BUILDING A MUSIC BUSINESS
Responsibilities of Owning a Music Business
Owning your own music business comes with its perks and benefits however, it is not for everyone. With this journey comes a commitment to gradually shift your focus away from working on your music to working on marketing, administration and sales. The initial 2 years of business is super exciting and can also be quite scary, especially as the costs of overheads and operating costs such as set up costs, rent, tax and equipment hit you square in the face (or so it seems that way at first).
Managing your finances using a basic profit and loss spreadsheet can mean the difference between clarity and confidence or confusion and chaos in your business. Numbers are a means to measure our success in business and a basic spreadsheet can help track your revenue, performance, expenses and create sales forecasts. As you continue to map out your finances and gain clarity over what is and isn’t working, over time it becomes more evident that every aspect of your business should be measured if you’re serious about scaling your business to the next level. Peter Drucker, who was widely regarded as the greatest management thinker of all time, invented modern business management and wrote 39 books on the subject said, “If you can’t measure it, you can’t improve it”. In an interview for the book ‘Measure What Matters’ by John Doerr, Bono from U2 claims measuring every aspect of their career using goal setting was critical for their success.
Common types of Music Businesses
There are a number of types of music related businesses today that can generate a sustainable income for most skilled musicians, artists, producers and educators. The most common music businesses today include running a private or commercial music studio and offering a combination of production services for artists, management, mentoring, education and training.
Earnings Potential for ‘Solopreneurs’
As a ‘solopreneur’, it’s realistic to earn anywhere from $50,000-$90,000+ in taxable income per annum, which is a comfortable range for most trained musicians, looking for a means to supplement their non-music related job. Plus, you’ll have the option to gig on weekends and get your music out there if you put in the extra hours throughout the week.
Earnings Potential for Entrepreneurs
For those serious about building a business to scale, you’ll need a team of staff to help manage various aspects of the business and learn to delegate. Small businesses with teams of up to 10 can typically earn anywhere from $300K to over $1 Million in revenue each year.
Expertise and Skills Required
If you want to create a profitable music business over time be prepared to dedicate 110% of you time and investment into the initial 18-24 months to ensure the business makes your initial return on investment. Business requires a whole new level of skills in administration, operations, finances, legal, marketing and sales just to name a few. Be aware also of the journey of an entrepreneur is one that comes with much responsibility and requires developing a high level of skill in leadership, managing people, executing vision and strategy. But it can also provide the greatest rewards for those who are passionate about making a difference and leaving a legacy.