Building a lighting service business

Hey Scotto,

You know I’ll give you my honest and humble opinion.

First of all, I applaud your entrepreneurship. Good job.

Second, I am no big fan of free anything, but if that is a business model that works for you, your choice.

Third, if you charge people for services, I believe you have to deliver a certain standard of gear. Unlike the competition that will no doubt use high end lighting gear (to give you an idea, at that level a single LED PAR will run several hundred dollars per light!) and charge a lot more. Clearly that is not your target market.
Having said that, the lights your are sporting are, again imho, below the level a customer might expect. I have no problems with American DJ, but I do think that for paid services you’d have to step up to more effective models. For PARs I’d suggest the new (4th Gen) DOTZ units (both PARs and Bars) and for FX something like Revo 3 and 4. As for foggers, I am no fan of those (having used them for many years), but the audience response has been getting worse and worse in the last decade. Also fog is more of an effect which you can only use occassionally. The whole idea behind fog usually is to enhance the effect of the other lights/effects. For that purpose though a hazer (while not cheap) is a FAR superior product to use. It creates a very fine and invisible mist, it can run all night and it truly enhances the light show by making all beams visible. So a hazer should be on the top of your wanted list.

Finally, and this is the big one, your business model.
Simply put, setting up and tearing down at least 2 hours total (been there, done that a million times, so rather modest assumption, if you include cabling, testing, etx.) So your 2 hour gig will cost you 4 hours including transportation, write-off on gear and such. But even just looking at the hours, you charge 25 bucks for two-hour show, costing you about 4 hours. That boils down to about 6,25 an hour. Not sure about the wages in the US, but I think there are far more lucrative things to do. If you go for the – more likely – 4 hour option, it’s 40 bucks for 6 hours, boiling down to 6,66 an hour. Again, this is excluding transportation (at the very least gas money), storage, write-off, upkeep & maintenance and putting money aside to upgrade your gear.
At that point I have to wonder about the feasability. While a side job, I do assume you are trying to make some money out of it. Getting paid for your efforts and expertise and for your gear.

Let’s assume for a moment that you have a complete light setup worth 1.000 dollars (very modest, but easy for calculation purposes). Average rental fee is about 4% of new value (excl. VAT). This means in order to put your gear somewhere in a normal rental situation you would have to charge around 40 bucks excluding tax, just for the gear. Let’s say you put 10 bucks of gas in the car. That makes 50. Then you should make at least 20 bucks an hour average (including setting up and taking down). So, for a two hour gig that comes to 90 bucks, Four hour gig comes to 130 bucks (don’t see the point in discounting your hourly rate if you have to work more hours, trust me, a decent DJ wouldn’t either.)

Clearly that rate goes up quickly if you start getting some more serious gear. A hazer will set you back at least 600 bucks for example.

To answer your final question, would a service like yours be interesting to a DJ like me? Yes, because I HATE doing lights, it’s time consuming, it’s very hard to make a manual light show when you have to DJ as well, so you end up setting everything to auto programs or sound activated (boring!) and it takes some serious investment. However, I’d expect at least semi-pro gear (glow in the dark Jelly devices would most definitely not cut it with me, nor would 3W LED lights) and a good operator. Someone offering me the whole thing (gear, hours, transport) for 40 bucks for 4 hours, while I charge 600-1000 for that same period of time excluding light would tell me I am not dealing with someone at my level of professionality. And the last thing I would want to do is undermine my customers experience when they hire me by having sub-standard lighting in place.

I actually work together with a guy that owns an LED video wall (about 2 by 4 meters). He does a lot of prep work (like put pictures, text, vids for the event in there as well as some of my name drops, logo’s, music videos) and looks very professional (booth, high end laptop, personal appearance). He charges a healthy 1000 bucks for a night and when I sell it (making a bit of profit on his services too).

My advice would be to step up your professionalism and your rates. If you do, I think you can get some serious side business going. As I said, most DJs care about music and don’t want to be bothered by the time consuming business of setting up and taking down lights, investing the extra money and still ending up with a sub-par light show if all you can do is set it on auto run.

For clarity, I am not suggesting you start doing 1.000 dollar rentals! I do think that even at this level, 2.000 isn’t all that much in gear (especially with a 600-700 dollar hazer in the mix). And the rental fees on that would have to be about 80 dollars for a night.

Another thing is, it’s better to start with higher (realistic) rates and offer introductory discounts (say first year 50%, second year 25% and third year full rate or something based on the number of gigs). The thing is that it is extremely hard to raise your rates significantly in a relatively short period of time once people are used to your lowball rates. It is much easier to dial back a discount.

Also it’s good business to reward repeat customers, which is hard if you start with very low rates to begin with. You’d end up giving a good customer 10% discount after a certain number of bookings. This will be 10% off an already low number.

I hear your argument of already owning stuff. In my daytime job we just had a comparable discussion. We own our current gear (worth about 140.000 euro) and it’s all paid for. Like your lighting gear, we already own this gear. Some folks wanted us to offer lower rental fees to our customers, as what we make on the gear SEEMS like all margin/profit, after all we don’t have to pay anything for the gear (no lease or borrowed money). But instead we calculate with what this gear would cost if we had to start anew right now. So including financing, write off and all the other good stuff. So, while bought and paid for, this gear now represents a virtual cost price. And that forms the basis of our pricing model.

Most important thing is that you are doing something you love doing. Not trying to demotivate you, on the contrary. But I AM trying to look at this from a pure business point of view. If other, non-business, factors weigh in heavily with you, then clearly another choice is yours to make.

Keep it up though, doing something beats doing nothing but hang on the couch any day of the week!

I won’t try to convince you to get a hazer. But the concept is so much different and regardless of the dispersion method, haze has a far superior “hang time” and is practically invisible (also when it’s coming out of the machine).

What I would like to suggest to you, if feasible, is to go a shop that sells this stuff and get a good hazer demo and see for yourself. I think it’s the single best thing you can do to enhance the quality of the light show you are selling and it does wonders for the ambience, again totally imho.

Back to my first remark, good job no the entrepreneurship and keep going on the path that YOU feel comfortable with.

That’s a lot of reading above but let me add my 2 cents. I like the idea and would probably use your services especially a year ago when I didn’t have a light setup. My suggestion would be to not do the second event free thing. It will just postpone you making money. Also I would increase the amount you’re charging a bit. Like double it. Those lights aren’t cheap (at least in my tax bracket) and you don’t want to sell yourself short. Try getting into some wedding gigs and maybe use both light stands and you can spread them out more. That’s just my thoughts on the matter take them as you will.