Paying for a music career is just about the hardest part of keeping the whole thing going. Musicians, record labels, music managers, promoters, agents - you name it - all face a constant battle of completing their projects while paying the bills. But how you get your music business funding and what you do with the money makes a big difference. Before you start digging yourself one big old hole of debt, find what you need to know so that your money woes don't shut you down.
Know Your Sources
Where you get your money is just about the most important factor to consider. Getting a loan or an investment in your record label or other music business from a bad source can cause all kinds of problems, ranging from sky high interest rates that leave you no hope of paying off your bills in this lifetime to losing all creative control of your business - or at the very least having to consult someone who really gets on your nerves about all business decisions. Don't just take the cash and worry about it later. You have to be able to pay ALL of the prices that come with your loan/investment. Learn more:
Know the Right Approach
There are many different potential funding sources, and there is a unique approach you need to take to dealing with each one. You may be able to convince family to throw some money your way by begging and pleading, but everyone else you deal with needs to see a bit more from you. The best way to make sure you're ready for anything is to write up a complete business plan. You won't get anywhere if you can't speak knowledgeably about your project, and writing a plan will help focus your own thoughts as well. And of course, know before you approach someone for money exactly what info they will expect from you. More info:
Know How Much You Need
A very common mistake people make when they want a music business loan is that they think the amount of money they need is "as much as possible." Not true. If you're going to write a business plan, then coming up with a realistic budget will be part of the process. If you're going to skip the plan, you still need to do some research into the likely costs involved, how much you think you can make, and how long you think it will take you to make it. Doing this before you start going can put the brakes on those rather unnecessary expenses like "company cars" (indie labels with company cars - that one drives me nuts).
Know How to Spend It
On a related point, know how to spend your music business investment or loan wisely. For instance, if you want to release a record, you need to make decisions about pressing, packaging and promotion expenses. You can decide to go all digital and skip the pressing and packaging - that's money in the bank - and you can decide to do your promotion in-house. If you decide to go for a physical pressing, then your real danger zone will be packaging. Yes, cool packaging looks, well, cool - but if you're trying to stay afloat, spending money on 32 page color booklets isn't a good call. The basic rule? Be cheap. Learn more:
Summing It All Up
When you apply for a music business loan or other kind of funding, there are a few questions you should be able to answer:
- Who is your ideal funding source, and how can you approach them?
- How much money do you need to for your project?
- How can you spend the money in a way that gives your project a good shot at being a success but that keeps costs down as much as possible?