Underground Sound

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					Underground Sound



  The Basement Studio
What is Underground Sound?
   Recording Studio in a residential
    basement
   Indy label for my music
   Full service sound engineering
   Personal musical workspace
Why can I do this?
   Trained in Sound          Multiple computer
    Design                     music courses
   Trained in classical      Music Business
    music                      major from Radford
   Over 400 hours of          University with a
    sound board time           Business
   Extensive practice         Administration minor
    with sound recording
    equipment
Why would I want to?
   Control
    • Artistic
    • Legal (rights)
   More legal control = More money
   Having your own studio to play in is fun
   Having access to a studio at odd hours
    helps the “odd” artist
Operations Statement
   This recording studio will star mainly by
    taking on outside recording projects
   Another main reason is to further my
    career as both a songwriter and sound
    engineer
   If ever my music becomes popular
    enough I wish to try and make it a
    private recording studio
Marketing
   Worldwide distribution through
    www.theorchard.com
   Direct performances to producers and directors
    in New York (dramatic readings)
   Direct internet sales to customer through my
    website.

   Trade magazine ads for the recording studio
   Radio ads
The Orchard
   49 dollars for worldwide physical
    distribution
    • Retailers such as Wal-Mart, Amazon.com,
      and both mega and small record stores
   99 dollars for both physical and digital
    distribution
    • Most Mp3 download services in many
      countries (languages)
The Orchard pt.2
   You get 70% of the wholesale price you
    get to set during registration
   It is a non-exclusive agreement
    • Can distribute to whoever else you want at
      whatever price you want concurrently
   There are discounts in the registration
    cost for multiple registrations
What to be?
   Sole Proprietorship
    • Full control
    • Easier taxes than a corporation
    • Free
    • Low administrative complexity
Other business
   I will use musicians to record my music
    in my studio and hire them as
    independent contractors
    • Don’t have to pay insurance or benefits for
        employees
    •   Becomes contracted musicians job to handle
        taxes
    •   Checked off mostly “Yes’s” as required on the
        IRS’s contractor check list
Insurance
   Specialty homeowners clause to cover
    the extra equipment
   Pictures and documentation of the worth
    of every piece of equipment
   Health insurance for myself
   What’s it all going to take?
                                         Equipment List 2010

Date Acquired       Name/Description          Cost        Date Acquired    Name/Description         Cost

                1" 8-Track recorder                                       Computer
  3/3/2010                     Otari MX80-8   $3,500.00     3/4/2010                 Main Unit    $2,500.00
                Console                                     3/4/2010                    Laptop    $2,000.00
  3/3/2010                  Trident 65 16x8   $6,000.00     3/4/2010             Extra Monitor      $300.00
                Microphones                                               Software
  3/4/2010               Nuemann TLM103         $800.00     3/5/2010               Reason 2.5       $600.00
  3/3/2010               Sound Deluxe U97       $400.00     3/5/2010                     Logic      $500.00
  3/5/2010             Nuemann KM184 (2)      $1,000.00     3/5/2010              Cool Edit Pro     $300.00
  3/2/2010            Sennheiser MD421 (2)      $500.00     3/5/2010               Finale 2005      $300.00
  3/10/2010                      AKG D112       $150.00
  3/3/2010                  Shure SM57 (4)      $300.00         Totals                            $22,050.00
                Components
  3/13/2010             FMR Audio RNC (4)      $600.00
  3/12/2010                      Altec 436B    $400.00
  3/10/2010                Joe Meek SC2.2      $400.00
  3/14/2010           Orban Parasound 648      $450.00
  3/4/2010                  Lexicon PCM60      $550.00
  3/5/2010                   Yamaha REV7       $500.00
       The Expected Costs
                             3 Year Budget
                       Project Underground Sound
                                                    2010             2011             2015
Expenses
      Hardware
                   Initial Hardware            $22,050.00           $0.00            $0.00
    Studio Costs
                                  Utilities      $300.00    $      300.00    $      300.00
                                   Phone         $239.88    $      239.88    $      239.88
                               Mortagage         $750.00    $      750.00    $      750.00
                          Office Supplies        $300.00    $      425.00    $      500.00
                          Compact Discs          $700.00    $      900.00    $    1,500.00


    Construction                                $3,000.00 $           -      $         -
     Employees
                                      Salary       $0.00 $       6,000.00 $      11,000.00
       Personal
                                Insurance       $1,440.00   $    1,440.00    $    1,440.00    Income                                 2010         2011         2015
                            Entertainment         $300.00   $      480.00    $      800.00               Sales CD's             $2,072.15    $6,000.00   $12,000.00
                               Education        $1,894.35   $    2,123.76    $      525.65
                                                                                                               Sheet Music        $74.29      $100.00      $400.00
                                    Travel        $500.00   $      900.00    $    1,200.00
           Other
                         Web Site Costs          $600.00    $      600.00    $      600.00        Investments Parents           $6,000.00       $0.00        $0.00
                                   Auto          $723.34    $      860.52    $      892.00                    J.P. Steiner      $6,000.00       $0.00        $0.00
                      Money Into Savings           $0.00    $    6,761.46    $   27,585.79
                      Paying Back Debts            $0.00    $   12,000.00    $   12,000.00       Studio Rental Studio Rental   $18,651.13   $27,680.62   $46,933.32

Total Expense                                  $32,797.57       $33,780.62       $59,333.32   Total Income                     $32,797.57   $33,780.62   $59,333.32
THE YEAR 2011!!!!



 Where did the time go?
     2011 Business Expenses
                                              Undergound Sound
                                                Business Expenses
                                   For the Period From 4-01-11 to 6-30-11 (Quarter 2)

          CHECK #                           TOTAL                   CDS AND     OFFICE &
  DATE    OR CASH          PAID TO        AMOUNT       AUTO EXPS     TAPES      POSTAGE         TRAVEL       ENTERTAINMENT
 4/1/2011   2555    Shelor Motors         $ 199.99     $   199.99
 4/1/2011   2556    Vonage Phone          $    19.99                            $       19.99
 4/1/2011   2557    City of Radford       $    26.73                            $       26.73
 4/1/2011   2558    Wal-Mart              $    45.11                            $       45.11
 4/4/2011   2559    Macado's              $    39.39                                                         $       39.39
4/10/2011   2560    Sheetz - Gas          $    11.95   $    11.95
4/20/2011   2561    USPS                  $    36.27                            $       36.27
 5/1/2011   2652    Shelor Motors         $ 199.99     $   199.99
 5/1/2011   2563    Vonage Phone          $    19.99                            $    19.99
 5/1/2011   2564    City of Radford       $    24.85                            $    24.85
 5/1/2011   2565    Quaterly Web Cost     $ 150.00                              $   150.00
 5/3/2011   2567    Sears Auto            $    18.02   $    18.02
 5/7/2011   2568    Sheetz                $    10.06   $    10.06
5/15/2011   2569    Wal-Mart              $    50.35                $   50.35
5/16/2011   2570    O'Lays                $    80.97                                                         $       80.97
5/16/2011   2571    Mikes Music - Sheet   $    12.36                            $       12.36
5/20/2011   2572    Sheetz                $    12.82   $    12.82
5/30/2011   2573    Office Max            $    34.86                            $       34.86
 6/1/2011   2574    City of Radford       $    28.99                            $       29.33
 6/1/2011   2575    Shelor Motors         $ 199.99     $   199.99
 6/1/2011   2576    Vonage Phone          $    19.99                            $       19.99
 6/5/2011   2577    Sears Auto            $    18.02   $    18.02
6/10/2011   2578    Sheetz                $    11.64   $    11.64
6/13/2011   2579    Holiday Inn           $ 225.00                                              $   225.00
6/13/2011   2580    Sheetz                $    11.09   $    11.09
6/28/2011   2581    Mikes Music - Sheet   $    23.98                            $    23.98
Totals                                    $ 1,332.41   $   493.58   $   50.35   $   443.46      $   225.00   $      120.36
Home business
   Mine is used solely for my business
   I am in the studio everyday working on
    my work or being paid to help others
    record
   I have taken many pictures of the studio
    in use
Part of my home…
                               BUSINESS USE OF HOME
                         FOR THE PERIOD FROM 4/1/11 TO 6/30/11

                                                                OTHER
      DATE            RENT            UTILITIES    REPAIRS     AMOUNT      DESCRIPTION
         4/1/11 $       500.00
         4/1/11                   $       213.86
         5/1/11 $        500.00
         5/1/11                   $       198.77
         6/1/11 $        500.00
         6/1/11                   $       234.65

        TOTALS         1,500.00           647.28        0.00        0.00           0.00

         BUS %           187.50            80.91        0.00        0.00           0.00

  Business Percentage:

  square footage - office                 300.00               Total Business
  square footage - total home           2,400.00                  Cost          $268.41

   Business %                             12.50%
Learn me good
   Sound recording conventions
   Seminars
   Continually working to gain new
    experiences
   Education is deductible
 From point A to point B
                                          Mileage Log

                             For the Pe riod From 4-01-11 to 6-30-11

                                              Busine ss           Auto Ex pe nse
 Da te          De stina tion/Purpose         Mile a ge            De scription       Amount
 April
 4/1/2011   Office Max for Supplies                    12.4
 4/4/2011   Power Lunch with Inv estors                13.5
 4/5/2011   John's Music for Hardware                  64.5
4/10/2011   Sheetz for Gas                                6 Gas                        $19.88
4/20/2011   Post Office                                 4.8
 May
 5/3/2011   Sears Auto                                 15.1 Oil Change                 $29.99
 5/7/2011   Sheetz for Gas                                6 Gas                        $17.64
5/15/2011   W al-Mart for CD's                         24.3
5/16/2011   Power Lunch with Musicians                 34.5
5/16/2011   Music Store for Sheet Music                34.4
5/20/2011   Sheetz for Gas                                6 Gas                        $21.33
5/30/2011   Office Max for Supplies                    12.4
June
 6/5/2011   Jiffy Lube                                 15.1 Dead Battery               $45.00
6/10/2011   Sheetz for Gas                                6 Gas                        $19.36
6/10/2011   Driv e to Conv ention                       304
6/13/2011   Driv e back from Conv ention                304
6/13/2011   Sheetz for Gas                                6 Gas                        $18.46
6/28/2011   Music Store for Sheet Music                34.4

            Tota l Busine ss Mile s                   903.4 Tota l Auto Ex pe nse     $171.66


            Mile a ge Re concilia tion
            Odome te r on 4/1/2011                    31543
            Odome te r on 6/30/2011                 32997.5

            Mile s Tra ve le d                       1454.5

            Busine ss Pe rce nta ge                 62.10% Busine ss Auto Ex pe nse   $106.60
 Trying to make some $$$
                                            REVENUE

                   FOR THE PERIOD FROM 4-1-11 TO 6-30-11 (2nd Quarter)


            MONEY OR VALUE RECEIVED:
                                                  TOTAL            W-2 NET        1099
  DATE                RECEIVED FROM              AMOUNT           OF TAXES      NO TAXES
 4/1/2011   Bob and Cindy Miller                   6,000.00          1,680.00      6,000.00
 4/5/2011   J.P. Steiner                           6,000.00          1,680.00      6,000.00
4/11/2011   Internet Sales of CD                     240.00             67.20        240.00
4/15/2011   George Ham - Studio Rental             2,456.00            687.68      2,456.00
 5/2/2011   Internet Sales of CD                     540.00            151.20        540.00
5/27/2011   Edward Karn - Studio Rental            1,462.00            409.36      1,462.00
 6/2/2011   Internet Sales of Sheet Music             23.44              6.56         23.44
6/14/2011   Thomas Gordan - Studio Rental          2,400.00            672.00      2,400.00


                                      TOTALS          19,121.44      5,354.00     19,121.44
Time to make an album



       Year 2012
Such cheap studio time…
        Creative Costs of Underground Sound
       For The Period from 4-12-12 to 4-16-12

      Recording Costs:
               Musicians              $   5,000.00
               Studio Rental          $        -
               Compact Discs          $     100.00
               Audio Engineer         $        -
               Supplies               $     800.00
               Consultant / Manager   $        -

      Total Recording Cost            $   5,900.00


               Amortization
               Year 1               $
                                  50%     2,950.00
               Year 2            25%$     1,475.00
               Year 3            25%$     1,475.00

      Total Amortization              $   5,900.00
How many I got?
         FOR THE PERIOD FROM 1-Jul-2012 TO 1-Sep-2012


       TAPE/CD COSTS:                      $      0.10

       Duplicating costs                   $      0.10

       Tape/CD cover                       $      1.50

       Case                                $      2.00


                  TOTAL TAPE/CD COSTS: $          3.60

              TOTAL NUMBER PRODUCED:            500.00

                            COST PER UNIT: $     10.00

       Inventory reconciliation:               Costs     Units

       Beginning inventory                 $ 1,800.00 500.00
       Plus: total Tape/CD costs           $     3.60   0.00
         Subtotal                          $ 1,803.60 500.00
         Less: sales / promos              $    50.00   0.00

         Ending inventory                  $ 1,853.60 500.00

         Cost per unit                     $      3.71
Hit the road jack…
                             FOR THE PERIOD FROM 2/4/12 TO 2/7/12

   CASH PAID OUT:

   Airfare                                     0.00 Supplies                          24.21

   Hotel                                     360.00 Stage hands                        0.00

   Gas                                        55.30 Engineers                          0.00

   Parking / Tolls / Taxis                    35.65 Cartage                            0.00

   Meals / laundry / tips                    756.00 Trade publications                 0.00

   Telephone                                  35.35 Rehearsal Space                3,000.00

   Hair/make-up                              105.25 Photos / Promotional             356.85

   Stage clothes                             165.35

                                                        Total paid out:            4,893.96

   Mileage reconciliation:                            Cash reconciliation:

   Beginning odometer                     46,592.00 Beginning cash                 5,000.00
   Ending odometer                        47,620.00 Cash advance                       0.00
                                                    Less: cash paid out           (4,893.96)
    Miles traveled                         1,028.00   Subtotal                       106.04
                                                    cash deposited on _________________0.00

                                                        Ending cash                  106.04
Making money yet…?
                               Internet Sales Log

                FOR THE PERIOD FROM 1-Apr-12 TO 30-Jun-12

                                                       TOTAL         TOTAL
  DATE             LOCATION - CITY, STATE           UNITS SOLD     COLLECTED
    1-Apr-12   Radford, VA                                 15.00   $   150.00
    5-Apr-12   Radford, VA                                 10.00   $   100.00
   12-Apr-12   Radford, VA                                  1.00   $    10.00
  26-May-12    Radford, VA                                 25.00   $   250.00
  29-May-12    Radford, VA                                 12.00   $   120.00
    3-Jun-12   Radford, VA                                  7.00   $    70.00
  12-Jun-12    Radford, VA                                 25.00   $   250.00
  18-Jun-12    Radford, VA                                  2.00   $    20.00

                                   TOTAL SALES:            97.00   $     970.00

               Inventory reconciliation:                Costs          Units

               Beginning inventory                  $   1,800.00         500.00
                 Less: sales / promos               $     349.20          97.00
                 Ending inventory                   $   1,450.80         403.00

               Inventory Sold Collected             $     970.00
               Inventory Sold Cost                  $     349.20
               Profit on Inventory Sold             $     620.80
        2015!



A glimpse at what might
         be…
    Money flows both ways…
                                                Business Expenses
                                 For the Period From 7-01-15 to 9-30-15 (Quarter 3)

           CHECK #                                 TOTAL                   CDS AND     OFFICE &
  DATE     OR CASH             PAID TO           AMOUNT       AUTO EXPS     TAPES      POSTAGE      ENTERTAINMENT
  7/1/2015   3659    Shelor Motors               $ 199.99     $   199.99
  7/1/2015   3660    Vonage Phone                $    19.99                            $    19.99
  7/1/2015   3661    City of Radford             $    26.73                            $    26.73
  7/2/2015   3662    Macados                     $    48.95                                         $        48.95
  7/2/2015   3663    USPS                        $    12.65                            $    12.65
  7/8/2015   3664    Sheetz                      $    17.86   $    17.86
 7/25/2015   3665    USPS                        $    16.84                            $    16.84
  8/1/2015   3666    Shelor Motors               $ 199.99     $   199.99
  8/1/2015   3667    Vonage Phone                $    19.99                            $    19.99
  8/1/2015   3668    City of Radford             $    24.85                            $    24.85
  8/1/2015   3669    Quaterly Web Cost           $ 150.00                              $   150.00
  8/1/2015   3670    USPS                        $     6.54                            $     6.54
  8/7/2015   3671    Sheetz                      $    20.65   $    20.65
 8/15/2015   3672    Wal-Mart                    $    20.32                $   20.32
 8/16/2015   3673    CVS                         $    24.97                                         $        24.97
 8/16/2015   3674    Al's Music                  $    23.35                            $    23.35
 8/17/2015   3675    Sheetz                      $    21.33   $    21.33
 8/23/2015   3676    Wal-Mart                    $    15.45                                 15.45
 8/26/2015   3677    Sears Auto                  $    29.99        29.99
  9/1/2015   3678    City of Radford             $    28.99                            $    29.33
  9/1/2015   3679    Shelor Motors               $ 199.99     $   199.99
  9/1/2015   3680    Vonage Phone                $    19.99                            $    19.99
  9/5/2015   3681    Sears Auto                  $    26.87   $    26.87
 9/10/2015   3682    Sheetz                      $    17.65   $    17.65
 9/10/2015   3683    Al's Music                  $    23.35                            $    23.35
 9/13/2015   3684    Power Lunch w/ Musicians    $    89.87                                         $        89.87
 9/22/2015   3685    Sheetz                      $    22.54   $    22.54
Totals                                           $ 1,129.70   $   556.87   $   20.32   $   389.06   $       163.79
Housekeeping…
                                  BUSINESS USE OF HOME

                         FOR THE PERIOD FROM 7/1/15 TO 9/30/15

                                                                    OTHER
      DATE            RENT            UTILITIES        REPAIRS     AMOUNT       DESCRIPTION
         7/1/15 $       500.00
         7/1/15                   $       209.56
        7/24/15                                    $      876.23               Roof Patch
         8/1/15 $        500.00
         8/1/15                   $       206.56
         9/1/15 $        500.00
         9/1/15                   $       187.65
         9/6/15                                                    $ 540.34 New Carpet

        TOTALS $       1,500.00   $       603.77   $      876.23   $ 540.34

         BUS % $         187.50   $        75.47   $      109.53   $   67.54

  Business Percentage:

  square footage - office                 300.00                   Total Business
  square footage - total home           2,400.00                      Cost            $440.04

   Business %                             12.50%
Hasn’t died yet…
                                            Mileage Log

                      For the Period From 7-01-15 to 9-30-15 (3rd Quarter)

                                                Business             Auto Expense
  Date            Destination/Purpose            Mileage              Description   Amount
  July
   7/2/2015   Business Lunch at Macados                    0.2
   7/2/2015   Post Office                                  4.8
   7/8/2015   Sheetz for Gas                                 6 Gas                  $ 17.86
  7/25/2015   Post Office                                  4.8
 August
   8/1/2015   Post Office                                    6
   8/7/2015   Sheetz for Gas                                 6 Gas                  $ 20.65
  8/15/2015   Wal-Mart for CD's                           24.3
  8/16/2015   CVS Pharmacy                                13.5
  8/16/2015   Al's Music                                     4
  8/17/2015   Sheetz for Gas                                 6 Gas                  $ 21.33
  8/23/2015   Office Max for Supplies                     12.4
  8/26/2015   Sears Auto                                  15.1 Oil Change           $ 29.99
September
   9/5/2015   Sears Auto                                  15.1 Flat Tire            $ 26.87
  9/10/2015   Sheetz for Gas                                 6 Gas                  $ 17.65
  9/10/2015   Music Store for Sheet Music                 34.4
  9/13/2015   Power Lunch with Musicians                  34.5
  9/22/2015   Sheetz for Gas                                 6 Gas                  $ 22.54

              Total Business Miles                     199.1 Total Auto Expense     $156.89


              Mileage Reconciliation
              Odometer on 7/1/2015                    98654
              Odometer on 9/30/2015                  100430

              Miles Traveled                              1776

              Business Percentage                    11.21% Business Auto Expense    $17.59
One last chance for some
bling…
                                              REVENUE

                     FOR THE PERIOD FROM 7-1-15 TO 9-30-15 (3rd Quarter)


              MONEY OR VALUE RECEIVED:
                                                    TOTAL            W-2 NET        1099
    DATE                RECEIVED FROM              AMOUNT           OF TAXES      NO TAXES
   7/3/2015   Harold Kumar - Studio Rental           6,598.00          1,847.44      6,598.00
  7/12/2015   Internet Sales of CD                   2,000.00            560.00      2,000.00
   8/5/2015   Sean George - Studio Rental            6,784.00          1,899.52      6,784.00
   8/7/2015   Internet Sales of Sheet Music            455.00            127.40        455.00
  8/22/2015   Internet Sales of CD                   1,200.00            336.00      1,200.00
   9/2/2015   Bubba Sparx Commision                  3,000.00            840.00      3,000.00
  9/14/2015   Internet Sales of Sheet Music            125.00             35.00        125.00
  9/23/2015   Thomas Gordan - Studio Rental          4,800.00          1,344.00      4,800.00


                                        TOTALS          24,962.00      6,989.36     24,962.00