Starting up...

[Nick_EventPro]

Originally Posted by bzbatl

If he's just taking 30% of your gig income to allow you exclusive use of the equipment, that's really not that bad. My average gig is $500. $150 to essentially rent out $5000 worth of equipment doesn't seem "unfair" to me.

+1 bzb, $150 is pretty fair to rent out a system for those gigs in the $500 price range, but let me offer another alternative.

It's always been a mantra of mine to never take on un-necessary debts. In this case, our un-necessary debt is being indebted to this "business-partner" to the tune of 5 grand. Never give someone else leverage over you.

Let's use your figures bzb. ($500 avg. gig)
If we look closer, we can figure out:
-If we look at this 30% as "rent" for a system it works out to $150, ok fine. At this rate, it will take us 33.33 gigs (avg.) to pay off our debt of $5,000. (Assuming all 30% goes towards the balance of the loan.)

There are plenty of places to rent gear everywhere. Being someone who rents gear, a pair of speaks on sticks can definately be had for $150. Why tie ourselves in with this guy whom we're giving leverage to? If we rent the gear we need each time, we can amass the $5,000 needed to purchase our own equipment in just 14.29 gigs. ($500 avg./gig minus $150 rent leaves us with $350/gig.)

Why lock in for 34 shows, when we only need to be on the hook for 15? The end result is you still owning the $5,000 worth of gear. What's more, is your partner that promises to book you has the leverage!

Why book you? He's getting his 30% regardless of who finds the show. He's provided you with the initial investment- you're on the hook. There's now assets involved. What leverage do you have that guarantees he will fufill his end of the deal by booking you? The answer is none.

If he dosent book you, so what? You have no recourse. If you don't pay for the tangible assets that he fronted you the money for, I can guarantee you there will be problems. Rent independently every time! If business slows, you won't have a bill that you can't pay, and you're only on the hook for $150 each time. In this case, less is more.

[DJ Master Sween]

^^ This. Great argument.

[DjDennis]

I would work for others for at least 5x years, build up some rep and buy gear as you go

then after you think you have enough (with saving)
then venture out on your own

BUT dont cut off a source if it all goes sour

I worked for guys that I eventually Bought the company from
and I still do shows for other Dj companies I use to work for

so KISS (Keep it Simple Stupid) is what I was always told

..

[Erkenfresh]

Originally Posted by Nick_EventPro

Let's use your figures bzb. ($500 avg. gig)
If we look closer, we can figure out:
-If we look at this 30% as "rent" for a system it works out to $150, ok fine. At this rate, it will take us 33.33 gigs (avg.) to pay off our debt of $5,000. (Assuming all 30% goes towards the balance of the loan.)

There are plenty of places to rent gear everywhere. Being someone who rents gear, a pair of speaks on sticks can definately be had for $150. Why tie ourselves in with this guy whom we're giving leverage to? If we rent the gear we need each time, we can amass the $5,000 needed to purchase our own equipment in just 14.29 gigs. ($500 avg./gig minus $150 rent leaves us with $350/gig.)

In the first case though, the OP would pocket $350 per gig and then own the equipment after the 33 gigs (assuming he gets ownership after the debt is paid). If he's not getting ownership, the $350 * 33 is more than enough to buy out the ownership.

The only difference is that in the first case, he's paying the rental fee to his friend instead of a store but along with that comes an obligation to succeed.

That being said, I wouldn't take the deal as it stands. You can't be certain that you'll succeed enough to pay off the debt or even that you'll enjoy the profession. What if you get five gigs in and decide this isn't your thing? In my case, I just bought my stuff outright and if I decided to bow out I could just sell it all.