Although it can be exciting to form a record label business, there will be significant demands on you as a small business owner. Here are some of the
things you can expect.
Let’s break down some of the key facts you’ll need to be aware of if you want to start an independent record company:
Finding artists that can appeal to a range of fans can be tough. You’ll need to network, go and see bands, talk to audiences and
spend time on A&R (artists and repertoire) to find the right type of music.
Starting a record company can be expensive. From renting studios and hiring producers to spending on marketing and promotion,
initial and ongoing outlays may be expensive. You’ll need to keep a very close eye on finances.
Managing multiple areas will be challenging. You’ll be scheduling recording sessions, arranging to have people in the right
place at the right time, promoting music on social media and more. You’ll need to be a master of the calendar and the to-do list.
Learning as you go is par for the course. Music and creativity can sometimes mean surprises. You'll need to react well to
unexpected challenges and keep a cool head.
Identifying the music’s unique selling points is essential. Music is very personal to people, so understanding what can appeal
to a reasonable number of fans is necessary for success.
Marketing is (almost) everything. There’s a large amount of music already out there. You’ll need unique, distinct branding and
advertising to help your artists stand out from the crowd. This will help you get a competitive advantage. Think about radio play, fliers,
posters, print media, internet ads and social media.
Understanding distribution is necessary. You will want to establish how you’re going to get music to fans. Will you opt for a
digital-only strategy with downloads and streaming, or will you plan to release physical products like CDs or vinyl?
Business plans are easily overlooked by record label businesses — after all, if it’s solely creativity and music, you don’t need a business plan,
You need to define how you’re going to run your record label business, market your artists, get sales, make a profit and grow. This can only come
about by creating a watertight business plan. It will help you get your thinking in order and show your commitment to your record label business.
All businesses need a business model, which is how you will generate music sales, pay for services and make money. Think about your business model
now in order to start selling music and generating revenue from day one.
You will also need to look at financial projections for your record label business. What are your expected sales and revenues? What is your
profitability? How much money will you keep in the business to grow it? How much will you pay yourself, your artists and others?
Business plans do vary slightly, but they should all cover the following areas: