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Author Topic: Just starting out - How much to charge?  (Read 14774 times)

Mike DiCosimo

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Re: Just starting out - How much to charge?
« Reply #10 on: May 29, 2013, 03:00:14 PM »

Well, I never said I'd done ALL the math on everything.  A quick check w/my insurance company about two months ago showed a $55/mo premium for a policy covering me for $50K in equipment loss and $1M in accident/damage loss due to my fault.  So that's relatively cheap, considering the coverage.

I don't need any licenses, save my driver's license which I already have.  Most of my equipment is less than 4 years old and has seen very little use and is babied by me as I'm the only one that moves or operates it.

Paying taxes on the income is unavoidable and I will pay what i must.  Keeping on the IRS' good side is the only way to go.

As I've already stated, this is something I want to do as a side gig/hobby.  If it's too expensive or prohibitive for whatever reason, I won't be doing it long.  I'll just save my rig for the most badass block parties thrown in Texas.   ;D

Music licensing is something I know nothing about.  I can prove I purchased every track I own (or whatever the terminology is).  I wonder how many mobile DJs that "have a legal business" do much more than that? (if required?) Good points, though, Steve Alves.
« Last Edit: May 29, 2013, 03:02:20 PM by Mike DiCosimo »
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Steve Alves

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Re: Just starting out - How much to charge?
« Reply #11 on: May 29, 2013, 03:26:18 PM »

Well, I never said I'd done ALL the math on everything.  A quick check w/my insurance company about two months ago showed a $55/mo premium for a policy covering me for $50K in equipment loss and $1M in accident/damage loss due to my fault.  So that's relatively cheap, considering the coverage.

I don't need any licenses, save my driver's license which I already have.  Most of my equipment is less than 4 years old and has seen very little use and is babied by me as I'm the only one that moves or operates it.

Paying taxes on the income is unavoidable and I will pay what i must.  Keeping on the IRS' good side is the only way to go.

As I've already stated, this is something I want to do as a side gig/hobby.  If it's too expensive or prohibitive for whatever reason, I won't be doing it long.  I'll just save my rig for the most badass block parties thrown in Texas.   ;D

Music licensing is something I know nothing about.  I can prove I purchased every track I own (or whatever the terminology is).  I wonder how many mobile DJs that "have a legal business" do much more than that? (if required?) Good points, though, Steve Alves.

Understood, but at $55 a month for insurance, even as low as that is, if you do 4 gigs a month then you would divide $55 by 4 = $13.75 per gig in insurance.

Music changes every day. You will need to keep purchasing current music or your catalog will become outdated. That is an investment back into your business just like buying equipment. There are ALLOT of other overlooked expenses to operating a business that you need to think about. How are you going to advertise? Business Cards? Printing? If you are going to do higher end events you may incur tux or suit rentals or at the least dry cleaning. All of this has to be well thought out to figure what your COST actually is. Once you know that then you can figure out what you want to earn.


Edit:  Just FYI depending on where you are located there are usually County and/or City licenses or taxes to pay if you are operating a business.
« Last Edit: May 29, 2013, 03:28:35 PM by Steve Alves »
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Steven Alves
South Florida Sound, Fort Lauderdale, FL
www.southfloridasound.com

Mike DiCosimo

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Re: Just starting out - How much to charge?
« Reply #12 on: May 29, 2013, 03:41:57 PM »

Thank you, Steve.  That's a whole LOT to think about.  The thing that concerns me most are the expenses and what/how much is deductible.  I haven't been able to find a whole lot of free info on this subject and I don't have a personal accountant or tax atty to ask.

I know that it will cost me $400 to register my business with the state of Texas, but that's a one-time expense.  I already own the .com domain name for my business and have web hosting for it (just no site built ATM) so that's taken care of. Business cards I can print at home.  I was also thinking about signing up with Gigmasters.com but need to check out their pricing. 

This is all "toe in the water" at this point. Thanks again for your help.
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Steve Alves

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Re: Just starting out - How much to charge?
« Reply #13 on: May 29, 2013, 09:21:53 PM »

Thank you, Steve.  That's a whole LOT to think about.  The thing that concerns me most are the expenses and what/how much is deductible.  I haven't been able to find a whole lot of free info on this subject and I don't have a personal accountant or tax atty to ask.

I know that it will cost me $400 to register my business with the state of Texas, but that's a one-time expense.  I already own the .com domain name for my business and have web hosting for it (just no site built ATM) so that's taken care of. Business cards I can print at home.  I was also thinking about signing up with Gigmasters.com but need to check out their pricing. 

This is all "toe in the water" at this point. Thanks again for your help.

No problem, It is the hidden expenses that will get you, although you CAN write off most of them, that just means you don't pay tax on that money. It does not mean you get it back..

A friend of mine needs a wall built to section off an area for her daughter. She asked another friend of mine for a quote. She told him it is JUST an 11' wall. He asked her if it needed a door and she said yes. She nearly died when he gave her the supply list. She thought $100 in materials would do it....

Studs
Drywall
Drywall Screws
Insulation
Seam tape
Drywall Mud
Baseboard
Pre-Hung Door
Door Knob.
Paint
Trim.

I think you get the idea. Nothing is ever as simple as it seems. That is why a good business plan is a necessity.
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Steven Alves
South Florida Sound, Fort Lauderdale, FL
www.southfloridasound.com

Luke Geis

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Re: Just starting out - How much to charge?
« Reply #14 on: May 30, 2013, 04:11:32 PM »

It is truly dependent upon your goals and business ethics. I would first see what your direct competition is charging for similar classed items. Then I would look into what your ROI goals are. Do you intend to replace gear every 5 years, or every 10-15 years? If your on a 5 year plan, you have to charge more to get the ROI to really work. Another big thing you don't want to do is drag the industry down. Undercutting your competitors by a lot of money just to get the gigs is not good form. It doesn't really help you, nor does it help the rest of us.

Some companies go by a 10% rule for most commercial level items. I.E. a basic speaker and mixer set up would rent out for roughly 10% of the cost of that equipment. For clarity, a $1,000 dollar powered speaker may rent out for roughly $100 and a $400 dollar mixer would rent out for $40. This is a more difficult concept to carry out with high ticket ( industrial grade ) equipment. Renting out a $25,000 digital mixer would be impossible to do at 10% because that would be $2,500 a pop, per day!!!! Not going to happen. These mixers will rent out for between $300-$400 per day usually. That is roughly 1-2%!!!! So you can see how the small rental companies can get a really good ROI. If the equipment can pay for itself in ten rentals, the rest of the rentals of that equipment carry overhead and re-investment capital. Rental prices are typically lower in highly populated areas where there is a lot of competition. This is just the name of the game. You have to decide what you want to charge.

You could do the more fee based system too. This is where you charge less for the equipment, but itemize everything. I.E. Delivery/setup fees, charges on a per cable basis and perhaps even extra fees for early and late hour setups and strikes. I typically group complimentary items together. So a powered speaker will include a stand and an XLR cable. My mic rental includes a mic, a stand and a cable. If you were to do a more broken down approach you can simply charge for every little thing. The stand, speaker, mic and XLR cable would each have their own cost that would all add up to a higher dollar amount, even though each one costs less to rent than the competitor. This factored with set up/ strike and travel costs can actually bring more money in, but the system requires more work and the client can get tired of seeing a ton of numbers for every little thing.

I have also set up a fixed rate system. I found that having a fixed rig deal works well. I have an A, B and C rig and each one has a flat rate that carries specific rules. It's a per day rate, with a fixed number of hours. After that the basic system rates are modified and there are charges for things like overtime and equipment that is not included in the cost of that system like wireless mics. This makes it easy to sell to a client, because I can throw a number out, tell them what it includes and it will usually fall in the basic needs. If they need more then it goes ala-carte.

In the end you will find that it is really based on your reputation and confidence. If your good, people will pay whatever you want them too. You can truly charge anything you want, it's just a matter of getting the client to believe it's worth the investment. This is easier to do when you have a reputation and equipment of a known standard. Most of my work is related to charitable organizations and I charge less to them because I feel that is important. But my non charitable work pays me very well and I love to make sure that they are all very well taken care of. This has gotten me to a place where I don't have to haggle about pricing. I charge a fair rate and provide a superior service than most of my competitors. My relationship with my competitors is great too. They hire me to work for them on shows and know that I will take just as good care of them as my own clients. Reputation..........
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Brad Weber

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Re: Just starting out - How much to charge?
« Reply #15 on: May 31, 2013, 01:43:27 PM »

Thank you, Steve.  That's a whole LOT to think about.  The thing that concerns me most are the expenses and what/how much is deductible.  I haven't been able to find a whole lot of free info on this subject and I don't have a personal accountant or tax atty to ask.
You may want to find an attorney and accountant, but until then you may want to check out sources such as the Small Business Administration, especially if they have an office nearby.
 
Many of the insurance, tax, etc. issues may depend on the form your business takes and the laws in your state.  If you are a sole proprietorship then you and the company may essentially be viewed as one and the same and you may not need to register with the state, though you may need to check that the business name is available and possibly register a dba (Doing Business As) with the county.  A partnership, LLC, S-Corp, C-Corp, etc. may all be viewed differently and in some states may not be allowed for an individual.  You might want to start with http://www.sos.state.tx.us/corp/businessstructure.shtml and sources such as http://www.nolo.com/legal-encyclopedia/how-establish-sole-proprietorship-texas.html, but it is best to have someone familiar with the relevant state and local laws help you decide what would work best for you.

I know that it will cost me $400 to register my business with the state of Texas, but that's a one-time expense.  I already own the .com domain name for my business and have web hosting for it (just no site built ATM) so that's taken care of. Business cards I can print at home.  I was also thinking about signing up with Gigmasters.com but need to check out their pricing.
But those are still all expenses you incur.  And as Steve noted, you might also have to check with your City and/or County to see if they require a business license to do business there.  Then there's property tax on business property, which could include some of your gear.  Want a separate phone number for the business, that could have a cost.  Here the State business registration has to be renewed annually.  You might need software to prepare invoices and track your financials and might want that running on a computer other than your personal computer.  The costs can start to add up, especially if you try to maintain separation between you personally and the company.
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Jay Barracato

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Re: Just starting out - How much to charge?
« Reply #16 on: May 31, 2013, 06:59:22 PM »

I think it also helps to be compensated for emotional strain.

My DJ services are currently priced at $250000 a gig or $100000 an hour.

Since no one has paid it yet, when the band goes on break, I go on break also.
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Jay Barracato

James Feenstra

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Re: Just starting out - How much to charge?
« Reply #17 on: June 18, 2013, 10:13:54 PM »

also note that just because you purchased a song off of itunes it does not give you the rights to perform it publicly for profit (ie. play it during a dj set)

you'll need to pay a licensing fee through socan (Canada) or ascap/bmi (US) depending on your area in order to legally use any material you already own. If you get caught playing songs without a license the fines are VERY high, something like $5000-$10,000, depending on area. Even higher sometimes, as it really depends on what they feel like hitting you with.

Even small businesses who play CDs/Itunes songs at their business as background music have to pay licensing fees. Only radio is exempt.
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Randall Hyde

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Re: Just starting out - How much to charge?
« Reply #18 on: June 25, 2013, 10:15:10 PM »

also note that just because you purchased a song off of itunes it does not give you the rights to perform it publicly for profit (ie. play it during a dj set)

you'll need to pay a licensing fee through socan (Canada) or ascap/bmi (US) depending on your area in order to legally use any material you already own. If you get caught playing songs without a license the fines are VERY high, something like $5000-$10,000, depending on area. Even higher sometimes, as it really depends on what they feel like hitting you with.

Even small businesses who play CDs/Itunes songs at their business as background music have to pay licensing fees. Only radio is exempt.

Actually, the venue is responsible for the licensing, not the person playing it (e.g., DJ). However, it's still damn wise to pay for that license. It's actually not that expensive and if you're going to be DJ'ing it's a wise thing to do. Ascap/BMI/etc. might not sue you directly, but the venue might feel obliged to come after you in one form or another.
Cheers,
Randy Hyde
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Randall Hyde

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Re: Just starting out - How much to charge?
« Reply #19 on: June 25, 2013, 10:21:40 PM »



All that said, how much should I charge for a gig?  Hourly? Flat rate?  How about this scenario:  What should I charge for a 4-6 hour indoor event, providing music and lights for 100-200 people?  $50/hour?  $75/hour? Flat rate?

Thanks for your patience and sharing your experience.

Ultimately, all people really care about is the bottom line. How much is it going to cost them to have you perform (all other things being equal, such as the depth of your music catalog). Almost every outfit I work with constantly asks me if there are going to be any "extra costs" (which they want no part of). They've dealt with sound companies that charge them overtime because the crew couldn't strike the gear fast enough or that nickel and dime them for every microphone, cable, and stand.  They want to know exactly how much it's going to cost them so they can stop worrying about the sound's effect on their event budget. They don't want to pay a penny more than you quote them (subject, of course, to you delivering on your promise to provide a sound system that is suitable for their event). Fixed price seems to be the best way to satisfy people but it does mean you need to do your homework and make sure that you're providing a reasonable bid. In your case (fixed PA system and other gear), the main thing you've got to so is make sure you have sufficient "rig for the gig" and don't try to take on bigger shows than you can actually handle (the rental route has *never* worked for me -- when I have to rent gear to do a gig I almost always get underbid in the market where I operate from).
Cheers,
Randy Hyde
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Re: Just starting out - How much to charge?
« Reply #19 on: June 25, 2013, 10:21:40 PM »


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