Building a Business Plan for Your Record Label Company
Starting a record label company? There are challenges and rewards ahead! The music industry is like no other on earth and it comes with unique perspectives, most of them learned during the process.
However, there are some key elements that can be shared; we offer them to you in the following words of professional advice.
Key Element 1: Create your record label name.
You may have already completed this essential component of your company; however, if you have not, this is a great time to establish it. Your company name should identify your company and indicate in some way the artists who will work under your record label. For example, if your record company has a focus on hip hop music, work that brand into your record label name.
And, because your record label name will be your brand, positioned on apparel, documents, listings and everything else, consider the visual appeal of the record label name and ensure you have an appealing design created for it.
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Key Element 2: Prepare the Basics of Your Business Plan.
Every business needs a completed business plan. It is the essence of why you’ve started the company, ways in which it will grow, and the future of its success. To get started, use this record label business plan as a template for the components of the plan, which include essentials such as, your mission and objectives, target audience demographic, operations plans, financial projections, and marketing strategies. The following will outline how to define each of these components.
Key Element 3: Compose Your Mission and Objectives
Consider the “why” behind your desire to start your own record label. What is it that brought you into this effort of a lifetime? Are you concerned about politics, social justice, or perhaps loving a certain musical vibe? Any or all of these elements may be involved; put them into a few sentences and add to your business plan.
Key Element 4: Define the Target Audience of Your Company
After choosing your musical styles for your record label, you’ll want to define who the audience is for this style of music. Is your target audience the young adult segment who appreciate pop culture or the 25 to 35 year-old who may be gamers loving rock music? Try to detail every aspect of those who you believe will be attracted to your record label because those are potential customers who will be targeted with your marketing strategies.
Key Element 5: Bring Structure to Your Record Label.
From the starting gate, you’ll want to consider the framework for the company and how you’d like it to work internally. For example, you’ll want to decide which type of legal entity will be best for your company. You’ll also want to consider how to start a record label before signing artists or record contracts.
While the initial plans may take time to develop, you’ll want to refer to them frequently as your record label company starts up and begins to grow.
Key Element 6: Choose the Distributor for Your Record Label.
There are several choices to be made when selecting a distributor, simply because there are very well-known and highly-distributed providers, while others are just starting or carry only a few artists. In the beginning, you’ll want to choose a very well-known distributor, despite the fact that you’ll earn lower distribution percentages.
The marketing and distribution efforts will be more sophisticated, better developed, and more widely-distributed with an established distributor and the bulk of the effort will, therefore, be taken off your desk, freeing you to sign additional artists.
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Key Element 7: Set Up Financial Projections.
A professional business plan includes sufficient financial projections to clearly communicate the financial status and expectations of the company. You’ll want to include both expected income sources, such as sales revenue, and expenses associated with launching or operating your business.
These projections will allow potential investors or lenders to review and clearly understand where your company stands currently, as where it could go in the future. When calculating the financial needs of your company, include every expense related to the start up, which could be the cost of marketing, record studio time, distribution royalties and other investments.
There are several key elements found within a purposeful and complete business plan. When you’ve finalized the components of the business plan, you’ll want to refer to it regularly to make informed decisions about the path of your record label. With your business plan in hand, your record label will be positioned for long-term growth and success.