Every business is different, but is there one fraught with as much risk and financial pressure than that of a recording studio?
For starters, your customers are often up-and-coming artists, digging deep to pay for your time, expertise, and facilities. When they’re not begging for discounts or free sessions, they’re promising you that they’re the next big thing and you should take a chance on them.
If that’s not enough, you’ve got increased competition from new technology, making bedroom recording better and more professional than ever before.
And then you have those expensive overheads including power, equipment, and staff to contend with.
In short, to succeed with your recording studio, you need to remain focused on profit. Let’s take a brief look at how you can do just that.
Three top tips for running a profitable recording studio:
1. Clearly state your terms (and stick to them)
You have two options when putting a price on the use of your studio: by the hour, or by the session. Whichever you decide to use, it’s important that you clearly state your terms in advance of any bookings, and that your customer is well aware that they’ll face a bigger bill if they go over their allotted time.
While it’s clear that the longer they spend in your studio, the more you’ll make, it won’t do your reputation any harm if you make sure they’re leaving with a good recording at a good price. And, with your focus firmly on profitability, you should be maximizing your studio’s potential by turning around sessions in a timely and organized fashion.
2. Incentivize the use of in-house equipment
One of the best ways of ensuring recording sessions start and finish when they’re supposed to is by incentivizing the use of your studio’s own equipment. By maintaining a high quality inventory of instruments and equipment, such as guitars, drums, amps, and keyboards, your in-house engineer – or the band’s own producer/engineer – will be able to set up in advance of the session. It also means less time unloading and loading equipment, which can eat into a recording session.
Consider making bookings that insist on using their own equipment slightly more expensive to compensate for the time spent clearing out the studio in advance. What’s more, try to upsell bookings using your in-house equipment, as you’ll be able to schedule more sessions closer together, without the risk of delays caused by the time spent packing up.
And remember, if the artist goes beyond their allotted time while unloading their gear, they’re still on the clock, and should be billed accordingly.
3. Treat it as a business, not a hobby
Being lax around your schedule is a sure fire way to lose money when running a recording studio. Although you may have started it due to your love of music, you need to remember that this is a business, not a hobby.
As such, you will need to wear your business hat when dealing with clients, clearly communicating terms and conditions, and ensuring that there’s a strict adherence to rules and start and finish times.
Now, this isn’t to say that your studio should be cold and rigid, or that you need to operate your business with an iron fist. That just won’t be conducive to an enjoyable and effective recording experience for your clients, and could damage your reputation via word of mouth.
Instead, you need to find a balance between accommodating the creative process and running an efficient and profitable business. To help with the latter, sit down with a trusted business adviser and identify the areas of your business where you can cut costs or increase revenue. This will give you the opportunity to further invest in equipment, which in turn will result in a better quality of recording and a positive reputation among your existing and prospective customers.
Need some help? Let’s get started
One of the most effective ways of guiding your business towards profitability is by becoming better acquainted with your numbers. If you can quickly and accurately review your financial information, you’ll have a better idea of the short and long-term decisions you need to make when it comes to running your recording studio.
We can put you on the right track by introducing you to Xero, the world’s finest cloud accounting platform. Our team of experts can have you up-and-running in no time at all, and they’ll help you pinpoint areas of improvement from the word go.