Many might argue that the investment required to start a recording studio business is gigantic, but only few realise the potential of the prospective profits that follow.
Due to advanced audio and video-making tools, starting a recording studio business is considerably easier than it used to be. So much so, that even a number of renowned recording studios operate from in-house offices.
That said, you should only approach this business opportunity in two cases, first, you have some prior experience in the recording industry or second, are looking to establish a joint venture with someone with relevant experience.
Starting a business is however, a complicated process and needs some thorough planning.
Keep on reading as we give you a 5-step cheat sheet to turn your dream business into a reality.
Step 1 : Market analysis
In order to stand out from the competition, you need to know answers to questions like :
- Who is my target audience?
- How much should I charge my customers?
- How exactly will I make a profit in this industry?
For a recording studio owner, the clients are musicians. As for animation and voice overs, you are looking at film and television production companies. Clients in this category include any business that has videos online and wants to extend their marketing efforts into other languages.
The customers will be charged by the hour or for the usage of the studio’s equipment during recording sessions at conventional rates. Adding hourly charges for support technicians is an option as well.
You can also sell products such as CDs and iTunes records. The typical price of an iTunes download is $0.99. Companies like these charge a fee for the services they provide. As for CDs, they might cost anything from $8 to $10.
In case of charging customers, the standard is to take a 20% payout from their hourly rate. To further increase your revenue, you can also start giving training sessions on how to use the equipment, recording your own work etc.
Step 2 : Drawing out an expense sheet
Mapping out a budget helps you filter out the unnecessary extra costs later on. Here is a list of some basic gear that you will at the beginning :
- A PC
- Audio interface combination
- Cables and connectors
- Studio monitors
- Microphones
- Pop filter
- Microphone stands
- Sound cancelling headphones
Do note that this is the bear minimum that you require, as your business expands, you will have to include more equipment in your inventory.
Rent, electricity, overhead, and personnel expenditures are among the most common day-to-day costs. Electrical costs will skyrocket if you use a lot of equipment, devices, and air conditioning.
You will also spend around half of your sales on payroll and equipment costs. It’s common for rent to account for 20% of gross income. This means that 30% of the revenue will be available for profit before taxes.
Step 3 : Settling all the legal affairs
In an event where your recording studio is sued for some reason, you need to form a legitimate business organization to counteract their claim. Partnership, sole proprietorship, corporation, and limited liability company are some of the most prevalent business structures (LLC).
Before you can legally begin for business as a recording studio, you’ll also have to register for a variety of state and federal taxes. State permissions and licenses are the next step. Your company might be shut down if you don’t have the proper licenses and permissions in place.
Understanding your recording studio’s financial success will be crucial if you keep track of your revenue streams and costs. Your yearly tax filing will be a lot easier if you keep correct and complete records.
To lower the tax deductions, you can consider using company credit accounts and dedicated banking. This will also safeguard your personal assets in case of a lawsuit.
Step 4 : Building your interior audio space
To do this, we recommend you check out some local recording studios and notice the kind of material, flooring and equipment that they have. Then you will have to carry out soundproofing for the entire space. You can also rent a flat in a non-residential area to save on the soundproofing costs.
When building your own studio, you can also consider second hand gear. Contact other studio owners and see if they want to sell certain items. Computers and mic stands can also be purchased from websites like eBay.
Step5 : Brand marketing
You need to make a good name for yourself before you begin full-scale operations. Using tools of social media platforms and influencer marketing is one way to expand your reach and let the masses know about your business.
You can also provide lucrative introductory offers to attract musicians. Another important aspect is your web presence. Hiring a professional to create an engaging website along with a decent logo will go a long way.
You can also try having a word with the clients that come in and request for free postings on Craigslist.
Summing up
With all these tips at your disposal, you need nothing but successful execution to lead your business to success. Once you have some profit, you can also invest some money to hone your skills. Sure an in-house marketing team is a good idea, but as a businessman, your main goal should be to generate maximum profit with minimum input.
Learning about digital marketing will also help you identify your target audience and effectively increase your brand’s reach. Furthermore, you can send out invites to various creators and artists to try your studio for free. Try to target the ones who have good social media reach.
Creating a community of local artists and learners who can come together to create music on your platform will also be beneficial. Lastly, look out for ways to automate your management process with the help of technology so that you can spend more time in your studio rather than worrying about recurring tasks.
Hope this guide helped.