Dear Anklebiters,
I read your column every month and I fall into the category of a lot of your letter writers. I work for a fairly large sound company and I want to go out on my own. I have been in this biz for some time and I have watched the market and my company go through a lot of changes. My question is, do you think this is a good time to start my own company? I mean, in this current economic environment, would it make sense to you? I look forward to your input. Thanks, Gene Anderson, Oxnard, CA
Jamie: Gene, the only reason I took this letter is that you are close to my office in Pasadena. The fact of the matter is I have very little idea how things are in the rest of the country, but I think I can comment accurately on the health of live sound in Southern California. Of course, the fact that you are in my working area means that you may become direct competition to my sound company. And like most people, I would like to be the only fish in the pond. You know, my own oil company if you will. No real competition for product. Since that fantasy is not about to happen, let's talk about you taking that big first step. Obviously, you know something about this business. After all, you're in it, aren't you? Do you have a group you want to target? Like corporate gigs, houses of worship, seminars, clubs, parks, fairs, theaters, stadiums, etc.? How much capital (money) do you have on hand? Do you have partners or investors? How's that FICO score of yours?
Paul: Jamie, you have brought up some really good points! Gene, you need to put together a business plan. Go to the Small Business Administration, the local community college, Better Business Bureau or your Chamber of Commerce and get a model business plan. Really work to understand and complete each section in the plan. Plan on triple the capital that you think is necessary to start this business. You have been working in the industry, so you are aware of the revolution that is taking place. Analog consoles, analog crossovers, etc. are going out of style and use. Do you have the money to keep up with the more expensive tools that are now required just to compete? How are you going to afford to keep up technically? Will you go to concerts, read FOH, attend trade shows and purchase gear when it becomes necessary? Change is the only constant in any industry. But change is expensive, so keep that in mind. I wish you luck, and more importantly, do your homework prior to spending any money!
Jamie: Personally, I started very small. I have no problem with the idea of having triple capital. I really don't think it takes a truckload of money to get into this business. Eventually, you will spend more money than you can imagine. But when I started, I had sound gear because I was in a band and I went after clubs, corporate gigs and I did live mixing at variety of local churches. I put as much money as I could back into gear and within a couple of years, I found a niche that I have really enjoyed working in for the last five or six years. That niche has been just about any kind of event (indoor or out) up to 1,000 people in attendance. I just recently bumped that number to 2,500.
Paul: Jamie has another good point. You are in business to make money and hopefully support yourself and your family. But, especially early on, it is very important to pour as much as you can into real pro-level gear. Whenever you purchase anything, always–and I mean always–get rider-acceptable gear. This has bitten me more than once, not because my gear is bad or unprofessional. But if you have to convince the performer that your console is as good as the one they're asking for, then you have to make up this deficit in other ways. You are instantly behind the eight ball and have to work harder to sell the gig. Maybe you feel that is not necessary for the niche that you have chosen. Well, what will happen if the company that you work for now decides to get involved in your niche? If they are already established, then they may be able to take a gig "at cost" just to keep their people and gear working. You, on the other hand, unless you have another job or a rich girlfriend, have to make a profit on every gig.
Jamie: Your approach will depend on your goals. Paul has a good point about having "rider-acceptable gear." However, you will learn very quickly that if your particular gear is not on the rider, you will be professing wildly about the attributes of the equipment that you use. Remember: You are now a soundman, salesman and PR professional. If you want to rule the world of sound (or your corner of it), you're going to have to come out swinging. As far as answering your question: I think this is a great time to be in the live sound business. Personally, 2005 has been a banner year for my rather small company. People who know me are amazed at how much money I make doing what I do (don't tell the IRS) and how much fun I have doing it.
I also get to write this very cool column, which is very satisfying in itself. I think the real question is not whether the economy is right to launch a new business, but whether you are ready to follow your dreams. Con- fidence in yourself is a powerful tool. If you have it, use it. If you don't, work on developing it, and the chances are you won't fail. Good luck, Gene.
