The music industry is always changing rapidly. Therefore, the need for a new record label that is fresh and unique will always exist. Searching for new artists, recording new albums, planning promotional tours, is one of the daily life of record labels. If you are building your own record label, then this article would be perfect for you to read further.
Step
Part 1 of 3: Planning Your Business
Step 1. Define your business
To be an effective business, you must determine the goals and segmentation of the music genre you are aiming for. If you want to focus on making a lot of money right away, maybe you should move into a popular genre. Although sometimes you can also focus on certain genres that suit your own taste, your focus and approach will be much different.
Step 2. Write Your Business Plan
This is fundamental in building a new business. How you will find new artists, promote your business, how you will fight and compete with your competitors, and how about funding and profit planning of your business. These are the things you need to include in your business plan.
- If you personally already have sufficient funding, you certainly don't need an investor. However, if you plan to attract investors, of course, your business plan will be the main assessment of investors when deciding whether or not they will fund your business.
- If you need financial assistance from investors, having a business plan that shows that you know the long-term risks and benefits of your business will certainly be of added value to investors before making their decision about funding your business.
Step 3. You need to be very detailed about the costs involved in relation to your business
This includes small costs such as buying stationery to electricity costs when recording and producing your album. The following are some of the costs you should pay attention to:
- Administration fees: rent, utility bills, taxes, licenses you should know from the start. Don't forget also costs such as telephone costs, internet, paper, computers, business cards, and other office equipment. You also need a website, which means you also need someone to monitor and maintain it. This fee can be weekly, monthly, or even yearly. These costs may seem overwhelming in your first years. But over time, these costs will probably only be a small part of your total finances.
- Recording costs: as a record label, you will naturally produce a lot of music. Which of course means you have to pay attention to several recording cycles such as studio time, fees for technicians and producers (that may be you, but you also need to be paid), as well as the musicians.
- Marketing Budget: a good record will be useless without proper marketing support. To do that, you have to promote your record label through online advertisements, magazines, press conferences, as well as websites. You will also need to work with a designer to help you design your logo, packaging standards, and other design plans.
- Professional Service: when you are busy making beautiful music, you will of course also need other people to help you take care of other things such as legal matters, contracts, whether contracts with your artists or other parties. For this, you need someone who is already specialized in music. You also of course need an accountant that you can rely on and trust to help you take care of the tax department.
Step 4. Prepare a cash flow forecast
Plan your cash flow for the next few years. To plan for this, of course, requires special preparation and attention. Planning in the first year will help you determine the initial costs for operating your business. This information is certainly very useful for other things such as determining the number of bands that you will produce in the early days of your business. In addition you can also get an idea of the costs and income that you will earn.
- For example, you can based on how the condition of the band you choose. Do they have a fan base? Do they always look prime and attractive? If perhaps you're interested in producing an entirely new band, you'll definitely have to spend more on promotion.
- When you start to increase the number of bands for you to produce, of course your potential profits will increase. In the next few years, you have to plan about how many bands or musicians you will produce. At that time, your predictions might be a little tricky because a good band will make promoting your other bands easier. On the other hand, a band that is not so good may be a source of spending that may be a hassle for you.
Step 5. Form your team
Unless you're very talented in sales, marketing, music, legal, and anything else, you'll need a team to help you out. The following are some of the key skills that will help you succeed:
- Marketing and sales: someone who will help promote your label, really understands the music industry, and has great relationships with many artists, promoters, and other important parties. One of their responsibilities may be finding new artists and of course promoting them. The better the person performs, the more successful your business will become.
- Production. Of course you need someone who really understands the production and recording cycle, someone who can help with the mixing process, the recording process, and maybe even a producer as well.
- Contracts are very helpful. To reduce the costs you incur, especially in the early days, hiring staff on a contract basis or based on specific projects and jobs is the right choice. You can try in some areas like design, accounting and other things that we don't always need every day.
Part 2 of 3: Execute Your Plan
Step 1. Formulate Your Business
Determine the corporate status of your record label, which will be very useful in the long run. You have several options, which may have different names in different countries, but function the same:
- Personal Effort. This is a business where you do it yourself. This type is easy to start, easy to stop. You may be able to ask others for help and advice, but in the end, you're the one doing it yourself. This includes benefits and costs. This model offers little benefit to investors. If you leave debt, the debt collectors will come straight to you. If you're planning to turn your label into a serious business, this might not be the right choice.
- Limited Liability Company (CV). CV is perfect for small-scale businesses. You can add to your staff as your business starts to grow. In addition, CV also offers simple and flexible control over finances, legal issues, and taxes. However, if you are planning to seek international investors, CV may not be a good choice.
- Limited Liability Company (PT). If you are planning to build a big business and are looking for investors and like a formal structure, this model is the right choice. With the use of PT, your personal property will be protected from business losses. You can share shares or other investment instruments. There are several rules that you must comply with in this model such as taxes, fees, and other reports. If you are the type who doesn't like things that are too formal, maybe this model is not for you.
Step 2. Find new talent
Once all the plans are in place, the business is up and running, the permits are in place, and the funds are in place, now is the time to find musicians and artists for your label.
Step 3. Go out and listen to music live, but listen with a critical ear
See how the audience reacts to the musician. If they really enjoy the music, maybe you are finding a potential star there.
- Approach the band and talk to them. Find out who they are, when they started playing together, if they've had an album, and what their plans are for the future.
- The important thing, make sure they are not tied to another record label. You certainly can't sign a contract with a band that's already tied to another record label.
Step 4. Meet the press
Of course, the city where you live will have a lot of press and journalists who can help you get to know you better, but they need to get to know you first. Find information about them and make an appointment with them. Invite them to eat or meet and always keep in touch with them.
Step 5. Go to the engineering section
Find and visit your local music studios. Some may be equipped with very good facilities and the rest may only be equipped with standard facilities. The most important thing before deciding which studio you will use is the quality of the music that will be heard from their recordings.
- Get to know your technicians and talk to them. Make sure their vision and mission as well as their music preferences match yours. This is very important. For example, if you really like Pop music and your technician really hates pop music, then this is not really good for you. Ask them to play their favorite music and listen carefully.
- For clarity, ask them for a CD or their creation so you can listen to it at home. Although very rare, sometimes a piece of music that sounds very good in the studio can sound mediocre when heard outside the studio.
Step 6. Visit a music store
Big or small, they still sell music. When you get to know them, they may be happy to sell your work. When you've started a business, don't underestimate small shops.
Step 7. Get acquainted with the agents
Agents are those who have many connections in the music industry. Bands that already have an agent can be considered as having passed a major test because they are professional enough to hire an agent.
If your service is satisfactory for agents and promoters, the next time one of their bands says “Hey, I think our band is ready to record a new album”, they will say “I know the right person to call!”
Part 3 of 3: Maintaining Success
Step 1. Introduce your brand
Now that the day-to-day business issues have stabilized, it's time to start introducing your brand more. Make a logo and make sure that logo and special appearance is always visible on all goods and media related to your label such as your website and merchandise. Then, always produce bands that match the characteristics of your label.
Check out other successful labels like Sub Pop and Matador Records for references on brand management
Step 2. Market your labels creatively
In the last ten years, the internet has completely changed how music is bought, heard, and distributed. If you're still relying on the old ways of selling CDs and radio shows, you're going to have a hard time. Try new things like using Youtube to maintain your label's success.
Try unique promotions such as making a t-shirt with a download code image. Goner Records, a label based in Memphis, once offered free 7-inch pieces of music to those who had “Goner” tattoos and showed them in stores
Step 3. Build your fan base
Sub Pop started by focusing on Grunge bands in the Pacific Northwest area, but now they have started to produce more general music such as, Iron & Wine and Fleet Foxes. With this development, their market share is getting bigger. Of course, you can consider this in developing your business.
In the early 90's, big labels were more willing to take risks to take on bands that were not yet well known. Sonic Youth, an indie band from New York, is a vivid example where they were offered a big contract by Geffen. The contract became one of the contracts that received a good reception from the executives and fans. If your label does make a lot of money, try speculating occasionally with new bands
Tips
- Never say no to your aspiring artist. Keep in touch with them even though you may not be able to work with them right now!
- Do not ever give up. Like any business, starting your own record label requires constant hard work and effort. If you're working hard on it, always on the lookout for new artists, and are promoting your label, you're on the right track!
- Don't get caught up in the competition. Always stay ahead of your competitors in this music industry.
