Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Updated on September 8, 2023
$4,150 - $9,600
$58,500 - $156,000 p.a.
Time to build
1 – 3 months
$52,650 - $140,000 p.a.
How to Start a Recording Studio
Decide if the Business Is Right for You
Hone Your Idea
Brainstorm a Recording Studio Name
Create a Recording Studio Business Plan
Register Your Business
Register for Taxes
Fund your Business
Apply for Recording Studio Business Licenses and Permits
Open a Business Bank Account
Get Business Insurance
Prepare to Launch
Build Your Team
Run a Recording Studio - Start Making Money!
Recording Studio Business FAQs
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.
Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.
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.
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:
Studio monitors and stands
Microphones and stands
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.
Setting up a business name and corporation
$150 - $200
Business licenses and permits
$100 - $300
Business cards and brochures
$200 - $300
$1,000 - $3,000
Wall insulation pads for studio
$300 - $500
Recording equipment including microphones and software
$1,500 - $3,000
$800 - $2,000
$4,150 - $9,600
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.
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
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: Brief overview of the entire business plan; should be written after the plan is complete.
Business Overview: Overview of the company, vision, mission, ownership, and corporate goals.
Product and Services: Describe your offerings in detail.
Market Analysis: Assess market trends such as variations in demand and prospects for growth, and do a SWOT analysis.
Competitive Analysis: Analyze main competitors, assessing their strengths and weaknesses, and create a list of the advantages of your services.
Sales and Marketing: Examine your companies’ unique selling propositions (USPs) and develop sales, marketing, and promotional strategies.
Management Team: Overview of management team, detailing their roles and professional background, along with a corporate hierarchy.
Operations Plan: Your company’s operational plan includes procurement, office location, key assets and equipment, and other logistical details.
Financial Plan: Three years of financial planning, including startup costs, break-even analysis, profit and loss estimates, cash flow, and balance sheet.
Appendix: Include any additional financial or business-related documents.
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
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
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.
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.
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
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.
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.
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.
Some of your business will come from the casual online visitors, but you should still invest in digital marketing! Getting the word out is especially important for new businesses, as it’ll boost customer and brand awareness.
Once your website is up and running, link it to your social media accounts and vice versa. Social media is a great tool for promoting your business because you can create engaging posts that advertise your products:
Facebook: Great platform for paid advertising, allows you to target specific demographics, like men under age 50 in the Cleveland area.
Instagram: Same benefits as Facebook but with different target audiences.
Website: SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Schedule Now”. This can sharply increase purchases.
Google and Yelp: For businesses that rely on local clientele, getting listed on Yelp and Google My Business can be crucial to generating awareness and customers.
Take advantage of your website, social media presence and real-life activities to increase awareness of your offerings and build your brand. Some suggestions include:
Flyering – Distribute flyers in your neighborhood and at bars and nightclubs.
Post a video – Post a video about your recording studio. Use humor and maybe it will go viral!
Start a blog – Start a blog and post regularly. Change up your content and share on multiple sites.
Seek out referrals – Offer incentives to generate customer referrals to new clients.
Paid ads on social media – Choose sites that will reach your target market and do targeted ads.
Pay–per-click marketing – Use Google AdWords to perform better in searches. Research your keywords first.
Influencer marketing – Pay people with large social media followings to promote your recording studio. You can find micro-influencers with smaller followings and lower rates.
Testimonials – Share customer testimonials about how your recording studio helped them.
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
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!
Recording Studio Business FAQs
How profitable is a recording studio?
The ongoing expenses for a recording studio, particularly a home recording studio, are low, so it can be quite profitable. The key is to have good equipment and great skills so that you get repeat customers and referrals.
How much can I charge for recording studio time?
Generally, for a home studio, you can charge between $50 and $100 per hour. If you have a professional studio in a commercial location you can charge up to $200.
How do I start a recording studio at home?
To start a recording studio at home, select a dedicated space with good acoustics, invest in quality recording equipment and software, ensure proper soundproofing and acoustic treatment, and familiarize yourself with recording techniques and software operation.
What makes a good recording studio?
A good recording studio has excellent acoustics, proper soundproofing, high-quality recording equipment, efficient workflow, and a comfortable and creative atmosphere for artists.
How can I attract clients and artists to record at my studio?
To attract clients and artists, showcase your studio’s capabilities online, offer competitive pricing and flexible booking options, collaborate with local musicians, provide excellent customer service, and host open houses or studio tours.
How can I market and promote my recording studio to reach a wider client base?
Market your recording studio by creating a professional website, utilizing social media to share content and updates, collaborating with influencers or content creators, attending industry events, offering promotions or discounts, building relationships with local music venues or schools, and utilizing targeted online advertising and SEO techniques.