How to Start Your Own Indie Record Label In Just a Few Simple Steps! By Ty Cohen Since it is so difficult to get a contract with a big label and the competition for jobs at the big labels is brutal, you may be better off starting your own record label. However, before you even begin your career in the music business, you need to answer several questions. It doesn’t matter if you are starting a band, are wanting to start your own label or even just setting up a recording studio. Define Your Business Goals You need to sit down and write a formal business plan. I know that sounds like total dullsville, but, believe me, you need to do it. Without careful planning you will only be wasting both your time and money. While the music business is glamorous, it is also a cut-throat business and the more experienced players will eat you alive and leave you bankrupt if you don’t take the time to properly set up and plan your business. You need to determine what resources you already have and what resources you are going to need to get the business off the ground. List items such as: the people involved, equipment owned, experience in music, experience in business, available working capitol, a place to work from (it can be your basement or garage, but you will need somewhere to work.), business contacts, music gigs, available working capitol, etc. No matter how musically talented you are, you cannot start your own record label without working capital and some basic business knowledge. If you don’t have it, find a partner who does if you want to be successful, or take a look at the financing guide available along with the How to Start a Record Label course over at www.TheUltimateRecordLabel.com Products and Services What are you going to produce and sell? Please don’t answer music. You need a more concrete plan then that to be successful. Will you be making CDs of your live performances? Or will you be writing and recording your own original compositions? In either case, be specific. You will need enough material to record an entire CD before you can sell it. Don’t forget that if you don’t own the copyright to the lyrics and music, you will need to get permission to use them or risk being sued for copyright infringement. Trust me, if you are successful and using someone else’s copyrighted material, you will get sued. So, draw up a royalty contract with the copyright owner before you record the material. Competition I don’t necessarily mean who is recording the same kind of material. I assume you already know that. I mean who are the other independent labels. These are some of the things you need to find out: * What is the going royalty fee? * How much can you charge to rent out your studio? Or what should you be willing to pay to rent someone else’s studio? * Who are the best people to distribute your CDs? What will it cost you? Can you negotiate fees? * What is your Unique Selling Proposition? In other words what make you stand out from the pack? How are you better than all of the others like you? * Have you created a “brand” yet? By “brand” I mean a something that makes you unique and different. KISS and Madonna certainly have a unique brand. You need to develop your own “Brand.” You’ll learn how to do this and everything else needed to start a record label by visiting www.TheUltimateRecordLabel.com Promotion Who are you going to sell your music to…who is your target segment? Teens in general, rap fans, jazz, country, hip hop fans, etc? How do you plan to reach your target audience? Will you send letters to the DJs, advertise in the local media, seek free publicity by doing free concerts, make sales calls, use an internet website, etc? In other words, if you aren’t familiar with marketing, you better get familiar or find someone who already is to work with you. In the competitive music business, you must shamelessly promote yourself every chance you get. The public has a very short memory for artists and unless you keep your name out there in front of them, the will completely forget about you. Think about all of the “one hit wonders”. Establish Your Business Decide of a legal structure. Your choices are sole proprietorship, partnership and corporation. Because of all of the different skills needed to operate your independent record label, partnerships are the most common form. Unless you already have a lot of money or property, a sole proprietorship or partnership should be sufficient. You can always upgrade to a corporation when you have sufficient assets to need the protection incorporating provides. If you choose a partnership, draw up a partnership agreement that lists in detail what each partner brought to the company, what their duties and responsibilities are and how they will share profits or losses. A partnership agreement is extremely important to avoid future problems. Next, go register the business with the proper legal jurisdiction. Once you are registered, you can rent space, lease equipment, open accounts with vendors and do all of the other things necessary to operate a business. Join the professional organizations both in and outside the music area. It never hurts any business to join their local chamber of commerce. In fact that can be an excellent source of referrals. Working Capital Now that you are a registered business, you need to start a business checking account and get a credit or debit card so you have a way to pay your business bills. You will also need to set up books to record income and expenses to use for later tax reporting. If you aren’t familiar with the tax requirements for small businesses go to your local small business development center. Most states have them and they provide either free or low cost assistance, advice or classes so you can learn what is required by law. Alternately, you can hire an accountant to do your bookkeeping for you. I’m sure you heard the horror stories of a performer robbed blind by their accountant or business manager. So, even if you can afford to hire a business manager or an account, learn about keeping books and the legal requirements so the people you hire can’t cheat you quite so easily. Insurance You will need some type of business insurance. Consult with the small business development center to see what they recommend you should get. You can ask an insurance professional but, unfortunately, they will tell you that you need everything and that really isn’t true when you are first getting started in business. When you become successful, then you will need all of that. Conclusion Careful planning will get your independent record label off to a good start. If you take all of the necessary legal precautions you will save yourself a lot of trouble in the future. --------------- Ty Cohen is the acclaimed author of over a dozen best-selling music industry “How to” books and courses. Grab a copy of Ty Cohen’s latest book title by visiting www.MusicBooksByTy.com and to learn more about starting or turning your existing record label into a world wide, profit pulling record label visit: http://www.musiccontracts101.com/cmd.php?Clk=2417706 Start A Record Label Today!

You Would Be Absolutely Crazy Not to Start Your Own Record Label…Or Would You Be? By Ty Cohen A business that produces and releasing original music CDs is called a record label. Many artists dream about having their own record label. In reality if you have produced and released your own music CD, you have for all intents and purposes created your own record label. However, there are some additional steps to becoming an “official” record label recognized in the music industry. Many of today’s better known labels were started by artists who just wanted to release their own music to the public. Everyone in the music business has heard Heb Alpert’s story. He started A&M records with $500 and a dream. You can do the same thing. Start out small by creating your own music and then releasing it the public. Later after you are successful with your own stuff, you can sign on other artists. Actually Starting Your Own Record Label The following are the steps necessary to make your label “official”: Decide on a business model - I like to decide what form of business first because it will be important when you actually choose your business name. The three most common forms of business are the sole proprietorship, partnership and corporation. A sole proprietorship is the simplest form of business. It has one owner who provides all of the startup capital takes all of the risks and owns all of the profits or losses. You must keep records of sales and expenses and file a schedule C for the business as part of your personal income tax return each year. A partnership has more than one owner. Each partner provides a portion of the startup capital and shares the risks and the profits and losses. Never start a partnership without first drawing up a partnership agreement that spells out exactly what each individual’s duties, responsibilities and share of the profits are. Partnerships must file a information return to the IRS and provide each partner with a schedule K to attach to their personal income tax return each year. A corporation is a legal entity that can own property, sign contracts and be sued. A corporation also files an income tax return pays its own income taxes. The corporation shields the owners from risking all of their personal property while conducting business. Each form of business has a different registration process and different filing fees. If you are just starting out, a sole proprietorship or partnership is probably the best choice unless you already have significant personal assets that need protecting. Talk to a lawyer if you are not sure. Select a Name - Once you decide on your business form, it‘s time to pick your business name. This can be a lot of fun but takes some serious thought. You will have to live with the name for a long time. Try to come up with three or four names that seem to fit your style and reflect what you are all about.. Next list them in order starting with the one you like best. Register the Name -There is a good reason for choosing several names. You cannot legally use the same name as another business. So, now you need to go to your state or county government office and register your business. If you are lucky, the first name on your list will be available. If not, try the next one on the list until you either find one that is available of run out of names. You will need to fill out all of the necessary forms for the business form you selected. The most important one is the “Doing Business As” form. This registers your business name and allows you to start a business bank account, get a business credit card, etc. Buy a License - You will need to get a business license if it is required by your local or state governmental agency. Laws vary so always check to see what is required. Sales Tax Number - Like a business license, this may or may not be required. Sales tax laws can be complex. Check with your local government agency to see what is required where you live. Basically, that’s all there is to starting your own record label. How much will it cost? It varies but should cost anywhere between $50 and $500 dollars for the various filing fees. A sole proprietorship is the cheapest and a corporation the most expensive. The Benefits of Starting Your Own Record Label Congratulations! You are now the proud owner of your own record label. Some of the advantages you now have are: A unique identity – this is also called a brand name. It gives you a more professional appearance and helps you establish the necessary business contacts to promote your music. Business Bank account – this will allow you to accept checks and for an additional fee, you can set up a merchant account and accept credit cards as well. An individual cannot accept credit cards. Registered business – you can now produce other artists’ works under your label. Enter into contracts – your business can now enter into contracts to lease equipments, hire a hall, etc. Join industry organizations – you may want to join one of the publishers’ organizations like the ASCAP or BMI to learn how to protect the copyrights and royalties for your label. Some Final Things to Do Logo – design and copyright a logo for your label. The easiest way to do that is to publish your new on a website with the proper copyright notices. Set up a Website – you really need to do this to promote your label. Stationary – get business cards and stationary printed up. Now, go forth and promote your new record label. ------------ Ty Cohen is the acclaimed author of over a dozen best-selling music industry “How to” books and courses. Grab a copy of Ty Cohen’s latest book title by visiting www.MusicBooksByTy.com and to learn more about starting or turning your existing record label into a world wide, profit pulling record label visit: http://www.musiccontracts101.com/cmd.php?Clk=2417705 Start A Record Label Today!