It is not too difficult to start a rehearsal music studio business in Canada, but there are some challenges to overcome, including sources of financing for the initial investment, a sound business plan, competitors, and other considerations.
Your Customers
There are three types of customers for a rehearsal music studio – hobby, commercial, and recording artists. The first are interested in renting to record songs and music for pleasure and enjoyment. Commercial artists record marketing content, voiceovers, commercials, and other types of commercial content. Recording artists are mainly interested in sales and distribution.
Type of Business
The main types are cooperative, corporation, partnership, and sole proprietorship. A partnership or a sole proprietorship is usually a good choice for a rehearsal music studio. Think of a business name and location and contact the local authorities to inquire about any permits and licenses they require. You will need music studio equipment such as microphone stands, cables, studio monitors, headphones and microphones, audio interface, computers, and anything else you can think of. A digital audio station is also a good investment.
Borrowing to Finance the Venture
Depending on the equipment you plan to buy, you may need start-up capital of $100,000 or more (see here). One idea is to check whether you meet the criteria for funding under the Canada Small Business Financing Program. As long as you plan to buy new or used technology and equipment, you meet the criteria. Registration fees and the purchase of buildings are also covered. If you fail to qualify or require additional financing, you can always apply with a private lender, whether a big bank, your credit union, or your local bank. They offer secured and unsecured loans (see here), depending on the amount required, whether you are willing to offer collateral, your business credit score (see here), whether you are a new or regular customer, etc. The interest rate can be higher than government financing, but unions usually offer affordable rates. Other options include peer to peer networks, angel investors, a loan by a relative or family member, and local and national economic development organizations. Look into different tax financing options, small business grants, smart leases, and other ways to finance your rehearsal music studio.
Business Plan
It is a good idea to include an executive summary in your business plan and highlight the fact that you plan to invest in the latest technology and equipment. Describe your customer base (corporate organizations, musicians, etc.) and your competition. You may want to include a description of your services as well, for example, sound and music consultancy, production of music or audio books, production and recording of soundtracks and jingles, studio sessions, music recording, and so on. Your business plan must include details such as your business structure and mission statement, roles and responsibilities, target market, and marketing trends. When it comes to your business structure, you can have a front desk officer, accountant, HR manager, recording engineer, studio manager, legal secretary, and chief executive officer. Describe your target market and potential customers as well, for example, authors and upcoming artists, TV and radio stations, churches, advertising agencies, and record labels. There are other pieces of information to cover in your business plan, including weaknesses and strengths, competitive advantages, sales forecast, sources of income, and payment options and pricing and marketing strategies. You can list different payment options such as cash, bank draft, check, online bank transfer, and standard bank transfer. The more details you include in your business plan, the better your chances to qualify for financing.
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