By Clay Howard, SBTDC Regional Center Director and accomplished musician
A business based in music differs in many ways from other businesses, with the number one difference being that, in music, most likely the product you are selling is YOU – you ARE the business.
While the product is different, core business concepts apply to your music business. You need to have a plan that addresses your goals and sets a path to reach those goals just like any “normal business”.
The following outline and its suggested answers lean heavily towards a performing musician or songwriter, but the bold questions apply to record labels, festival planners, and anyone starting a music business.
1. What is my business?
- Are you a songwriter? A performer? A performing songwriter, a band, a support player?
2. What is my product?
- Are you producing physical products, i.e. CDs, vinyl, USB drives?
- Are you writing songs for other artists? Are you writing/recording for film placement?
- Are you a touring artist whose shows are the product?
- Are you a rhythm guitarist, bassist, drummer? Are your skills and ability your product?
- Is your music your advertisement, and you make money from tee-shirt sales at your shows?
- Are you a cover band playing weddings, clubs, corporate events? If so, the product is a 3-4 hour show?
Think about the answer, your product must be clearly defined before you can sell it to someone. *The answer to this question and the answer to the next question directly affect the potential answers to each question. In music, the customer may dictate the product, or the product may dictate the customer… this differs from other businesses a bit, due to the nature of the solutions being provided.
3. Who is my customer?
You must identify your customers and potential customers to put your music or yourself in front of the correct audience. Releasing a bluegrass album and playing a hip hop festival is a waste of time, effort, and money.
- Is your customer the club owner? Is your customer the mother of the bride planning a reception?
- Is your customer the person putting together his/her playlist on Spotify? A vinyl collector? The person leaving your show and wanting a memento?
- Who wants what you are making?
- Who are you providing a solution to? (and what is the solution for?)
- Who is your paying audience?
4. How will you reach your customer?
How will they find out about you and your product?
In many businesses, educating the customer on why they need a product becomes a pricy aspect of their marketing plan. With the advent of social media, those who are marketing music have been provided with self-aggregated groups of people with common needs, tastes and wants. Your job is therefore a bit easier, you probably already frequent these social groups, because you perform, write or release music of a certain style, based on your own tastes, which mimic those you admire.
*Remember, social media is not the only marketing method. What other ways are you planning to reach your customers? Consider every option, and if valid, outline how you will utilize each method that applies to your business. Press, radio, podcasts – consider every potential avenue.
5. How will you make money?
This is where you consider all factors relating to pay. This is the hard part, and if you are just starting, don’t panic, you will be making an educated guess.
If you are planning to record and release music, how much did it cost you to create and record your music? How much to create a physical release? Will you pay for ads? How much will you make per physical copy, per stream? Take all this into account as you price your product. How many will you sell based on the market you identified?
If you are touring, how much will you make per show? How much will each show cost you in gas, food, and lodging? Consider all logistics.
Will you enhance your income through merchandise sales? All those questions about costs of creating music and physical release are repeated here. Before you decide how much to charge for that tee-shirt, consider how much it cost. Your merchandise (merch) is a business within your business. Do you see the need for planning now?
These questions provide a very basic outline, and not in any way a comprehensive how-to, but they are the beginning questions you must answer as you embark on a music business. Each of the five questions in bold deserves a great deal of attention and the answers will be different for each person reading this. The important thing is to look at your music business as a business – strategically, with goals and plans to achieve them.
Have more questions?
The NC SBTDC is one example of the groups in your community that are helping entrepreneurs and business owners. Music is a business, and if you approach it like a business owner, your potential for success is much greater.