New Business Venture
 

I have been approached by my dear younger brother with regard to helping him finance his new business venture. He is currently working as a self employed musician/teacher (drummer - percussionist). He teaches drums during the day at pupil’s private addresses using their gear and in the evenings plays various gigs with 1 of the 20 odd functions outfits or bands he is involved with. The evening functions are usually wedding receptions, private parties or corporate lunches/dinners. He also has a friend with a small recording studio where he will occasionally be called in for session work by various recording artists. As a musician he is very highly regarded and turns down at least as much work as he takes on.

His business plans revolve around his daytime activities rather than his evening gigs which are already quite lucrative. He sensibly reasons that he could make more money by pupils coming to him for lessons as he wastes plenty of time travelling. Added to this, if he were to open a teaching school, he has friends playing other instruments who function the same way. These people could teach bass guitar, electric/acoustic rhythm/lead guitar, vocals etc. at the same venue. He believes that he could offer a room to these people for teaching purposes and charge them a rental fee for this. Added to the teaching, his friend that runs a very busy studio is looking for larger premises which maybe could be located in the same building if large enough. Finally, he use to be in musical retail and still has contacts to obtain trade prices for musical instruments, consumables, teaching books etc. These he could sell to the pupils/studio users passing through.

The one flaw in his plans is that he has ZERO capital to get things off the ground.:D This is where I come in, as I already run a manufacturing business and have cash reserves. He is aware that I’ve been looking for something to add as a 2nd string to my bow (pardon the pun) and he has asked me to consider his idea.

We have discussed location and reasoned that the building would need a central town location to allow for people using public transport links (kids etc.) Allied to this, said building would require soundproofing as it is likely to be adjoining other business or residential areas. Obviously rent/rates will be higher in town centres but he feels location is key. Our local town use to have a music teaching school that my brother worked at during his early years. He assures me that this packed up due to bad management and not lack of business. I believe the average charge per teaching hour is £25-£30 which seems low to me.

It's a tricky one as given the relationship I don't want to just say NO but on the other hand I don't want to start throwing money away. Obviously I want a return on my investment either as rent or other remuneration.

Over to the SN faithful for general discussion. :)

Has he approached any banks for backing to help him start his business ?

If yes and not approved, then why ?

If no, then why ?

If you can't afford to gamble it, then as much as you like your brother.... no

My 2p's worth

Good luck to him though

sounds risky to me.

Ive heard it said before many a time, dont go into business with your family its asking for trouble.

my worry would be it has a limited audience, so it would have to depend on the area you were looking at, and you would need some heavy figures to go along with it.

my suggestion is if you are seriously looking at this, find out who used to own the other music place and ask direct questions, why what when etc.

other than that if there is plenty of people looking for that sort of thing (which i seriously doubt) it will be good (but for how long?)

sorry

jamo :)

SiPie,

He hasn't approached any banks yet as he know that my bank doesn't have an Indian call centre so called me 1st. I can still pretend not to understand him though or put him on hold for hrs!! :D

j4mou,

You would be supprised at the size of audience m8. The amount of kids these days who want to become rockstars is bigger than ever. Add to this that the parents seem to have plenty of disposable income to buy them the latest gear and it starts to look better. My Bro's mate with the studio is always fully booked with kid bands wanting to be the next "Busted" etc. and they pay the high studio time rates. As i've already said, my brother alone is turning away twice as much business as he's able to accept.

Cheers for the input though guys.

:D LOL

Just be careful and don't let your heart rule your business head on this one....

Good luck to him though and hope he makes a good go of it

It's not always trouble - I've been in business with family members for the past 12 years and have had no problems at all. But of course, it depends on the family !

I wouldn't be prepared to provide 100% of the funding for this venture : your brother needs to be prepared to take the risks in order to reap the rewards as I suspect you have done yourself. Get him to form a business plan (or help him form one if you're so inclined) and approach a bank for some capital.
Your choice of location for this venture will be critical, but I wouldn't limit the choices to expensive city centre properties : a location with good transport links doesn't have to be smack bang in the CBD. An old mill complex would be ideal for this sort of thing, if you can get hold of one before they're all turned into "luxury" apartments that is.
Also your brother will need reminding of the red-tape nightmare that comes with running a business : health & safety, public/employers liability insurance, etc etc. stuff which you're more than likely already famliar with if you're in manufacturing.
And get him to start saving egg boxes, he can soundproof the place himself ! :D

I'd think there will be plenty of business. My wife works as a woodwind instructor (Flute, Clarinet, Sax) part time in the evenings, 2 nights at a small music school attached to a shop, and 2 nights at our home. We stay in Aberdeen, and in Aberdeen itself there are at least 2 music schools getting plenty of business, there are also 2 in Inverurie (small town 30 minutes from Aberdeen) which also get plenty of business from the people that live out of town.

The difficulty will be getting the word out and building up the pupil base. Obviously your brother has pupils already, who he would hope to bring to the new "school" and his friends teaching other instruments would do the same, but it will still take a wee while to get filled up, and some instuments will always be more popular than others.

The Music school my wife works at charge the pupils £12 for a half hour lesson, of which the school gets £3.50 as room fees. She charges the puils that she teaches at our house £10 per half hour, and figures it's not worth going out to their houses, it effectively doubles the time per pupil from the teachers point of view once travelling is taken into account and you can't charge twice as much per lesson (and that's ignoring transport costs). Some of the other schools in Aberdeen charge up to £15 per half hour.

Good luck to your bro and you. Just some points from my limited experience of finding teachers etc for my son and some involvement with local bands.

A couple of years back lessons were around £12 - £15 per hour for individual tuition. These were done at teachers home.

Around here there is a lack of premises for band practice. Some village halls or social centres don't like kids booking and anyway the acoustics are dreadful. So that might be an angle. My boy's band use a council subsidised soundproofed room in a building that has a couple of practice rooms and with some basic support gear. This is £25 per 2 - 3 hour session.
Are you certain that you want a town centre location with extra costs that this entails, especially soundproofing? May be there is something out of town like a barn with a bit of character where sound levels are not so important. Might even be on a bus route or a lot of kids will have their own or a mate's transport. Note kids may want to bring amps and kit so that usually rules out public transport anyway.
Check in with the music department at the local school/s as they may give you an idea of needs.
Many big towns now have annual "Battle of the Bands" competitions and eagerly support the kids. Usually a friendly crowd and would be pleased to support your venture if you offered something in return for the local bands. HTH. D

Sounds like a reasonable plan. I would just be concerned that you are investing all the cash as he has no money. If he is earning lots of money currently, where is it all going?

If you do it, keep a tight control of cash flow and it should be ok.

Thanks for all your usefull input guys. :) Your thoughts have followed the same path as my own so that gives me a little more confidence. As far as my Bro's own cash situation, he currently earns approx. 16K a year doing what he does now. This is all above board and run as a business. He does not have much disposable income left after he has paid his house rent, bills etc.

He is a very talented musician who very nearly hit the big time when he was playing in a signed rock band supporting Bon Jovi at Milton Keynes Bowl in the early 90's. He has played sessions with some very well known artists (i won't name drop :D) and now by invite helps with teaching at a summer drum academy thingy in Bath with some of the worlds best drummers. I know that he is very highly regarded in the musicians world and is very comitted. He has lived and breathed drums since the age of 6 and practices every day sometimes upto 6Hrs solid!!!! As his big Bro I feel that he deserves a little success and reward for his efforts and if I can help with this plus make myself a little extra then it's all to the good.:)

I'll keep you posted on developments.

Meanwhile, any other input?

Generally, banks won't consider any start-up plan that involves them putting all of the money in. They like to share the risk.

I guess that is where Biggins comes in.

He is 30 by the way so is beginning to realise he has to grow up sometime soon. :D

business you know nothing about run by a family member.......NOOOOOOOOOOOOOO!

just a thought about the town centre location.

Music lessons are an expensive luxury and mummy and daddy are far more likley to drive little timmy/jessica to music practice therefore a suburbian location with reasonable transport links and lower rental/rates maybe a better option.

Also on the luxury front when times are harder (maybe in the near future who knows??) the first thing out the window will be those expensive music lessons ??