What should I check before buying a DJ or entertainment company?

Entertainment companies sell a personality as much as a service. A wedding couple or corporate client may pick the firm because of one particular DJ or host. That makes this a purchase where the people matter more than the equipment, and where the same question keeps coming back: what remains once the current owner steps away? Look at the following areas.

Is the owner the headline act?

Ask how many events the owner performs personally and how many are run by others. Look at the website and the reviews to see whose name is on them. If clients ask for the owner, plan a handover period, and ask the seller whether a non-competition agreement will form part of the deal. Your lawyer can advise on that.

The roster and how they are engaged

List the DJs, MCs and technicians and find out whether each is an employee or a contractor. Contractors often work for other firms and can take their followings with them. Speak with the main performers if the seller agrees, and learn how their pay is arranged and whether they know about the sale.

Gear, dates and venue relationships

Inspect the speakers, mixers, lighting and vehicles, and confirm the business owns them rather than the owner or a performer. Ask for maintenance records and any equipment financing. Review the booked dates, the contracts and the deposits received. Ask which venues list the firm as a preferred vendor, since those arrangements can depend on a personal relationship. See also what to check before buying a photo booth business.

Music licensing

Ask your lawyer whether copyright or performance rights apply to recorded music played at events, and who is responsible for them. Do not assume the current arrangements are complete. Ask the seller what is in place and ask your lawyer to confirm it before closing.