Before now, starting a record label was a difficult venture. The entry into the industry was difficult despite it being a billion dollar industry. Also, it was hard for new record labels to compete with bigger labels. All thanks to the internet and everything digital, it is now easy to launch a record label in no time. This post outlines all details involved in starting a record label from scratch.
Why You Need to Start a Record Label:
a. High Returns on Investment: The music industry is generally a billion dollar industry. Launching a record label will give you an opportunity to partake in the billion dollar industry. Also, the returns from royalties from music sales are usually high especially when your record label has several successful artists. It can also serve as a source of passive income because your music will keep brings income for years after the initial work.
b. Easy Entry: As mentioned earlier, the entry into the industry was unusually tough. But with the advent of the digital world, it is easy to start your record label in no time.
c. Be Your Boss: Also, you have the opportunity to become a business owner when you start a record label. You will not only release your songs, but you can also sign in an artist that will bring extra income to the label. That is a significant reason why most people want to start their record label, to become a boss.
How to Start a Record Label from Scratch:
Step 1: Draw up a Business Plan:
The first step to take is to draw up a business plan. What is a business plan? A business plan is a document that contains your projects and goals for a business. Most people make the mistake of starting a record label without a proper business plan. Little wonder most small record labels don’t survive the first couple of years. What are the things to include in your business plan? You have to outline every aspect of your business in your business plan. The business plan will serve as a map to take your business from idea to an established record label. Some of the information to write down in your business plan includes the type of music that is the genre, mode of distribution and room for the external artists.
Step 2: Choose a Name for Your Record Label:
The second step is to pick a name for your record label. A name gives your record label a brand. Thus, the name should reflect your industry, create a brand, portrait the type of music, short and easy to pronounce. Also, when picking a name, ensure that the name does not infringe any existing Trade Mark. The name should be available for incorporation in your start, and the domain name should be available for your business website. These are the three factors to check after you’ve picked a brand name. Your record name must check the three factors. How do you come up with good brandable names? You can start by coming up with a list of 10 names and make your choice with your friends.
Step 3: Handle the Incorporation Process:
This is an aspect you should not take for granted when starting a record label. You will do yourself good if you incorporate your record label to run as a business. The first thing to do is to choose a business structure. The business structure determines the management and how you intend to run your business. For instance, if you wish to start the record label with another person, you can choose the partnership business structure. Check this post on the types of business structures available. After you’ve picked a business structure, the next step is to draft the legal document and incorporate the business. You can get an attorney involved at this stage.
Step 4: Brand your Company:
Branding is essential for a business. Branding helps to portray how people see your business. Most fortune 500 companies you see are going strong because of their brand. Your business brand covers several aspects of your business. It includes the quality of the music you produce, the visuals of your brand and also your customer care service. You need to take some initial steps to build a brand now. For instance, you can create an eye-catching, unique logo for your business. That may involve getting a graphics design involved. Also, you need to create a website to reflect your business. Finally, create a fan page on major social media platforms.
Step 5: Sign in Artists:
Along the line, you may want to bring in artists into your record label. To become a big record label, you need to have a handful of successful artists. So, it’s time to scout for artists. There are two ways to go about this. First, you can sign in successful artists, or you can scout for talents yourself. The first option is quite an expensive option. This post will not teach you how to scout for talents. Before you bring in an artist, you need a proper contract that covers all ends and terms of the agreement. You may also include your attorney and that of your artist at this stage. Some basic things to cover in your contract are, payment structure for the artist, duration of the contract, renewal of the contracts, terms of renewal, who handles the cost of production, number of singles or albums.
Step 6: Release Songs:
As a record label owner, music is your product. Thus, you need to start releasing your music as soon as possible. It could be your tracks or that of your artists. Whichever one it is, ensure that the track is properly mixed and mastered. Remember that the quality of your tracks will either build or break your brand.
Step 7: Handle Distribution Channels:
One other thing you need to figure out is the distribution channel for your music. How do you intend to release your music to the public? There are various options available now. You can go the conventional route of selling CDs in stores around the country. The option is more expensive and time-consuming. Another option is to make use of digital distribution channels like Apple Itunes, Deezer, and Spotify.
Step 8: Promo:
Nobody will know about your tracks unless you take steps to promote the music. How do you go about promoting your music? You can advertise your music or blog on social media like Facebook, Twitter, Sound Cloud, Instagram. You can also pay social media influencers to help you promo your brand.
You also need to figure out how to collect your royalties. Most times it takes a couple of months to be able to receive royalties from these digital distribution platforms.
Tax is another important aspect of your business you have to handle. Your business structure will determine how you pay your tax. For instance, if you are running your business as an LLC, you can either opt to pay tax as a corporation or a sole proprietorship.
This is all it takes to set up a record label in no time.