Bored? .. with a glamorous career in the music business?? No way!!

I like your idea, but making a living renting anything - whether it be real estate or equipment isn't easy. (and in your case both real estate and equipment). I don't want to rain on your parade, but I will run down some pitfalls I see at first glance. I'm sure more will follow from some of the business savvy RO contributors.

I'd move to Phoenix, start working your way into the music scene doing the same thing you're doing now in Ohio. Do some networking first, while you look for the perfect location and do your homework.

Keep doing research and write down as thorough a business plan as you can. If you're borrowing money the bank will want to see if you've thought this through and have any plan (and high probability) to pay them back. They will want you to spell it out for them in dollars and cents. As you might imagine, the fact that you plan to cater to a very flakey musician demographic will put you at a disadvantage in the banker's eyes. Stereotyping aside, we all know stability is not a trademark of the small bar band culture. So you might need some historical data. How much do bands pay now for the services you plan to offer? How much did they pay last year, 5 years ago? Will you have any competition? What do they charge? How long have they been doing it? How much will insurance be to cover any losses?

You've been at this live sound thing a little while now and should have an idea of what things cost - and what expenses you would have with a live PA.

EQUIPMENT RENTAL SIDE
Calculate the cost of multiple "Mid grade" systems, factoring in every single case, cable, and stand.
How much will you realistically be able to charge for a system you've got $3,000 invested in? $5,000, $10,000?, $50,000?
Will bands pay, what you're going to have to charge - just to break even, much less turn a profit and eat on a semi-regular basis.
It may take several years before a new business can run at a profit, are you prepared to roll everything back into the business until then?
Extrapolate that information over time, how many days/weeks/months do I have to rent that system before I break even? Factor in repairs. Wannabe-rockstars will bust up your gear, because they think they're supposed to - like a rite of passage. Like somehow smashing YOUR gear is 'paying THEIR dues'. Have a proper rental contract.

REHEARSAL SPACE
A building with 5+ practice suites, a larger performance/practice space, warehouse for rental gear, a workshop for you, workspace for silk-screening equipment - that's going to be a big building. Are you planning to soundproof those practice rooms, so multiple bands could practice at the same time without driving each other nuts? That's VERY expensive. Are you going to equip the practice suites with small PA systems? guitar amps? bass amps? keyboards? drum kits? That's expensive. Electrical requirements to operate such a building and the, desert-grade-air-conditioning to all these separate spaces, won't be cheap either.

Like any business, location is extremely important. This particular business will require accessibility, AND security. And just like your trailer dilemna, do you advertise that you have valuable equipment inside? or try to keep a low-profile to avoid being targeted for theft?

Let's be honest, your clientele won't be Boy Scouts. If there's a band of crack-heads renting the space across the hall, I wouldn't leave my valuable stuff there. Bands can be competitive too, and aren't above some pranks and sabotage.

Those are the first things that come to mind as, things I would suggest you think about.
It's a fine line between dreaming big, and biting off more than you can chew...

Yeah, I plan to start heavy networking and finding the actual bands that I will potentially be dealing with. Until then, I can just research all I can via the web and get some ideas for how things will work. We all know I cant afford to just jump right into this once I get out there. I do plan on going through a bank for a small business loan, and the fact that I will be taking the payment for the month in advance (for rental space) should help confirm that I will indeed be getting paid. As for the equipment rental, I will require a deposit of XXX as well as rental payment ahead of time, or something to that effect.

You bring up alot of good points Dave, with historical data and numbers. And insurance is a big thing I need to find out more about, as it seems that could be something that makes me want to forget this whole plan!

I've done alot of research regarding the sound proofing, or atleast acoustically treating the rehearsal rooms to make them manageable. I've got some numbers of what the estimated cost will be to make these work. I dont plan to throw in backline, however, I do plan to offer small PA's at extra cost. Basic powered mixer and 2 wedges should be sufficient. And a larger PA for the "live" room. I wont need heat, and my AC idea I got from a rehearsal place in Orlando when I lived there. They had window air conditioners in each room. By far a lot more affordable solution to running ducts and all of that, and seemed to work just fine and keep everyone happy.

When it comes to accessibility and security, I think I've got some good plans. Having ONE entrance in and out (allowing for load in/out), into one hall way, and rooms on either side. Security would be cameras in the parking lot, hallway, etc. Along with a security device on each steel door (and dead bolt) to each room, requiring a PIN number to get in. Or, something similar. Not having a huge sign on the building or road would probably help, and be ok, seeing as how I dont plan to gain clients by them just happening to drive by. I could be wrong?

I think there will have to be many rules that are of course enforced. And no second chances. Proper video surveillance should be of great help for this.

All in all, right now I think I am just trying to find myself, figuring out where I need to be in this music business!

I have done exactly this.

I've also set up several businesses over the last 15 years, some of which have succeeded, some of those spectacularly, and some have failed, equally spectacularly.

Your mileage may vary because of location. I'd just for £ read $.

The first thing I would say to you is this. Bands tend to assume that for some reason, rental of a rehearsal room for them will be about half the price of an apartment on the same square footage. Quite why they assume that the laws of economics suddenly stop applying to floor space, I don't know.

But most bands are prepared to pay approximately £2-300 per month for a rehearsal room, where a similarly sized apartment would be £5-600 per month.

I have 8 rehearsal rooms, and 2 are on what we term permanent hires - one for £300 pcm, and one for £400 pcm. The ONLY reason I do this is because I have 8 rooms and can usually fill up to 5 at a time - so these rooms would be lying dormant, and so its an extra chunk of money. Its by no means my core business and I contest you would not be able to support the cost of rent, heat, light, electricity, staff (or paying yourself), maintenance, etc, by doing this alone.

A far better idea is your room by the day - or even by the hour. We charge between £10 and £15 per hour for rooms equipped with kit, 2 x guitar amp, bass amp, PA, 2 mics. Thats an average of £12.50 per hour - and even at only 3 hours per day, 6 days a week, a single room then brings in £975 pcm. For this you need only 6 bands practicing weekly!

You see the difference already. If you can fill 6 hours per day, you're looking at £1800 pcm or so, and suddenly you have a business - off one room.

You need to find a place where the landlord will allow you to rent part of an empty building. It sounds hard but this is key. You can then start with one rehearsal room, plus an office/store area, and then expand into the building. Taking on 5 rooms at once is suicide.

Even if you can make the figures work with 4 rooms rented monthly, and a 5th on a day or hour rate, bear in mind bands are in flux constantly - they can and will cancel at a moments notice, and will not pay you your last months' rent in lieu of their deposit, every time. So your figures need to work with occupancy for 9 months not 12.

As dvdhawk says, to simultaneously outfit 5 rooms at once with proper insulation is going to be impossible. I have to say, half my building (which I started exactly this way, just using 1 room) is not well-insulated - the bands don't care. The other half is done properly as it houses the recording facility.

It costs me about £3000 per room for drumkit, PA, bass amp etc - buying crap will cost you more in the long run, just as with anything else. And probably about £1500 in materials to do it properly, £750 without. All of these figures should work in dollars.

I would say that to build your business model - once you factor in having to have snare drums for bands to hire, cymbals ditto, spare drumskins, a decent safe for your money, etc ad infinitum - would be $30,000.

This business model excludes your hire idea. Take a look in the local Yellow Pages or whatever you call them over there - you will see firms who hire sound and visual equipment. These guys have warehouses of equipment worth hundreds of thousands. Then you will find by talking to bands, a few guys under the radar who do hires to the techno clubs and smaller bars and bands. You'll be competing with them too. I turn over something like 100 bands per month and have about 6 of everything available to hire - and I make a pittance out of hires. The money in hires is with conferences, tours and festivals - and you won't have the actual equipment to compete.

To outfit a single room, perhaps with some kit you already own - and do it really nicely - maintain it well, and get yourself a good rep - will be about $7,000. You should be able to make this include deposits on the rent, everything, assuming you've got some gear of your own. This is ex equipment - so deposit, rent, safe, drywall, fibreglass, fabric, carpenter, framed walls, rubber, fitment, doors, etc.

From this room if you can get 1 band for 3 hours per day, 6 days per week, at $12.50 per hour, you're looking at a yearly income of $12,000. This is utter worst-case, and you should aim to be able to live off it (not pleasantly) and pay your overheads from it.

2 bands per day, $24,000. Now you have a small wage and good word of mouth. You can then look for more bands, actors who need somewhere to rehearse, drum teachers etc to fill up the off-peak hours.

After paying yourself properly, you should put 50% of your net away into a 'sink fund' - money you do not touch without extremely good reason.

What you have left is what you can afford to use to build more rooms or add a recording/hire facility.

The second thing I wanted to say to you is this - do NOT, under any, any, any circumstances, commit yourself to some massive project with vast weekly overheads, and a loan, having never done it before. There's nothing worse than being in a situation where you need to make, say $5,000 per week just to stay afloat!!

Even if your research suggests the bands will sustain this in Phoenix, somebody can turn up with a government grant to 'support the arts' and open the same business across the road without your financial concerns. Things change in business and you need to be small, fast and adaptable.

Get your operating costs down to a point where you can survive on very little business and you'll be set. Then the occasional hire, T-shirt sale, engineering gig, road case sale, are all extra profit for you, not necessities that if you don't sell them, you'll be in trouble.

Its horrible to say, but you're aiming plum in the middle of a target market who by definition have no money. They don't want to pay for quality, they don't want to expend money on merchandising, they don't want to pay for decent recording quality - or rather, they do, but they can't afford to.

To go back to my original point, if rehearsal space is no different in cost psqm than apartment space - if somebody gave me $500,000 tomorrow - would I be more sensible building a recording studio - or a block of flats to rent out!

The only reason anybody chooses the former is because its more consistent with their dreams. Just try and find a way that you can live your dream without it turning bad for you.

TLDR; start small, look before you leap, don't overestimate what bands will pay for.

Most bands are not making any money in the US. They are doing a lot of gigs where they have to provide the audience before they will get paid. (kinda like pay for play). If they are going to spend money on a rehearsal place they will have to finance it by paying for it themselves. They will usually try and rehearse in one of the members houses until their significant other tosses them out or they start a family and the baby can't stand the noise or the neighbors start to complain. So they move to another band members house and repeat. When they have exhausted all of the band members houses they may start to look for a rehearsal space but since this has to be self financed they will be looking for the cheapest possible solution. I question in this day of dwindling good paying jobs for bands how many bands are going to want to pay for a rehearsal space. If you add in a basic back line and increase the fees you are going to have less bands that can afford your services.

At the college where I worked there were three band rehearsal rooms. They were all filled up all the time. They cost nothing to rent and they were basically a room in the attic with some electrical outlets in them. There was no sound proofing and no AC. Students had to use the rooms since a band could not practice in the dorms. It worked because it was free and they did not have any other options. If they had to pay for the rooms I am sure they would be vacant most of the time.

Around this area lots of churches are trying to raise money by utilizing their buildings every day of the week. Some have pre schools in them during the day and HS equivalency classes at night funded by the county or state. Some churches are renting out their spaces to bands for practice rooms. I don't know how wide spread this is but it is something that churches around here are experimenting with to meet expenses.

To the OP I think you should do a lot of thinking and looking before you decide on a course of action. There is a lot to think about. Expenses versus income, security, insurance, sound proofing, HVAC and the list is endless.

One problem that I see is that someone is going to have to be present the whole time the building is in use. One for security reasons and second so someone does not set the place on fire or start trashing the place in a drunken rage. You will have to figure out early on what your policy is going to be on smoking and alcohol use. Lots of band rehearsals are a good excuse for downing a couple of six packs. If you are going to allow smoking (and there maybe laws against this) you will probably have to have a sprinkler system installed which can be expensive and have to be maintained. If you are going to provide a back line or small PA system it will have to be maintained and you will have to charge the band if there is any damage done to the equipment (which means that someone will have to check the equipment when the band leaves). This person cannot be a high school student so you will have to hire someone and this means salary plus benefits which can be costly. If you are going to be there it can get old very quickly and you will be limited in what else you can do.

I wish you the best of luck but I think you really need a business plan and a good long talk with a banker and with people in the area to see what they are doing and what their needs are.

When you have all your ducks in order and have answered all the hard questions you will be well on your way to realizing your dreams.

Thomas - I know what you mean, its true. Alot of bands arent making a sufficient amount of money to warrant a costly rehearsal space. I guess I am kind of aiming for more developed, serious minded bands as opposed to some hobby garage band. I've came to some good conclusions regarding smoking (non inside), sound proofing, security, and my way around HVAC (being window A/C in rooms, and Phoenix no heat will be needed).

I know its going to be hard and alot of time spent there, but I am willing to do it. Its no different than me sitting at home all day! :) Anyway, I know I have alot more thinking to do, and finding out what bands in that area need and what they are willing to pay and get in return. I'm working on that as we speak. Thanks!

Jeemy - Thanks for your knowledge from doing this. You bring up some great points, and some things I have either not yet thought of, or things I pushed out of view. The biggest thing to me....hourly rentals, with backline. I have noticed that probably half of the places I have found, offer (and some ONLY) hourly renting, with backline provided. At first glance, I wrote this off for the following reasons: The extra cost of backline equipment. I assumed I would make more money monthly, as well as it is guaranteed for a whole month (especially if I took payment BEFORE the month). So with that said, I wrote off hourly and daily rentals.

I think maybe the best option for me, to get the best of both worlds would be to start with two room. One that is always hourly/daily, and one that is monthly. If the monthly room is open, it can then be used for hourly/daily.

Do you agree with me that a sufficient PA for a rehearsal space is a simple powered mixer and 2 floor monitors? I have found this works just fine, especially if you set your backline up in a proper way. As in - Drumset against one wall, facing backline facing the drummer. Singers and guitarist facing their amps with back towards drummer.

Although, I think your figures are a bit far fetched ("From this room if you can get 1 band for 3 hours per day, 6 days per week, at $12.50 per hour, you're looking at a yearly income of $12,000"). Around here, I dont know any bands that practice every day! But thats besides the point, I need to bank on more than a couple bands for this operation to make it.

Thanks for the advice though, starting with 2 rooms is probably a better idea than starting with 5, and making the rooms easily adaptable for whatever the need is.

No.

One band a day, 3 hours a day, 6 days a week. Not the same band. 6 bands, practicing once a week each, at the very best hours to suit them, all taking Saturdays off. This is a worst-case and is still double the income of a monthly rental.

This is not a far-fetched figure. It is an absolute worst case of lowest possible occupancy, to illustrate that monthly rents are a poor business model and hourly rents allow you to be close to failing and still in business while you work out what you are doing wrong. If you can't see that this is a bad outlook, not an optimistic one, you need to sit down with Excel for several hours, and work things out several ways.

To clarify if I'm not clear: I mean 6 bands practicing weekly. 7-10pm is your best bet. You can force them to 6-9 and 9-12 and charge less, but in the end you're better doing 7-10pm at £15 per hour and making £45 with happy bands, than 6-9 and 9-12 at £10 per hour and making £60 with double the maintenance problems.

Plus as I said, nothing is guaranteed. No matter the contract, bands will dissipate at a moments notice. Monthly rents don't equal money in the bank.

With regard to PAs. Buy cheap speakers with well-made cabinets (I use Carlsbro and throw away the drivers). Then buy 400W or higher speakers and replace the woofers (I use Eminence and buy in bulk from France). People will prefer speakers on stands to floor monitors. An additional floor monitor for the drummer, or better a powered monitor + slave wedge for the drummer and singer, will make you popular.

Buy 600W rack blocks (I use Crown or Tapco) - and small mixers (Mackie or Peavey). This way you can mix and match and later when you move into better PAs with crossovers, you don't end up with a bunch of useless mixer/amp combos.

I'm not sure what bands you'll get who want to practice with their backs to the other musicians. Fugly ones I guess. Most prefer to practice in a rough circle.

Bear in mind, backline is not a "cost" if you buy second-hand - i.e. at the same value you can re-sell at. It is an asset and increases the value of your business - effectively for a bank's purposes a direct investment.

WRT what Thomas said - respectfully, I find quite the opposite in Edinburgh - a large city, but a small music scene. Since I opened in approx 2004, about 4 other rehearsal rooms have opened in Edinburgh - making the total about 10-12 facilities across the city. Nobody appears to be going bankrupt. We certainly have a big market of 30-somethings who find being in a band as much fun as a game of soccer or going ice-skating, and will do it weekly. YMMV city-to-city. I'd guess there are up to 50 bands per night practicing for £40 or so for a 3-hour session - its a market, but be under no illusions, although its steady, its not high-rollin'

WRT Thomas' point about repairs - its something I wrote early in the 'how to save money on audio purchases' thread - you should be aware certainly how to check circuit boards, speaker wiring, soldering cables, loose jack sockets, etc - all basic repairs. If you are able to take old, but worthy, audio equipment and leave it in a better state than when you found it, your path will be exponentially easier.

++1 to business plan and a long talk with a banker. Find somebody with an evil streak and get them to faux-grill you in preperation, or watch some episodes of 'Dragon's Den' - I'm sure there is a US equivalent if its not called the same thing. You only get one chance to borrow money, and adequate knowledge of figures is not enough; you need to know everything inside out and not over-estimate your earning potential.

When I acted like "it was money in the bank", it was because for monthly rentals I said I was going to require payment at the beginning, before they could even move in. But yeah, I get what you are saying about the hourly rates, thanks for the heads up.

Maybe its just me, I prefer to practice as I will perform. Either way, that can be worked with. I suppose it would be a better idea to skip the powered mixer, atleast using seperate things I can mix and match later if ever needed.

Good call on buying used backline, I will have have scour craigslist.

These days when renting properties to tenants, whether they're bands, or actual tenants, I ask for a month-and-a-half deposit, not a month. Its become common practice to just refuse to pay the last month's rent so that you can't have any deductions made for damage or unpaid bills. This unfortunately is a knee-jerk response to decades of unscrupulous landlords making up charges so they can keep deposits.....

Anyway, if they can't pay 6 weeks, I just don't take them. Eventually you get to a point where long-termly, the small profit you might make is outweighed by the hassle and damage.

You'll probably find you don't have the freedom of choice when all your eggs are in one basket at the beginning. Well, business involves risk-taking. You sound like you are on top of the research side of things and just need to actually get the profitability of this straight now.

If you want to talk more I'm happy to PM but I wouldn't want to go into deeper business details on a public forum.

Jeemy, post: 297397 wrote: These days when renting properties to tenants, whether they're bands, or actual tenants, I ask for a month-and-a-half deposit, not a month. Its become common practice to just refuse to pay the last month's rent so that you can't have any deductions made for damage or unpaid bills. This unfortunately is a knee-jerk response to decades of unscrupulous landlords making up charges so they can keep deposits.....

Anyway, if they can't pay 6 weeks, I just don't take them. Eventually you get to a point where long-termly, the small profit you might make is outweighed by the hassle and damage.

You'll probably find you don't have the freedom of choice when all your eggs are in one basket at the beginning. Well, business involves risk-taking. You sound like you are on top of the research side of things and just need to actually get the profitability of this straight now.

If you want to talk more I'm happy to PM but I wouldn't want to go into deeper business details on a public forum.

Thanks Jeemy, I will be in contact with you once I move in June, after I get to talking to more bands out there and see if this is a feasible business move for me!

stealthy, post: 297347 wrote: Thomas - I know what you mean, its true. Alot of bands arent making a sufficient amount of money to warrant a costly rehearsal space. I guess I am kind of aiming for more developed, serious minded bands as opposed to some hobby garage band. I've came to some good conclusions regarding smoking (non inside), sound proofing, security, and my way around HVAC (being window A/C in rooms, and Phoenix no heat will be needed).

I know its going to be hard and a lot of time spent there, but I am willing to do it. Its no different than me sitting at home all day! :) Anyway, I know I have alot more thinking to do, and finding out what bands in that area need and what they are willing to pay and get in return. I'm working on that as we speak. Thanks!

Different cities in the USA and different countries have different socioeconomic climates and bands can either be making money or losing money. If what you are proposing works then GREAT. The bands around Northern Ohio are not making much money. I recently did a mastering job for a GREAT band but the last CD I did for the was 7 years ago and the reason was mostly financial. All their normal gigs are falling on hard times and even weddings that they use to make money doing are looking for "cheaper alternatives" like a DJ or Karaoke. I wish you well in your endeavors and hope that this all works well for you. You sound like you have done your homework and have yours eyes wide open which is GREAT!

For serious bands who aren't touring, you really need to be providing a full-range PA (4 tops, 2 bass bins, crossovers, 1.5kW at a minimum) with floor monitors, facility for in-ear monitors, proper desks etc. Again, bought wisely this will be an investment. We rent to a band whose record label pay for it. I doubt they could afford it on their own, and the label constantly threaten to cancel it.