The music industry can be a tough nut to crack. Gaining exposure and a loyal following is difficult without a big record label behind you and competition is stiff on platforms like Spotify and Soundcloud.
You'll need a strategic, business-oriented mindset to distribute, market, and monetize your passion for music. A business-like approach will ensure your long-term financial security and help you make money sooner as a musician.
Starting a Small Business
Earning income from your musical talents can be deeply rewarding. However, from the moment you cash your first check, you need to start thinking of yourself as a small, growing business. This shift in mindset will help you embrace the entrepreneurial spirit and successfully navigate the basics of successful business ownership.
Avoid the most common mistakes for small businesses by outlining your operational goals, target market, financial plan, and marketing strategy before your brand starts to grow. This will help you accurately estimate your costs and ensure that you don't end up with a budget in the red. This business plan should include key details like:
- Your area(s) of interest (live performer, music instructor, sound designer, etc.)
- Your business structure (Sole Proprietorship, Partnership, LLC, etc.)
- Long-Term Marketing Strategy
- Channels of distribution (e.g. what will your point of sale look like? How will you distribute music to producers?)
- Bookkeeping procedures (which accountants will you hire? How will you store and record your invoices?)
Seek help early and often during the start-up phase. Your working capital may be limited during the first months of your musical career, but professional help can make a huge difference to your long-term viability. Join local business organizations to increase the scope of your network and try to connect with a mentor who is well-established in the music industry.
https://www.youtube.com/watch?v=TKI41vlHOwE
Kato On The Track tells how to set up your music business like a professional.
Remember to reinvest some of your profits into skill development, too. You may be able to bus out Beethoven's Sonata No. 9 on command, but what are your marketing skills like? Failing to invest in self-development will limit your long-term growth and undermine your ability to adapt to the ever-changing music market.
If you're planning on recording and producing your own music, you should invest in a soundproof home recording studio. Installing a home recording studio ensures that you can ride the waves of creative inspiration when they come and will reduce your long-term costs. A great home studio can add serious value to your property, too, as soundproofed spaces are a rarity on the market.
Growing Your Brand
Your brand is a public reflection of your skills as a musician. Without a strong brand, consumers will turn to competitors who already have a track record in the industry.
Start small and focus on building a social media presence that impresses consumers, record labels, and potential investors alike. You can post clips from the most recent performances on your social media and should invest in a few photoshoots to give your page a "professional" image.
If you're struggling to plan and produce social content, create a social media content calendar to alleviate the pressure to post. A monthly social calendar should utilize the social media rule of thirds:
- One-third of posts direct users to your point of sale
- One-third of posts should feature curated music-industry content
- One-third of posts should hinge on interacting and engaging with your followers
A rule of thirds approach will help you grow your brand at a minimal cost. As your brand starts to grow, consider investing in more paid marketing services. Hiring a professional social media account manager or a web designer can help build your brand and ensure that you continue to grow as a musician and a business person.
Financial Security
Running your own small business can give you financial freedom and personal pride. However, as your business grows, you make take on more risk than you first intended to. Working with an accountant or business manager who specializes in the music industry can help mitigate risk and secure your long-term finances. Watch the video below to learn tips on how to make your band a business.
https://www.youtube.com/watch?v=Id3klQu-sLQ
Berklee Online offers five tips for making your band a business.
You may want to register as an LLC as your business grows. The U.S. small business administration explains that LLCs “protect you from personal liability,” meaning your personal assets (like your car or home) won’t be at risk if your business fails. This makes LLCs a great choice for medium-risk enterprises in the music industry.
Minimize your risk of facing financial strains by diversifying your income streams as a musician. You may eventually want to make all of your earnings from sound design, but money-making endeavors like teaching music and composing for private commissions can be a great way to bolster your income.
Consider utilizing the subscription model as you gain more followers online. The subscription model can give you increased financial security as it provides a predictable income stream. This can be useful when budgeting, as you can rely on a steady income from your subscribers. Today, many musicians post on popular subscription-only sites like Patreon and Podia.
Conclusion
Turning your passion for music into a business opportunity can be daunting. However, with the right business structure and professional help, you can earn a great living from your pizzicatos and perfect pitch. Secure your long-term financial future by adopting a subscription model and choosing a business structure that works for you.
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