Just for fun...for now /evilgrin

[Matt Crooks]

Well, I may have been a little dramatic in my statement. It's not like they would come in and start repossessing gear or anything... It's left to the whim of the IRS basically. They have the ability to apply one of two rules: the "1 in 3" or "2/3 in 5" rule. What it basically means is that if you don't make a profit in at least 1 of the first 3 years, or in at least 2-3 of the first 5 years (you can extent this to 5 - even 7 I think - by filling out Form 5213, I believe), the IRS has the ability to remove your business status and reclassify you as a hobby instead. Once they do that, you're no longer an official business any longer and the business deductions from the previous years become disallowed, which means you could also be liable for all the back taxes and penalties.

Still not true.

You have to make INCOME, not profit. There are companies who have lost money for decades that are still businesses.

 

[006]

I've used the Dynaudio BM5-A's, I do like them. But I would rather have the Mackies. Just a preference. I wasn't trying to imply that the Event monitors aren't as good or aren't as flat as the Mackies, I was just using it as a point. I know they are good. I definitely want something that has a flat response for tracking as well because I do some pre-mixing on everything with the tracking monitors anyway. I wouldn't want the originally recorded signal to not be right, in case I need to eq it differently later on and end up with something that I have to pull up and it's not there. It's just that the Event monitors are much cheaper for the pair, and I don't want to spend a lot on tracking monitors that will be going through hell every session. I chose the Events for that reason. They are good monitors, and they are cheap in cost.

As far as the mixers go, like I said I would just prefer the Mackies. If I wanted to, I could just put some Genelec 1031a's in there instead, but I'll always have room to upgrade later on. I still personally feel like I could use some more experience under my belt before I get something as true as Genelecs or the Dynaudios. For learning purposes really.

Besides that, the Dynaudios have a smaller subwoofer in them than the Mackie's, I like 8" subs in my monitors. We have some monitors here that have 6" subs in them, and even if the Mackies are holding the bass fine, the 6" monitors are trying to tell me that there's too much bass. And I have trusted the 6" ones before, and ended up with a low-end lacking mix. Again this is all personal preference.

My mixes sound much thicker when I do them on the Mackies because I'm not afraid the speaker will blow and think I have too much low end. So instead of having only certain low end frequencies there because of the 6" speakers, and ending up with an alright mix, the 824's let me get a thicker fuller sound because I'm not having to cut certain things here and there. The Event's I have used to mix on before didn't translate as well to other systems as the same projects being mixed on the 824's did. Again, it's just me.

Any other suggestions guys? Did I miss anything else? Or do I have everything I would need on the gear side of it?

~006

 

[006]

There are companies who have lost money for decades that are still businesses.

*cough backstage studios cough*



~006

 

[silverwulf]

Still not true.

You have to make INCOME, not profit. There are companies who have lost money for decades that are still businesses.

Everyone makes income when they have a business. You'd have to have a business that did no work at all in order to not have any sort of income in the course of a year. What the IRS cares about is whether you made a profit, where your income exceeds your expenses.

 

[006]

OWNED!

~006

 

[silverwulf]

OWNED!

~006

It's not a matter of owning anyone...I just want to make sure we get the proper info. If I'm proven wrong, I'll gladly own up to it!

 

[silverwulf]

Still not true.

You have to make INCOME, not profit. There are companies who have lost money for decades that are still businesses.

Let me expand on this a little more...the companies that you're thinking of that have reporting multiple years of losses are most likely businesses that have been incorporated. If you incorporate, then you're different to the IRS...companies like S & C-Corps, LLC's, etc. When C-Corporations continue to have losses, those losses are carried forward in successive years to offset profits they would make in the future. Losses for S-Corps/Partnerships reduce current income on your 1040's. They all play by a different set of rules than a business.

If you're a standard business, filing a 1040 - Schedule C each year, then everything above mentioned should still apply in regards to posting losses over a 3-5 year period. If you fail to post a profit in at least 1 of the first 3 years (or 3 of the first 5 with a 5213 filed), you're at risk of a costly audit from the IRS where you can be reclassified as a "hobby" and then be liable for all back taxes and penalties. You could then look to incorporate if you wanted to keep going and posting losses, but you'd also have to factor in the costs of the IRS audit, plus additional costs for incorporating.

 

[006]

Ok, back to my dilemma.

I just realized something....how can I have a bunch of inputs in a room, like a drum room, all going to the OctoPre's, and have 1 or 2 inputs in another room go to the same 1 or 2 inputs that the drum room would be using too.

A little deeper...Ok, say, I have a wall plate in the drum room that has 24 mic inputs on it, those are wired through the walls to go to 1-24 on the 3 OctoPres. Now, in the guitar room, I would have like 2 mic inputs, and I want to send those to one of the OctoPres as well. How would I do that...or should I just find another mic pre unit to dedicate extras to...or...should I not even worry about having ALL 24 inputs for the OctoPres available to the drum room?

I have a friend who has a pretty big kit. 2 kick drums, 1 snare, 1 mini timbale, hi-hats, 2 tom-toms, 2 roto-toms, 2 floor toms, 1 ride, two chinas, and three or four crashes. Now, mic'ing would suck for this. I would need at least 18 or so inputs for his kit, including the room mics...that's if I'm mic'ing the cymbals in pairs. usually I like to mic up every singe peice. So I would need 20 mic inputs going that route, including room mics. So...I guess I could just have 20 jacks on the wall plate in the drum room then...I mean, I highly doubt that I will ever need that many inputs for anybody except him, but I want to make sure just in case anybody else ever comes in and has an obnoxious kit like he does. That leaves me with 4 inputs...2 for guitars, or whatever. Or if anybody knows how I can have all inputs available for every room via any kind of switching or patching, please let me know.

Which reminds me, I need second kick mic.

~006

 

[Noumenon]

Why not get more patchbays and install wall plates in every room that goes to the controll room and into the patchbays? Alot of patching to be done, but still

 

[Matt Crooks]

Let me expand on this a little more...the companies that you're thinking of that have reporting multiple years of losses are most likely businesses that have been incorporated. If you incorporate, then you're different to the IRS...companies like S & C-Corps, LLC's, etc. When C-Corporations continue to have losses, those losses are carried forward in successive years to offset profits they would make in the future. Losses for S-Corps/Partnerships reduce current income on your 1040's. They all play by a different set of rules than a business.

If you're a standard business, filing a 1040 - Schedule C each year, then everything above mentioned should still apply in regards to posting losses over a 3-5 year period. If you fail to post a profit in at least 1 of the first 3 years (or 3 of the first 5 with a 5213 filed), you're at risk of a costly audit from the IRS where you can be reclassified as a "hobby" and then be liable for all back taxes and penalties. You could then look to incorporate if you wanted to keep going and posting losses, but you'd also have to factor in the costs of the IRS audit, plus additional costs for incorporating.

This is not at all what my accountant has said. As long as you're making income, and can show how you're staying in business (i.e. money from another job) there's no issue. You still have to run it as a business (i.e. have business bank accounts, file the proper forms) but you don't have to make profit.

Note: I'm not an accountant or an attorney, I'm just relaying what was told to me by mine. I asked specifically "do I have to show a profit in the first five years", he said "No."

 

[silverwulf]

This is not at all what my accountant has said. As long as you're making income, and can show how you're staying in business (i.e. money from another job) there's no issue. You still have to run it as a business (i.e. have business bank accounts, file the proper forms) but you don't have to make profit.

Note: I'm not an accountant or an attorney, I'm just relaying what was told to me by mine. I asked specifically "do I have to show a profit in the first five years", he said "No."

It's all cool...I'm not a corporate lawyer by any means. I do have a Master's in Business and I've dealt with my fair share of corporate lawyers, so I'm just repeated what I know/heard from what they stressed and what I learned over time.

It's just interesting that he said you have to show no profit in the first 5 years. If you push 5 years without showing a profit for at least 3 of them, in the govt's eyes, you're pretty much a "hobby" that's non-profit instead of a business that acts for profit. If you think you won't show a profit in the first 3 years, a lot of people would probably recommend filling out a 5213 immediately after the first year to delay an potential audit to 5. If you hit 5 years and haven't shown a profit, you can still show your intent to make a profit using a 9 factor test they have (although I don't recall what those 9 factors are right off). They do include things like conducting in a business manner and having business accounts, etc.

If it comes to that, you could go on doing it, but you'd have to have pretty accurate records and survive what could be costly audit. Definitely keep track of everything...all receipts, an in-depth journal that even details meetings with clients/artists, deadlines you had, etc. Otherwise they'll have no sympathy for you. If you survive the audit and/or prove your intent to make a profit to them, then you could continue on taking a profit loss for a while. If you lose the audit, then you get demoted to hobby status and become liable for all back interest, penalties, portion of income taxes, etc. The other alternative would be to incorporate like I talked about above.

Do you use a 1040 - Schedule C with your tax return and operate as a sole proprieter business? That's the only folks this applies to, which would be most upstart studio owners. If the accountant is just assuming that you could prove a profit intent after 5 years and would pass an audit without trouble, it seems like a dangerous game to play. If he knows something I don't, I'm all ears. Laws change so quick it's hard to stay on top of all of them, so it's entirely possible... But yeah, you gotta go with what your accountant and guys are telling you. I was just saying it contradicts a lot of what I've always known in regards to business law.

 

[ThatGuitarGuy]

Okay, first idea...get a part time job at like, Guitar Center or something. That or find a friend that works at GC and get some mad discounts.

Second. Our recording guy made a deal with us that we could pay him with gear. This is a GREAT way to get some new gear by just spending some time for free for a little while. Not only will it make their product sound better, you get new gear!

 

[iekobrid]

Now I just need to find a building, or find out how much it is to build one, or get a house, and convert it (total cost), and then I can go to the governor's office here in Texas and try to get the grant for small businesses. If not...then I need to work my ass off, and in 300 years of saving, I should be able to get it easily. Or really get somebody that knows their stuff to help me put together everything to try to get a loan from somewhere for this stuff. Fun fun fun! Hopefully I have a convincing business plan to pass the state's grant requirements.

From what I understand, all I really need to do is have a well put-together plan, reasonable cost qoute, and show the reasons why I would flourish here in San Antonio, over the competition. I think if I can match or beat this studios prices on booking, and offer better quality, and since I have a pretty well established name for myself around here, that should be enough right there to prove I could survive out here. Hopefully...

~006

I know it would take all the fun out, but instead of setting up a new business have you considered buying out the owner of your current studio? Or at least some sort of partnership and/or profit sharing arrangement?

 

[006]

Well, beleive me, I would LOVE to go into a partnership with Bobby. He's VERY good at business stuff. And he's a really good engineer too. He really knows how to make literally anything sound good. My problem with that though is that right now he wants to stay in this building. I would want two suites, so we could be recording two bands at the same time. Doubling the income. I mean...if we're both recording bands at the same time in two seperate suites, we'll double the income of the studio. Right? Plus our booking would be much more relaxed and easier to do, to me anyway, since we wouldn't have to tell bands "well, the next two weeks are booked up", instead, we could be like "ok, which engineer do you want, Mike or Bobby?" and base booking around that instead. We're both really good at what we do, we blow the competition out of the water with our production quality, and these are studios with 3 and 4 times the amount of money dumped into the equipment than we have.

I think we would kill the competition if we had two suites. But he doesn't want to get into a bigger building (one big enough for two) for a loooong time. He's looking to eventually make me the main engineer, and hire another guy to take the spot that I'm doing now, and that way Bobby won't even have to come in. Basically I would be there all the time like he was. I would be the main guy, but he owns it still. I'm just really impatient though and I have wanted my own studio for like 5 years now.

I figure if the state has this money laying around for people to apply for to start up a business, why not at least try? It doesn't hurt anything to try to get the grant(s). I honestly don't want to compete with Bobby, we are really good friends, but his interests aren't my interests, well...on time schedule anyway. If he told me tomorrow that I'm the main guy and gave me keys to the place, I would throw out this idea. But, he won't...not for at least another year or two.

Ok...so back to the routing...

I'm not a wires kinda guy, so bear with me if I sound stupid. I can have wall plates in the the rooms with XLR jacks in them, and have them wired to 1/4" cables (in the control room) to go to patch bays, and then have the outs of those patch bays go from 1/4" to XLR to go into the mic pres of whatever I want...and it will work? I was under the assumption that going from XLR to 1/4" wasn't a great idea...and then to top it going back from 1/4" to XLR again? Or will it be the same? I can solder, and all that. I just couldn't tell you how to wire anything up, lol. So, I could actually have it go from XLR to 1/4" at the wall plates to the patch bays, then from 1/4" to XLR again at the patch bays to the mic pres. Correct?

I already am going to be using patch bays to route signals to things before they hit the MOTU interface. Like, the OctoPre line outs, they are going into the patch bay, that way I can have just the drums from the OctoPre's patched to the MOTU, and then have like, the bass into another point to the MOTU, etc. But, like I said I am trying to figure out how to route the mic signals from the rooms to the control room, i.e. having the option of every available input in each room. So, it would work then by going XLR -> 1/4" and then back again? Just making sure.

~006

 

[006]

And if I can...then patch bays would be like...

This is how I have the original bays setup already...

Bay 1
1-24 ins (rear), octopre 1,2,3
1-24 outs(front), octopre 1,2,3

Bay 2
1-12 ins (rear), drawmer 1,2
13 in (rear), Avalon
14,15 ins (rear), Compounder
16 in (rear), Tampa
17-18 ins (rear), PODxt
1-12 outs (front), drawmer 1,2
13 out (front), Avalon
14-15 outs (front), Compounder
16 out (front), Tampa
17-18 outs (front), PODxt

Bay 3
1-24 ins (rear), MOTU
1-24 outs (rear), MOTU (for monitoring via Big Knob, and then other outs for headphone distribution, etc.)

SO...then I would just add two more patch bays in there like this...

Bay 4
1-24 ins (rear), Drum Room panel
1-24 outs (front), to go to the OctoPre patch bay

Bay 5
1-4 ins (rear), guitar room 1
5-8 ins (rear), room 2
9-11 ins (rear), vocal booth
1-11 outs (front), to go wherever I wanted (OctoPre's, Avalon, etc.)

Right?

Patching is fun...

~006

 

[006]

We did it like this at the old studio I worked at, and you had to patch everything, no matter what you were using, since every single pre and dynamics unit was mounted in the wall in the control room. There were like 7 patch bays. And we had to log which inputs we used in the rooms so that we could patch them into where we wanted them...but I never saw how they had the cables. We used patch bays that had the old TT cables, the half sized TRS cables, to patch with. I liked that setup, it meant endless possibilities for me to utilize. It was tedious at first, but then I got to where I loved it. Yanking out the cables from the previous session, and starting almost from scratch each time. Mmm.

~006

 

[ThatGuitarGuy]

yeah I love that setup as well. Go for it...should make it a lot cleaner around the place too.

 

[Disconnekt]

1/4" TRS and XLR are two different connectors, but they are functionally the same, and they use the same cable (2 conductor, shielded). If you're hardwiring your studio, you can get special cabling with highly-efficient foil shielding to do your runs between rooms and patchbays and whatever else you won't need to be moving around. It doesn't have the thick insulator and stringy stuff inside to make it flexible because it doesn't need it if it's in a fixed installation. This makes it a whole lot smaller in diameter and easy to cram a bunch of it in a smaller space. You can wire everything with this kind or other kinds of bulk cable, and it won't matter which kind of connector (XLR, 1/4" TRS, or TT), or for that matter how many different kinds, you use in the patchbays and panels. The main advantages of XLR are that it latches into devices and panels, and it's pretty easy to keep track of signal flow direction (always female to male down the cable). Besides that, there aren't any qualitative differences between it and TRS that I know of.

 

[Noumenon]

Patchbays for the connections to the rooms would rule. Go and buy some more patchbays! NOW! Just make sure the support 2 conductor and a shield.

Oh, and get a dymo thingie to print out names so you easily can se what patchbay jack gos to what

 

[006]

I have the dbx passive 1/4" TRS patchbays on my list. Those will work right?

~006