How to Start a Fun Karaoke Business in 3 Steps
Many people dream of singing or otherwise performing on a stage in front of an adoring audience. But how many people actually get the chance to do so in a professional capacity? An audience typically would not pay good money or stick around to hear your average person sing!
This is why the karaoke business is such a great idea. People go in knowing that they are not going to be listening to professional singers and that if they want their turn in the spotlight, they will need to stick around. Even better, they are often supportive of even the worst singers as they know how nerve-wracking it can be to get up on stage!
If you are one of those people who really enjoy the whole karaoke experience, then perhaps you have wondered about running your own karaoke business. Is it as easy and fun as it looks? Can I really make money doing something like this?
Keep reading for the answers to these questions and more as we help take you through how to start a karaoke business.
Step 1: Do Your Research
Do I Need Any Licenses or Permits to Open a Karaoke Business?
Just about any business that wants to be able to operate legally will require a business license, and the karaoke business is no exception. The requirements for a business license and other licenses and permits can vary depending on your area, so check with your local city, town, or county clerk’s office to learn more about what is required in your situation.
You may be wondering whether you need some kind of music license to play karaoke songs. Essentially, this would only be required if you were planning on opening up a venue specifically for your business, like a karaoke bar.
In this case, you will be required to get a music license from PROs (Performing Rights Organizations). The PROs that you would typically obtain this licensing from are ASCAP, BMI, and SESAC. Popular music artists typically make the karaoke songs that you will be playing, and these organizations ensure that these artists are fairly compensated for their work. Business owners cannot legally claim all of the profit made when playing other people’s songs.
On the other hand, if you plan to be a KJ (Karaoke Jockey) who travels from business to business doing karaoke nights, you typically do not require this type of license. The onus to obtain the licensing is on the venue owners, not the KJ (that is unless they are both the promotor and producer of the event).
There are a few exceptions to these rules, so it is best to check with the PROs to determine whether you need a license for your karaoke business.
What Are Some Skills and Experiences That Will Help You Build a Successful Karaoke Business?
It really takes the right kind of person to run a successful karaoke business, as it is not the same as just getting up to sing at another business’s karaoke night. The audience depends on their KJ to put on a show, helping and guiding them through their song choices while ensuring everyone gets their chance up on stage. You will also need to be able to deal with difficult audiences and singers, as they can really make or break your shows.
If you are patient, confident, outgoing, friendly, charismatic, and generally have good people skills, you will have a good chance of succeeding in your karaoke business. You really need to be able to put on a show for your audience, especially if people seem to be especially nervous or if participation is low for other reasons.
You also cannot be afraid to get up there and sing some songs yourself if necessary, so confidence in your singing ability can certainly be helpful too!
Step 2: Figure Out Your Costs
What Are the Startup Costs for a Karaoke Business?
You could potentially be looking at spending somewhere around $5000 to start your karaoke business, depending on what equipment you already have and how much you are willing to spend on anything else you need to purchase.
Essentially, you will need your own karaoke sound system to set up for your gigs and a catalog of karaoke music. Traditionally, karaoke music came on CD+G discs, but this technology is now mostly obsolete. Instead, you will likely be looking at purchasing karaoke software, installing it on a laptop, and playing the music off of there.
In addition to the music software and laptop, to create the ultimate karaoke sound system, you will also need speakers, microphones, a monitor, an amplifier, and a mixer. It is also a good idea to bring some extra equipment or tools to fix things in case something breaks down.
Since it can be a lot of equipment, you will also need a reliable method of transportation to carry it all around. If you do not currently have a car that will fit your sound system, you may want to consider investing in something bigger.
What Are the Ongoing Expenses for a Karaoke Business?
While the startup costs can get a little expensive, the ongoing costs tend to be considerably lower. As long as you update your song catalog every so often and replace any worn equipment, you are pretty well set! You will need a car in good working condition and gas for it to get from place-to-place of course, but other than that there is not really anything that you have to do on a regular basis.
Step 3: Make a Profit
How Much is the Karaoke Industry Worth?
It is difficult to estimate the worth of the karaoke business for KJs who do gigs at other businesses, so we will look at the worth of the more general karaoke bar industry. The market size of the karaoke bar industry in the US in 2021 was about $1.1 billion.
What is the Growth Potential for the Karaoke Industry?
For the karaoke bar industry, the market size is expected to decline by about -4.5% in the US in 2021. This is at least partly due to COVID, which has led to business closures and restrictions during the last couple of years.
How Do You Market a Karaoke Business?
First, you need to identify your target market. Karaoke can certainly appeal to people of all ages and from all walks of life, but your best customers are probably going to be young adults in their 20s. This age group is most likely to see karaoke as a fun way to spend time with friends or meet new ones, and they tend to have the free time and money to spend on a fun night out.
After you have decided on your target audience, you can start marketing to get the word out about your karaoke business. If you plan to take your karaoke business to already established businesses, then reach out to bars and clubs in your area to inform them of your services and see if you could work together.
If you can go there in person to speak to the owner or manager, even better, as you can show off your people skills while checking out any kind of stage setup to get an idea of where you will be putting on your show. Do not forget to bring some business cards, so they know how to contact you if necessary.
You could also consider setting up a social media account for your business and reach out to others through there. It can be an easy and inexpensive way to do some advertising to get the word out about your services and shows, and you may develop a following of loyal karaoke patrons over time that will want to know where you will be hosting next.
How Much Should I Charge for Karaoke?
On average, a successful KJ charges about $375 for a three-hour gig. Make sure you are charging enough to cover the costs of your time, effort, supplies, and transportation to and from the venue.
However, when you are first starting out, you may consider charging a special “first performance” price. If, in the beginning, you price yourself lower than your competitors, people may be more likely to give you a chance.
Any Other Tips for Jump Starting a Karaoke Business?
Sure! Here are some extra tips to help you get started:
- While trying to get regular shows at bars and clubs is ideal, you can also consider advertising your services for weddings and other types of parties.
- Try and stand out as a host. Maybe you have a signature song, outfit, or even catchphrase that will make people remember you.
- Offer to record and burn karaoke performances for those who want to remember the night.
- In addition to your karaoke shows, you could consider branching out and hosting open mic nights at coffeehouses. Contact the owners and sell them on your quality sound system setup and how it can attract performers and audiences.
For more helpful tips and steps, read our general guide on how to start a business. We will run through the other business aspects you must consider before turning your side hustle into a successful business.
Be sure to check out our other posts for more ways to start your side hustle!