to be able to provide these services are having to tough it out, change their focus or go out of business.

The average price for recording in this area is $40.00 per hour for multitrack time and there are some studios offering a rate as low as $15.00 per hour and as high as $160.00 per hour. There is one studio near hear with an SSL board that is offering off peak rates as low as $35.00 per hour for the SSL studio which seems very low but the studio is having some financial problems and has had to drop its rates to attract new clients.

I just heard a very interesting statistic on NPR yesterday....." at present there are only two audience members for every musician" Which, according to the story, means that more and more people are turning to producing music and less and less to listening to it which is not good for the professional recording studios and sellers of CDs but great news for the musical instrument retailers.

All in all not a good time for a small or medium professional recording studios but hopefully after the elections things will pick up and the economy will start to prosper more and people will have more money to spend on things like recording and mastering which will be good for all us involved in the music industry. I am very hopeful this will happen....but who knows......

[oakman]

I'll tell you what... If it wasn't for voice-over, commercial production and video post jobs, I wouldn't be eating. I dabble in the mixing and mastering end of things because I enjoy it. The competition for the small dollar jobs is insane and big dollar people only know me as "that voice guy". My relationship with them doesn't leave any openings for self-promotion in other areas.

Bottom line... What you said Thomas. These days the studio business is a hard road. Too many wanna-be Producers and engineers, armed with the power of new technology, diluting the market, causing unrealistic rates. I'm guilty by association, but not motivation.