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Starting a Radio Station – How Much Does It Cost?

Do you want to know exactly how much it cost to start a radio station? If YES, here is a detailed cost analysis for starting a radio station and raising finance.

Radio is known to be one of the basic companions to a large number of people scattered all over the globe. This is because, unlike Television, a radio station can easily be connected to with a simple device that you can carry around; the device could be a transistor radio, mobile phone or any internet enabled device. Radio broadcasting can be defined as a one-way wireless transmission over radio waves that can be far reaching and covering a wide distance.

Having provided you with a:

  1. Industry Overview
  2. Market Research and Feasibility
  3. Radio Station Business Plan
  4. Radio Station Name ideas
  5. Licenses and Permits
  6. Radio Station Marketing Plan
  7. Cost of Starting a Radio Station
  8. Marketing ideas & Strategies

Industry Overview

In the United States of America just like in most parts of the world, radio broadcasting is indeed a major mass medium that services millions of Americans on a daily basis.  Although the invention of television in the 1950s contributed to the decline in the number of people that listen to radio stations daily, but with diversification, radio stations were able to regain some of the listeners that totally abandoned radio for television.

In recent time, radio stations have becoming more creative in designing programs that can help them maintain a robust audience. This is important because the larger the number of your audience at a radio station, the juicier commercial sponsorship you can attract.

The total number of radio stations in the United States of America as of 2009 is 3,494 and the number has grown beyond that in recent time. Statistics has it that American radio stations generated a total revenue of about 15.1 billion U.S. dollars in 2012 and out of the total revenue generated within the said period, an estimate of 510 million U.S. dollars was generated via online platforms. In 2009, there were 3,494 radio broadcasting stations in the United States.

If you are looking towards starting your radio station in the United States of America, you would need a license and a permit from the FCC. It is illegal to run a radio station in the United States, Canada, the United Kingdom and Australia without following due process. It is important to state that in the United States, potential applicants for radio license are always in heavy demand.

The Federal Communications Commission (FCC) stated on their website that loads of people are applying to start their own radio stations in the U.S. For instance, a few years ago, the Commission received approximately 30,000 inquiries in a year from people who wanted to start a radio broadcast station. Hence the demand for radio broadcast stations license and permit has grown while the amount of available spectrum has declined.  Which is why when application filing window periods open for new radio stations, many competing applications are filed.

If you are looking towards sending in applications to the Federal Communications Commission (FCC), you should be aware at the onset that the filing of an application does not guarantee you will receive a broadcast station construction permit.

As a matter of fact, in many areas of the country, no frequencies may be available on which a new radio station could begin operating without causing interference to existing radio stations. So before going into setting up your facility and purchasing equipment for your radio station, ensure that you first of all secure a radio construction permit from the appropriate authority; the Federal Communications Commission (FCC) office close to you.

How Much Does It Cost to Start a Radio Station?

The cost of setting up a radio station to a large extent has reduced from what it used to be; many thanks to the advancement in technology and perhaps the internet. These days, it is common to see people set up radio stations in their houses. All they need to do is to register a radio station, obtain the required license and pronto! They’ll be in business.

If you are considering starting your own radio station, you might not start making profit immediately, but if continue in the business, it won’t be too long before you gain fame and fortune. All it takes is to gain recognition in the advertising and branding industry.

The income you can generate from your radio station is proportional to the finance that you invest into the radio station. It might be expensive to run a 24 hours 7 days a week radio station with some of the best on–air radio personalities and quality programs, but that is part of what you require to attract listeners to you radio station.

If you have robust listenership, you can easily attract corporate organizations and individual to place adverts on your radio station; that is perhaps one of the major means of generating income from a radio station.

Basically, it is not expensive starting a radio station in the United States of America, Canada, the United Kingdom and Australia. The amount required to start a radio station may vary slightly from country to country and from state to state. Part of the factors that can influence the start–up cost of a radio station is the amount needed to rent or lease a facility, the cost of the equipment you would need and the money needed to brand your business.

On more serious note, starting your own radio station is to a large extent dependent on your preference and budget. You could budget and spend millions of dollars, or you could choose to spend moderately; far below a million dollars.

Other factors that may be slightly different in terms of costing when it comes to starting a standard radio company in any of the countries listed above are cost of labor, cost of transportation and logistics, local tax, business incorporation fee, rent/leasing amongst other factors.

When it comes to starting a medium scale radio station, you should be prepared to either rent or lease a standard and centralized facility in a business district; this is going to be one of the areas where you are expected to spend the bulk of your start-up capital.

How Much Does It Cost to Start a Radio Station in the United States?

These are the key expenses you are expected to make when starting a medium scale but standard radio station in the United States of America;

  • The total fee for registering the business in the United States of America – $750.
  • The amount required for obtaining licenses (frequency license) and permits as well as accounting services (software, P.O.S machines and other software) – $3,300.
  • Marketing promotion expenses for the grand opening of the radio station in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The cost for hiring business consultant (including writing business plan) – $2,500.
  • The cost for insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
  • The cost for leasing a standard facility for the radio station and administrative office – $150,000
  • The cost for remodeling the facility and construction of a radio station – $20,000.
  • Other start-up expenses including stationery ($500), phone and utility deposits ($2,500).
  • The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
  • The cost for start-up inventory (CDs supply, notice board, printing papers, printing ink/cartridges, pen and stencil et al) – $2,500
  • The cost for cash register, security, ventilation, signage – $3,750
  • The cost of transmission and studio equipment (FM Radio Transmitter, Antenna, Coaxial Cable, Power Supply, Audio Equipment and Accessories, Computers, Receiver, Transmission lines, Audio Processor, Connectors, Interface panel remote control, Cables, Equipment Rack, Power Protection equipment, UPS, Microphone, Silent Microphone boom arms, CD players, Mixer, Amplifiers, Monitor Speakers, Speaker Mounts, Computer automation software, Rack Mount, Power Protection Units)- $25,000
  • The cost for the purchase of furniture and gadgets (telephone, printing machines, computers, tables and chairs, book/CD shelves, cabins, standard library, photocopier, fax machine, amongst others) – $4,000.
  • The cost for building and hosting a website – $600
  • The cost for opening party – $2,000
  • Miscellaneous – $5,000

You will need an estimate of three hundred and fifty thousand dollars ($350,000) to successfully set up a medium scale but standard radio station in the United States of America. Please note that this amount includes the salaries of all the staff for the first 3 months of operation and it applies to a radio station with just one outlet and defined coverage area.

Starting a small scale but standard radio station that can only cover a limited location such as campus community in the United States of America will cost about five thousand dollars to twenty thousand dollars ($5,000 to $20,000). Please note that with this budget, you will be expected to settle for fairly used transmission and studio equipment and the radio station will be built in your home or a small office so as to enable you cut overhead cost drastically.

When it comes to starting a standard and large scale radio station with unlimited coverage area and several outlets in key regions in the United States of America, a radio station that has the intention of selling franchise, then you should look towards budgeting well two million, five hundred thousand dollars ($2.5 million).

How Much Does It Cost to Start a Radio Station in the UK?

These are the key expenses you are expected to make when starting a medium scale but standard radio station in the United Kingdom;

  • In the United Kingdom, Online applications are usually registered within 24 hours and cost £12 (paid by debit or credit card or PayPal). Postal applications take 8 to 10 days and cost £40 (paid by check made out to ‘Companies House‘). There’s a same day service costing £100.
  • Legal expenses for obtaining licenses (frequency license) and permits as well as accounting services (software, P.O.S machines and other software) – £700.
  • Marketing promotion expenses for the grand opening of the radio station in the amount of £3,500 and as well as flyer printing (2,000 flyers at £0.04 per copy) for the total amount of £3,580.
  • The cost for hiring business consultant (including writing business plan) – £2,500.
  • The cost for insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – £2,400.
  • The cost for leasing a standard facility for the radio station and administrative office – £135,000.
  • The cost for remodeling the facility and construction of a radio station – £18,500.
  • Other start-up expenses including stationery (£300), phone and utility deposits (£1,500).
  • Operational cost for the first 3 months (salaries of employees, payments of bills et al) – £60,000
  • The cost for start-up inventory (printing papers, printing ink/cartridges, pen and stencil et al) – £2,000
  • The cost for cash register, security, ventilation, signage – £2,500
  • The cost of purchase and installation of CCTVs: £4,500
  • The cost of transmission and studio equipment (FM Radio Transmitter, Antenna, Coaxial Cable, Power Supply, Audio Equipment and Accessories, Computers, Receiver, Transmission lines, Audio Processor, Connectors, Interface panel remote control, Cables, Equipment Rack, Power Protection equipment, UPS, Microphone, Silent Microphone boom arms, CD players, Mixer, Amplifiers, Monitor Speakers, Speaker Mounts, Computer automation software, Rack Mount, Power Protection Units) – £23,000
  • The cost for the purchase of furniture and gadgets (Telephone, printing machines, computers, tables and chairs, book/CD shelves, cabins, standard library, photocopier, and fax machine, amongst others) – £2,500.
  • The cost for building and hosting a website – £600
  • The cost for opening party – £2,000
  • Miscellaneous – £5,000

You will need an estimate of three hundred and twenty thousand Pounds Sterling (£320,000) to successfully set up a medium scale but standard radio station in the United Kingdom. Please note that this amount includes the salaries of all the staff for the first 3 months of operation and it applies to a radio station with just one outlet and defined coverage area.

Starting a small scale but standard radio station that can only cover a limited location such as; campus community in the United Kingdom will cost about four thousand to eighteen thousand seven hundred Pounds Sterling (£4,000 to £18,700). Please note that with this budget, you will be expected to settle for fairly used transmission and studio equipment and the radio station will be built in your home or a small office so as to enable you cut cost and overhead drastically.

When it comes to starting a standard and large scale radio station with unlimited coverage area and several outlets in key regions in the United Kingdom, a radio station that has the intention of selling franchise, then you should look towards budgeting well over two million, two hundred thousand Pounds Sterling (£2.2 million).

How Much Does It Cost to Start a Radio Station in Australia?

These are the key expenses you are expected to make when starting a medium scale but standard radio station in Canada;

  • For federal incorporation of business in Canada, the cost to incorporate is $200 if filed online through Corporations Canada’s online Filing Centre ($250 if filed through other means).
  • The amount required for obtaining licenses (frequency license) and permits as well as accounting services (software, P.O.S machines and other software) – $3,300.
  • Marketing promotion expenses for the grand opening of the radio station in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The cost for hiring business consultant (including writing business plan) – $2,500.
  • The cost for insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
  • The cost for leasing a standard facility for the radio station and administrative office – $150,000
  • The cost for remodeling the facility and construction of a radio station – $20,000.
  • Other start-up expenses including stationery ($500), phone and utility deposits ($2,500).
  • The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000.
  • The cost for start-up inventory (CDs supply, notice board, printing papers, printing ink/cartridges, pen and stencil et al) – $2,500.
  • The cost for cash register, security, ventilation, signage – $3,750
  • The cost of transmission and studio equipment (FM Radio Transmitter, Antenna, Coaxial Cable, Power Supply, Audio Equipment and Accessories, Computers, Receiver, Transmission lines, Audio Processor, Connectors, Interface panel remote control, Cables, Equipment Rack, Power Protection equipment, UPS, Microphone, Silent Microphone boom arms, CD players, Mixer, Amplifiers, Monitor Speakers, Speaker Mounts, Computer automation software, Rack Mount, Power Protection Units) – $25,000
  • The cost for the purchase of furniture and gadgets (Telephone, printing machines, computers, tables and chairs, book/CD shelves, cabins, standard library, photocopier, fax machine, amongst others) – $4,000.
  • The cost for building and hosting a website – $600
  • The cost for opening party – $2,000
  • Miscellaneous – $5,000

You will need an estimated cost of three hundred and fifty thousand dollars ($350,000CAD) to successfully set up a medium scale but standard radio station in Canada. Please note that this amount includes the salaries of all the staff for the first 3 months of operation and it applies to a radio station with just one outlet and defined coverage area.

Starting a small  scale but standard radio station that can only cover a limited location such as campus community in Canada will cost about five thousand dollars to twenty thousand dollars ($5,000CAD to $20,000CAD). Please note that with this budget, you will be expected to settle for fairly used transmission and studio equipment and the radio station will be built in your home or a small office so as to enable you cut cost and overhead drastically.

When it comes to starting a standard and large scale radio station with unlimited coverage area and several outlets in key regions in Canada, a radio station that has the intention of selling franchise, then you should look towards budgeting well two million five hundred thousand dollars ($2.5 millionCAD).

How Much Does It Cost to Start a Radio Station in Australia?

These are the key expenses you are expected to make when starting a medium scale but standard radio station in Australia;

  • In Australia, the fees to register your business name with ASIC include: $34 for 1 year. $80 for 3 years.
  • The amount required for obtaining licenses (frequency license) and permits as well as accounting services (software, P.O.S machines and other software) – $3,300.
  • Marketing promotion expenses for the grand opening of the radio station in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The cost for hiring business consultant (including writing business plan) – $2,500.
  • The cost for insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
  • The cost for leasing a standard facility for the radio station and administrative office – $150,000
  • The cost for remodeling the facility and construction of a radio station – $20,000.
  • Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).
  • The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000.
  • The cost for start-up inventory (CDs supply, notice board, printing papers, printing ink/cartridges, pen and stencil et al) – $2,500.
  • The cost for cash register, security, ventilation, signage – $3,750.
  • The cost of transmission and studio equipment (FM Radio Transmitter, Antenna, Coaxial Cable, Power Supply, Audio Equipment and Accessories, Computers, Receiver, Transmission lines, Audio Processor, Connectors, Interface panel remote control, Cables, Equipment Rack, Power Protection equipment, UPS, Microphone, Silent Microphone boom arms, CD players, Mixer, Amplifiers, Monitor Speakers, Speaker Mounts, Computer automation software, Rack Mount, Power Protection Units) – $25,000
  • The cost for the purchase of furniture and gadgets (telephone, printing machines, computers, tables and chairs, book / CD shelves, cabins, standard library, photocopier, fax machine, amongst others) – $4,000.
  • The cost for building and hosting a website – $600
  • The cost for opening party – $2,000
  • Miscellaneous – $5,000

You will need an estimate of three hundred and fifty thousand dollars (AUD$350,000) to successfully set up a medium scale but standard radio station in Australia. Please note that this amount includes the salaries of all the staff for the first 3 months of operation and it applies to a radio station with just one outlet and defined coverage area.

Starting a small scale but standard radio station that can only cover a limited location such as campus community in Australia will cost about five thousand dollars to twenty thousand dollars (AUD$5,000 to AUD$20,000). Please note that with this budget, you will be expected to settle for fairly used transmission and studio equipment and the radio station will be built in your home or a small office so as to enable you cut cost and overhead drastically.

When it comes to starting a standard and large scale radio station with unlimited coverage area and several outlets in key regions in Australia, a radio station that has the intention of selling franchise, then you should look towards budgeting well over two million, five hundred thousand dollars (AUD$2.5 million).

Estimating Start-Up Cost for Radio Station Based on the following factors;

  • Staff/Manpower

When it comes to starting a standard radio station on a large scale, you would need the services of the following professionals;

  • Chief Executive Office
  • Human Resources and Admin Manager
  • Accounting Officer
  • Librarian
  • Radio Station Manager
  • Anchor persons (one or two people can run each shift; morning, afternoon, evening and night shift).
  • Sales and marketing executive
  • Sound engineer cum maintenance engineer.
  • Other roles can be contracted; roles like company’s lawyer (entertainment lawyer), graphic artist and brand manager.

Can a Radio Station be Bootstrapped on a Lean Budget Right from Home?

If you a looking for a small scale business that you can successfully bootstrap on a lean budget right from your home, then you should consider starting a radio station. One good thing about a radio station is that you can successfully run the business from your home especially if you choose to operate on a small scale and if you have a facility that can accommodate the transmission and studio equipment.

As a matter of fact, you can start a radio station with as low as twenty thousand dollars or even less depending on how small you want the business to be. All you need to do is to register the business, purchase the basic needed frequency transmitter and studio gadgets (fairly used), print your business card and promote your radio station.

The challenge here is that you must be ready to take on more than half of the available roles in the business. You should be able to serve as the radio station manager, accountant, human resource and admin officer, sales and marketing officer, sound engineer et al.

How Much Does It Cost to Buy a Radio Station Franchise?

In the United States of America, the Average Cost of Purchasing a Radio Station Franchise is $15,000. Examples of 3 Well – Known Radio Station Franchising Companies in the United States of America are;

  • KRXO-FM The Franchise 107.7 Oklahoma City, 107.9 Tulsa, 1560 AM
  • 1560 kHz, AM – Del City, United States
  • Radio World

In the United Kingdom, the Average Cost of Purchasing a Radio Station Franchise is £10,000. Examples of 3 Well – Known Radio Station Franchising Companies in the United Kingdom are;

  • Global Radio United Kingdom
  • Virgin Radio United Kingdom
  • Global Radio

In Canada, the Average Cost of Purchasing a Radio Station Franchise is $18,000 (Canadian Dollar). Examples of 3 Well – Known Radio Station Franchising Companies in Canada are;

  • Virgin Radio – Bell Media

In Australia, the Average Cost of Purchasing a Radio Station Franchise is AUD$18,000. Examples of 3 Well – Known Radio Station Franchising Companies in Australia are;

  • BIZpaye Franchise
  • Virgin Radio
  • Global Radio
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