Let’s Start a Home-Based DJ Business! Part 3: Why Is a DJ Business Such a Good Idea?
There are thousands of professional DJs around the world, and it’s no secret that pro-level DJing is a multimillion-dollar industry. If you want to grab your piece of the DJ market, there’s a lot of work you have to do to officially set up your business…
Last week in Part 2: Let’s Start a DJ Business we talked about the about the joys—and downfalls—of being your own boss. I’m assuming if you’ve made it this far, I haven’t scared you off yet—and you’re still interested in starting your DJ business. Congratulations—you’re joining fine company. There are thousands of professional DJs around the world, and it’s no secret that pro-level DJing is a multimillion-dollar industry. It’s easy to see why—DJs are versatile, they’re entertaining, and they truly do offer the best bang for the buck when it comes to entertaining a large number of diverse people. That’s going to be your secret to success as the consummate professional DJ—your services are at a premium because of that flexibility and diversity, not to mention your ability to be flexible with your clients’ budgets.
So, Why Is a DJ Business Such a Good Idea?
One look at any of my friends’ iPods reveals a good indicator of why DJs are the top form of entertainment for weddings and private events worldwide. Musical tastes are as varied as people themselves—one person’s tastes may go from Top 40 to jazz to hip hop all in a single playlist; think about that much musical diversity spread out among a guest list of four hundred people. You’ve got people who live their whole lives immersed in music, and you’ve got people whose musical interests go no further than the local Top 40 pop station. There’s also the performance aspect—many of your well- paying clients want you to be the center of attention, to help move the party along; they want you to be the person responsible for getting their guests into party mode and to be the one to play “bad guy” when it’s time to wrap up the festivities. As a DJ, you’ve got a lot of hats to wear.
Before you jump in to grab your piece of the DJ market, there’s a lot of work you have to do to officially set up your business. The first task is defining what your business is, what your business does, and how you’re going to do everything. There’s also a lot on your plate as a new small business owner—and as you get started, you’ll probably notice that there’s no tried-and-true formula for a business’s success. We’ll find your business and personal strengths, we’ll find your weaknesses, and we’ll figure out how to best balance the needs of a growing business with your personal necessities. From there, we’ll write a business plan—an important document that you’ll reference (and change) often—then get to the more fun stuff!
Your Time Frame
Establishing a time frame for your DJ business isn’t necessarily about reaching specific goals on a specific schedule, although that’s important as well. Finding your timeline is an important tactic when starting your business because it’s about pacing yourself in search of those goals that will bring you success. Many businesses have failed because they ran out of money too quickly, and many businesses hit a slow period because they blow their advertising budget for the whole year in the first couple of months (I have been guilty of this in the past).
Finding Your Timeline
Establishing a working timeline is absolutely essential to the smooth operation of your growing business. Although you’re probably just starting to realize how in- depth this business-owner thing really is, it’s important to think long-term as well. You’ve got a few turbulent months ahead of you, so it’s best if you plan your resources accordingly.
Here are a few questions you might want to ask yourself when figuring out how far your finances and resources will go. Doing this will help you establish a budget—very important when we talk about your business plan later on.
How much money—cash and credit—will you have to use from the day you begin your business after major business start-up expenses? We’ll call this your “day 1 operating budget.”
How much do you plan to budget for marketing expenses per month?
What’s your budget per advertising campaign?
When do your business loans, if any, become due?
What are your monthly fixed expenses—both business and personal—that you’re responsible for?
What’s your day 1 operating budge?
What’s your day 1 operating budget divided by 12?
Answering these questions will give you the amount of money your business has to sustain itself on for a year’s time. That’s assuming you don’t have any paying clients which is a very unlikely scenario but one that’s not unheard of in a small businesses. This amount should give you a good idea of how healthy your business’s overall financial picture is for the time being. It’ll also give you an idea of how carefully you may need to budget to make sure your business (and personal) fixed expenses are met.
First, let’s look at the amount of money you have available. Whether you choose to finance your business through savings, loans, or credit cards, you’ll have a finite amount of money that you will start with. We’ll assume a worst-case (yet common) scenario—a business that doesn’t have a single client the first week it is open. The day you start your business, the countdown starts on draining your bank account. Knowing the amount you’re starting with is critical.
Now, take the amount of money you’ve budgeted for your monthly expenses and add the amount of money that you’ve budgeted per month for marketing expenses. These are the two biggest things you’ll need to worry about at first—your fixed expenses and your marketing budget. Fixed expenses are such expenses as rent (for both your personal and business spaces), insurance, licenses, and estimated self- employment taxes. Your marketing budget is the amount of money per month that you set aside to market your new business—something we’ll talk about in great detail later. This amount of money should be set with online and print marketing in mind—and remember that online marketing can be free or very cheap. You’ll also want to budget money for exhibiting at local wedding and event trade shows if you feel that doing so would be a good use of your time.
Aside from your fixed expenses, let’s talk about when your business’s first bills become due. Many small-business lenders have no problem extending out the date when a business’s loans start becoming due, but you’ll be paying way more interest in the long run. If the option presents itself, and resources allow, it’s always better to start paying off your loans sooner. If your loans start becoming due right away, add them to your fixed expenses. If not, plan ahead for when they do.
At this point, you should be able to see how far your money is going to go, and that information should give you a good time frame for how fast you’ll want to grow your business. If you’re finding that your money won’t last over six months, then you might have a problem. On average, it takes a business six to eight months to get a firm hold on its day-to-day operations—and that’s not even factoring in if customers start coming or not. A lot of the necessary steps for success as a DJ will come well after you’ve opened your business (and, as we’ll talk about in the next chapter, you’ll most likely be overhauling a lot as time goes on).
Remember: Don’t get in a rush. Success takes time, and the most successful DJs didn’t become successes overnight. You’re going to need to spend a lot of time marketing yourself, improving your efficiency as a DJ, and—the most time-consuming part—dealing directly with your clients, both new and old.
Who Needs a DJ?
As an aspiring DJ, you probably have an idea of exactly what kind of business you’re looking to become. After all, there are a lot of types of DJ businesses out there—and many of them specialize in specific types of events. If you’re like most DJs, regardless of your specific preferences in music, weddings will be the bread-and-butter of your business. Most weddings, in fact, hire DJs as their entertainment—and most weddings have a nice budget for entertainment. According to the American Disc Jockey Association, the average budget for a wedding DJ can be from $350 to $3,500—and according to entertainment booking powerhouse GigMasters, the average amount of money spent for entertainment at a wedding in the United States is $1,950. That’s a lot of potential money for a small business to make on one gig!
Weddings may be the most profitable and steadiest type of work for you, but you should look out for a lot of other types of gigs to fill the gaps, especially in the winter when weddings are a slower market. Birthday parties, retirement parties, corporate events, and private entertainment venues are always on the lookout for entertainment, and DJs are at the top of the list. Being a great DJ is about a lot more than offering an impeccably thorough music collection and being able to make people dance; you’ll also have to offer a superior value to your customers and to do whatever it takes to keep yourself competitive. It’s a tough market out there—and the competition that can siphon off your customers’ dollars should always be in the back of your head.
Beware of the (Diverse) Competition
Although DJs may be the most popular form of wedding entertainment, you’re up against some other heavy-hitting, quickly growing forms of entertainment. According to GigMasters, one of the busiest entertainment booking companies in the industry, there’s a trend toward hiring nonmusical entertainment—psychics, palm readers, and magicians being some of the fastest-growing forms—many of them creeping up on live music’s number two spot (DJs maintain the number one position for wedding and private event markets).
First, keep an eye on your local economy and use that knowledge to your advantage. How’s the local job market? Are people getting married and throwing receptions with the budgets they used to—remember that weddings will be your primary market—and are private events happening with any regularity and with budgets that include entertainment such as yourself? If you’re in a smaller area where the economy has been poor and there’s already some strong, well-respected competition, chances are you will find yourself with fewer clients.
We’ll talk in more detail later about analyzing your competition, but as you’re in the planning stages for your business, you need to keep in the back of your mind what you’re up against. Even in a strong economy, how do you think you’ll match up to what your competitors can offer from start to finish? You’ll have to work your way in and work hard to build your client base. If your local community has two or three strong competitors, it’s going to take some work to knock them out of the saddle. But I’m optimistic that you can do it!
[From, How to Start a Home-based DJ Business by Joe Shambro available on Amazon.com]
Next Week: Part 4: Your Business Plan— And Why You Need One
Your business plan is, essentially, your roadmap to running a business. I won’t say it’s a roadmap to success—success is ultimately determined on how well your business plan is executed and how well you roll with the punches of being a small business owner—but it’s a great way to plot out your course. A business plan is your best bet, and it’s why we’re dedicating a whole blog chapter to it.
Until next time, keep learning, keep practicing, keep building, and keep growing!
Questions?
If you have other questions along the way, which you undoubtedly will, you can certainly email them to me at info@djkwah.com. I’ll try to respond right away.
WHO IS DJ K. WAH!?
DJ K. Wah! is the owner and operar of DJ K. Wah! Entertainment which is currently a professional mobile disc jockey operation serving the New York City area. DJ K. Wah! Entertainment offers the best quality music, top-of-the-line equipment, emcee and line dance routines. Music genres include Mainstream and current hits, House and Gospel House music, 70's, 80's, 90's music, Rock and Alternative Rock music, Reggae & Dancehall, Soca, Calypso, Salsa, Cumbia, Merengue, and Bachata.
DJ K.Wah Entertainment also provides a variety of lighting, sound, and video services to help make your event a success! Contact us to discuss options that best suit your event.
DJ K.Wah! Entertainment has provided entertainment for many and varying venues including Bronx Museum of the Arts, Nuyorican Cafe, The City University of New York, New, Boogie on the Boulevard, Parkchester PEP for Seniors, Gennaro’s Catering Hall, Alhambra Ballroom, Tropical 128, The Grand Slam Ballroom, Numerous weddings, engagement parties, baby showers, birthdays, and outdoor events within New York City, New Jersey, Long Island, AND EVEN THE DOMINICAN REPUBLIC!
Contact K. Wah! Entertainment
Business Line: 347.640.4529
Email: info@djkwah.com
Website: www.djkwah.com
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