At a crossroad...........

S

Steve Ferreira

Sophomore
Jan 12, 2011
189
0
16
Toronto, Canada
I'm kind of caught at a crossroad. I'm a weekend warrior, I have a band that I am there preferred providor, and a banquet hall also where I provide for when they bring in artists. I have been finding myself double booked, cross renting gear and turning down work (as much as I hate to). I have another guy that works for me when I'm double booked, he does one event and I do another. I also have a monday-friday job.

I think that I have some pretty good gear for a warrior

2x 728s

2x 725s

6x 712m

4x Xtis

2x ITechs

4x Martin scx600

2x Martin Mac 250 entours

20x led pars

Allen and Heath 24ch console

Yamaha 16ch console

Eqs, Verbs, delays

Truss, chainfalls

3 phase power distro etc....



I have been thinking about taking the next step, but this includes some deeper pockets to play. My next step would be to purchase some more srx stuff or a line array. I do have use for a line array at some of the venues I go to. I would also need to get a larger console (maybe get into digital) and purchase some more lighting gear. I have figured that $100,000 should get me started and build from there. I friend of mine has some colleagues of his that are promoters and he said that he would send them my way if I made the investment, as they are not happy with there current provider.

If I invest this kind of money it means that my monday-friday will not happen anymore. I really don't know what to do. I figured I can payoff a loan in acouple of years, but this is a serious step to be taking.



Steve ''confused'' Ferreira





 
Re: At a crossroad...........

Steve....



It seems the ''carrot'' on your particular stick may be the referrals to the folks who are not satisfied with their current provider(s). I'd be curious to know why they are unhappy and what the issues are. Certainly there have been lot of threads in the sound forums regarding the expectations of clients and their propensity to squeeze budgets.



If I were in your position I'd want as much info up front as possible and where possible get commitments and agreements in writing. If you're going to make the commitment and investment it should not be one-sided.



BTW.....what's your day job??



 
Re: At a crossroad...........

Hi Dick,



The majority of the complaints are that the other providers don't really care about the quality, no customer service ..... The only reason why they still use that provider is because of my friend. He and the promoter are very good friends, and out of loyalty has been using this provider (my friend got them the contact). Things apparently started fine with great service, but now the provider is too comfortable with the promoter and does whatever he wants.

I would need some sort of contracts/agreements signed before I can really jump in feet first.



I work as an AV technician for a very large company in North America.
 
Re: At a crossroad...........

Sounds good so far. Only one caveat:



Business is business.

Friendship is friendship.



The two unfortunately do not mix......as you probably know.



Does the organization in question communicate well? Everything will depend on their ability to tell you what they want done. I do understand service. That is the name of the game.







 
Re: At a crossroad...........

Hi Steve-



At the Crossroads, you sell your soul to the Devil. So this might be appropriate.
icon_wink.gif




Here's Uncle Tim's ''The Next Level'' financial calculator: How much have you spent on the gear you have right now? Add in the costs of the gear your current stuff replaced... and the gear before that. Don't forget transportation costs (use of personal truck, trailer, rentals) for each time you grew. The total of all that is what you will spend at a minimum to Go To The Next Levelâ„¢.



The sum total of everything you've spent getting where you are today, from the moment you decided this was more than a quaint and expensive hobby, to date. Feedback from other forum users tells me I'm pretty darn close.



In our shop, it's pretty accurate. When we're done with this round of upgrades, we'll have nearly doubled the investment in the company. Business is steering in unexpected ways, and we've been in the odd position in our market to be ahead of the curve. Now competitors are ramping up, so we're looking at other ways of using our capacity in a B2B sort of way.



Have fun, good luck.



Tim Mc
 
Re: At a crossroad...........

Hi Tim,



I have been doing my upgrades at a very slow pace. I just sold my eaw la's, which I had purchased about 12 years ago. I just feel that purchasing gear slowly puts a bigger strain on things. Spending 5000 today and then spending another 3000 four months from now can take it's toll. It's almost better to decide on what's needed to get the ball rolling for the next 4-5 years and just purchase that.

The $100,000 upgrade that I was thinking seems like it's in the ballpark, give or take acouple thousand :)



 
Re: At a crossroad...........

Steve Ferreira wrote on Thu said:
I just feel that purchasing gear slowly puts a bigger strain on things. Spending 5000 today and then spending another 3000 four months from now can take it's toll. It's almost better to decide on what's needed to get the ball rolling for the next 4-5 years and just purchase that.

The $100,000 upgrade that I was thinking seems like it's in the ballpark, give or take acouple thousand :)
Click to expand...



Hi Steve,



I don't know about you, but I sure sleep better at night knowing that I don't (currently) owe money to anyone. What's stopping you from formulating a 4-5 year upgrade/business plan and then purchasing the gear as necessary/cash flow allows? Assuming that you would be able to meet your clients' needs, you'll be saving yourself money in the long run.



Another option that shouldn't be overlooked is potentially buying some used gear/another provider.



Along with the additional gear would also come additional staffing/business overhead, more storage/transportation requirements, etc.



Jeff
 
Re: At a crossroad...........

Let's see.. you are at the ''top'' of your game at your current level.. plus a good day job. You have nice gear, get double booked, and may even have to turn down work... all with the security of a good steady paying day job. Sounds like a good position to be in... especially considering the uncertain economy we are in.



The dream of being your own sound company certainly sounds alluring...



A very small line-array system could still be practical and have many benefits.. and could be expanded at a rate that works for you.



From my perspective... I would probably play it safe and just keep building and upgrading the sound system, buying what is practical, and perhaps renting what is needed for the bigger occasional jobs. When those jobs become more regular.. then may be the time to make the jump, unless you are certain you are there. Just my ''weekend warrior'' opinion...
icon_cool.gif
 
Re: At a crossroad...........

$100,000 is a lot of money to borrow - especially on a depreciating asset. Simple interest on $100,000 at 6% is $6000/yr - $500 a month in debt service.



I'd think very carefully.
 
Re: At a crossroad...........

Ive thought about getting a loan/financing some higher end equipment just recently. It can definitely be a risk. Personally I would almost double what you have, They will easily combine for one big rig or split to two shows on the same night, maybe the other guy can run one show while you do the other. Would make for decent pay in one night.





Edit: Sorry i didnt realize how many typos were in this comment. Fixed!

 
Re: At a crossroad...........

If you are looking to purchase a big $100K rig, you would have to ask yourself:



Can your market support the rig?

How much more money will it net you?

Can you still keep your day job and be able to set it all up?

Are you setting up your current by yourself, and now you'll need to pay another person to help?

Can you just add to your current rig and do the jobs and make it scaleable?

What will be your ROI?
 
Re: At a crossroad...........

There is no way in this economy I would invest in 100K of gear @ least not in my market. Your best bet would be to approach and establish a relationship with another larger provider, perhaps offer to work as a commision sales person, or rent racks and stacks as needed. (I would at least do a few shows with the promoter this way, to make sure everyone gets along and remeber it usually only takes one bad show for a promoter to fold)



Personally I think Perhaps a smaller investment say 30-40K would be a better move. There are lots of good deals out there.

Look @ it this way no matter what you buy for $100K, if you go to sell it a year later its worth maybe 75% of what you paid for it.



Really I would consider myself lucky if I were you. You say spending 5K now and 3K in couple more months can be a strain, I aggree but why not look in to a Line of credit or some kind of pre aproved leasing capital. Buying a bunch of stuff and then having it sit or having to work just to make lease payments is a huge grind.



@ 100k you are not just jumping a level but more like 2 or 3 and that can really complicate things. Right now you a are a 1 man show, jump up a couple levels and administrive costs start to get out of hand.
 
Re: At a crossroad...........

Scott Smith wrote on Fri said:
Let's see.. you are at the ''top'' of your game at your current level.. plus a good day job. You have nice gear, get double booked, and may even have to turn down work... all with the security of a good steady paying day job. Sounds like a good position to be in... especially considering the uncertain economy we are in.
Click to expand...



I think you are in a good place too. The larger market has a whole other can of worms, and you are then competing with REAL production companies. To make money you need a lot more than some LED pars and a line array. The inventory and infrastructure required to service a broad range of clients will drastically alter your current price model and margins. I'd take a good look around the Toronto area at all the equipment that's sitting around and ask yourself if the city really needs more gear.



I just got outbid by a very large production company who sent 8 stage decks, double your current PA, a big conventional par rig, some movers and a couple LCD screens for $1500 with an operator and they provided the electrician for the tie-in. It's a dead time of year and I guess they just wanted to pay some bills, but holy shit batman! My quote was basically double that and I thought I was going in pretty low.



If you have the clients, become familiar with a handful of companies and subcontract the work or cross rent. I know one guy here who has a decent PA and nothing else. If you call him he'll get you whatever you want by making a few phone calls. He keeps track of who's busy, and who's not and can often squeeze better deals out by soaking up the excess capacity that exists. He also isn't stuck with anything. For larger shows he'll get whatever console and lighting is requested and doesn't have to 'sell' what he's got. If you build the business around the clients and the service the equipment is really secondary.



Just my thoughts,



Marlow
 
Re: At a crossroad...........

Thanks for all the replies so far.



The current market that I'm in has potential to be something better, but there are more ankle bitters then anything else. There are only 3 companies that can handle the workload and have good gear. My friend has a contact in a different market, they don't have many soundco's and put on big events. It's also word of mouth, and thats how providers get the jobs.



I was looking at buying used gear, maybe a 12 box 4887 rig with acouple more IT's, and some movers.



I do feel previlaged to have a day job right now, and the fact that we are busy is great.
 
Re: At a crossroad...........

Steve Ferreira wrote on Fri said:
Thanks for all the replies so far.



The current market that I'm in has potential to be something better, but there are more ankle bitters then anything else. There are only 3 companies that can handle the workload and have good gear. My friend has a contact in a different market, they don't have many soundco's and put on big events. It's also word of mouth, and thats how providers get the jobs.



I was looking at buying used gear, maybe a 12 box 4887 rig with acouple more IT's, and some movers.



I do feel previlaged to have a day job right now, and the fact that we are busy is great.
Click to expand...

It seems to me, another weekender, that you see potential for more work that you don't have the gear for?

If it were me (having listened to these guys for a few years), I would rent the needed racks and stacks (line arrays?) to see if that was what was really needed before buying my own.

Will you be able to put a line array to work every week? Will the gigs pay for in the needed time?

If the answer is no, then rent for the times you need em. Make a good relationship with another company that has the larger rigs and perhaps they will give you gigs in return?

$100k is a lot of $$ in this enonomy.

 
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