How to Start a Recording Studio

Do you love making music? You could be a key part of the creative process every day by starting your own recording studio and joining a billion-dollar US industry. If you have the space, you could start from home and build the next go-to studio in your city. You could even record the next Justin Beiber or Billie Eilish! 

But before you get your groove on, you’ll need to plan and prepare and learn about the entrepreneurial process. Fortunately, this step-by-step guide lays down all the tracks you need to hear to launch your soon-to-be successful recording studio.

Step 1: Decide if the Business Is Right for You

Pros and cons

Starting a recording studio has pros and cons to consider before deciding if it’s right for you.

Recording studio industry trends

Industry size and growth

• Industry size and past growth – The US audio production studios industry is worth an impressive $1 billion in 2022.((https://www.ibisworld.com/united-states/market-research-reports/audio-production-studios-industry/)) 
• Growth forecast –  The US audio production studios industry is expected to increase rapidly as the pandemic recedes. 
• Number of businesses – In 2022, 30,675 audio production studios are operating in the US. 
• Number of people employed – In 2022, the US audio production studio industry employs 31,183 people. 

Trends and challenges

Trends in the recording studio industry include:

• Advanced sound technology has enabled remote recording over the internet. Multiple artists can collaborate and record at the same time from different locations. If handled right, this could offer an additional revenue stream. 
• Digital manipulation of audio is becoming more advanced, allowing recording studios to alter and improve recordings — an opportunity to boost revenue. 

Challenges in the recording studio industry include:

• New technologies present a challenge for recording studios, which must regularly update their equipment to keep up.
• The widespread availability of digital audio production software has made it easier for artists to record themselves rather than going to a studio. Recording studios can combat this challenge by increasing their knowledge about editing and producing, to offer additional expertise.

Demand hotspots

• Most popular states – The most popular states for recording engineers are Oregon, Washington, and Michigan.((https://www.zippia.com/recording-engineer-jobs/best-states/))
• Least popular states – The least popular states for recording engineers are
  Rhode Island, Connecticut, and Nevada. 

What kind of people work in recording studios?

• Gender – 9.7% of recording engineers are female, while 85.2% are male.((https://www.zippia.com/recording-engineer-jobs/demographics/))
• Average level of education -The average recording engineer has a bachelor’s degree. 
• Average age – The average recording engineer in the US is 39.8 years old.

How much does it cost to start a recording studio business?

Startup costs for a recording studio range from $4,000 to $9,500 for a home studio space. Costs include all the equipment you need, a computer and insulation pads for your walls. 

You can get inexpensive equipment like a Focusrite Scarlett audio interface or a Logic Pro X audio workstation to get started and keep your costs low. 

You can take courses on recording music on sites like Udemy, generally for under $20. You can also get a recording arts certificate or online degree from a place like Full Sail University. 

You’ll need a handful of items to successfully launch your recording studio business, including: 

• Computer
• Audio workstation
• Audio interface
• DAW software
• Studio monitors and stands
• Headphones
• Microphones and stands
• Amps
• Pop filter

You could also provide instruments, like a MIDI keyboard and acoustic guitar, for artists to use. You could also add electric guitars and basses, a piano, and a drum set.

How much can you earn from a recording studio business?

A home studio can charge $50-$100 per hour, with an average of $75. Your profit margin should be high, around 90%. 

In your first year or two, you could work from home and record for 15 hours a week, bringing in $58,500 in annual revenue. This would mean $52,650 in profit, assuming that 90% margin. As your brand gains recognition and you get repeat customers and referrals, you could record for 40 hours a week. With annual revenue of $156,000, you’d make a tidy profit of $140,000.

What barriers to entry are there?

There are a few barriers to entry for a recording studio. Your biggest challenges will be:

• The costs of the equipment
• Breaking into a competitive market

Related Business Ideas

If you’re still not sure whether this business idea is the right choice for you, here are some related business opportunities to help you on your path to entrepreneurial success.

How to Start a Radio Station

Read Now

How to Start a Record Label

Read Now

How to Start a Music Production Company

Read Now

Step 2: Hone Your Idea

Now that you know what’s involved in starting a recording studio, it’s a good idea to hone your concept in preparation to enter a competitive market.

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research recording studios in your area to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a recording studio that also offers music production or music distribution.

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as hip-hop music or country music.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

A recording studio can serve as the bridge between record stores and labels by producing exclusive tracks or albums that are promoted and sold primarily in specific stores, backed by the label’s marketing power.

What? Determine your services

Your services will depend on your skills and your equipment. The more you can offer in terms of sound manipulation and music production, the more revenue you can make.

How much should you charge for recording studio time?

Prices for recording time in a home studio range from $50 to $100 per hour. If you build a brand and open a professional studio in a commercial location, you could charge up to $200 per hour. Your ongoing expenses for a home music studio will be very low, so you should aim for a profit margin of about 90%.

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will be musical artists, which is likely a younger demographic. You can find them on sites like TikTok and Instagram. It’s also a good idea to just get out and talk to people because there are many aspiring artists out there who might be interested in your studio. You’re also likely to get a lot of referrals from clients because local music communities tend to be very connected.

Where? Choose a recording studio location

In the early stages, you may want to run your studio from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out a professional studio space. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a recording studio space, you may want to follow these rules:

• Acoustics: Ensure space has good sound isolation and minimal external noise interference.
• Size & Layout: Space should accommodate equipment, artists, and crew comfortably.
• Accessibility: Easily reachable for clients and artists, with ample parking.
• Power Supply: Sufficient and stable power sources for equipment.
• Ventilation & Climate Control: Maintain optimal temperature and air quality.
• Security: Safe area with measures to protect expensive equipment.
• Proximity to Suppliers & Amenities: Near music equipment stores or other related services.

Step 3: Brainstorm a Recording Studio Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “recording studio” or “music studio”, boosts SEO
• Name should allow for expansion, for ex: “SoundBox Studios” over “The Hip-Hop Lab”
• Avoid location-based names that might hinder future expansion
• Use online tools like the Step by Step Business Name Generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Recording Studio Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

• Executive Summary: Outline the main goals, services, and competitive edge of your recording studio to attract musicians and producers.
• Business Overview: Describe the recording studio’s services, including tracking, mixing, and mastering for artists and commercial clients.
• Product and Services: Detail the variety of recording packages offered, potentially including hourly rates, full album production, and engineering services.
• Market Analysis: Assess the demand for recording services in your area and the genres or types of clients you aim to serve.
• Competitive Analysis: Compare your studio’s technology, acoustics, and services to other local studios to highlight your advantages.
• Sales and Marketing: Explain how you will market your studio to potential clients through channels like social media, music events, and industry networking.
• Management Team: Introduce your team’s expertise in sound engineering, music production, and business management.
• Operations Plan: Outline the daily operation of the studio, session scheduling, equipment maintenance, and customer service practices.
• Financial Plan: Present an overview of startup costs, session pricing, expected revenue, and profitability timelines.
• Appendix: Include supplementary materials such as studio layout plans, equipment lists, or artist testimonials that support your business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to recording studios.

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your recording studio will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.

• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.

Form Your LLC

Choose Your State

Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming

Search

We recommend ZenBusiness as the Best LLC Service for 2024

starts at $0, plus state fees

4.7/5

starts at $0, plus state fees

Visit ZenBusiness

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist, and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Venture capital: Venture capital investors take an ownership stake in exchange for funds, so keep in mind that you’d be sacrificing some control over your business. This is generally only available for businesses with high growth potential.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a recording studio business. You might also try crowdfunding if you have an innovative concept. 

Step 8: Apply for Recording Studio Business Licenses and Permits

Starting a recording studio business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your recording studio business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You may want to use industry-specific software, such as Studio Director, Sonido, or Skedda, to manage your bookings, schedule, invoicing, and payments.

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial. 

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

Marketing

Starting a recording studio is an exciting venture, and effective marketing is crucial for success. Beyond the basics of creating a website and networking, here are some practical strategies to boost your recording studio business.

1. Social Media Engagement: Leverage social media platforms to showcase your studio’s capabilities, share client success stories, and engage with your audience through polls, challenges, and interactive content.
2. Collaborate with Local Artists: Partner with local musicians, bands, and influencers for collaborative projects, joint promotions, and events, enhancing your studio’s visibility within the local music community.
3. Referral Programs: Implement a referral program that rewards existing clients for referring new artists, providing an incentive for word-of-mouth marketing and expanding your customer base.
4. Exclusive Promotions and Packages: Create limited-time promotions or special packages for new clients, encouraging them to experience your studio services at a discounted rate and potentially leading to long-term relationships.
5. Content Marketing: Develop valuable content related to music production, recording tips, and industry insights through blog posts, videos, or podcasts, positioning your studio as an authority in the field.
6. Open House Events: Host open house events where local musicians can tour your studio, meet your team, and experience your facilities firsthand, fostering a sense of community and trust.
7. Participate in Industry Events: Attend music festivals, trade shows, and industry conferences to network with potential clients, showcase your studio’s capabilities, and stay updated on industry trends.
8. Client Testimonials and Case Studies: Feature client testimonials and case studies on your website and promotional materials, highlighting successful projects and satisfied artists to build credibility.
9. SEO Optimization for Local Searches: Optimize your online presence for local search engine optimization (SEO) to ensure that your recording studio appears prominently when potential clients search for services in your area.
10. Host Workshops and Classes: Offer workshops or classes on music production, recording techniques, and industry trends, positioning your studio as an educational resource and attracting aspiring musicians.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your recording studio meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your recording studio business could be: 

• Record your music in our studio on your time – late night appointments available
• Hip hop recording and production at affordable prices
• High quality recording to get your music noticed

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a recording studio, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in music for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in recording studios. You’ll probably generate new customers or find companies with which you could establish a partnership.

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a recording studio business include:

• Recording Engineers – assist with music recording
• General Manager – scheduling, accounting
• Marketing Lead – SEO strategies, social media

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Recording Studio – Start Making Money!

With your own recording studio you’ll meet aspiring artists and help produce great music! You could even see songs you recorded on the charts someday. Even a home recording studio can bring in a lot of money, giving you a great return on a relatively small investment. Now that you’ve gathered all the business know-how you need, go ahead and launch your new entrepreneurial career with your new recording studio!