Kinda personal but: How many of ya own your setup?

[DC11]

How many of you own your stuff? Not lease, not bought with a business loan, etc.. but flat out own what you work with. I've got a descent setup and since I own it I can charge cheaper then alot of places that I know. Does the answer to either effect what you charge? I'm going to be upgrading soon, so I'll need to charge more to compensate for the cost. I just hope the clients understand. Have any of you had that problem?

I know it's kinda personal, so don't answer if you don't want to.

Peas
DC11

[A2D D2A]

Can't see how it makes a difference, you charge for what you do not what you own.
What I mean is most people think a lower price means lesser quality.

[EarHole]

Well if you had charged the right amount with the future in sight... you wouldn't have to change your rates based on an upgrade. My rates take that cost of doing business into account.

[Natural Sound]

I own it all.
I charge the going local rate. More if I can.
I just don't panic when business gets slow. It also means I can turn down a job every now and then. It also means that when I get a really good client, i can cut them a little break every once in awhile.

[RobMacki]

I owned all my stuff.
I just upgraded last Dec. and now I'm on an Avid lease.
All clients in good standing and regulars get the same rate.
New clients and clients I haven't seen in a while get new rate with new policy on payments.

[Monte McGuire]

How many of you own your stuff? Not lease, not bought with a business loan, etc.. but flat out own what you work with. I've got a descent setup and since I own it I can charge cheaper then alot of places that I know. Does the answer to either effect what you charge? I'm going to be upgrading soon, so I'll need to charge more to compensate for the cost. I just hope the clients understand. Have any of you had that problem?

You should budget in the cost of updates, maintenance, repairs and the like into your rates. Part of the problem now is that people are used to paying too little for studio time while expecting too much. As you realize, the extra $$ has to come from somewhere.

Owning your own rig is not a magic bullet either. Yes, you save on finance charges, but you still have to pay (up front) for the gear, and if the combination of your clients with the current rate structure can't do that, then you have a situation to deal with. The issue is that any sort of DAW tends to become mostly useless within 5 years time, just like the IRS says it will. So, if you can't pay off your DAW gear in 5 years, then you bought too much gear or you charged too little for your time or you didn't book enough hours.

Own vs. lease is not an issue. If anything, a lease will get you to work harder just to make the monthly nut, but the profitability is basically the same, plus or minus interest. The only difference is whether your studio operates at a loss or not, taking capital expenditures into consideration. The finace company digests all this into a neat, simple monthly payment, and if you can make that and pay your staff, then you're doing well. If not, you have problems. You need to charge more, work more or buy less gear. Buying outright will only hide the loss you took by paying up front for gear that didn't pay its way.


Best of luck...

-monte-

[Howardk]

The bank generally owns about half of my Studio, as soon as something is paid for I add newer or better gear and the list keeps getting longer. . . so it sure would be great if rates were directly related to cost/investment. However the local market sets the rates, along with the reputation of the studio/people involved, and it is a wanna-be industry with much competition, so the gear often means less to $rates than one would think. Here is a little article on Live Sound that touches on key points and applies to studios as well:
ProSound - Developing your pricing and stradegy

[SKI]

Just seems to me that most people who are operating a studio at any level don't want to treat it as a business.
Regardless of the part-time/full-time or hobby mentality it still should be treated like a business.
Think about all the great deals you have seen because someone got in over their head and were in need of funds.
Not to say you will get rich but you won't get twisted along the way.
Also remember that in the business world you don't upgrade or expand just because the opportunity presents itself it still should be a well planned strategic move.
Have plan, follow the plan, evaluate the plan, adjust the plan.