..."selling out or filling a need"

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..."selling out or filling a need"

Postby davidjones@a2zmobilemusic » Wed Nov 29, 2006 11:18 am

the problem (of sorts)...
i just acquired a david's bridal account with all types of clientile. some of which are "bargain hunters". Some of the data that is sent to me is via info obtained during their "$99 clearance sales". i WILL NOT comprimise the cost of my normal "premium" pkg. but i feel if i added a smaller less expensive pkg, i can take advantage of more of the list. in 1 month i have booked 4 weddings at full price and 4 with my 2 hour cost cutter pkg.

the cost cutter pkg is as follows... $350
2 hours of music, announcements, online request permitted

available add on's are ...

$75 for dinner music
$75 per 1/2 hour overtime
$75 lights

i pay the dj $100 total. my take is $250 for my efforts. in your opinions is this a good idea? i am not 100% either way right now.
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Postby djmarcburgess » Wed Nov 29, 2006 11:32 am

David,
As long as you are profitable, then you are good. It doesn't matter how much you charge. It's how much you get to keep after expenses.
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Postby dokai » Wed Nov 29, 2006 12:39 pm

As I indicated in my previous post, my main concern is how this approach would impact your performance and reflect on your business.

Without the pre-wedding consultations, interaction with the guests during dinner, setting up in advance, and other similar things that drive up the cost of your premium package, how are you going to maintain the quality of your company's performances? Yes, I understand that the brides that are shopping for bargains may be willing to sacrifice quality in order to get the price they want, but how will that lower-quality performance reflect on your business? Don't get me wrong: for only two hours worth of work (not counting setup and travel), it's not a bad price, but I'm not sure that it isn't going to cost you more than it's worth in the long run by tarnishing your company's image.

Perhaps you could start a second DJ company: a multi-op specializing in low-cost post-dinner performances? One that isn't immediately associated with you and your upscale DJ company? The new company could even be considered a "training ground" for personnel that you hire. If and when a "star pupil" emerges, he or she could be transferred to the premium company. Or just keep the multi-op company focused on the bargain weddings, while your single-op company continues to take the premium events. Referrals between the two companies might even help drive sales higher.

I'm curious to see how you work this out. I can certainly understand not wanting to leave money on the table. Good luck with it!
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Postby Joseph Ivy » Wed Nov 29, 2006 2:14 pm

I have 2 concerns.

First, who are these DJs that will work for $50 an hour. Either they don't know what they are doing or they don't know what they are worth.

Second, why do you get $250. Are they using your music and your equipment or are you taking advantage of the synaptically challenged?

Personally, I am still considering a lower-cost service for corporate clients. I am leaning against it.
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Postby DJ Scott » Wed Nov 29, 2006 3:06 pm

I agree. Seperate your "prime" company from your "discount" one.
You don't want to get into a "you quoted $XYZ price for so-and-so's reception". By seperating them, you don't need to explain the difference.
As was mentioned....If you can actually MAKE money....Why Not.
I know of several DJ companies that rent out I-pod systems (clent supplies their own I-pod) and all they do is drop off and pick up.
If the client is going to go this route anyway, why not get some money instaed of NO money.
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Postby davidjones@a2zmobilemusic » Wed Nov 29, 2006 4:24 pm

Joseph Ivy wrote:I have 2 concerns.

First, who are these DJs that will work for $50 an hour. Either they don't know what they are doing or they don't know what they are worth.

Second, why do you get $250. Are they using your music and your equipment or are you taking advantage of the synaptically challenged?

Personally, I am still considering a lower-cost service for corporate clients. I am leaning against it.


thats not bad money for a "dj employee" to make. i will max them out at $80 per hour after a level of performance and commitmnet have been met. most have no interest in being full-time and hunting for their own gigs. they can make good money without all the hassle.

i am now thinking of offering a 3 hr alternative to our 4 hr pkg and charge about $600 as opposed to our normal $800 charge... it is a work in progress :wink: once i find the niche...watch out!!!
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Postby djdonny » Wed Nov 29, 2006 5:25 pm

Second, why do you get $250. Are they using your music and your equipment or are you taking advantage of the synaptically challenged?


I would guess they're using company equipment and music, but even if they weren't, why would any multi-op owner accept less than $250 for ANY gig?
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Postby Joseph Ivy » Wed Nov 29, 2006 6:23 pm

...Because the owner isn't doing much actual work.

If the owner is providing the equipment and music library and doing all of the sales and planning for the bookings then I have absolutly no problem with the employee getting $50 for each hour.

In contrast, if the owner only does the initial contact while the DJ provides the actual music, sound, and planning services then the DJ should get much more than $50 per hour unless he simply sucks.

If he is taking advantage of stupid people then I think he's wrong for doing so.
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Postby djdonny » Thu Nov 30, 2006 1:01 am

I agree that I'd pay the DJ more than $50 an hour if he's using his own music, sound, and planning, but that's why I can't charge $350 for a 2-hour event. (Even if I WERE a multi-op, which I'm not.)

Even if I did "nothing" but make the initial contact, if the DJ worked under my name I wouldn't send him out unless I made at least $250. I still pay all the marketing costs to get the client, and spend the time to run my business so that it can attract clients, plus I'd sell during the initial contact (after perhaps several clients turn me down on price), and I also have to pay insurance, taxes, etc.

So, if I were to pay the DJ, say, $200 per hour for 2 hours, then the 2 hour gig would cost the client $650. ($200x2 + my $250)

By the way, I do charge a minimum $750 regardless of hours, so a 2-hour gig costs the same as a 6-hour gig. The "easy" part of the DJ business is actually playing for the crowd. If I were to run a multi-op, I'd probably pay the DJs about $500 per event regardless of whether it were for 2 hours or 6 hours, and then add $250 for myself, assuming the DJ used his own equipment.
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Postby davidjones@a2zmobilemusic » Thu Nov 30, 2006 3:13 am

djdonny wrote:
Second, why do you get $250. Are they using your music and your equipment or are you taking advantage of the synaptically challenged?


I would guess they're using company equipment and music, but even if they weren't, why would any multi-op owner accept less than $250 for ANY gig?


i need more multi op guys to help in this thread. he used to be a club jock ($125 a night)... $80 an hour which he will max out at, is considered pretty good pay for a part time dj. i'm taking all the risk. i don't have another job, HE DOES! i do this full time everyday. working the phone and emails with potential clients. i do give him a mp3 cd with all the requested music and he does attend any planning meetings.

maybe this part of the country $250 is worth more to us. i charge $800 for my full package and will be increasing to $875 January 1,2007.

if i can make $800 at my own event and have a dj elsewhere making me another 250-400 profit, what's wrong with that??
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Postby davidjones@a2zmobilemusic » Thu Nov 30, 2006 3:31 am

Joseph Ivy wrote:...Because the owner isn't doing much actual work.

If the owner is providing the equipment and music library and doing all of the sales and planning for the bookings then I have absolutly no problem with the employee getting $50 for each hour.

In contrast, if the owner only does the initial contact while the DJ provides the actual music, sound, and planning services then the DJ should get much more than $50 per hour unless he simply sucks.

If he is taking advantage of stupid people then I think he's wrong for doing so.


joseph,
what did you make working under the dj you were with. what is a good percentage? i need some multi op dj help help provide some insight.
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Postby djdonny » Thu Nov 30, 2006 5:10 pm

David,

I'm NOT a multi-op owner, but...

I can tell you that the minimum here in NYC (for any DJ worth his salt) is $50/hr for a minimum 4 hrs at $200 for a DJ who uses company equipment, and $100/hr for a minimum 4 hrs at $400 for a DJ who uses his own.

There are certainly experienced DJs who make more than that as employees (especially if they can MC), but I haven't met any DJ recently who claims to work for less.
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Postby Joseph Ivy » Thu Nov 30, 2006 5:41 pm

I wasn't a DJ. I worked for a DJ who worked for another company. I'd get 10% of the amount the the DJ got plus half or more of the tips. I am a good hype man and I ballroom dance with old ladies so I was a tip magnet. It was between 10-15 dollars an hour, but counted from the time I was onsight until we left the site. He and I both agreed that I was being grossly underpaid. That is one of the reasons why it was so easy for me to stop doing it.

Personally, I think that someone who is decent at playing music looking at a schedule should pocket $300 minimum. Add another $200 if they use their own equipment and music.

You can charge clients $500 and send a kid out with a limited music library, a CDMix, and a couple of powered 12" speakers. Require that the clients do their own planning, make their own announcements, and allow contemporary music and party standards. It would cost you a couple thousand dollars to start the kid off and you'd make that back in 10 events. The problem you'll face is that the kid will have $3000 by that time and might leave you to start their own business.

If you are going from a successful single op to multi op, then you only need to cover the difference in the relative costs of each configuration. Are you going to spend more on advertising? What is the difference in time that you would spend getting those bookings? What's the difference in insurance and taxes?

If you take too much then you are going to have a very high turnover rate. You'll be sending out a steady stream of crappy DJs who are making more than they ever made by charging $500 and booking by word of mouth. You'll create your own low end competition. If you take too little, then it won't be worth the money.

My suggestion is to hire an apprentice and train them in the basics. Take half their money until you get back the money it costs to buy the extra equipment plut the change in opperation costs over that time. Once they have earned you back your money and gotten a few glowing references, then give them 3/4th of the money you charge while booking them only when you are already booked. Give them bonuses when they are asked for by name.

Your challenge is to run a multi-op while making a profit without creating your future competition. The hardest part is keeping your employees happy enough that they don't go out and compete against you.
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Postby dokai » Thu Nov 30, 2006 6:25 pm

Some lawyers think that a non-compete agreement isn't worth the paper it's printed on, but I'd have every employee sign one anyway. Better to just keep them happy, as Joeseph recommends, but it couldn't hurt to have an NCA, too.
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Postby djdonny » Thu Nov 30, 2006 7:25 pm

I think Joseph's numbers are pretty much right on target. I would want to pay my DJs $250 w/o equip or $500 with. (I would rather they use their own equipment, even if they choose to purchase mine after a number of gigs. This way they can leave directly from their home instead of picking up equipment from me before each event.)

I would pay them 2/3 of the booking price right from the start and stay at that. I also would give a bonus (commission) when a client asks specifically for that DJ, probably another 1/6 of the booking price. This means that if the DJ directly generates the lead, I'd make only 1/6 rather than 1/3.

NYC is too big a town to worry about employees starting their own business and competing with me. They can go with my blessing.

(Again, I'm NOT a multi-op owner -- I just play one on TV.)
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