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We are proud to bring you the works of Dan McKay a skilled industry writer for many years. Dan's Soup will be a regular feature in each issue of DJzone with both old and new articles. We hope you enjoy them as much as we do.

Is A Spare Bedroom Office Putting Your Business To Sleep?
by Dan McKay

It makes me want to scream when after I tell folks I'm a mobile DJ, they snicker and say, "Great! And what's your real job?"   Sure, many of us are happy booking gigs from the crowded desk in our spare bedroom.  However, an increasing number of DJ companies are discovering to be taken seriously in the marketplace, they've had to make the leap to a real live office.  How do you know if your company is ready?

"It really took my business to the next level," insists Bob Deyoe, of Tucson's Desert DJ's.  "If you're a new jock and I take you to my garage to train, and the mosquitoes are buzzing and my kids run out to kiss me goodnight, what's the message you're sending?  In an office, a potential employee will think, 'Hey, this is a legitimate company, this guy is successful.'"

Bob's single operator mobile soon grew to 10 systems and 13 employees, all operating out of his house.  And every weekend at 2 a.m., DJ's cars would back up in his driveway all the way to the street.  "It's really difficult when your bedroom is 20 feet from where the DJ's were bringing back equipment and you can tell by the sound of the dolly who it is. And I'd want to get up and see who it is."

It became as much a personal decision as a business one for Bob to move Desert DJ's into an office. "The problem with working out of your home is that you never leave work. Clients would come by and the kids are so riled up from daycare, they'd come walking naked out of the tub in the middle of our meeting. Once you have kids, you have to draw the line between working and spending time with them and enjoying the money."

So although unjustifiable in a business sense, for sanity's sake Bob went on the hunt for an office.  Fortunately he found a industrial park just a half mile from his home with office space already "built out".  "Build-out" is the term used for the installation of dividing walls, floor covering, lighting, electrical and telephone wiring.  Most offices come empty; amenities are an additional and unrecoverable expense (you can hardly rip out wiring and pull out walls when you leave!).  Bob was lucky.  "There had been a previous tenant who had already built a big reception area, conference room for the clients and a private office I could lock myself into. We just put in furniture and it was good to go."

But for Howard Wallach of suburban Chicago's A-Z Entertainment, the perfect office didn't fall into his lap.  So he enlisted the help of a commercial real estate broker. "They're finely tuned into the marketplace," Howard advised. "You tell them what your needs are, tell them what you can afford and they're able to process it."

Howard's key to getting what he wanted was patience. "We weren't under a time restriction, so we looked at about 20 locations over a two-month period. We knew what we wanted, but in each place there was always one little thing that made us think, 'Should we deal with it, or should we wait?'"

A-Z's new digs -- complete with a 2,000 sq. ft. warehouse -- are a far cry from the company's beginnings at Howard's Dad's house. "Dad was very supportive,  I give him a lot of credit," Howard recalls. "By 1994 we were running five units out of the house."  But to raise the bar from $375 weddings to bar mitzvahs in the thousands of dollars, he had to find a way to spend more sales time in the office.  "I was spending all hours of the evening driving to clients' offices and homes for meetings.  When I started this, that wasn't as big of a deal.  I was younger, single and happy to meet clients wherever and whenever."

Howard became encouraged by his company's new focus to higher-end gigs and raised the cash to make the leap.  The investment paid off within a year.  "Our first 12 months after the move were particularly strong. Also I was confident enough to increase our prices and not be scared about the fallout."  The appearance of success soon bred success. "I have a better staff now -- I couldn't have attracted the high-quality people who run my office if I was working out of my house."  Similarly, having clients on "home turf" has enabled A-Z to increase their upselling of such items as dancers, video projection and giveaways.

And when your turf includes a tile entrance, leather couch, refreshments and an intelligent lighting show on a permanently installed truss, they're much more receptive to upselling, according to KC Kokoruz of Chicagoland's Spinnin' Discs.  "It cost us a friggin' fortune to move into this facility," KC chuckled. "But here I can take a $650 wedding reception and upsell it to $1,200; a $2,000 bar mitzvah to a $5,000 bar mitzvah."

Quite a change from nine years earlier when KC tried to operate his single system from his apartment in a Chicago highrise. When the management wasn't thrilled about DJ equipment in the elevator at all hours, he rented an office in the back of a building where his friend was a sign painter. "It was the biggest shithole in the city. But it was warm, big enough for a phone and to store my equipment."

Soon at four systems and motivated to find better surroundings, KC met a videographer at a local trade show. "I knew he was already sharing an office with a DJ.  Being the pompous egomaniac I am, I told him when he was serious about getting a real DJ in his office to give me a call.  One week later my phone rang."


Sharing office space became the best of times and the worst of times for Spinnin' Discs. For $200 on a month-to-month agreement, KC got a 9 X 12 space in the photographer's strip mall location. "Sharing an office was the best thing for us... it was super cost-effective. But we just ran out of room."  With the help of a real estate broker, KC found an industrial park location that was perfect, but it was just out of reach for his growing company.  So he invited a local balloon company to share the space and monthly rent.  And that's when KC's troubles began.

"They were consistently late in paying the rent and we asked them to leave. Unfortunately, they had co-signed the lease... a big mistake!  We learned to always put the lease in our name. You're married to that co-signer otherwise!"  Fortunately, the real estate broker intervened and relocated the errant balloonists.

Next lesson learned? Always work through a real estate broker. "A good broker will help ascertain what you need, and they get their commission from the landlord," KC advises. "When you call a property directly and say you're a DJ, they picture a little mom and pop operation. When you're represented by a broker, everyone wants to talk to you."  Brokers can additionally negotiate office buildout, shelving, fixtures and even special lease terms. For a growing business, a balloon lease could help with a low starting rent, then charge a higher rate over the lease term as revenues increase.

Ken Rochon of Absolute Sounds Professional Disc Jockeys in Baltimore had very specific ideas about his new office.  It would give him enough space to get to the next level -- having DJ's work for him.  So, after saving profits, maxing out credit cards and bringing in a partner, he was ready.  Touring six nearby industrial parks and noting the plusses and minuses of each, Ken soon found it wasn't the space that was pricey, but the build-out.  "I also learned office space is priced by the square foot; my office had a $7 difference per square foot to get a shell instead a fully finished one. We figured no matter what it cost to finish it, we would still save money."

Still, Ken was apprehensive about taking off his headphones and putting on a tool belt. "My partner and I wrote down everything we were looking for an in an office.  When we presented our plans to a contractor and got a quote of $11 a square foot, totaling $41,000,  there was no doubt in our mind we had to do it ourselves."  Purchasing all the raw materials and bringing in some subcontractors with the help of some well-worn credit cards, Absolute Sounds was able to bring the job in "down to the furniture and fake plants," according to Ken, for only $15,000.

After three years of paying off the initial debt, Absolute Sounds is ready to put four suites on their office's second floor, currently a loft.  Their plan?  Offer local florists and photographers free space in exchange for booked referrals, credited at a fixed rate per closed gig.

One thing you can't put a price on is the positive effect an office can have on employees... or even the owner. For Ken Levy, owner of Let's Dance Entertainment in Seattle, setting up a real shop was just the boost he needed.  "It was too easy to sit in front of the TV, or go do things on the spur of the moment. Once I got an office, I took myself more seriously about the business.  I felt better about myself... more professional."

Ken admits the leap was scary, but extremely motivating.. "Just by applying myself, it wasn't really that many more shows to pay for the expenses. I was able to have a set schedule in the office; I tried doing that at home and it never worked."

A-Z's Howard Wallach also testifies to an office's morale-building power. "After moving into our new office, I think there was greater respect across the board from our employees. They were seeing the fruits of their labor, and everyone felt they contributed to our success."

But how much office is too much?  For Spinnin' Disc's 4,000 square feet of creature comforts, profits from three of their 10 systems go solely for overhead. But owner KC Kokoruz claims to "fix it in the mix". "If you amortize the costs of moving furniture and equipment, reprinting your brochures and reinstalling your telephone and alarm systems against the higher rent, it all works out. I'd have outgrown a smaller space. Even if a third of my systems do nothing but pay for my overhead, they allow me to be more comfortable and headache-free."

Whether you're buying at-home privacy, more family time or building for the future, moving to an office should be an investment, not an expense. But capital alone won't complete the investment. Step outside your day-to-day operations to visualize where you want your business to be in 2, 5, or 10 years.  Are you willing to invest the  hours of hard work and perseverance to increase revenues?  Although it's not for everyone, the new breed of mega DJ entrepreneurs show that with a professional outlook -- and office space -- the rewards are there for the booking.

= = = = =

Dan McKay has been a writer and mobile DJ since 1979. He is owner of PartyHits! DJ Party Hosts in Seattle. This article originally appeared in DJ TIMES Magazine, 25 Willowdale Avenue, Port Washington, NY 11050. Subscriptions are $30/year at (516) 767-2500.)




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