Learning how to buy a radio station may not be as difficult as you think. However, there are other things to carefully consider before you lay down your hard earned cash to buy one.
How to Buy a Radio Station
Have you always dreamed of buying your own radio station so you could broadcast whatever you choose? For many teenagers, this would be a dream come true, especially if the FCC didn't exist. The reality of owning an actual radio station is really quite different. Radio stations need a lot of care and advanced planning if they are to make any profits. Let's face it; no one wants to own a radio station that isn't profitable for the owner.
Find a Broker
The first thing you need to do if you are considering buying a radio station is to find a broker. This can be done online by Googling "radio station broker" or by looking in your local yellow pages for "brokers." A radio station broker is just like any other broker, such as a real estate broker. They are in business to help owners sell their radio stations and find buyers for these stations. As with any business transaction involving a lot of money, be prepared to show that you have the financing available for this business venture. While many stations can be still purchased for under $100,000, there are just as many that sell for millions of dollars.
Don't be offended if a broker asks for your financial background; they want to know up front if the sale is feasible or not. This is very important because of the way the market is today. If you don't already have the liquid assets for the purchase, finding a lender to help you purchase a radio station is going to be very difficult. Currently, the Internet is more profitable than most radio stations are. Financing is done mainly on an up-front cash basis. If you think you can buy and flip radio stations, you haven't done your research.
Locate a Radio Station to Buy
It is not necessary for you to buy a radio station within your own city or state for that matter. It is a lot like owning a home in various parts of the world. If you own it, you are responsible for the upkeep and the taxes on the property. Aside from that, where it is located is entirely up to you. You can find radio stations for sale by visiting:
Research the Market
Knowing what the potential for the local market is key to knowing how much money a radio station is really worth. Think of it in terms of buying a car: you wouldn't buy a used car if an independent mechanic hadn't checked it out first. The same is true in buying a radio station. If there is no market for the types of shows you are interested in doing, it is better to invest your money elsewhere. The best way to find out what the market is capable of is to invest in a broadcast engineering firm to do an evaluation of the market. It will save you money in the long run and help you avoid headaches if you take over an existing radio station.
Do Your Research
It is understood that some people want to get into the radio business without knowing a whole lot about how it works. What is important to know before you do get into the business is that it runs on sales. A radio station sales department is the lifeblood of the business. If you have a poor sales department, you won't be making any money; in fact you may be bleeding money instead.
Buyers should also have a plan in place for making a radio station succeed. A business plan is very important, and your goals should reflect the changes and improvements needed, as well as a budget for running your business. Without these things in place before the sale, you may be headed for disaster.
Where to Find Help
Not sure where to start? Dave Garland, Radio Broker offers more tips and information on how to buy a radio station and run it.