July 8, 2009 How to Write a Music Business Plan
I could start a whole new blog around the topic of preparing a business plan, but, I think it is important to touch upon a few main points now. Writing business plans are my specialty, so I plan to revisit this topic in more detail, sometime in the near future.
The first two posts in my series on “How to Release an Independent Record”, spoke to the massive amounts of research necessary to prepare for what lies ahead. The logical next step is to put a basic plan on paper to make sense of all you have recently discovered.
Writing a business plan may seem daunting at first, but it doesn’t have to be. Even if you limit your plan to both sides of a bar napkin, it is better than not having a plan at all. The purpose is to map out your release from start to finish, so you can avoid any surprises along the way. No matter how much you plan, there will be unexpected events. Writing a plan before you release your record will only minimize these experiences.
In general your plan’s outline should include the following: Company Summary, Products and Services, Market Analysis, Marketing Programs, Management Summary and a Financial Plan. Below is an overview of each of these topics.
Company Summary- This section should discuss how your company is formed, whether it’s a Sole Proprietorship, Partnership, C or S Corp or an LLC. The idea is to outline who is involved in your release and how each of you will share in the profits.
Products and Services- Briefly describe what you plan to sell. In this climate certain things are close to impossible, but I’m sure your market research has taught you that. Typical products and services should include digital downloads, merchandise, live shows, song licensing and physical CD’s.
Marketing Analysis- As painful as it may seem, it will serve you well to put down on paper, the troubled state of the music industry. Be as frank as possible. Explain that the only way to survive this music biz recession is to come up with something new and improved. Your ultimate challenge is to turn this negative into a positive. Hopefully your band is just the ones to prove it.
Marketing Programs- Take your time on this section, because these programs will make or break your release. Marketing is the act of raising awareness. If no one is aware, no one will buy. That being said, the majority of your total budget should be spent on a variety of marketing tactics that make you more visible to radio, press, live venues, retail outlets and on the internet.
Management Summary- This section is a perfect place to delegate responsibility to everyone on your team. You may or may not have a personal or business manager and that is OK. Instead you should focus on your fellow band members, web designer, publicist and other parts of your team. It’s important to map out who does what before you launch your plan. It will be much easier to know who is responsible for what before the shit hits the fan.
Financial Plan- Here is where you put your money where your mouth is. Once you determine what you want to sell, you need to allocate money to marketing these products. You will also need to flesh out ways in which you will obtain this money. Will you put in money from your 9-5 or ask a family friend or close relative?
Once you have put all of these ideas on paper, you will feel much more confident in what you can or cannot achieve with your release. My next two post will discuss, “Creating Your Image” and “How To Assemble Your Team”.
Kevin Englishis a marketer and student of the arts, who blogs about the skills and strategies necessary to get the most of your musical career at http://eleetmusic.com or on Twitter @eleetmusic.
Kevin English
You can now download the free PDF, “Template for Writing a Music Business Plan”, here. In addition, I will update my blog over the next few weeks with examples of the content expected in each section.
Please feel free to add to the comments section, find me @eleetmusic or email me at eleetmusic@gmail.com with any additional questions. Thanks for reading and I look forward to hearing from you all soon!
Reader Comments (24)
It would have been a stronger article with an example/template included.
Agreed. Stay tuned for an update to this post. I'll be sure to include a business plan example or template for everyone to follow. Thanks for the feedback Justin.
Kevin,
I am a B2B marketer as well as a musician. It is amazing how many small businesses don't have or follow a business plan. They are more likely to fail. Musicians who view themselves as entrepreneurs and have a strategic plan are so much more productive and successful. You've provided quite a gift to anyone who wants to share their talents most effectively. Excellent work.
Pam Mark Hall
It's extremely important when undertaking any kind of business/strategic plan, to make all points actionable and measurable. In other words, make sure you set goals that you can actually measure and track. Not only does this help ensure that you'll actually follow through on your plans (helps to have a tangible goal), it will also give you a basis for deciding whether or not your plan is working at various stages of execution. For example, stray away from abstracts like "increase awareness"or "start commenting on blogs". Instead, be specific. Say, for example, "Find and subscribe to at least 5 music business blogs". "Get (song) placed in at least 10 podcasts with listernships of >100 subscribers." Of course, these numbers are for you and you alone. Fudging them isn't going to do any good. So if you set goals and can't reach them, determine if either your goal was unrealistic or if your implementation was flawed.
I totally agree. Musicians are entrepreneurs, but most of them don't view themselves as such which is likely what may hold many of them back. This is primarily because they are not doing the necessary entrepreneurial branding and advertising activities to get the exposure they need.
@Andrew Goodrich You make an excellent point. Without measurable goals, any plan is destined to fail.
@mlgreen8753 Branding and advertising are very important, but the perspective that a business plan gives you is more powerful than those two things alone.
Hey, this is a great detailed piece. I wrote a post a while back called 'How To Write Your Music Business Plan' here:http://www.insidermusicbusiness.com/blog/how-to-write-your-music-business-plan/
Both will work together as a great resource, I think.
-Kavit
Thanks for the kind words Kavit!
The real challenge is executing and monitoring the progress of your music business plan. Many times we get caught up in the planning phase and never get passed the first milestone. What are your thoughts?
Thanks, Kevin! This music business plan renews my ongoing strategizing! I find that the most difficult part is that I have to (at the moment) wear too many hats. There's the creative "department"... writing songs, recording, rehearsing... plus R&D. And then there's also the business sides, the marketing, networking, bookkeeping. Nudging each goal a little further in a continual cycle is the approach I'm taking, and doing it gradually as to fit realistically into my overall life responsibilities. I've been working on articulating my goals this past year. I'm going to take another pass at it with your categories/template in mind. www.kilissa.com.
Very true Kilissa. Thats what makes you the well rounded individual you are...don't you think? Time management may be the real issue. Keep nudging. I'm with you all the way!
I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.
Patricia
http://dataentryjob-s.com
This is great! My husband manages a group who was just presented the opportunity to get a BIG investor so they can really get going with a cd, publicity...but they 1st need to present a business plan and pro forma before the money comes :) Any other sugesstions/advice? Love this site!
Jen
Hi Jen. I'm glad you found this post useful. I suggest showing some success early on in your plan (i.e. sales, spins, shows, press). Investors are more likely to spend money on something that they feel is already working to some degree. Also, its a good rule of thumb to ask for 3 times more than what you think you will need. Even the most well thought out plan won't account for the unexpected. You don't want to get half way down the road and find yourself having to ask for more cash. If you reach a sticking point in the business planning process, feel free to give me a call (347) 688-5383. Best of luck to you and your husband's band.
can a example template not be posted?
Hi b2b.Thanks for your inquiry. I've started by providing sample Financial Statements here . I also plan to release samples on the Products and Services section, and a sample Marketing Plan in the weeks to come. A full downloadable music business plan sample will we available as an eBook at the beginning of the year. If you have any questions before hand, please feel free to call me directly at 347.688.5383.
Best,
Kevin
Eleet Music
I agree on this one. Business plan is very essential for start-up companies. This info will be a great contribution.
Writing the marketing analysis proved to be the most daunting task for me. That really took almost everything for me.
music video making software
Thank you, I have just downloaded, I will share this to all my musician friends. I haven't read it yet, gotta go for a gig, but this would be a great article to read for my new year music career
Respect
Cha
I got plenty of investors waiting and free business plan template from
http://www.unitedbizbooks.com/business_pro.php . There are many ways to start but be prepared.Best Wishes
In the case of an unsigned band, developing and following a business plan should also help build a sizable fan base, always a big plus with music labels when seeking to get a record deal.
Thank you for sharing the template,
Joe Brighter
Get your band signed!
Thank you very much, I am assisting a friend on a project. I take any job very serious so this information is very helpful. Do you coach as well?
Thank you very much for taking the time to write this and to make it a free guide. It has been more helpful than you can imagine, and I am grateful.
This article was helpful! I would have loved to see an example of the Market Analysis and Management Summary to get an idea of the layout. This let me know that I am on the right track though.
Hi, i am unable to download the template pls