DJ Insurance and Business License

[Lastcat]

Just started my Mobile DJ Service, something I never thought would take place a year ago. I was just a Soundman/Bass player in our band. Decided to upgrade the PA System, and found this website. Now after a year I have built 4 WH10's, 4 DR200's, 4 T39's and 2 DR250's. Great system, never heard anything better. Plus have learned so much here about placement, amps, crossovers, etc.. a big thank you to Bill and everyone that graciously offers their help .

I found this system not only to be great for live sound, but also for DJing, weddings, parties, etc. So I invested in a trailer. Now I need to get insurance, and a business license.

I have studied a few websites for insurance, http://www.madisonaveins.com/pages/business.php and http://www.wedj.com/. I also frequent the DJForum, and see a few members over there, one that I hope chimes in, is bzb. It seems that a few are split on what lic. to carry.

Insurance Questions:

1. What insurance company for Public Liability Insurance?

2. What insurance company for Equipment Coverage?

3. What insurance will I need for my Trailer?

4. Is there coverage that I should also include?

Business Lic.

5. What is the benefit of Sole Proprietor (doing business as) over LLC (Limited Liability Company)? Defiently not interested in Corporation Lic. I don't plan to expand where I would have employee's. Currently would be just a single man operation.

There is so much to comprehend at this point, I could read online for weeks. Just wondering the benefits of Licensing, and good Insurance Companies to work with.

Any advise would be appreciated, thanks!

Lastcat

[Gauss]

Insurance Questions:
1. What insurance company for Public Liability Insurance?
2. What insurance company for Equipment Coverage?
3. What insurance will I need for my Trailer?
4. Is there coverage that I should also include?

Business Lic.
5. What is the benefit of Sole Proprietor (doing business as) over LLC (Limited Liability Company)? Defiently not interested in Corporation Lic. I don't plan to expand where I would have employee's. Currently would be just a single man operation.

Lastcat

I recently started my own, and went through the same questions. I went to the library and looked up the difference between business types, then I checked out my State's Web site for info on business licensing. We've had a family insurance agent for three generations (surprisingly a very helpful thing to have) who walked me through my insurance options on the phone. The only thing I'm still fuzzy on is my business taxes, but my income is not high enough to require a more thorough knowledge yet. One important thing I found was that every State has it's own business laws, so legal information needs to be local.

Here's what worked for me: I went with a sole proprietership (easy taxes and creation, no need for the extra security and work of an LLC), and registered my business name in my county. Michigan doesn't require any sort of business licensing for mobile DJ's, and America puts the copyright responsibilities on the venues, instead of the performers. My insurance falls into a category for traveling theatres (strange how that works out) and covers everything I use for business. This meant my laptop was moved from my renter's insurance to my business insurance. They print up liability certificates when venues request them. Finally, I set up a business bank account at my credit union to cash checks that came in with my business name on them. I had set up a PO Box, but that turned out to be worthless.

Good luck!

[Dantreige]

I don't have all the answers for you but I would suggest contacting an insurance agent to help you out. Tell them what you need to have covered (your equipment) and ask what would be needed for liability.

FYI, as a sole proprietor if you get sued, they can come after your personal property because you are the buisness. If you are set up as a LLC, only your company assets can be considered.

That said, I am a sole proprietor. (I am a drywall and paint contractor.) It's easier to set up. The insurance I have is basically for a "handyman". This allows me to be flexable in what kind of jobs I can take. It also covers me if I want to DJ, or play in a band. I have my "band" equipment covered.

Going though the hassle of setting yourself up as a buisness is worth it. Just the tax insentives alone make it worth it. I write off a portion of my household expenses because my "office" is located in my home. Cell phone, internet, garage space, equipment, strings, cd, etc, etc, can all be write off's for you. Don't forget to include travel and entertainment in there.

Talk to an agent, then contact your local and state government office. They'll set you up.

Good luck!

[Jon Barnhardt]

I set up an LLC for my company. Downloaded the forms online and took them to the Sec of State office and submitted them. Got the EIN online and had everything set up in a few hours total. No lawyer needed if it's just you in the company. I also got a tax permit because I sell goods and do equipment rentals, but if all you offer is performance services, you should be ok without. (Check local laws)

For insurance I checked out all the options listed over at DJForums but found a local agent that would carry for a better rate. Liability is easy to find. For the gear, they consider it "inland marine" and it's harder and more expensive to find coverage.

It appears a lot more daunting than it really is...

[Greg Plouvier]

This company deas in entertainment industry insurance:

INEX/Farallone Pacific Insurance Services - Steve Sims

[bzb]

Good info here already. Here's my take:

Business Licenses
It's entirely state dependent for licenses. Georgia does not require a license for DJs, bands, etc. unless you're putting on large public shows or selling tickets to your event. All states vary, but most I've done research on do not require a license for Mobile DJs. Check with your local Chamber of Commerce.

Insurance
I have an umbrella policy through my insurance company that's provisioned by Traveler's. Liability is $1 million and gear is covered at $25,000 replacement cost. I'm taking a bit of a risk there, as the speakers are clearly worth more than I listed, if I had to purchase them. The insurance is a little under $400 per year, but it has a couple stipulations: I will not be covered if I perform in bars or clubs with my gear unless it's a private event, all events must be contracted, and I cannot leave the gear in the trailer or vehicle overnight.

Your trailer should be covered by the business policy. You don't want your car insurance to find out you used the trailer for business... they likely squirm their way out of paying for it.

Business Entity
I also run as a sole proprietor for ease of taxes. I have done my own taxes for a long time, as the one time I did use a CPA, it didn't pan out to be a very good ROI. With my 9-5er and my wife's income, there's very little incentive for me to establish a LLC - I just don't make enough with the DJ business to make up for the time and money spent on corporate taxes and maintenance - other than the risk mitigation. The way I see it, yes, a LLC can protect your personal assets, but litigation costs can still drain you for everything.

If you itemize, you can still deduct any and all business expenses as a Sole Proprietor. One thing I see becoming a problem is business checking. Stupid banks are starting to charge for former "free checking" accounts. I have to do some more research, as my SunTrust account is going to turn into a $12/mo charge.

Monthly Expenses
My only significant monthly cost is music. I pay for a couple music services: ERG, Promo Only, Prime Cuts, and a variety of remix services offer monthly delivery of discs. There's also a bunch of good record pools out there if you actually mix during your sets. Although these are regarded as marginally legal, I often am using the same exact songs that I have on one of the monthly services, just different remixes/intros/instrumentals of them. Something I used to do myself, I now basically pay someone else to do. We're talking around $60/mo total for music.

Occasionally I'll have a gig (karaoke, DJ, etc) at a bar that I'll promote for. I'm a new media guy by trade, so I do some artwork myself and most of the time I use GotPrint for the glossy prints.

GotPrint is also excellent for business cards - cheap and outstanding quality. I go through about 2000 cards per year. At charity gigs, I'll often print up some stickers for the backs offering 10% off for xxx charity members and leave a bunch of them on tables and with the organizers. I also distribute at the venues I frequently perform, the city halls I work with, and various formalwear and wedding providers.

Only other I can think of is my website, but I pay that yearly. The two providers I use regularly are Omnis and Fatcow. I don't update it nearly as much as I need to, though... slacker.


On a side note, I don't know why folks have an idea that I'm a hugely successful DJ... my revenues have only averaged $15k per year! There are plenty of guys out there doing way more business than me. I just have fun doing it and I try to give people a professional, affordable entertainment. It's my creative outlet from the daily grind, since I'm not good enough to be in a band

[AntonZ]

On a side note, I don't know why folks have an idea that I'm a hugely successful DJ... my revenues have only averaged $15k per year! There are plenty of guys out there doing way more business than me. I just have fun doing it and I try to give people a professional, affordable entertainment. It's my creative outlet from the daily grind, since I'm not good enough to be in a band

Go figure, I've been in bands on and off for some 25 years, never ever have I made anywhere close to $15k in a single year doing the bands thing. Should stop practicing and start DJ-ing. From a financial perspective that is. I don't think I have what it takes to DJ.

Thanks for the detailed information by the way, very informative to read about the various considerations.

[bzb]

To be honest, if I could find a group of fun, professional guys that want to play hip hop, gogo, Roots-style covers... I'd give up most of my DJ gigs. It's a creative outlet first and foremost. The extra income is "mailbox money".

I know guys who do it full-time, and once it becomes a job it seems like they're far less interested in it, and it becomes a grind. The moment I complain about doing gigs, I'm done with it. I can make a far better hourly rate doing things that are slightly less fun to me, like editing video.


As far as demeanor, attitude, and personality: there's all kinds in the DJ world. The typical cheeseball image is alive and well - and I try to make sure I am NOT that guy. There's nothing wrong with those guys, they love what they do and lots of people want that at their parties. I'm not looking for those clients. I typically do higher-end client parties and kids parties (two VERY different styles and pricing/services). At any event, the best skill you can have to be an in-demand DJ is reading the crowd.

For the adults and higher-end events, I don't do games. I don't put on a wacky voice. I try to stay off the mic as much as possible and let my mixing do the talking. I am the primary point of contact for everyone because I'm in a static position most of the night - photographers, caterers, other staff, etc come to me for scheduling, announcements, etc. I do lighting design and assist with the decorating. I present video montages for the clients and ensure all the technology for the events runs smoothly. I interact with the crowd beforehand and take requests during. Most adult parties end up being 70s/80s fests, which I'm cool with.

For the kids parties, they just want speakers, loud bass, and the same 10 songs they hear on the radio every single day. I'm 34, but I apparently look like I'm still in my 20s, and I have an ability to talk to any age with appropriate colloquialisms without sounding like I'm trying too hard. Funny thing, that - my hip hop slang from the 80s is apparently cool again. I think this is the reason I get as many gigs as I do... my corporate life allows me to talk to the parents intelligently and professionally, and my hip hop side allows me to relate to kids.

Games are great up to about 10 years old. Any older then they just want to sit around and request songs every 14 seconds. High school parties get pretty filthy/uncomfortable, I just work with the parents on appropriate playlists and crowd control. College parties are ridiculous, I don't do those anymore for any price.

Too many guys think that one-size-fits-all with regards to approach, the entertainment, and the PA system. Bad way to approach this business.

[Lastcat]

Thanks for the great information, I can gather what you all have shared and make a decision.

bzb, 15k is a good chuck of change, I would consider that a success . Though 150k a year would put any of us in a different ball park.

Also, since we all own Custom Made Cabinets, how does the insurance company see coverage and replacement for our gear? 4 T39's get toasted in a fire, how would the Insurance Co. replace this gear? A few dollars for speakers, handles, wheels, and some crossovers?

[bzb]

I had to submit receipts for my gear. After discussing it with the agent, they allowed me to add in a couple hundred dollars for build time (but wouldn't go off Bill's MSRP listed on the site, unfortunately). Which reminds me, I need to call them to adjust the speaker prices since Neo driver prices went up significantly.

[mikeratliff]

LLC is worth the effort...think again

[bzb]

Fantastic information, compelling argument.



Here's why a sole proprietorship is easier for me:

1. Tax benefits are really only if there's more than one member. No one else owns my business... so doesn't apply to me.

2. I don't file corporate taxes, which saves me many tens, if not hundreds, of hours per year. I don't pay taxes quarterly, either. My taxes are filed on a Schedule C at the end of the year.

3. I don't have any maintenance fees, business licenses, or other costs (time OR money) to worry about.

There's a big misconception that an LLC protects you. It does protect your personal assets... from business debts or liabilities... of which I have very little.

A LLC doesn't stop anyone from being personally sued - say, if someone trips over a speaker cable and the speaker comes tumbling down on them. Liability insurance should take care of any claims, but they can still sue you personally, especially as the owner/operator and the sole member of the LLC. As I mentioned before, the litigation costs will be the bigger hit to you personally. Even if your business is bankrupt, you still gotta pay a lawyer.

[Lastcat]

Became a Member at WeDj.com to get the Insurance through G.A. Mavon. Includes equipment, and general liability. Listed all items, mp3's to cables, including the BFM cabinets, with Bill's suggested prices per cab, no problem there. At about $425 bills a year.

Insurance? Check!

Business License through the State as a Sole Proprietor. Took a week, $25. Good anywhere in Washington.

Business License? Check!

Then I get a quartly statement from the City. Woohoo, I get to pay the City taxes too

6x12 Trailer Insurance through my car insurance at $10 a year.

Trailer Insurance? Check!

[Dan30]

A week? I think you can get a business license on the same day in Hong Kong.

[Benj Ross]

I went through wedj.com too. Be sure whoever you look into for insurance is clear about all the eclusions in the policy. For example, wedj.com covers your equipment as long as the vehicle is locked and or being loaded. Other policies (adja.com I think) require that you leave someone attending the vehicle at all times when loading/unloading. That is a no go for me because I run solo most of the time. G A Macon and co. Didn't bat an eye at the BFM msrp prices either. Another point is if you ever have helpers, and I mean even a volunteer at the event who helps you pack gear in, check with your insurance about if they are covered. GA mavon's policy is that if someone is functioning under you company name, paid or not (ie. Organizer's staff helping etc), they are covered by your liability insurance. Most companies want them to be on payroll before their work is covered. I have friends help out when I am packing gear for a 200+ person event with 8 bands. Good to know that if they drop a speaker on a kids foot I am still covered.

I am also an single member LLC which is a limited liability company. Not a corporation. Still have the protection of my personal assets, but I am taxed like a sole proprietorship.. I am not doing the corporate thing. I am bit fuzzy on all that but that is what I signed up for. Some states won't allow single member LLCs.

Hope that helps.

Benj