Run Your Own Music Business - How to write a Music Business Plan
Blog by Music Business School under Artist Managers, Finance, Law & Music Business, Music Training & Careers
The opportunities for funding a new music business have greatly increased in the UK in the last 12 months or so. AIM has just announced it’s new Loans Initiative which will lend amounts between £1,000 and £25,000 to entrepreneurs and the PRS Music Foundation has it’s Music Abroad Funding in place. Also with the UK economy on the up-turn private investors are again looking for companies to invest in.
To attract funding for your new record label, artist management business or even to make a living as a self-releasing artist you’ll need to show potential investors that you’re organised and that you have a clear plan of how you are going to move forward. A small amount of music business training can help you get that business plan together. Here, thanks to the Music Business School, are four key areas that you need to focus on in your business plan that will help to get you running and funded.
Business Type & Income: Sole Trader, Company, or Partnership. There are a surprising number of types of business structures. The chances are you’ve not thought about which one you are going to use as you start your new music business. Also whilst it’s easy to generalise about where your income is going to come from, potential investors or funding agencies will want to know specifics. It’s also good for you to have really thought about how soon money will become to come in and from where.
Business Plan Tip No 1: Identify what your business structure is going to be and why you think that is the best way to go. Show income and expenditure estimates via a simple Income and Expenditure spreadsheet.
Management: You need to have a really clear idea about who is going to do what. If you are working with a partner, each of you might have different strengths - so best to divide the workload to play to these. If both of you hate a particular task - such as booking keeping - it might be best to farm that out to an external supplier. If it’s Artist Management you’re going into, there are a dizzying array of skills you’ll need. Have you worked out what they are and can you prove to an investor that you have these skills?
Business Plan Tip No 2: List who is going to be working for your music business and what specifically are they going to do. Keep these descriptions brief and to the point. If you have a skills gap then it can help to list external organisations that you are going to use to fill that gap. You can always say that you are going to bring a particular skill in-house at a later time as your organisation grows.This shows that you are being realistic about what you are currently capable of.
Rights Management, Licensing and Online Sales Platforms: No matter what section of the music business you are going into, you’ll need to be able to show that you’ve considered how your going to pay or collect money from these areas. Depending on the kind of business that you want to run, this might almost be the most important part of your plan.
Business Plan Tip No 3: This will of course tie-in with Tip No 1. All of the organisations including collecting societies, distributors and sync-agencies that you are going to work with should be named - if you can get covering letters from them stating that you have a deal in place these can be added to an appendix in your business plan.
Marketing: Reaching out to fans on Social Media, Booking a PR campaign to get you onto blogs and radio and even getting flyers printed are all part of your marketing, and getting it all in place takes a surprising amount of planning. Attracting attention for your artist, club night or music release is the lifeblood of any new music business and it’s surprising how a well thought out marketing plan can impress and even excite investors.
Business Plan Tip No 4: Sketch out the marketing that is planned as part of your first go-to market activities. Adding visuals of how any marketing might look can add excitement to a presentation pitch or plan. But Beware! Many plans that have relied too much on marketing and visuals at the expense of the other details we’ve talked about here have failed when scrutinised by investors or funding organisations. Marketing props should be in addition to a solid plan - not instead of it.
Music Business School’s London based MMBE course focuses on all of these essential areas plus gives you the opportunity to walk away with a developed business plan after only 4 months.
The MMBE Music Business Course Accreditation Option and Certificate gives you a further endorsement of the level of study you’ve undertaken.
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