If you are considering starting your own record label company, you are preparing for an exciting challenge ahead. The music industry is like no other on earth and it comes with its own set of rules, regulations and rights, most of them invented by undefined individuals. With this in mind, if you’re ready for the roller coaster ride, read on to discover the key steps to getting started with your own record label company.
Key Step 1: Create your record label name. The name of a record label is so crucial to success that it is the first key step we recommend in starting your business. The name you select must identify your company and indicate in some fashion the artists with whom you will choose to work. In short, creating the record label name is serious business; take time to reflect on the name you believe fits your goals and mission and get advice from trusted associates before finalizing the name of your record label.
Key Step 2: Place your mission and objectives into your business plan. Consider the “why” behind your desire to start your own record label. Are you concerned about political or sociological issues? Do you have a goal in mind that is tied to your record label? Be specific about the reasons behind starting the record label and be prepared to include your mission and your objectives in your business plan. If you do not yet have a business plan, use this comprehensive business plan for a record label to efficiently place each element needed into your final document. In addition to including your mission and objectives in your business plan, be prepared to include them in business presentations, industry interviews and throughout social media platforms.
Key Step 3: Define the audience for your record label. To define your audience, you’ll want to first specify the type of music played by the artists you plan to sign. If the artists are within one genre, your target audience will be a specific musical genre, as well. If the artists you sign are within more than one genre, consider the listeners of each style of music and create a “model” listener for each. This allows you to place demographics on the age, fashion styles, trend followed, and other segmented characteristics of the listeners of your record label.
Key Step 4: Bring structure and strategy to your record label. In every business process of your record label, consider the structure and strategy of your company. For example, you’ll want to decide what legal structure your record label should hold, whether an LLC, partnership, or corporation. Also, consider the general strategy of your record label before signing artists or record contracts; do potential partners align with your goals? If you do not have a strategy in place, use this record label strategy document as the backbone of your strategic plan.
Key Step 5: Sign artists. With the prior steps completed, now is the time to sign the artists you want for your record label. Search Spotify for new music artists or use a musician friend to be your first client, however, don’t settle for music that doesn’t align with your mission and objectives. Use an entertainment attorney to assist in drawing up the contract.
Key Step 6: Sign recording contracts. This is an important step for both you and the artists you’ve signed. Use an entertainment attorney to assist with signing a recording contract and ask for a meeting with both the artist and the attorney to go over, in detail, every aspect of the contract. Ensure everyone is clear about the expectations of all parties with no unexpected conflicts in the future.
Key Step 7: Pay royalties on time, every time. Your reputation will become well-known throughout the record label industry as your company becomes successful. You’ll want a stellar reputation as someone who is consistent in payments to artists. Building trust in the entertainment industry is not always easy; maintain a solid ethical grid to hold the trust of the music industry professionals.
Key Step 8: Choose a well-known distributor and record manufacturer. Although it will return a lower rate of profit to you, obtain a well-known distributor and record manufacturer for the music of your artists. Primary distributors own most of the industry and make recommendations based on their in-house opinions; count it as a privilege if you are able to contract with a well-known distributor. Your record manufacturer should also be well-known and trustworthy, as supply-chain providers have been hit with shortages in recent years. Stay in close contact with your manufacturer during the entire process.
Following each of these key steps will bring conformity and structure to your company and set it up for success and long-term growth in the years to come.