I Could Get A Live Band For That

Fred Stewart said:

If it's any help I've tried the lower cost for more work scenario. Seemed that other DJ companies were undercutting me so I figured two can play that game...

This was one of those times when I should have considered the consequences of my actions.

To be certain, I got more shows, many of which were ball-busting loads that most DJs wouldn't have touched. Out in the hot sun, up on somebody's deck or patio. Up stairs in cheap, ratty, rented venues that I never knew existed. Got rained on, struggled with icy sidewalks etc.

Was doing two, three or more shows per weekend. Some Saturdays I left one show to drive to another.

Come the end of the month I was no further ahead as far as the bank balance went. I was beating myself to death, putting more miles on the truck and cleaning mud and dirt off the speaker cabs... but I had no more gross income to show for it. My overhead had increased due to the additional work.

That had to come to a stop. The phone was still ringing but I couldn't keep saying "Yes" every time a prospect called. I went back to stating my regular rate and the backbreaking shows receded to a trickle.

On the other hand, the upscale shows stayed steady. At the end of the month the bank balance hadn't suffered, even though net income had dropped slightly.

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I feel very fortunate in that I "DJ" for the mere enjoyment of it.......My hats off to those who are doing this for a living.....it's tough.

One thing I have done when pricing a job is to respect my competitors in my area, and I maintain rates commensurate with the rates in my area.

DJ Gray,

Not being combative...just looking for clarification.

"Commensurate"...can be a loosely used term.

Not to disclose your price...on a scale of 1-10. 1 being the lowest...10 being the highest...where would you fall commensurately?

Also, where would your market average be on the same scale of 1-10?

Actually, it's been said that when disclosing price, one commiserates to consummate a commensurate commission comparable to the conditions of the climate acceptable to the co-inhabitants of the contractual conception.

On a scale of 1 to 10, that is.

But John, that depends on how you pronounce "consummate".

Dude Walker said:

1) Joe, fair enough.

However, the sampling group used their own survey questions. Outta my hands.

The pennies do add up...however the biggest ticket items still run the show.

2) The calendar has a finite number of days in a year. Most markets experience seasonal demands.

There is a finite potential for any given entity. Which is affected by many factors.

3) There's nothing wrong with being cost effective. As long is it's not at the expense of wages. That's the tricky part... make it too cost effective...and you might end up looking cheezy and cheap.

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1) Um, Dude,....My samples and statement were supposed to be a touch of humor, in hopes of easing some thread tension....guess that's why I'm not a comedian.........


2) I have posted similarly elswhere. This is the reason one MUST have specific profit margins in mind.


3) to re-iterate other posts of mine: The Back-End Principle doesn't really mean buying lower quality. It means buying the HIGHEST quality at the best price. My favorite example is a Shure microphone that goes for around 100.00 retail. If you do just little work, 80.oo on line. BUT, if you actually do some THINKING, you find that Shure has done private label manufacturing. In this particular example, they made the exact same microphone for-believe it or not- Radio Shack. Their price: around 40.oo. No compromise of quality at all, just a massive savings for that item.

The Back-End Principle is simply learning to THINK before you BUY. That means long term costs as well as the initial investment. Also, buying what you NEED, not just what makes you happy. This is a BUSINESS principle. You bought that 20,000 watt amp/speaker setup so you can play ANYWHERE, right? You're all prepared- terrific. Except maybe all you are playing at the moment are parties or venues of around 150 or less. So while you are waiting for those BIG venues to roll in, you're using more fuel, causing more wear and tear on a body that's aging every moment, as well as wear and tear and depreciating value on the equipment itself. The longer this goes on,the more work you'll have to do to make your purchase cost effective ( that's assuming you start booking venues of a size to actually NEED this setup in the first place). So "being prepared", in this case, is being OVER-prepared, and NOT cost effective...

.....and that's just the tip of the iceberg. You can, if a thinker, add a huge percentage to your profit margin without having to raise your fees a penny. All this and maintain high quality in both reality AND appearance.

OK, outta breath........

Dude Walker said:

DJ Gray,

Not being combative...just looking for clarification.

"Commensurate"...can be a loosely used term.

Not to disclose your price...on a scale of 1-10. 1 being the lowest...10 being the highest...where would you fall commensurately?

Also, where would your market average be on the same scale of 1-10?

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Market would be about a 7, my rates 6-7. Again I don't do weddings, so what I compare to are Corporates, Anniversary Parties, Birthday Parties etc.....

I still recon that a type of price breakdown to show a rough (not the correct prices of course) that could be shown why we need to charge so much

I'll start (as what we have to pay in Australia)

PPCA Fees: $255.00 a year
Apra Fees: $120.00 a year
Banking fees: $120.00 a year
Music: (cd buys) $400.00 a month (as most cd's here are about average 25.00+ a CD) you cant buy much in one hit... especially new releases

ok lets keep it to what they would ask why they could get a band for what you buy and charge that - see if bands can justify thier costs...

GoodKnightDJ said:

DJ Gray:

This may seem heartless, but I could care less about my competition because they are just that, competition. If they fail it is no concern of mine.

Now there are some companies that I work with that I will not compete against. When a prospective client calls and I find that they have received a quote from that company, I simply tell them that I recommend that company and will not compete against them.

My prices are based on my cost of production plus a profit margin.

How do you determine your cost of production in a service oriented profession? I'd could be a smart azz and say ask Dude Walker, but, here's the way I do it.

1. Set an hourly rate I want to make for my time (travel, set up, strike, performance, meetings, and so on). Multiply this by the average hours per event.
2. Add up all the expenses and divide by the average number of events to be performed. Those expenses also should include the labor cost of any assistants/roadies you use.
3. Add 1 & 2.

Of course, this is just a rough estimate. I have data going back to 2001 (that should impress Dude) that gives me per event breakdowns. Hard data is the basis for good estimation of cost.

Click to expand...

I'm in a different situation....I'm not trying to make a living as a "DJ", however a lot of you are, and out of respect for that, and respect for the profession, I won't undercut rates to do business.

I still want to cover costs, and not make this a drain on my other assets.

I set a Hourly rate, and minimum charge per gig.....these are based on incurred costs.......

DJ Gray said:

I'm in a different situation....I'm not trying to make a living as a "DJ", however a lot of you are, and out of respect for that, and respect for the profession, I won't undercut rates to do business.

I still want to cover costs, and not make this a drain on my other assets.

I set a Hourly rate, and minimum charge per gig.....these are based on incurred costs.......

Click to expand...

DJ Gray,

Thank you for subscribing to a business-like approach to DJing.

I'd like to call you a kindred spirit...

However, out of respect for you I'll just give you a nod!

DJ Gray said:

I'm in a different situation....I'm not trying to make a living as a "DJ", however a lot of you are, and out of respect for that, and respect for the profession, I won't undercut rates to do business. rly rate, and minimum charge per gig.....these are based on incurred costs.......

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And therein lies the heart of the matter.

DJs who have day jobs have the luxury of sticking to their price and if they don't get it, they still have income from their day jobs.

DJs who are trying to make DJing their full-time occupation still have the same types of overhead as the DJ with the day job, but takes a greater risk at losing precious income if they aren't willing to be flexible.

It's one thing to stick to your guns on principle, it's quite another to have an open date pass you by with no work all because you weren't willing to be flexible to work with the customer to get the gig and bring in the income you need.

Were I still DJing with a full-time day job, I'd be the most expensive DJ in the market. Since I made the decision to go full-time, I needed to maximize every opportunity for income, for once that day passes and you didn't work, you have no way of ever earning income for that day and that can and will have an impact on one's cash flow.

Jeez, I didn't want to turn this into another FT/PT debate, but I hope everyone can see the logic behind what I'm trying to say.

Guaranteed income with a day job makes it easier to hold out for a certain price, whereas it is much riskier for the person who, without that gig, makes no money for the week.

Self-employment. Do whatever it takes within the bounds of the law to maintain positive cash flow.

John Allo said:

Guaranteed income with a day job makes it easier to hold out for a certain price, whereas it is much riskier for the person who, without that gig, makes no money for the week.

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And when they "day jobbers" lack the spine or business sense to hold out?

You've offered a valid example of potential...

And YET!

GoodKnightDJ said:

"Screw 'em. If they can't make it then they need to find another line of work."

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Thank you for a prime example of the greed, "NOT CAPITALISM", that is destroying the economy...

Yet another example of the "Race To Zero"...

The squandering of an industry...one vanity placation at a time...

I forgot what this thread was about...


Oh wait -- I'd hire the band -- they argue less than DJs

Tom,

No selective reading.

This is the defineable fence that we are on opposing sides of.

Profit margin is the key and also the fork in the road.

Autonomous operation for nearly all other "profitable businesses" is the goal...not the fringe benefit.

Most small businesses fail to support an autonomous operation...let alone...liveable wages.

You've openly admitted the "screw em" mentality to justify lower rates.

You've offered up anectotal hearsay in search of support for your philosphy.

The specific quote that you posted...and that I used are the essence of the problem.

The "screw em" mentality devalues the industry... because these entities devalue themselves with the "screw em" mentality.

Tom,

Production Costs...Profit Margin = Semantics at this point.

Take any MDJ...anywhere in the nation...

Cost of living may vary...

Legit business costs may vary...

However, each has a general average.

Ask two MDJs...they may be at opposite ends of the spectrum...

Ask 100 MDJs...you may get a general sense of an average production cost...

Ask 10,000 MDJs... you get a fairly consitent average.

It is that "average" production cost that is at the center of most debates.

These "averages" formulate a price that MDJs espouse to the masses.

It is these "averages" that most try to sell below.

The masses that have very little understanding of real value as opposed to monetary savings in seach of the lowest price.

Price leaders are always "followed". The lower the price leader goes...the lower the followers go. Usually at the expense of wages.

Too many MDJs...slinging too much BS...about legit business ops they don't comprehend. Too many convenient & creative bookkeeping practices that prevent any real sense of production costs to formulate.

That failure to quantify real production costs perpetuates a false sense of valuation on the business and client side.

One example of several:

There are MDJ that pay cash off the cuff to staff that should be under payroll. Willfully avoiding SSI, FUTA, Workers Comp & State Unemployment is not a mark of ethical business practices...

I would save thousands each year by "cuttting" this legit operational cost.

These MDJs subscribe to the "screw em" mentality. It allows a lower price via non-legit operations.



BTW, clients don't "deserve" everything they want.

If clients cannot afford something...then they should go without. But leave it to the lowest common denominators within any industry...to whore themselves out for sake of being chosen in the interest of placating vanity & greed.

Too many sources imparting false wisdom of dream weddings on the low budget.

If someone wants to charge what they think is a fair price, and there able to make profit on it, while offering a top quality product...

Good for them.... I bet there so busy, they don't have time to count there "modest" profits.

I will say, that some of the stuff i see posted on here, leads me to believe there are some on here who've never done a hard days work before.

One must take the good with the bad.

I have a day job.
I have to get up everyday, bust my a$$, for at least 40 hours a week,
many times that turns in to much more.
Yesterday, i started working at 7a.m. and finished at 10.15 P.M!!
it usually turns out to 50-70 hours a week.

I also know a local Dj that IS full-time..
He does not work 40 hours a week at his job, But isn't demanding Peter Merry wages either. He has great equipment, and is booked steady.
But he will most certainly lug his CV Earthquakes up stairs for his rate, and not piss and moan about it.

In doing these comparisons, first off you have to take those that choose to violate the law, out of the discussion, as being an unfair comparison.

It was mentioned several times in this thread "costs".....this is where not enough time is spent.....

We all have different equipment, that cost us different amounts, purchased at different times. This alone can make a "huge" difference in one's cost basis, and then following this, what needs one has for revenue, and how much.

I for one have no lights! A significant additional cost to purchase, and as such would affect my rates. Not only the equipment costs but the upkeep, Bulbs etc...., and additional labor needed to do set-up. (At least for me...an old man..)

I would love to have lights, and someday I will, but until then, in this one category alone I have a cost advantage over someone who has a light display as part of their shows.

Bottom line as long as your pricing policies are a function of cost, you can operate profitably. There is a basic business/economic theory that simply stated says "....You are operating (at the margin) in profitable manner as long as your revenue generated covers/applies to your fixed asset costs....."

Meaning if you can quote a price for a gig that can make that next equipment payment, or cover the house payment your are operating ..."at the margin..." in a profitable manner.....For without that revenue you would be worst off........then with it

Does this make any sense, as applied to the DJ profession?