Steve,
In the "Introduction" thread you mention the purpose of this forum includes discussing the owning and operating of a studio. I appreciate all the threads about gear and techniques, but I wonder if we could discuss the actual business side of a studio?
I commend you on your work ethic, as well as your outspokenness about conducting business in an upright manner. It is refreshing not to be patronized by someone with your experience.
I'd be interested to know more about your general principles in making Electrical a studio that is built to last. Obviously, it's not "all about the money." But I imagine the cost is staggering, and there must be considerable risk. Is there a balance between the punk archetype and the business world? For instance, when do you need lawyers, if at all? When do you need contracts, if at all? Incorporated, LLC or just plain Steve? (This italicized bit was my way of interjecting humor into a seemingly humorless thread. File Under: CPA humor.)
The common "small business" (though, I doubt one could classify Electrical as such) perception seems to be that everything is well and good until hard earned money is involved, and then one must get serious; with "serious" referring to the involvement of contracts, lawyers, limited liability, etc. I find this train of thought dismissive of the idea of the "indie" mindset, but wonder if there is some crossover. And, if so, when?
You've spoken before (on this site I believe) about the idea that the "money issue" shouldn't be taboo, so I ask if you could talk more specifically. What percentage of profit goes back into the studio? What is a gauge of a healthy, or lean, year? What are the criteria for judging whether the business is operating successfully? In comparison with other engineers of your caliber, I imagine your (self-proclaimed) annual salary is modest. Where then, if not in your pocket, does the money go? Or should it be thought of more as lower costs for clients = lower wages for studio personnel?
I ask, in part, because I own a very small independent record label with a friend. We have conducted business with engineers, printers, and manufacturers that are similarly independent, and have not felt the need to "go legit" yet. Pay with cash, and pay on time. We both have a commitment to our interest and appreciate that we could use our label for fundraising, which we've done to our delight. We've been tinkering with the idea of turning the label into a non-profit. We are comfortable with day jobs now -- sinking the money earned through the label back into the label or using if for donation -- with the idea that we could eventually draw a modest income and spend our profits wisely. Is there something you do, personally or as Electrical, to keep a similar balance?
I find the whole process rewarding. And realize my partner and I talk a great deal about shit we never spoke about before. Money, scheduling, following up with people, etc. I haven't been deterred thus far, but I don't think I realized how much time the "administrative" tasks required. Which brings me to my next question: What percentage of your day is reserved for "Steve Time?"
Forgive me if this is too blunt. Most of the independent folks whose business ethic I admire rarely talk about money, but it's usually some money shit that breaks the back of the up-and-comer. It seems logical, then, to be frank about these issues so others may avoid common pitfalls. I am interested in those specifics more than the "how much did Nirvana pay you" type specifics.
Thank you for your time,
Eric