RECORD LABEL COMPANY BUSINESS PLAN SAMPLE
The global music industry is one which has been driven by talent, innovation as well as the business side of things. This has given birth to a continually evolving industry with lots of people gainfully employed and taking part in its value chain. A major contributor to this growth is the record label.
Record labels are the engine room of the music industry as they engage in the recruitment and the development of new artists, copyright enforcement, music publishing, and marketing which are its major activities among others.
However, how are record labels created? This brings us to the title of this article as we focus on showing you how to start a record label.
If you have ever wondered how they are created and would like to know, read on as we show you the necessary requirements for starting one. By the end of this article, you would have gained a critical understanding of how they run.
Step 1: Choosing a Niche
When starting a record label, you should be able to have a particular niche or music genre in mind before venturing out. This has a huge impact on streamlining the services you will be providing. Also, you need to make a choice regarding how your music will be produced.
The word “produced” may seem bogus but it simply means determining if your music will be solely sold online as downloadable products or if you plan on producing solid copies like Compact Discs (CDs) among others.
With several gains made in technology, the music industry has not been left out. Music production has been made a lot easier by selling online albums. This has curbed piracy and copyright infringement to a large extent too.
Considering these, you need to compare your financial resources with what is obtainable as well as selecting the best way your services will be distributed.
Step 2: Choosing a Business Structure and a Business Name
Do you need a business license to start a record label? Yes. This is a critical decision you would have to make in your bid to start your own record label. The business structure you would adopt will depend on the type of business you intend to run. Some common structures are Limited Liability Companies (LLC), Sole Proprietorships as well as Partnerships among others.
Starting a record label together with a partner or group of persons will require adopting the partnership structure. It is important that any structure selected fits the particular purpose of its creation. It is important to seek legal advice when choosing a business structure.
Your choice of record label name should convey an idea of what your label stands for. It is a brand for your business, and careful selection of a suitable name should be made. Advice from friends as well as doing some research will not be out of place when choosing a name.
Step 3: Building an Online Presence
The importance of having an online presence cannot be overemphasized. This is where your visitors will know details about the business, the services you offer as well as making purchases. It is therefore very important that you give it all the attention it deserves.
When building a website, you should only hire highly qualified hands that will be able to convey your thoughts and imaginations into a befitting website. It is important to note that the website is an extension of your business and should be able to convey your brand.
Using a web service which is easy to update is necessary. For this, WordPress is a good idea. This is particularly good if you are on a budget as it is absolutely free.
Step 4: Creating Good and Digitally Mastered Sound Tracks
It is of immense importance to your business that you produce good sounding music as this is what attracts patronage.
Apart from hiring good talents for your music label, doing the necessary work to ensure exceptional music is produced is of supreme importance. Hence to do this you would need to have the necessary equipment. This would mean investing money to get these. It is good to always use good music produced by other labels to compare your quality of production.
This is where objectivity comes into play. You should always tell yourself the truth if your music is not up to par. Although your friends and family will be your initial fans, you should encourage them to be objective in their outlook to ensure only the best music is released for sale/download. To achieve your desired results, you would need to invest considerably in digital equipment.
Step 5: Promoting/Marketing Your Music
The promotion and marketing of your music to your potential audience requires professionalism. To generate anticipation as well as interest in your music, there are a lot of channels you can use. Apart from your website, social media channels are extremely effective ways to spread the word and build awareness about your product.
Therefore you need to create a variety of social media accounts such as Facebook, Twitter, Myspace, Soundcloud among others. However, having these are not enough as you would have to be very active on them. By having others help you with these, you would have generated the buzz you need about your music.
Step 6: Having a Binding Contract
Having a binding contract helps prevent any breach of contract that may arise in future. Here, you do not necessarily need the presence of a lawyer(s). Both parties only need to agree and the terms of the contract clearly spelled out in writing as well as having the signatures of both parties appended.
These are some of the basic requirements for starting a record label. It requires a series of steps as well as resilience on your part as results will not be obtained immediately. However, with the right approach as well diligence, having the desired results will only be a matter of time.
RECORD LABEL COMPANY BUSINESS PLAN EXAMPLE
Here is a business plan for starting an independent record label business.
If you are already set to start your record label business, and you want to write a good and simple business plan for your business, then this article will prove very useful to you. This article contains a record label business plan sample.
BUSINESS NAME: Optimistic Record Label Company.
- Executive Summary
- Our Products and Services
- Vision Statement
- Mission Statement
- Business Structure
- Market Analysis
- Sales and Marketing Strategy
- Financial Plan
- Competitive Advantage
Optimistic Record Label Company is a record label company which has fulfilled all the legal requirements for starting a business in New York, United States of America. The business would do all within the law to fully carry out all its operations.
Jimmy Justice and Philly McCarthy will both be the owners and managers of Optimistic Record Label Company which will be located in New York, United States. They have both been able to secure a total of $150,000 from their savings and the sales of some of their assets just to be able to contribute towards the startup capital which amounts to $350,000. The remainder will be borrowed from their banks.
Our Products and Services
Optimistic Record Label Company is in the music industry to provide its numerous music related services to clients not just in the United States of America, but all around the world. We will be having our headquarters stationed in New York, United States of America. Our services offering will encompass numerous areas in the music industry.
Our vision in the music industry is to build a record label company that will be rated as one of the best, not just in the United States of America, but in the entire globe.
Our mission is to be able to build a standard record label company which will produce some of the best talents in the music industry. We are committed to working hand in hand with our music artistes in order to unleash their true potential.
We well know of the stiff competition in the music industry, and as such, we will do well to build a very strong business structure so as to have a very reliable foundation for business success. We will do well to recruit only employees that are qualified, talented, skilled, hardworking, and reputed as some of the very best in the music industry.
The successful record label business is such that requires great skills and creativity from entrepreneurs who are coming into it as startups. They are also required to have good business skills to be able to thrive in the industry. There is so much profit in the industry for entrepreneurs to make each year.
One thing that encourages startup entrepreneurs to venture into the business is the fact that they could one day also become assistant celebrity on a much grander scale, especially if they are able to produce from their record label, a very astounding and successful music artiste.
Another trend in the industry is that lots of record label companies now take advantage of the internet in promoting their brand, and enlarging their sources of earning more revenue. Also, they are no longer comfortable with being restricted to the local level; they have started venturing into the international scene in various parts of the globe.
As regards music, there is virtually no limit as to your target market. You could sell your music to anyone, since different kinds of music are suitable to different kinds of people. There are so many genres of music, and these genres of music appeal to various groups of individuals.
Typically, you would find out that old people prefer highlife and countryside music, while younger ones are naturally drawn to pop, hip hop, blues, reggae, etc. Also, devoted Christians would be particularly drawn to gospel music. And so, our target market will comprise of everyone.
Sales and Marketing Strategy
We have been able to seek the help of some of the very best business developers we could get around. This is so as to help us to be able to devise ways on how to deal with the stiff competition typical of the music industry. We well know that it would require continuity on our part to be able to make it big in the industry and gain the fame and fortune that comes along.
The following are the ways which we have devised to be able to compete favourably with the top record label brands in the industry:
- We will make sure to fully introduce our record label company to prospective customers. This, we will do by making sure we send introductory letters about our business, together with our business brochure to various organizations, communities, and influential stake holders in the New York music industry, as well as other parts of the United States of America.
- We will do very well in hosting music talent hunt shows where we will be able to source for upcoming talented music artistes with lots of potential.
- We will do very well to advertise our record label business on online magazines and newspapers, radio and TV stations in New York, and other cities in the United States of America.
- We will not hesitate to fully use the internet to promote our business.
- We will list our record label business on yellow page ads.
Source of startup Capital
We will need a minimum startup capital which will amount to $350,000. This startup capital is useful for us to be able to get the needed equipment and facility for our record label company. We have been able to actualize a total of $150,000 from the savings of our owners’, while the other $200,000 will be sourced as a soft loan facility from the owners’ bank.
Optimistic Record Label Company is a new record label in the industry, but that does not in any way mean we would be laid back, and watch other record label companies take the lead in the industry. We are coming into the industry with a team of highly professional individuals. Also, our recording studio facility and recording equipment are some of the very best in the industry.
Above is a simple and standard record label business plan sample which bears the name ‘Optimistic Record Label Company’. This business will be owned by Jimmy Justice, and Philly McCarthy, both of whom have been long time friends and associates. The startup capital will be sourced from both the owners, as well as from their banks.
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Oluwamayowa holds an MBA degree from Obafemi Awolowo University.
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