Do’s And Don’ts When Establishing A Recording Company


A new recording company may experience unprecedented challenges in its attempt to curve out a niche for itself. Other companies that are already established are likely to have more trust, more clients and a major say in pricing negotiations. However, there are a couple of helpful tips that a new company can employ in order to wrestle part of the market share from rivals:


  • Be prepared- No one will come looking for you if they don’t know who you are or have never heard about you. For this reason, a newly established recording company should market itself aggressively. To begin with, it should have a website, email address and active social media accounts. Business cards should be printed and shared with prospective clients and the general music community.
  • Favorable rhetoric- Talk about the company with pride. The key thing is to highlight all the benefits you shall offer your clients in a clear persuasive manner. Avoid discussing rival companies. It demonstrates insecurity and unprofessionalism. To convince recording artists that you’re the best, you have to be knowledgeable and demonstrate unmatched expertise in your chosen genre.
  • Be flexible during price negotiations- Nothing turns clients off more than taking hard lines during negotiations. Instead be open and flexible. At this point, it may be wise to charge less compared to established labels. Price is a useful tool that can make your company gain market share first, if used wisely.
  • Leave no loose ends in contracts- The contracts you sign with recording artists should clearly articulate all major issues including sharing of profits, royalties, naming rights, patents and trademarks. Failure to deal with these issues at the onset may bring about harsh realities later on. You might find your company embroiled in court cases that might damage your reputation permanently.


  • Trying to accommodate everyone- The company should not aim at bringing everyone in the music industry on board. Rather, specify your targets and make your move at the right time. It’s also very important to concentrate on one music genre, leaving the door to expansion wide open.
  • Trying to mimic everything a competitor does- while it’s wise to borrow a few ‘good leaves’ from other companies, it’s absolutely unnecessary to try and conform to trends that are no longer relevant. Instead, try to be creative and approach the market with an open mind.
  • Lack of a clear vision- Artists will want to deal with someone who has a clear plan and vision about their careers. While trying to bring in talent, ensure that you lay down a clear plan of what you want your client to accomplish. Let them soak in your dreams. It’s the only way to convince them to join.
  • Trying to dodge established legal issues- There’s no point trying to argue with the law, especially when you’re just starting up. The law might not be favorable but it’s better to conform first and possibly raise the issue with the authorities. For instance, if you deem work permits to be too expensive, make no attempt to establish your company without one. You should do everything possible to obey the law, just like everyone else.

Establishing a strong recording company is as tricky as it is demanding. But with the right tools, advice and a determined attitude, there is no limit to what you can achieve.


Challenges Facing Recording Companies Today


The music industry has faced big changes over the last two decades. In particular, recording companies have found themselves in serious problems. This article has outlined the biggest challenges facing recording labels.


In a nutshell, piracy refers to copying or distribution of music without the consent of the recording artist or company. According to the international federation of the phonographic industry, unlicensed music services continue to undermine the industry and that 20% of people with internet connection regularly access unlicensed content. The result is loss of revenue for recording companies and artists running into billions. Attempts to get rid of the vice have largely been futile partly because of the absence of stringent internet sharing rules and a lack of co-operation between law enforcement officers in different countries. Some artists are also leaning towards condoning the vice in the hope that out of the many people who download their content, a few will buy tickets to live performances, in which case they earn more than they would by selling albums.

A diverse musical industry comprising of different genres

It’s no longer possible for a given recording artist or band to dominate the industry and make astronomical figures from sales. It’s hard for a new band to dominate the market like the beetles, for instance. The situation has been brought about by emergence of different genres that have divided the music world into segments, depending on one’s tastes and preferences. As such, it’s no longer possible for recording companies to make huge amounts of money from a given artist or band.

Album fillers

In the past, recording companies were able to make good money even from average and non performing songs, by producing an album with one or two great hits and using the other songs as filler material. Today, music compilation is so fluid such that people are doing it at home. People are resulting to cherry-picking the best tracks that will generate the highest sales. Consequently, recording companies can no longer make money from substandard tracks.

A fan base that sees music as disposable

Music lovers of the 70s and 80s would be happy to buy an album from designated stores and would look forward to growing old while still in possession of their highly valued items. Today, millennials see music as disposable. A majority are reluctant to buy official content from recording companies as they feel it’s not worth it. After all, one can download any track online and can almost guarantee availability of fresh content in a matter of days. This has resulted in a major drop in sales volumes among recording companies.

Direct selling

The social media today has enabled recording artists to engage their fans directly, without the help of a recording label. Musicians can sell products and other merchandise through social media sites or personal websites. Many artists are using this method to avoid sharing their profits with recording companies.

Music recording is no longer as lucrative as it was just a few decades ago. However, there is hope. Most of the issues undermining the industry can be dealt with. For instance, Piracy can be eliminated by greater co-operation between countries and law enforcement. Laws could be enacted that could protect the artists and recording companies from unscrupulous music dealers.


Recording Company’s Establishment: Things To Consider


Some have described it as a gold mine. To others, it’s all about passion and enjoyment. Whatever the reason, the music industry is one of the most productive in the world today, capable of generating profits large enough to curb global poverty. Perhaps you’ve witnessed an upcoming artist getting into recording deals with a certain company, and suddenly living large just a couple of months down the line. Good news is that you too can have a piece of the cake. You could establish your own label. The article describes all the major things you need to consider if you’re to make it big.

Embrace the competition

The industry is so competitive such that a new recording company could take years to find its place. Successful companies are the ones that embrace connections. When you’re deeply connected, people will respect you and want to do business with you. Sitting in studio and waiting for clients won’t work. Attend live shows and performances hosted by other companies. Get to know how they do it. Invite market players-recording artists and publishers to your events as well. It will help build your reputation and fame.

Pay attention to financials

Each and every cent spent should be accounted for. It might appear boring trying to keep the books balanced, but it actually pays. You will be able to note patterns and trends in just about every department. This way, budgeting for the future will be much easier. Keep tabs on artists’ moves, social media developments and the sales market. These matters will be very helpful when making business decisions.

Creativity is key

In a world where there are so many recording companies, a newly established one can find it hard to get by. You should think outside the box. The initial goal should be getting the right artists and professionals on board, as opposed to making immediate supernormal profit. Perhaps you could charge recording artists a lower percentage of their earnings as compared to other companies. Anybody out there would want to make more money. Embrace digital sales. You could learn something from the English rock band, Radio Head. Having fulfilled recording terms with XL records, the band decided to offer their next album online, to fans around the world but did not cap the price at any figure. The results were impressive. Not only did the band save on distributions costs, but they were actually able to make an average of $6 per album. The decision also greatly popularized the band.

Bring in quality, not quantity

Only sign up the best talent for your company. Identifying the best might not be an easy task, but it’s rewarding. You company needs to churn out a few great hits at the beginning. This sends the statement that the company means serious business and it’s bankable. The ancient trick of producing an album with a single hit and having other tracks as “fillers” is outdated and no longer pays. People can compile their own music at home, in which case your music will lose sales volume.

Avoid conflict with the law

You should ensure that the business is registered for tax purposes and has the relevant permits. Establish and adhere to contractual agreements with your artists. Have transparent mechanisms on sharing of profits. Issues like royalties, patents and trademarks should be handled professionally too.

A recording company is likely to give you an opportunity to work on something you love and one that actually pays very well. The important thing is to maintain focus and consult widely. Don’t be afraid to make big decisions, if that is what it takes to succeed. Have a plan and stick to it. There are simply no limits to what you can achieve in music.


How To Start A Music Recording Company: 15 Steps That Count


Music recording is a lucrative business that generates billions of money around the world. Starting a recording company is always a daunting task, but there is a set of standard steps that have been followed by the most successful studios around the globe. These steps maximize chances of success by mitigating risks involved.


  • Choose your music genre: For a starting company, it’s always advisable to have a narrow focus and target a particular genre of music, as opposed to attempting production of different genres. The format your music, whether physical or purely online content should also be considered. Physical products are almost always more expensive to produce and distribute, as compared to downloadable content.
  • Develop a business plan: It should give details about your financial plans, marketing strategies and the plan to follow during recruitment of talent. It should give a clear idea of your strategy towards making your company profitable.
  • Choose a name and brand look: The name of the company should ideally be catchy and unique. You could list down several names and settle on one, perhaps with assistance from friends. The company should also have a unique logo that looks professional and appealing to the eye. It’s advisable to enlist the services of a design professional.
  • Establish all the costs to be incurred: This includes everything from sound system to electricity and recording costs. All costs, including the minor ones should be detailed, as the total cumulative amount could be quite a sizeable amount. You need to make provisions for future expenses like marketing costs, distribution costs and management fees.
  • Create a strong team: It’s always advisable to surround yourself with talented people who will serve as marketers, sound technicians, graphic designers and others. It might be too overwhelming to do everything alone. Bringing in people with an eye for talent will help your company recruit the best performers who are likely to bring success to your label.
  • Make your company a formal entity: It’s important to register your company as a limited liability entity to protect your personal wealth in case the company is involved in legal tussles leading to huge fines. At this point, it’s also important to acquire a business permit. A company well grounded in legal issues sends a message of confidence and transparency to the music world.
  • Bring in the talent: To be able to recruit top talent, get out there and attend live performances of bands or individual performers. A key indicator in such performances is the reaction of the audience. Loud appreciation might be an indicator of talent and huge potential. However, use other methods to search for talent, including online platforms.
  • Sign performance contracts with artists: The fact that you’re possibly starting the next big thing, ensure that artists agree to a performance contact that specifies how everything, including methodology to be followed when sharing profits.
  • Publicize your label: This could be done by inviting the media to the recording premises, holding interviews as well as social media marketing. The aim is to introduce your new brand as one that is exciting and unique.
  • Introduce your music to stores, both physical and online: The aim is to distribute music recorded by your company as widely as possible. This is a sure way to develop awareness.
  • Build the artists’ confidence in your brand by talking to their agents: well established bands normally have agents who are tasked with identifying the best recording companies on behalf of their clients. As such, one only needs to convince the agent that the new label is the best in the market, and their clients will surely follow suit.
  • Promote your company: Come up with creative ways of selling your brand to the public. For instance, you could hold regular regional promotional tours where you get to sponsor music competitions.
  • Capitalize on Music hits: Not all the recorded music will end up topping the charts. For this reason, you should aim at maximizing promotion of top music hits recorded by your company. In other words, the target should be getting the most from every recorded hit.
  • Have an organized music catalog: Fans should find it easy to buy old albums, not just the new ones. It will help increase sales.
  • Develop a good, positive attitude when dealing with people: This will help cultivate a strong working relationship with artists and other market players.

It’s important to note that it’s possible to combine some of these steps and still achieve greatness. Whatever your strategy, make sure that you incorporate these steps in it. By doing so, you shall have put your label on a path of success.


Starting A Music Recording Company: All You Need To Know

studio starting

Music is a language we all understand, regardless of our racial or geographical background. It’s an industry that has room for all of us, whether you’re an artist, a producer or a diehard fan. There are millions of songs in the world today, categorized into different genres like Rock, hard Rock, Classical music, punk and many others. But have you ever wondered what goes in to music recording? Behind every music track that you’ve heard as you pass by the grocery store, or even listened to in the comfort of your room, there is a recording label associated with it. You might have had of successful music companies out there. I bet that you’ve had about Warner music for instance, an American recording company boasting millions of records over the years and revenues running into billions of dollars. Music recording is an established, well- paying venture. Perhaps you’ve been thinking of starting your own recording company. In this article, we have pieced together all you need to know.

Start small

The best recording companies in the world today started somewhere and a majority started with pretty simple ideas. Even before establishing your label, you need a firm idea of what you want. First, choose your genre. Being a specialist is better than trying to be a Jack of all trades! It will help you establish all the structures needed to attract the best in that genre. While choosing the genre, you should be dictated by the market’s preference. The market should be already in love with that type of music and finding top notch artists will be easy.

Make a detailed business plan

The business plan should outline your financial projections, marketing tools and every other production procedures you hope to introduce in the company. The plan will help you to identify business areas that will require more attention than others, as well as help in actual budgeting of funds. It will also help a great deal in case you have to borrow funds from financial institutions. Next, you need to acquire all recording items required including gadgets, software, CDs, online stores as well as walk-in stores that will sell your company’s music.

Legal Issues

There are a couple of requirements that apply across the board. First, one must acquire a business permit from the authorities. Next, register the business for tax purposes. It’s important to satisfy these legal conditions before commencement production, to avoid hefty court fines and the negative publicity that comes with such a process. Your label could be obliterated this way, even before it stands on its feet.

Marketing of your company

Every successful recording company must have its own marketing strategy that is competitive, unique and one that is focused on the long term. A marketing advisor with some industry experience would be very helpful in this. For instance, they could organize distribution as well as sell your company to artists already established as well as incoming ones. It’s paramount to look professional and prepared if your new company is to attract the best. They would want to deal with someone who takes their music careers seriously.

Bring in the artists

This is perhaps the most important stage of the starting process and one that has a major bearing on your company’s success. The musicians who sign up should be preferably a mix of established ones and incoming ones. To recruit the best, you could visit local clubs featuring performances by raw talents or go online. Some artists have been noticed online through websites like YouTube, after uploading their music. It’s also important not to cut out people just because they are not performing very well during the early stages. All it takes is a single hit that might well put your company in the limelight.

Starting a recording company is not always an easy task but with the right resources, perseverance and an eye for fresh talent, there are no limits to greatness. You need to take advice from those with more experience in the industry. If others have started small and made it big, why not you?


They Succeeded – You Could Too!


Have you ever considered running your own Independent Recording Company?

After all, why should the major record companies take the lion’s share of the music industry? The world of Music recording is changing rapidly and digital distribution has bought new opportunities for independent recording companies. You don’t need a fortune to start your own label and there are increasing examples of independent companies which have been successful especially in the rock/punk genre.

Start small

It is possible to start in a small way, especially if you have a band that you are passionate about. James Passmore, for example, speedily started his independent label National Anthem from his North London flat, with little previous knowledge as to how to run one. He had seen the American all girl group Haim. Knew he loved them and realized they were unsigned in the UK. He saw an opportunity and moved in quickly. He confirmed the release of their Forever EP, and then had to come up with a name for the label, find out how to get vinyl made, and learn how to put tracks on iTunes.

Marshall Teller is another independent recording group that started small. It was started in 2010 by founder Leon Diaper from the sitting room in his mum’s house. The label quickly became a well-known on the alt-rock scene, specializing in American youth culture and 90s nostalgia.

music industry

Share your expertise

It can be a lonely business however and having a like-minded partner or group can help to ease the burden, both financially and mentally. Briton Kevin Douch the head of Big Scary Monsters joined forces with Simon Morley (Blood and Biscuits)and Alex Fitzpatrick (Holy Roar) to form the increasingly successful label Pink Mist in 2010. This label has created a rebel rock alliance that covers varying shades of the “loud music” spectrum. By joining forces the individuals have been able to collate their talents and connections. Pink Mist has gone from strength to strength and has released records by many of the bands at the forefront of the British rock scene of the past decade – including Tall Ships, Gallows and Pulled Apart by Horses.

Pink Mist and other indie companies have proved their worth as well as the undisputed fact that independent recording companies can punch well above their weight  – especially by discovering new music and nurturing new talent.

How on earth do you get started?

So what does it take to start an independent recording company? It helps of course if you have an artist who you admire and believe in, but there is also the financial aspect to consider. It wouldn’t cost a huge amount to press a few hundred copies of your self-produced new release but if you are hoping to sign several artists and make an impression on the charts then it is likely to be rather more expensive.

You will probably need the services of a marketing advisor, especially one who can organize radio plugging and distribution. It is important then to have your objectives clear. Are you aiming to just release a few tunes in the hope that one of them is successful or are you aiming to develop the careers of potential chart topping acts?

There will be other overheads to consider. These will likely include payment for studio time and session musicians. You may have to consider producer’s and engineer’s fees. You may also have to pay to set up a web site, and for the artwork needed for advertising and packaging.

Of course most of your outlay will be covered if you have a successful record, as some of the above stories have illustrated. But as in any business venture, success is by no means guaranteed.There are no substitutes for hard work, enthusiasm and a little luck!


How to Start Your Own Hard Rock / Punk Music Recording Company

How to Start Your Own Hard Rock

Starting out:

Firstly, you will want to figure out your main game plan.  Do you want to start running a company that releases a few good albums and then gets swallowed by the Hollywood dust storm and forgotten about in the process? Or do you want to go big with it and give some great artists an opportunity to head to the top with your company as their backbone?

The choice is yours, but choose wisely my friend, because this endeavor is not for the faint hearted, nor is it cheap by any means.

Punk Music Recording Company

When starting a recording company, you have to either know the right people, or be able to buy services from the right people, most likely both.  These people, the ones who market rock / punk rock music, distribute it and help out in the production of it, are not going to lend or give their time away by any means. And they especially won’t even consider doing business with someone who approaches them unprepared and witless about what they do for a living.  Generally, anyone that you would be going to for help with this sort of thing would have a well established career in the music industry for a good amount of time, they are professionals, and they really don’t like to mess around with people who come off as amateurs.

Most of these people are not even going to give you a single moment of their time without you having taken the time to go through and make an extremely detailed, solid, and fail-proof business plan.  Your business plan should outline your use of finances, how you plan to utilize various marketing tools, your planned production procedures, and every other aspect that you will need to be successful in the music industry.

Once you have your help, it’s time to get down to business.  Firstly, this means you need to go get a business permit and tax registration documents before anything else gets done.  Next, you need to make a list, or a spreadsheet, of every resource that you will need to use to make it in the music industry.  This includes where you will get your recording software and gadgets, cd distributors, music marketing savants, radio stations, music news and information resources, online stores and industry trade associations.  This is only a handful of the resources you will need, and should be used as a starting point.  Obviously, if you’re heart set on a recording studio AND a record label, You’re going to need more money than if you were only starting a record label.  This means that even though you may have some funding available to you currently, You are going to need more before you will be in a position to start making a profit off your newly founded business.  Government business grants are a good option for securing funding for a business, or, if that doesn’t pan out, you can try your local bank.  If you have good credit and a business plan then your bank should be able to hook you up with a good sum of cash to make magic happen with, in the form of a business loan.  Notice I say ‘loan’, this means you will be paying a considerable amount of interest on this money (between 5% and 15 %), so if you have been looking at this new business as a part time gig, or an easy way to make quick cash, think again.  This money will need to be paid back at some point, so you need to spend it wisely.

After you have all of the anxiety inducing stuff out of the way, you can start looking for people who want to produce their music in your studio.  This can be done in all kinds of ways, you can go online and see who’s out there, you can do it by going to local clubs that feature talented artists, heck, you can even put up “ take a number” signs if you want to, to advertise your services. Just remember, if you put your money – or anyone else’s money – into this recording company, then you need to make sure the talent you are recording is able to pay your prices.  Don’t cut people deals just because they are starting out, this could put you in a bad position, one that could totally end your newly founded career.


Starting Your Own Record Company – Legal Issues


So you have an eye for talented rock or punk musicians, you have found a band or artist you believe in and you have a business plan. You have raised enough cash to take the initial steps in forming your own company.

Exciting stuff indeed, but the next considerations are somewhat more mundane and they concern getting things correct legally. It cannot be overemphasized that you must ensure that you overlook nothing that can later lead to a stumbling block to your success. In the legal department there are a significant number of points to address. Here are the main ones.

Legal Issues Contract

The Recording Contract Itself

This is the single most important element of the legal process and it articulates the obligations of both parties – you and your artist. It would include issues such as how many singles or albums you will release during the contract’s duration and the level of the royalty rate. It encompasses the marketing budget and in which markets the recordings will be released (domestically or internationally), the frequency of live performances and so on.

The issue of copyright ownership is vital and you should ensure that the contract names the copyright clause in your company’s favour. This will help to develop your company’s portfolio over time and add to its status. As an indie label you might also be advised to include an ‘override royalty’ should a major record label buy out one of your successful artists. The recording contract needs to be signed by both parties and also witnessed. Once in effect, it cannot be broken by either party without penalty.

The Recording Contract Itself

Producer Contracts

These are written agreements with producers or remixers and deal with advances, the budget for the actual recording, fees for session musicians, rental for the use of the recording studio and who pays any producer royalties.

Publishing Deals

There is a huge market for good original songs and these deals are for original songs written by your artists. They can be substantially lucrative should the song become a hit and perhaps later be recorded by other performers. The daily administration of the publishing can be undertaken on your behalf by a larger publisher who specializes in such deals. You will however have to pay them a commission if you go along this road.

Do You Have Everyone’s Consent?

Err on the side of caution here. You will need necessary permission to make full use of photographs, artwork, logos or trademarks that might be included on websites, advertisements or sleeve notes. You must also acknowledge any quotations you use. You will also need signed consent forms for any session musician you have used. These will state that they agree for their performances to be recorded.

What Is In A Name?

An amazing amount actually. You will want a memorable, snappy company name, but you must be certain that it doesn’t already exist and you need to ensure that you have the right to use it. This also applies to your band’s and individual artist’s names. You may need the services of a lawyer to make a unique trademark registration for your label.

Perseverance is the Key

Clearly there is more to starting an independent recording company than first meets the eye, and it is easy to be deterred by some of the legal red tape. It is a risky business so it is imperative that you undertake the venture from a sound business perspective and to take good advice from those in the know. You need determination, confidence in the musical abilities of your artists and a little cash. The opportunities are surely out there and nothing is insurmountable. Others have succeeded, why not you?


Guide to Your Independent Label

Guide to Your Independent Label

The first thing you must understand is that this is a business. You need more than a catchy name to slap on your label. That will definitely make people stop and take a look but if you can’t replicate what a record label supplies for its artists, they will move on. Being an independent label does not mean you don’t have to spend money on your artist. You’ll have to arrange tour booking, either through in-house or contracted booking agents. When larger labels sign an artist they’re given a developmental deal or a full on recording contract. The first develops an artist’s brand and sound but may not always result in a release. With a recording contract the artist is given an advance to record and promote. Any other financial terms can vary.

Duplication & Distribution

  • Most labels make a profit by duplicating their CDs overseas for a few cents per unit. If you’re planning on a smaller run find a duplication (burning) company that has good deals on lesser units. For a larger run a replication deal is your best option.
  • As an independent label getting your CDs into stores will not be easy. Find your local music stores and get to know the employees and managers. Putting in the work to become friends with them might make them more willing to sell your products. Any venue is a good start, even small ones.
  • Don’t depend solely on stores though. Digital distribution is your best bet. It’s inexpensive and easily shareable. Some of the most well-known sites are CDBaby, TuneCore, Barnes & Noble, and Amazon. Both Barnes & Noble and Amazon require more work from you and a larger fee than CDBaby. Whichever site you choose to sell on there’s no manufacturing or shipping overhead. Research companies to find out which has the lowest start-up cost, widest distribution, and highest percentage of profit that will return to you.



  • Social media has become a part of everyday life and can be invaluable. It can be used to offer easily accessible downloads, announce tour dates quickly, and communicate directly with the people who support your artists. To make sure you do it right, make sure the band profile accurately describes the artists and genre of music. International promotors, fanzines, management companies and brands are always on the lookout. You don’t want your hard/rock or punk band(s) looked on negatively because what potential fans saw, was not what they got.
  • Submit copies of the albums everywhere. To as many promotional sites, newspapers, and music publications as you can think of. Remember not to spam in the name of promotion. Once is enough, if you’re going to get a review. Constantly badgering someone will make the entire label look bad and adversely affect every band you’ve signed. When you do send out a copy include a “one-sheet”. This will explain your band’s basic information; the background on the album and any other information that will help the reviewer. Submitting with a personalized note for the reviewing outlet will look better than a copy and paste form letter.



The A&R (Artists & Repertoire) side of your label is responsible for talent scouting and artist development. This means that not only do you go to live shows and see who the crowd’s most interested in but your label also plays a large part in helping their growth, whether that’s making it possible for them to release the best album or helping them look and sound like a cohesive unit. Once you sign an artist you have a responsibility to them. You help them and they will help you.


Starting an Independent Label

Starting an Independent Label

Starting a label from the ground up can get pretty costly. The type of help you’ll need won’t come cheap so be clear about your objectives from the start. Decide what genre your label is going to promote and create an approach that appeals to that demographic. If you’re intention is to sign artists and make an impact on the charts then you’ll need a marketing, PR, and radio plugging specialists as well as a distributor. To make sure everyone is on the same page, have a business plan. It’s more than just a list of goals you want to reach. It’s a concreate sign to show investors the steps you plan to take to make your goal a reality. It also shows that you’re aware of the risks that come with the business. But before showing it to anyone there’s steps you need to take first.

Your Business Plan

Your Business Plan

  • It should show all costs associated with your venture; studio time, producers and engineers’ fee, session musicians, setting up a website, lawyer and accountant fees. If your label gets off the ground and does well enough, you may be able to add a label manager to take care of daily tasks.
  • It’s very important that you work out how you’ll cover personal living expenses on top of business costs for the first year. Once you figure these numbers out you’ll know just how well your artists need to do in order for you to actually turn a profit. From here you can extend your business plan from one year to three, or longer.
  • Your business plan should tell where you plan on your CDs being sold but it also doubles as a resume for everyone involved. It should have information on what positions your employees have held at other labels.

Moving Forward

Moving Forward

  • Formalize your business by setting up the appropriate business entity for your label. Once that’s done you can operate legally and protect yourself as well. You have a few different options but they may be called different things in different languages.
  • Sole proprietorship allows you to take all the profit and liability, but offers you very little protection and isn’t much of an incentive for investors.
  • A Limited Liability Corporation (LLC) is a better option because it allows you to add people to the team as you grow and relatively easy and flexible control over finances, legal, and tax issues. It’s not a good option if you plan on seeking investors or an international business.
  • If you plan on making your business a major business, are going to be seeking investors, and like a more formal structure the best option is a Corporation (You, Inc.). You also get liability protection from losses and can issue stock shares, raise investment capital, and have legal precedents to call on but there are strict rules of organization. Your accountant and attorney will be kept busy with taxes, fees, reports, and filings.

Once the paperwork is finished the next thing to do is to find the talent. Go to the local rock shows and listen with a critical ear. Pay careful attention to the audience’s reaction. If they’re drawn in from the start and cheering loudly for every song that may very well be a band you need to pay attention to. Approach the band after their performance and find out what you can. Who they are, how long they’ve been together, is their music available online, what are their plans, etc. And most importantly make sure they aren’t already signed to another label. Don’t stop there; get in contact with writers who work on the local paper’s music section. Find music blogs that are relevant to the music you want to promote. Meet the engineers that work at the local studios. Keep a good attitude when meeting with people. Word of mouth is just as important as any marketing your label does.