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Author Topic: From Hobby to Business  (Read 3345 times)

Chris Kantner

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From Hobby to Business
« on: January 30, 2018, 11:56:18 am »

Hello PSW

First off I just want to say that this site/forum has been a godsend and plethora of great information. I am a long time lurker with only a few posts under my belt.

So I am looking for guidance on when and how to take providing sound from a hobby to a business, or even if it makes sense in my case.

Little about me...I am a musician (gtr/vox/keys/trumpet) and gigged moderately and locally in the 90s-2000's. Got married, had kids, yadda yadda and gigging slowed down. Kids are both in High School now and don't need me as much these days so I have been rehearsing with some of the old crew the last couple years. I also have a hobby of recording concerts...mostly jamband stuff (dead/phish/crowes etc) but also some local bands and jazz. I think seeing and recording these shows really helped with my ear for live sound.

So since I was also always "the guy with the PA" I was asked to run sound for bandmates I used to jam with. Started about 3 years ago...mostly bar stuff...a few DJ and church sound gigs also thrown in...maybe 3 or 4 times a year...and basically for peanuts.

So last year ramped up and I got a bunch of requests to run sound and took all the gigs I could get. I recently picked up new band...10 piece horn/wedding band...on a word of mouth thing for a last minute cancellation that thier normal sound guy could not do. Did the gig and got some compliments from the band and thier friends/wifes/SO in attendance. A few days later they gave me a dozen more dates at a significant higher rate than I was charging my pals.

Now I have a calander of 2-3 gigs a month with my pals bands and this horn band and I am now thinking maybe I should start up a business. To be honest I make more per gig doing sound then I ever did as a musician. I have an appointment with my accountant in two weeks to discuss with him but would like to tap the knowledgable people in the PSW Lounge.

Does it make sense to start a business? If so then as a sole proprietor, LLC? What are the advantages and disadvantages?

I would appreciate any advice. Thanks in advance.

Chris K.
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John Roberts {JR}

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Re: From Hobby to Business
« Reply #1 on: January 30, 2018, 12:00:06 pm »

To make a million dollars, start with 2 million.

JR
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Tim McCulloch

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Re: From Hobby to Business
« Reply #2 on: January 30, 2018, 12:01:47 pm »

Hi Chris-

We get these topics every 9 months or so and have since 2004.  I suggest using the G search using G's site filter (remove quote marks):

"site:forums.prosoundweb.com incorporation LLC business"

Feel free to substitute your own search terms until you find hours of reading pleasure.

Have fun, good luck.

Tim Mc
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"Practicing an art, no matter how well or badly, is a way to make your soul grow, for heaven's sake. Sing in the shower. Dance to the radio. Tell stories. Write a poem to a friend, even a lousy poem. Do it as well as you possible can. You will get an enormous reward. You will have created something."  - Kurt Vonnegut

Tim McCulloch

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Re: From Hobby to Business
« Reply #3 on: January 30, 2018, 12:02:35 pm »

To make a million dollars, start with 2 million.

JR

Like the farmer that won the lottery... when asked what he was going to do with his winnings he said "well, I guess I'll keep farming until it's all gone."
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"Practicing an art, no matter how well or badly, is a way to make your soul grow, for heaven's sake. Sing in the shower. Dance to the radio. Tell stories. Write a poem to a friend, even a lousy poem. Do it as well as you possible can. You will get an enormous reward. You will have created something."  - Kurt Vonnegut

Craig Leerman

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Re: From Hobby to Business
« Reply #4 on: January 30, 2018, 12:50:06 pm »

Chris,

My advice is that if you are going to be a business, make sure you are legal and doing things correctly.

If working at home, make sure zoning says you can be a home based business and get a business license. Also make sure you donít piss your neighbors off.

Get insurance! All it takes is for one drunk to say they slipped on your cables and you could lose your house.

Donít cut corners. Make sure your AC cables are up to code, use gaff tape and not Duct tape, etc. 

When you factor in all the costs of being a real business and you can still make money, then I would say go for it.
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Scott Holtzman

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Re: From Hobby to Business
« Reply #5 on: January 30, 2018, 01:21:32 pm »

Hello PSW

First off I just want to say that this site/forum has been a godsend and plethora of great information. I am a long time lurker with only a few posts under my belt.

So I am looking for guidance on when and how to take providing sound from a hobby to a business, or even if it makes sense in my case.

Little about me...I am a musician (gtr/vox/keys/trumpet) and gigged moderately and locally in the 90s-2000's. Got married, had kids, yadda yadda and gigging slowed down. Kids are both in High School now and don't need me as much these days so I have been rehearsing with some of the old crew the last couple years. I also have a hobby of recording concerts...mostly jamband stuff (dead/phish/crowes etc) but also some local bands and jazz. I think seeing and recording these shows really helped with my ear for live sound.

So since I was also always "the guy with the PA" I was asked to run sound for bandmates I used to jam with. Started about 3 years ago...mostly bar stuff...a few DJ and church sound gigs also thrown in...maybe 3 or 4 times a year...and basically for peanuts.

So last year ramped up and I got a bunch of requests to run sound and took all the gigs I could get. I recently picked up new band...10 piece horn/wedding band...on a word of mouth thing for a last minute cancellation that thier normal sound guy could not do. Did the gig and got some compliments from the band and thier friends/wifes/SO in attendance. A few days later they gave me a dozen more dates at a significant higher rate than I was charging my pals.

Now I have a calander of 2-3 gigs a month with my pals bands and this horn band and I am now thinking maybe I should start up a business. To be honest I make more per gig doing sound then I ever did as a musician. I have an appointment with my accountant in two weeks to discuss with him but would like to tap the knowledgable people in the PSW Lounge.

Does it make sense to start a business? If so then as a sole proprietor, LLC? What are the advantages and disadvantages?

I would appreciate any advice. Thanks in advance.

Chris K.

As a one man operation you can trade equity in your gear, vehicle and person and have decent cash flow.  In the end reality rears it's ugly head.  You can't maintain a rig, a vehicle, carry insurance, pay taxes and make any real money working with the local bar scene.

You want to make money you have to have more than one rig (because customers don't consult each others schedule), a stable full of itinerant help that you trust with your reputation and an ongoing marketing operation.

Money makers are private events, corporate, political, touring acts (hard to break into and very competitive). 

That's my take..

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Scott AKA "Skyking" Holtzman

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Steve Litscher

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Re: From Hobby to Business
« Reply #6 on: January 30, 2018, 01:37:45 pm »

Are you asking if it makes sense to leave whatever job you currently have to do this full-time, or specific questions about creating a LLC and "formalizing" your hobby?

If it's the former, then there's a ton to consider before doing so...

If it's the latter, it's relatively straight-forward and can be done without too much headache. Most local/state governments will have information about how to register your LLC, obtain an EIN, and all of that fun stuff. Worst case, you can hire a lawyer (or possibly a CPA) and get things prepared for a few hundred bucks.

Keep in mind as soon as you do this, you'll likely have to charge (and file) sales tax (in most states) and for any labor amounts higher than $xxx you'll have to send 1099s to your "helpers" at the end of the year. It's a slightly different ballgame, but again, it's nothing too difficult (at least in my state).

Tim McCulloch

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Re: From Hobby to Business
« Reply #7 on: January 30, 2018, 01:40:35 pm »

Chris, I forgot my stock reply:  Show me your business plan and pro-forma cash flow for 3 years.
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"Practicing an art, no matter how well or badly, is a way to make your soul grow, for heaven's sake. Sing in the shower. Dance to the radio. Tell stories. Write a poem to a friend, even a lousy poem. Do it as well as you possible can. You will get an enormous reward. You will have created something."  - Kurt Vonnegut

Rick Powell

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Re: From Hobby to Business
« Reply #8 on: January 30, 2018, 02:26:54 pm »

My title to this thread would be "From Money Pit to Semi-cost Recovering Hobby", or the reverse, take your pick LOL. Echoing Scott's comments, if you are a one man show and want to stay that way, you are going to want to chase your most lucrative market with guaranteed dates that pay the most, and you will lose potential one-offs as well as potential long term clients by having to turn down gigs due to conflicts with already-booked gigs in your calendar. Of the operators around my area, only one has multiple rigs, but he has been at it quite a while and sometimes covers 3 shows at once in a day...and it's still a "part time" business. It is a hell of a lot of driving around, pre-staging systems, collecting more than one system at the end of the night. etc. although he does have some trusted help who can sometimes take care of things. And at some point you will need to turn down those $200 or $300 bar gigs because they don't pay the nut if you are properly equipped and insured with crews that are worth a decent payday.
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Scott Holtzman

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Re: From Hobby to Business
« Reply #9 on: January 30, 2018, 03:01:20 pm »

My title to this thread would be "From Money Pit to Semi-cost Recovering Hobby", or the reverse, take your pick LOL. Echoing Scott's comments, if you are a one man show and want to stay that way, you are going to want to chase your most lucrative market with guaranteed dates that pay the most, and you will lose potential one-offs as well as potential long term clients by having to turn down gigs due to conflicts with already-booked gigs in your calendar. Of the operators around my area, only one has multiple rigs, but he has been at it quite a while and sometimes covers 3 shows at once in a day...and it's still a "part time" business. It is a hell of a lot of driving around, pre-staging systems, collecting more than one system at the end of the night. etc. although he does have some trusted help who can sometimes take care of things. And at some point you will need to turn down those $200 or $300 bar gigs because they don't pay the nut if you are properly equipped and insured with crews that are worth a decent payday.

We have no full time help and did 13 shows one weekend this summer.  Process is king.   Not counting walk ups we have had 4 shows going at once as our peak.

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Scott AKA "Skyking" Holtzman

Ghost Audio Visual Solutions, LLC
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Re: From Hobby to Business
¬ę Reply #9 on: January 30, 2018, 03:01:20 pm ¬Ľ


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