Most of us probably do not have a clue or the slightest idea why someone would want to make their own record label, is that not just more stress and more hard work on our shoulders? Well, if you only look at the most basic format, then yes, but we will show you why that is not entirely true!
Here are some of the benefits…
Benefits & Considerations for why this is a good decision!
You’ll lack the budget and the control of a big name major record label but you can give both yourself and other independent artists a chance to get started and make a name for themselves, and that is just one of the many reasons you want to start considering this option.
Another great reason is building a bigger and wider network, you will have to record other musicians to start earning big money if you really want to maintain your label and bringing the quality further every now and then that you can invest in better equipment.
If you do well locally and regionally, and have an established presence on the Web, you will probably most get a much better contract offer with an established Record Company than you normally would have if you could get any Contract offer, also you will receive and possibly retain much of your own Production Company/Recording Company royalties.
Also one of the reasons why many musicians take this road and decide to record themselves is because they have been told that they are not “good enough” or “pretty enough” or just “too different” and this happens A LOT in today’s music business as it is, sadly in the marketing and distribution world it is easier to sell a book by its cover, rather than real art…
But you can be that change and you can also succeed as an artist and producer out there because there is a lot of people out there seeking something different or artistic,
One of the best things about running your own business is that no one will tell you anything about how you should run it and you will have total freedom and total control of what goes on.
I will not lie to you, it can be a daunting task getting everything prepared and in order to maximize these benefits and start earning sufficient money.
That is exactly what we will assist you with, and not only that! Some general rules of thumb for any home based business and setting up your very own independent record label website to make it look as professional as possible from the very beginning.
Take a notebook, a pen and write what you want to investigate further on,
Let the journey begin…
Business Plan & Structure
The first step to take is sitting down and planning this through
Whilst your record label needs to have a defined group of artists that it will try and promote and connect with, arranging the business structure is all about setting up a strong and cohesive business plan fоr thе most effective ѕtаrtuр, focus оn a раrtісulаr genre tо buіld уоur reputation. This fосuѕ wіll bе determined іn large раrt bу whаt уоu wish tо ассоmрlіѕh.
If уоur goal іѕ to make a lot оf mоnеу, thеn you’ll fосuѕ оn рорulаr music, now… if your goal is recording artists who play a Jazz-post apocalyptic Metal and you only want to focus on that particular style and want to help them popularize it and get the word out there, your aim will be much more different, of course.
Include key details such as revenue forecasts, potential competition, all potential expenses, the products being offered, long-term goals and what your monthly overheads will be to begin with.
There’s a lot to cover in a good business plan but it will help you make sure that your case is clear and defined when you inevitably have to go source financial assistance.
Your business will typically be one of three modes – sole trader, a partnership or a limited company, We strongly recommend you write that down and sit down in your computer and do some searching on how each one works, as they cover a lot of different grounds and vary in many many things.
If you’re іndереndеntlу wealthy, thеn уоu mау nоt need іnvеѕtоrѕ, аt lеаѕt fоr the monetary backing, athough for many that is not the case, if уоu need fіnаnсіаl bасkіng, hаvіng a plan that shows thаt уоu undеrѕtаnd both thе rеwаrdѕ and thе rіѕkѕ is favorable.
One way or another whether you have the money or not, уоu wіѕh tо аttrасt іnvеѕtоrѕ who саn help уоu build credibility іn уоur mаrkеt. If you reach out a huge artist and convince him to invest in your record label he will even spread the work out and work will start flowing immediately as you will pop out like a mountain in no time! But to do that you need to show him/her that you really have a structured business plan and good grounding on how it is going to progress the first year.
And how can I make such a specific plan you may ask? Let me show you the two main considerations
to engage and convince for any business to receive investment whether it is economical or for gaining professional remark and image:
Detail & Consider All Costs Associated with your Start up:
A General Business Rule: Financial Planning
The financial planning that should be considered before starting a business is something that most people are smart enough to look into, the extent of the knowledge applied leaves much to be desired and often the business owner is faced with unpleasant surprises due to the inadequate knowledge and planning of the financial aspect of the business.
Here the most reliable or professional decision is to hire an accountant for the business (in our case it could also help us administrate and plan how much we can charge and cover monthly expenses all music studios have to pay)
We were not kidding when we said daunting task! Let us take a look at some costs to consider, shall we?
This list will include everything from staples tо electricity to rесоrdіng аnd production соѕtѕ. Be vеrу thorough whеn you do thіѕ, remember that the purpose of this is also to look convincing in the eyes of any possible investor.
There are 4 Types of Costs all Studios & Labels deal with:
- Administrative соѕtѕ: Rеnt, utilities, tаxеѕ, аnd lісеnѕеѕ are rіght uр frоnt and саn bеcome very ѕіgnіfісаnt.
Also very important and overlooked, іnсludе рhоnе, іntеrnеt, рrіntеrѕ, рареr, соmрutеrѕ, buѕіnеѕѕ саrdѕ, аnd office ѕuррlіеѕ in thіѕ lіѕt. You wіll also need a website ( which we will discuss later on), as wеll аѕ ѕоmеbоdу to bоth сrеаtе аnd mаіntаіn іt. Sоmе оf thеѕе соѕtѕ will bе wееklу, mоnthlу, and ѕоmе thаt оnlу happen еvеrу year оr twо.
It may ѕееm like a lоt аt fіrѕt, but if уоu сrеаtе a fіvе-уеаr рlаn, уоu should bе аblе tо сhаrt out hоw thеѕе соѕtѕ wіll еvеntuаllу bесоmе a small реrсеntаgе of thе оvеrаll fіnаnсіаl рісturе, remember that the purpose of this is also to look convincing in the eyes of any possible investor.
- Prоfеѕѕіоnаl ѕеrvісеѕ: while you have oyur hands full mаkіng bеаutіful muѕіс, ѕоmеbоdу nееdѕ tо tаkе саrе оf wrіtіng clear and еffесtіvе lеgаl соntrасtѕ bоth for уоur talent, and fоr уоur business dеаlѕ. For that, you wіll wаnt thе services оf a qualified attorney whо ѕресіаlіzеѕ іn thе muѕіс buѕіnеѕѕ. Yоu’ll аlѕо want аn ассоuntаnt tо make ѕurе that уоu frіеndlу tаx соllесtоr dоеѕn’t соmе tо саll. Ensure they are реорlе thаt you can truѕt and rеlу оn to build a strong business relationship.
- Rесоrdіng соѕtѕ: аѕ a rесоrd lаbеl, уоu arе gоіng to be рrоduсіng a lot. Thаt mеаnѕ you nееd tо account fоr thе rесоrdіng chain, including studio tіmе, thе fееѕ for thе еngіnееr and рrоduсеr (even if that person is уоu, but уоu nееd to gеt paid tоо), mіxіng engineers, аnd studio muѕісіаnѕ.
- Marketing budget: a great rесоrdіng іѕ nоthіng untіl it’s actually in thе mаrkеt right? Tо dо thаt, you’re gоіng tо nееd tо рrоmоtе your lаbеl thrоugh оnlіnе ads, mаgаzіnе ads, рrеѕѕ releases, and уоur wеbѕіtе. Yоu will аlѕо nееd tо wоrk wіth аrtіѕtѕ аnd designers to сrеаtе уоur lоgо, packaging standards, аnd оvеrаll dеѕіgn рlаn.
Prераrе a саѕh flow fоrесаѕt:
Plаnnіng a саѕh flоw fоrесаѕt fоr one, three, аnd five уеаrѕ оut rеԛuіrеѕ ѕоmе skill, some ѕаvvу, аnd ѕоmе еduсаtеd guеѕѕwоrk.
There are companies that offer a service for helping or assisting you with a very detailed plan, however it is up to you if you want to do this by yourself or get assistance, also as we mentioned before there are accountants that dedicate specifically to music related business, but they can be pricey, but if you have the cash to pay for one, we strongly recommend it! I mean… anything to make this business grow and start on the right foot, right?
Thе fіrѕt уеаr should bе a vеrу solid рlаn: уоu will have a gооd idea оf your ѕtаrtuр costs аlrеаdу, аnd уоu wіll lіkеlу hаvе іn mіnd (аnd mаdе соntасt wіth) a fеw bаndѕ whо wіll bе thе fіrѕt on your rоѕtеr.
Using thіѕ іnfоrmаtіоn, determine hоw muсh уоu’ll bе ѕреndіng, аnd a projection аbоut hоw much these acts wіll bring іn.
- you саn base this оn hоw thе bаndѕ аrе doing сurrеntlу: Dо thеу fill a space when they play live? Thеіr music hаѕ a gооd track rесоrd, аnd wіll probably реrfоrm wеll. If уоu аlѕо hаvе bands thаt аrе brand nеw, аnd dоn’t hаvе a fаn bаѕе tо work frоm, уоu’ll hаvе tо do significantly more promotion to gеt thе wоrd out.
- Aѕ you plan for уеаrѕ thrее tо fіvе іn your fоrесаѕt, уоu wіll nееd to dеtеrmіnе hоw аnd whеn уоu wіll add mоrе tаlеnt, and how уоu wіll рrоmоtе thеm. Thіѕ іѕ whеrе prediction gets a lіttlе mоrе соmрlісаtеd: a great bаnd оn уоur rоѕtеr may make it much еаѕіеr fоr you to promote all the bаndѕ on уоur rоѕtеr. Sіmіlаrlу, a poorly-performing bаnd will bе a саѕh drаіn thаt can lead to financial ѕtrugglеѕ.
Now that we have approached how you should do prior planning to your Independent record label’s business plan, we will now approach the other side of the coin involved with legal considerations, for starting the business with everything taken care of.
General Terms for all independent business to consider:
Sole Ownership of the property and Business.- Also known as sole proprietor the owner of the said business entity does not have to pay any income tax separate from the company but does have to have proper records of income and losses shown, this is usually reflected in the income tax file returns filed.
Most modern business that only require one person for the job or have to start very small pick this choice for its minimal requirements and legal obligations.
Trading laws.- if the business transaction is going to involve the exchange of goods and services of sorts, where the public is the target audience, then the individual needs to have some knowledge about the legislation involved.
Terms Of Trading.-when there is a connection made based on the business makeup with the public and other business entities, there is a need to get the terms and conditions of the business procedures sorted out. This is very important and directly affects the trading arrangements, usually covers elements such as the payment terms, the transfer of titles due to the successful sale, the estimates for work done, failure to perform up to the contract stipulations and any other contractual related subjects.
Employment of staff.- if the business expansion require the employment of staff, there are some legal implications that should be explored. This is to ensure the individual is well covered under the law and also to ensure all labor law requirements are met.
State Laws.- It is for the best that oyu look into your state’s laws and check out if there is anything that could concern your business or you as an individual, when it comes own to legal terms it is always wise to know and investigate as much as possible as this can save us a lot of trouble, in worst scenarios, our business could end up closed, and we end up in jail, you can meet with a local lawyer to assist you in this matter or anyone who is reliable in Law-wise terms.
Specific Terms for a Record Label
A record label comes with a bunch of legal considerations, terminologies and necessities to assist aside form the prior mentioned ones, protect and back up you or the artists who work with you from any form of extortion or piracy.
Here is a handful list for you to memorize and comprehend over time, again we strongly suggest you look further into each as the small descriptions are not all there is to each one, it is only for you to just a general concept of what they imply and cover, a good way to investigate is to look into legal situations that involved all or one of these:
- Licensing.- All good record labels handle this properly. Basically licensing refers that the artist allows you to promote the product on their behalf, helping you avoid things like development costs.
- Clearance.- You need to go and speak to any artist who you might want to use a sample of their song within your track. A failure to do this can leave you in major hot water so it’s worth paying the royalties to avoid, any legal issues, as it can in worst case scenarios lead you up straight into jail.
- Agreements.- Band agreements and the like have to be set up quickly so they will ensure that everything from budgets to band names are clarified in a watertight contract.
- Trademarks.- You can’t just use trademarked goods, and you will want to make sure you trademark your own to avoid this happening to you. Always work with a legal mind to build up smart copyright notices for all of your products. This is to ensure to yourself that there are no holes for people or piracy to take advantage of.
- Handling contracts.- Artist contracts need to be clear on many aspects such as royalty rates, how many albums or singles per deal and how much you will be laying out on marketing for that person. Get a favourable copyright clause in here nice and early, too, you will need it!
- Advances.- As a producer contract holder you’ll need to arrange details on things like setting up advances for artists, recording budgets, session musicians and equipment.
- Publishing.- Publishing deals are a very tricky matter but they are needed. You’ll need to have a publishing company setup that can handle things like PRS and royalties as well as cover fees and sync income. You can outsource this to bigger names in exchange and profit a little.
- Consent.- You need to have full consent to use artwork, materials, trademarks and everything else associated with your work. Everything needs to have the OK from the right people so draw up a consent contract ASAP.
Now that we have covered most of the legal and delicate matters and gave you some perspective of how it all works together as a whole, let’s look into a little more detail of what a record label has to cover up, Distribution, Publishing and Marketing, let us speak about each one individually and cover some general aspects for each.
Distribution For Your Music
This is the main function of your business, getting your artists out there, show the world what they do and make sure people are listening to them, but of course that is not your job , you have to hire a distributor who will help you move your music from the studio into stores and you’ll need to find a distributor you can trust to do the best job possible.
Although at first, you will have to do this yourself as your studio gains recognition and a little fame talking to some distributors later on down the line, as they will be one of the main boosts for your label to keep stepping up instead of going down.
Artists & repertoire
An alternate business branch for the distribution area is the search of new talents to add up to your studio or record, some great session musicians record labels have contact with were scouted by them and then interviewed for a business relationship.
Sort out your publishing
Publishing companies handle royalties and make sure that playback of artists tunes is rewarded in the right way. They play a major role in helping you make sure that your artists are being heard and then paid the right level of income, we could even say distribution and publishing go hand by hand and without one the other can not function at its maximum potential.
As you move forward with your company it would be hurtful to not adapt correctly to the publishing world, look for a good couple of trustworthy publishers that can really do their job, as this will not only affect you it will also affect the bands that invested in your service.
Branding and marketing
Your product quality can only take you so far, people who have put a lot of time and money into branding themselves and reaped the rewards have said it and strongly recommended it to every artist out there, all the way from rappers to orchestral music composer, to heavy metal bands there is not a single famous artist who does not use branding and marketing to exploit their artwork’s income.
Branding, like in any company, is a major factor in your chances of being a genuine success here. Branding and design are a major factor of making this work and given that you are now a brand as much as anything else, you have to be prepared to adapt to this.
Some of the most influential aspects for branding and marketing are:
- Logo.- when has a logo not popped into our head when we hear a specific word or a brand? All the way from a bar of soap to a worldwide known musician or band have this effect in people thanks to a good logo, a good logo has to be catchy and authentic. It also needs to reflect your business itself. Does this showcase the very best of what you are all about?
We recommend you start looking for a good logo designer, someone who can enclose all the things you want to represent and ensures you with a professional result.
- Press.- Be ready, you will need good press kits so that anyone who devote to write an article about your business have plenty of information, images and similar aspects that they can use easily.
Make sure that press kits are succinct and don’t read like a sales brochure. Make them quick to read through and authentic for the maximum level of positive response moving forward.
- Biographies.- Who are you and who are your musicians? A question everyone will wonder, something as simple as a good biography can impulse others to stay engaged to one of the bands you are working on , or your very own work.
Have a writer, someone with the professional skill and knowledge on how to write a short, compelling, unique and expressive biography.
- Contact info.- Make a business card, a website, a social networks site, anywhere that opens accessibility for others to contact you is a benefit.
A Good Website
Nowadays what business does not have online support of some kind?
In our situation we can be rather lucky as a website is the first thing people will look for when they want to contact us, the best course of action is getting a web developer who can help you with this task, as he will take charge of many many aspects of it, from fixing errors to implementing new information on a regular basis, every time you sign a new band, or you upload new material you will need him to feature in on your website and implement it with the most professional look for it.
A website works like a logo in a way as a simple, well design and good looking website can engage people and even make them explore it thoroughly, all the aspects written above about press, biographies and contact info must be showcased in your website along with any other social networks they can sign up to, and check you out.
Let us mention another key elements that conform a good website:
- Homepage.- Your homepage should stay as simple and straightforward as possible. Use the best photos of your artists yu have in a static or slideshow header so your visitors will know they’ve come to the right place.
Use a call-to-action to bring attention to the most important thing you’d like to highlight. This could be an upcoming event, a new video, or recent album release for one of your artists.
Also if you have a Blog feature it with text and images to showcase your recent news in an eye-catching way. Update this regularly to make fans return to see what’s new, for even more up to the minute news, use a Twitter feed on one side of the page as this can help generate traffic due to the express format twitter works with.
- Artists page.– As we mentioned before, here you can showcase their biographies, add some photos and links to all websites they handle, if they are about to release a record or single showcase it at the top of the band with an attractive catch phrase like “Their new single is out, check it now here” linked with a hyperlink to the video or player they use.
- Shows.- Aside from the artists page to avoid to much visual charge and keep attention you want to add a page solely to showcase when are the bands or you playing a live show.
- Store.- The first place we all look into to buy official merchandise from our favorite bands always leads to their personal website or their label’s store website, you can agree with the bands to allow you to sell their merch for a small comission for each item sold or some labels charge a small monthly fee to the artists for selling the merch, any of the two methods is practical and a Win-Win situation.
- Submissions.- Of course when we spoke about you going out there and looking for the talent we didn’t mean it entirely, that would be tiresome!
Have a small submission page, you can ask the bands to send you a video, a recording, anything you find convincing or appealing to sing them up.
Next step is to dedicate one day with your team or some friends even (set up an ambience with many people) and ask for opinions, question them if they see a future to this band, what are they lacking and if you should work with them or not.
Of course our aim is also trying to give new opportunities to new talents or different types of music so always trust your instinct on this one, if you see yourself working with them, give it a shot.
We have covered legal terminologies, and some aspects to how to give your business some professional image let us go into detail with the final aspect of our music business conversation, Gear for your studio and record label…
Gear for your studio and record label
We will tap into the basics, stuff you should buy to start off and cover some budget-wise tips and tricks to buy more for less, we want to give you the capacity to have the best quality to offer as this is the main reason artists will want to work with you!
We have left this for the very end as it will be stuff you will buy when you are sure everything else is in order and you have accessibility to the space you have picked to start your business.
Basic and most important Gear:
- A Computer.- A good computer can get pricey when it comes to audio, the reason is that most software requires a lot of processing, your best choice is to invest for the best you can afford, do not buy a laptop, the best choice is a desk computer as it makes many thing simpler and faster, such as having two monitors in which one you see the recordings and on the other your digital mixer.
- DAW.- Digital Audio Workstation, your software for recording, usually expensive, the most common one is Pro Tools but by no means is your only choice, you can always look into the internet and try demos and see which one fits your work flow the best.
- Studio Monitors.- It is a must have, as you will want them to mix as best as possible, as they provide the most flat response they can, so you know when something sounds good in those monitors… it will sound good EVERYWHERE you play that song.
- Audio Interface.- your must have for recording instruments, microphones go through the audio interface and process the sound and places it in your DAW when recording.
Audio interfaces are like candies, they come in all colors and size but all of them with the same objective, transforming the sound into a wave digital file.
You want to look for one that has some of the next features:
- digital conversion
- DI boxes
- mic preamps
- A MIDI Controller.- There are plenty of these with so many things and aspects to offer but your best choice for general music production is a piano styled one with knobs or integrated drum pads.
It will help you give the “feel” you are looking for as they are usually sensitive to pressure strength and most software support this, you will be able to play like if it was a real keyboard/piano.
You should also buy a drum pad, just for the drums and rhythmic fills as many artists like to support their music with some electro-style fills, specially solo pop-genre artists today.
- Microphones.- So many out there to pick from so try to at least select one of each, as many artists have a preferred one and with time you will too when you discover better ways to improve your overall sound quality.
- stereo/matched pair mics
- ribbon mics
- dynamic mics
- condenser mics
- variable polar pattern mics
- Microphone Stands & Pop Filters.- Additives for your mic’s you will need where to put them! And a great set of pop filters to filter certain sounds for your recording artist, this will save up a lot of time in the mixing process and the mastering as you will have already filtered letters like “s” and breathing or hissing.
- Acoustic treatment.- As for all the pieces we have mentioned to work together from the natural recording to the mixing process we need a good set of acoustic panels:
- Bass Traps
- Acoustic Panels
Buy them all as soon as you can, as one does not work without the other, look into how other studios place them and how they work, every studio is unique and it is unique because of how it is treated, even two rooms in the same building that are treated differently can show a huge difference, if you ask the same guy to mix the same song but in those two different rooms, the result will definitely vary by a lot.
- Reflection Filters.- a great choice if you do not have the money to buy a whole set of acoustic treatment panels is using Reflection filters to at least reduce natural noise as much as possible from your recording artist, providing you with clean sound to work with.
- Un-interruptible Power Supply.– UPS for short, if you are recording in a rainy night with a thunderstorm and you recorded the best song ever, and suddenly the light goes out…it is gone.
You want a power supply with a battery integrated that lasts at least 20 minutes, so in case your lights go out you can keep recording no matter what! Or at least have enough time to save the project until it is safe to keep working on it!
- Plugins.- Virtual plugins like a reverb, a multi band compressor , a normal compressor, limiters, flangers, bass boosters and blah blah blah… (there are hundreds, no kidding!) Are a must have.
Look into the most used plugins for the genre you are focusing on as there are very few out there that work for everything, I am pretty sure you will find a ton of options and some for a super accesible budget friendly price.
- Virtual Instruments.- Today many of the great instrumentation we hear even in theatrical compositions are just the result of a well programmed Virtual Instrument that can almost pair up to the real thing.
You have to make sure to buy at least two very essential VST’s to start with a good set of drums and a piano/keyboard instrument.
There are many many offers out there, pick the one that appeals to you the most and you find reliable enough.
- Monitor Management System.- We have left this option for last as it is a commodity overall, it will allow you to hear your mix through a variety of speakers or monitors you plugin to it, so that you can compare how your mix will sound in different quality speakers.
It is a commodity as a good mix sounds overall good when done properly no need to overlisten to it in so many variations unless you are working into something too specific like hyper-realistic sound simulation (used in cinema and videogames) or if a band wants to give the listener an experience with a lot of panning and headroom play, but it is a rare situation as many people listen music in a speaker rather than headphones, and most headphones do not cover all the range of sound motion that speakes do.
Many Labels and music studios nowadays start by buying used hardware from other studios because it does not necessarily mean the stuff doesn’t work anymore, maybe they are upgrading to a better microphone set, or better studio monitors and they just do not need the old ones anymore.
So it is a good decision to buy them with this method at first, but you should always petition the seller to prove you it does function properly, you want to avoid getting scammed.
Time to wrap up guys…. setting up your very own label is a lot of hard work but it can generate income from so many things, not only that! It is a great experience as an artist and will be benefitial for your artistic career.
You know perfectly how it is that a record label works and what to consider if you want to start your very own, which we hope you do, there is always space for a new face in the industry! Who knows? Maybe you are the next big producer or mixer to take a big spot in the music world.
We have covered as much ground as possible, now it is your turn to investigate further into all the technicalities and learn the business even further, as we mentioned, you can always look for assistance from professionals in each area to skyrocket your business as much as possible and have the best result possible.