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Starting Your Own Music Business
by Jeffrey P. Fisher - Fisher
Creative Group - February 2001
(c) 2001, Jeffrey Fisher. All Rights Reserved. Used By Permission.
Back to The Academy
You have a better chance of starting your own music business than trying to land a job in the industry. Whether
you decide to start a label, put together a band, begin a recording studio, or any number of music industry gigs,
follow these basic steps before you take the plunge.
* Make plans for the short- and long-term. These plans should be specific with clear goals and ways to evaluate
them. One crucial aspect of planning is to determine the resources that you need such as people, things, a place
from which to work, money, and more.
* What music products and services will you sell? You should have a pretty good idea of how you will make money
from your musical endeavors. What benefits do those music products and services bring to people who buy them?
* Who is your competition and what are their strengths and weaknesses? Finding out useful information about your
competitors can be one of the most difficult tasks. It is important that you know a little about what others are
doing as it helps you in competitive bid situations. What makes you different from that competition? Direct on
the heels of the above question, you need to know (and promote) what makes you unique from others who do similar
work.
* To whom will you sell your music products and services? What specific people or businesses are candidates for
what you offer? What are their specific characteristics? This information helps you focus your promotions effectively.
Also, ask yourself how you will promote yourself? What particular promotional strategies will you employ -- letters,
advertising, publicity, sales calls, Internet, and so forth? The ONLY way to ensure your success in today's music
world is to master ruthless self-promotion. First, to find new customers and convince them to buy what you sell
and second, to keep your existing buyers and, more importantly, get them to buy again (and again). Focus your promotions
on reaching the greatest number of people who want what you sell. Determine the best way to contact them, including
by what means and when. Launch your promotions. Make sales. Use your initial success to get more business. Follow
this basic plan throughout your music business career. Because the minute you stop promoting is the minute your
sales plunge and it all goes away.
* Set up the business. Decide on the legal structure of your business. Determine your start-up costs if they apply
to you. These costs would be the initial money you would need to open the doors such as gear, furniture, professional
services, business forms, deposits, licenses, and so forth. You don't need a huge infusion of cash to get started
unless you are starting entirely from scratch. Chances are you already have some things in place and you just need
some start-up money to take care of some legal and promotional matters. Also, find out what it is going to cost
to stay in business. Often called overhead these costs might include rent, utilities, promotional expenses, professional
dues, taxes, supplies, insurance, loan payments, etc.
* Take care of the money issue. Start a business checking account. Deposit all your music income into that account.
Pay all your business related expenses using checks drawn on that same account. Alternately, use a credit card
just for the business. Use the card for business purchases only and pay it off on time from the business checking
account. Setup a basic bookkeeping system that lets you record your income and expenses in such a way that makes
tax preparation and monitoring your financial situation easier. Also, make sure you fully understand all the tax
consequences and how they affect you. You have to make regular tax payments along with the usual year-end tax preparation.
Meet with your tax adviser or accountant to make sure you handle this issue satisfactorily.
* Protect yourself. There are several types of insurance that you must have such as health insurance and property
insurance. You may elect to have life insurance, disability insurance, and liability insurance. Talk with your
insurance agent to determine what coverage is right for your particular situation.
* Attend to legal business matters. If you plan to operate your business using a name other than your legal name,
you will need to file a fictitious name statement or doing-business-as (dba) with your local government. Contact
your local municipality for the specific requirements. You may also need to secure a tax ID for your business.
In most cases, your social security number is all you need. A corporations would need its own tax ID. Also, states
with a sales tax may require a separate sales tax ID number. Contact your state's department of commerce and industry.
Find out and be sure to meet the specific regulations that pertain to operating in your town. You may need to obtain
a business license from your local municipality. Also, there may be other regulations that affect your business.
Go to your local clerk's office and ask them what you need to do to start a business from your home. And if you
have employees, make sure you know and follow all the regulations that pertain to them.
Because this list is far from complete, use it only for the basics when planning your start-up. Consult with business
professionals and/or do some additional research to make sure your music business venture is a success.
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For more FREE music industry success material, stop by
Jeffrey's Moneymaking Music Web site at
http://www.jeffreypfisher.com and subscribe to his free
Moneymaking Music Tip of the Week by sending an e-mail
message to fishercg@mcs.com with "subscribe tip" in the
subject or body.
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