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Utility costs @ Electrical Audio

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Utility costs @ Electrical Audio

Postby drifter_in_pyre on Wed May 25, 2016 6:36 am

Greetings to all FMs and comrades!

First post from my part in this inspiring forum.

I have a question for the guys at Electrical Audio.

To be concise : No oddball/troll here.. I had a yesterday's late night thought that's been boggling me.
I am not sure if you could disclose this sort of information , but anyways , here it goes:

1. How much are the utility costs (i.e electricity, water, gas, machinery/equipment maintenance etc..) in an approximately monthly basis for running a studio like Electrical Audio?

2. What about insurance costs? Do you have any sort of plan in case of calamities(fire, theft, bombs falling over Chicago, a possible Trump presidency ) ? [again, an approximation would be enough].

Reason for all this:
There is a planning in the works to start a partnership with some fellows of mine in order to operate an all-purpose recording studio. I just wanted to have a rough analogy of the month-to-month mathematics/economics behind a business of this trade in the U.S, compared to where I reside and wish to start the operation(Brussels, Belgium) .

I am aware that way more logistics can be involved when running a business, feel free to complement with any other info, may you have the time and disposal. I just wrote down what came to my mind in the first-coffee-morning-rush.

P.S #1 : I have total understanding if you wish to keep this information undisclosed.
P.S #2 : I hold a dear respect for your studio work and this community here operating over the wire.

Thank you for your time and have a good day.
Last edited by drifter_in_pyre on Wed May 25, 2016 4:05 pm, edited 1 time in total.
Blessed are the hearts that can bend; they shall never be broken.
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Re: Utility costs @ Electrical Audio

Postby tmoneygetpaid on Wed May 25, 2016 3:02 pm

Hey,

This is Taylor- Studio Manager/ Office Wolf here. Steve gave the go-ahead for disclosure of these numbers, just so you don't think I'm going rogue here.

I should point out first that it is WIDELY UNDERSTOOD AND ACCEPTED that running a recording studio is NOT a good way to make money, if that's what you are after. Engineers do it because they love the work and want to make records in a sane environment that is suited to their methods and tastes.

1. Our expenses, not including any salaries or benefits (essentially taking human beings out of the calculations), and not including our mortgage, are around $3500- 4000 a month. Non-recurrning expenses like repairs and maintenance averaged out last year to about $3500 a month. We got hit with a lot of building-related shit this past year, so I imagine that's a very liberal estimation, but these types of unexpected, unforeseeable expenses are not atypical. Add humans (salaries, benefits, taxes related to employment) and we're at the $25k-30k a month figure you may have heard before. Staff are our most expensive expense, and I say that not begrudgingly, because there is no more worthy expense, but just because if you are looking at the numbers of how you're going to make it, what your rates will be to sustain the business, the calculations change radically once you have employees. And they change radically again once you decide to offer them good and livable benefits.

Utility costs vary significantly over the year (in the summers we spend more on electricity for AC, winters more on gas for heat), but here's a rough breakdown.

Electricity is $1130 a month, on average
Gas is $800 a month, on average
Water is $35 a month, on average
Phone is $290 a month
Internet and cable are $180 a month
Trash removal is about $300 a month
Fire and security system is $160 a month

2. We have three types of insurance:

Workers Comp- we are legally required to buy it, it covers salary/ wages lost as a result of injuries on the job, and medical payments related to those injuries.

I just quoted this out and got our rate reduced a lot. Our premium is about $1800 annually. If you have no employees you don't have to pay it. If everyone involved in the business/ all employees are owners, then it is optional, if I understand correctly.

Commercial Package- covers everything from fire to theft to terrorism. We estimated our coverages pretty liberally (replacement cost of our equipment, building value, etc.), and our annual premium is about $8,000 a year.

Most insurance providers allow you to pay in installments with 4-pay (quarterly), or 10-pay (roughly monthly, with no payment for the last two months). If you do a payment plan there's a few dollar charge for each installment.

Employee benefits - health, dental, life. We have great health and dental benefits and they are very expensive.

Let me know if you have more questions or want elaboration on anything.

-Taylor
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Re: Utility costs @ Electrical Audio

Postby drifter_in_pyre on Wed May 25, 2016 5:10 pm

Hey there Taylor,

Thanks for hitting back.

This is a great overall insight , you gave me way more than expected so thank you for all this valuable information.

What I am after is to play and record music for its own sake. Hopefully one day I'll end up making a simple living out of it. For the moment, staying afloat and keep on doing both. :)

That's all from my part for now.
There's like a 1,000,000 questions popping in my mind right now so I'll be hitting back once I put some order and I'm able to formulate them well.

Again, stoked & humbled from all this.

Cheers!
Blessed are the hearts that can bend; they shall never be broken.
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Re: Utility costs @ Electrical Audio

Postby tmoneygetpaid on Thu May 26, 2016 2:14 pm

Sure, I'm happy to answer any more questions whenever you're ready. Feel free to call me at the regular studio number, too, if you'd like, but I do like the idea of having all this info be out in the air.
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Re: Utility costs @ Electrical Audio

Postby eliya on Thu May 26, 2016 3:17 pm

Seeing your last post (about how you're cool with it being out in the air, unless you were being sarcastic) - $3500/month in repairs! Holy smokes! Did the roof collapse on you guys or something? Seeing how you have Greg and parts aren't that expensive, I'm guessing that gear repairs are a small fraction of this?
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Re: Utility costs @ Electrical Audio

Postby tmoneygetpaid on Sat May 28, 2016 11:17 am

Last year we had two (or three depending on how you count it) big building projects. $13.5k for replacing our pipe to the city mains after they redid the mains in our area *shakes fist*, and another $20- 25k if I remember for masonry/ tuckpointing and roofing. We had to do the tuckpointing to do the roofing so I count that as one project.

I averaged that over the last 12 months, and it's the vast vast majority of our repairs and maintenance budget- not gear repairs, as you suggested, Eliya. We got off easily in that department last year, or maybe just held some needed gear repairs at bay. This year there have been a number of big gear expenditures already- $5000 for new 16-track heads, $2000 in MRL tapes, we are going to re-ribbon 5 fucking Coles that have blown ribbons for $1000, and get a C24 connector that'll probably come in right under $1000. It's $9,000 vs. the $25k we spent on the building last year. But there are another $10k worth of non-critical gear fixes and upgrades we should do when we have the reserves.

Such are our costs for Doing It Right (TM). Again, we have two full studios, we are analog, and we have staff that are paid a livable salary and benefits. You can get away with doing it half-right on 10% of our figures and have some fun and probably even make good records. But those are our numbers.
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Re: Utility costs @ Electrical Audio

Postby Redline on Mon Mar 05, 2018 11:01 am

Let's not forget the donut / heroin costs....
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Re: Utility costs @ Electrical Audio

Postby tmoneygetpaid on Thu Mar 08, 2018 3:24 pm

Last year we spent $712.77 on Fluffy Coffees.
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