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Do You Qualify?
Record Label Realities
Lifestyle of Freedom
Income Streams
Music Business & Money
How Much Money
Getting Started
Pro or Amateur?
Common Pitfalls
Do You Qualify?
Record Label Realities
Lifestyle of Freedom
Income Streams
Music Business & Money
How Much Money
Getting Started
Pro or Amateur?
Common Pitfalls
 |
Business skills What do full-time musicians know about the music business? Develop your financial intelligence How can I make my music business better? Taxes, savings and free beer! What are the benefits of a full time musician? Marketing the musician How do I get gigs? |
| Selling your original music How do I sell my original music? Making a professional CD Should I make CD's or just sell downloads? Sponsors, investors & endorsements How do I get sponsorship as a musician? |
Business skills
Business skills will help you have a successful music business...but money skills will keep you there. You are obviously gifted at your instrument or vocal abilities. My musical gift is that I have a hell of an ear. But mostly I'm gifted in business.
Business is not rocket science. It is 3 principles:
- Offer something of value
- Profit from what you offer
- Obtain and serve customers
I began to research the independent music business. I soon found there was not much of a business to it. There were great ideas, but it still took me back to trial and error research to find the REALITY of what actually makes money and which activities do not make money.
In the end I simply applied the same business, sales and marketing principles to T's music business as I had to my earlier successful businesses. That's also when we began to make a lot more money in the music business.
The good news is it takes very little money to start your music business. I am always getting the best quality product or service for a cheap price. That too, is one of my business skills. I built the Save Your Money segment on this website to help you excel in this area also. I'm going to share what I know but once you read it, you own it! :)
Money isn't the most important thing in life, but it's reasonably close to oxygen on the "gotta have it" scale.
-Zig Ziglar
Develop your financial intelligence
It is my experience that 95% of the people I meet need to develop their financial intelligence. If I met you today would you be able to have an intelligent conversation with me about money?
Can you look at your own financial situation with an honest and intelligent eye? Reading about managing money is good, but it isn't quite enough. I must have read 100 books on the subject of money. Yet I still spent money and used my credit foolishly in my 20's.
That's when I began to study the wealthy. Most of them were my business associates. They told me to read everything Robert Kiyosaki wrote. I did, and I still do today.
Today I treat consumer debt like a plague to be avoided at all costs. Other than a home and one car, I wouldn't advise anyone to carry other personal debt. If I decide can't live without it, then I make myself pay cash. (I consider student loans, real estate investment and business debt an entirely different issue or strategy.)
I got smarter, I practiced what I learned and I got really good with handling money. We live better today on less money than we did back when I made (low) 6 figures.
As for your finances, only you know your financial position. Only you know if you have financial discipline. You should evaluate yourself about handling money in a very honest way.
It is my experience that 95% of the people I meet need to develop their financial intelligence. If I met you today would you be able to have an intelligent conversation with me about money?
Can you look at your own financial situation with an honest and intelligent eye? Reading about managing money is good, but it isn't quite enough. I must have read 100 books on the subject of money. Yet I still spent money and used my credit foolishly in my 20's.
That's when I began to study the wealthy. Most of them were my business associates. They told me to read everything Robert Kiyosaki wrote. I did, and I still do today.
Today I treat consumer debt like a plague to be avoided at all costs. Other than a home and one car, I wouldn't advise anyone to carry other personal debt. If I decide can't live without it, then I make myself pay cash. (I consider student loans, real estate investment and business debt an entirely different issue or strategy.)
I got smarter, I practiced what I learned and I got really good with handling money. We live better today on less money than we did back when I made (low) 6 figures.
As for your finances, only you know your financial position. Only you know if you have financial discipline. You should evaluate yourself about handling money in a very honest way.
A budget tells us what we can't afford, but it doesn't keep us from buying it.
-William Feather
Taxes, Savings and free beer!
Taxes saved is income
You will save thousands of dollars every year by owning your own music business. This puts you closer to leaving your job right away. If you make $50,000 per year now you won't have to make as much to leave.
Then when you buy business related gear, drive to gigs or lessons, take your drummer out to eat, it's all tax deductible. Here is how that stacks up with the average paycheck:
As an employee:
- Your paycheck was $1000
- You need a new amp $800
- You pay taxes on $1000
- Gig / Lesson cash $1000
- You need a new amp $800
- You pay taxes on $200
We are proud Americans and we pay our taxes. But why pay more than you have too? Good accountants are worth their weight in gold! I wouldn't own a business without one or two of them.
Savings...'A penny saved is a penny earned' concept
Saving money is an automatic way of earning money. I could almost say it's a secondary source of income. Instead I will call it a fringe benefit.
A full-time musician probably would have paid only $600 for that $800 amp in the example above. They usually have more time during the day to sniff out the deals than an employee may have.
Anytime we have to record a CD, I will usually negotiate a $2000 recording to $1000. Let everyone else pay $2000...I'll make $1000 by saving it. You can find good engineers who will negotiate with you.
When it comes to saving money I look at everything. Just by changing guitar string brands we save $40 per month. Not much of an income...but a nice benefit when all these savings add up.
The 'Free Beer' benefit
This is another great benefit of the gigging musician. It ties right back to saving money. If we go out to see live music we leave with a bar tab. When T is performing he never has to buy a beer. Either the venue, or the customers buy it for him.
It's not that he expects them too. They just want to talk to him about music and can't stand to do so until he has a beer in his hand. So they buy his beer. It's nice when he leaves owing no bar tab. That's about $20 x 5 nights a week!
Most places we gig offer a meal too. Again, don't expect it unless you negotiate for it. Consider it a full-time musician benefit that just kept $10-$20 bucks in your pocket.
Collecting more taxes than is absolutely necessary is legalized robbery.
-Calvin Coolidge
Marketing the musician
Marketing creates sales. Whether verbally, visually, or audibly the way you sell yourself says a lot about you. No I'm not talking about bragging. That's not selling, that's just annoying.
You need to think of your identity as a musician and simplify It down to a choice statement. A 'music' tagline. Then you can brand a logo that sums you up.
There are 3 things you will generally market.
- Yourself as a musician
- The benefits of hiring you
- Your original music
Your official website.
I want to address this first since this has been a cornerstone marketing tool for us. Our website successfully sells the musician, sells gigs and sells original music. It is a simple but powerful tool. If you are only using Reverb Nation or similar sites, please reconsider.
The one big thing I would stress is to buy your own domain name and build your official website. Do not rely on 3rd party web hosts with crazy URL's. A good looking website is cheap and easy to build with GoDaddy. Your own domain name is so much more professional and credible when you send people to a website.
I buy domain names regularly for different businesses and for different business associates. GoDaddy is the cheapest game in town when it comes to domain names and web hosting. I also like the fact that I get lightning fast service from a knowledgeable, intelligible, live person. I've had other hosts but the service sucked and they were pricier.
I had few computer skills when I started this music business. Website Tonight uses a template program that makes it easy for us techie dummies to build a professional website. When I got stuck, I could have a techie on the phone in 3 minutes to assist me...for free.
All I had to understand is how to sell TMoody and organize information. I have gotten many compliments from marketing experts on the TMoody website. But I'm more impressed with the money it has helped us earn. Bottom line, it would be much harder to book our gigs without it.
Your online presence
There is a lot of advice on this subject on the web for "do it yourself" musicians. The best I have found, all in one place, is The Buzz Factor. There are others out there but Bob Baker is very knowledgeable when it comes to online marketing for musicians. He also understands having a tight budget. I highly recommend Bob's teaching materials. For more on this Click Here!
When it comes to social networking I know you probably enjoy it and are really good at it. Well, it never sold CD's for us. I'm still waiting to hear from someone to prove otherwise. Therefore we only use it for targeting venues, keeping in touch with fans and getting people out to the gigs.
Marketing that always works.
Your time is best spent on what you know works. You will get much further picking up the phone and calling the people you want to hire you. Get good on the phone. It saves time and gas money.
The other surefire way is to visit the people you want to hire you. If you can't book a date right then and there, leave a gig flier with your website and contact information...not a CD!...duh! Let them know you will be calling them.
You will soon learn that it's nothing more than Contact, Sell, Book, Play and Get paid. This is the work of any salesman. If you lack these skills, you can learn them through books and practice. If you talked someone into marrying you, then you must already have selling skills. :)
Never wait for someone to call you back. Let them know that you will call them back. When T's on the phone or out getting gigs he always says "They may not hire me, but they will know who I am". That persistence pays off.
When he is sick of calling them, suddenly the phone rings and they are calling him ready to book a gig. Keep this winning attitude: In anything...persistence is everything!
If you are ready to start gigging professionally, we detail our gigging system in our BOOKED SOLID IN 30 DAYS! email training series.
Marketing that will fail
I once saw a musician marketing himself online somewhere. He actually wrote that you should buy his music because he was a poor starving artist trying to make money with his talent. He insisted that if you love music, you should want to pay for his songs.
I felt insulted just reading it! Maybe that is why his name is no where in my memory. I damn sure didn't buy his music. Pity and guilt is not how you run a music business. People want to be a part of someone who is successful...not desperate. And why would you try to make me feel guilty for your poverty?
I know how much money full-time musicians make...when they WORK at building their music business. They don't sit behind their computers soliciting donations using guilt and pity. He was certainly an amateur.
Any real record person knows that the number one most powerful marketing tool when it comes to music is repetition.
-Nile Rodgers
Selling your original music
If you have original music...sell it! "How do I sell my original music?" This seems to be what all the online buzz is about. I've written more details about this topic on the Original Artist Corner page.
There are a lot of good theories and methods to try. I have tried soooo many. In the end physical CD sales brings the most income. This held true during T's teaching years and gigging years.
Selling music online
It is really cool when we sell original music to strangers all over the US. It's even cooler when we sell music to strangers in Australia, Germany, Japan, and countries we've never heard of.
Submitting your music to CD Baby should be a NO BRAINER!! They have the complete hook up on digital distribution. You won't need anyone else. They are on top of the needs of independent artists better than anyone in the industry.
They recently got a music store widget you need to sell music on your official website. It is super easy to submit your albums and get a bar-code. And the accounting is simple enough for anyone to understand.
Downloads pay only a fraction of what physical CD's pay, but I think it's necessary for a couple of reasons. It does a lot for your confidence as an original musician. It creates a residual income stream. It immortalizes your music!
Selling music at gigs.
It's all about the way we package them and the way he pitches them when he's in front of you.
The TMoody Collection contains of his original music (full length) CD's. The same 4 CD's from the website cost about $45. When T plays a gig or private party he will promote them by describing the music on each CD to his audience. They are listening because he has already connected to them.
Then he explains how much they can get them from the website for, "But tonight you can have 4 of them in this nice case for $25!" He sells a lot of original music this way.
And he plays covers to do it! He introduces his original song about every 4th cover, after they are diggin' what he's doing. He makes a few remarks about the origin of his song and they hang on every word. Then some will buy CD's. :)
Artists...musicians, painters, writers, poets, always seem to have had the most accurate perception of what is really going on around them, not the official version or the popular perception of contemporary life.
-Billy Joel
Making a professional CD
When I first met T he was playing some beach bar for beer, food and tips. I am one of the few 'music consumers' who like hearing original music. It makes me dig into the true talent of the musician. So I tipped him to play one of his originals.
It was so damn good that I wanted to buy a CD. I was disappointed to find out he had none...as in he hadn't recorded any! He had only recorded about 5 unpolished songs but had no copies of that either.
A few years later we re-connected started dating and got married. I watched him struggle trying to get his music heard. I wasn't sure how to help him but I'm a wife...that's what we do. :)
The first deal I struck with him was when I said "If I'm going to help you in the music business we have to record a CD of 10 good solid tracks that we can promote and sell."
I explained my reasoning:
- People like you so they want to buy your CD...that's more money.
- You can't have many online music sales without some songs...that's more money.
- More songs mean more CD's...that's more money.
- You need to get these songs recorded so you can unclog and let more songs come out...that's just for you honey!
We threw a CD release party and sold a bunch. We did a lot of shows and sold a bunch more. The following year we recorded 2 more CD's. During that time we filmed a DVD. That's what made up the first TMoody Collection.
Every time we did a project T would set 30 day goals on selling enough CD's to make all of our expenses back. Sometimes that took a few months to make our money back in our pocket but he always made it happen.
Now he enjoys a $23 profit and 4 CD sales each time he sells a collection. $38 profit from the website sales.
If you intend on selling original music you are kidding yourself if you don't have a professional full length CD! When you have your CD in hand...not on order...but IN HAND have a CD release party and make some of your money back right away.
It should also be in your 30 day plan to get it online at CD Baby. Keep up the momentum while you are still excited about it. Book a bunch of gigs and sell your CD while getting paid your fee.
If you teach lessons every student should get your $15 CD for $10. Yes even family and friends buy TMoody CD's. Why give them away to your biggest fans?...duh! They enjoy supporting us in this small way.
Now we do give them out to the people who helped us in the project. Sometimes we give them away to new musician friends we just met. But our goal is to sell CD's not give them away. Otherwise we would cheat ourselves.
Music is the soundtrack of your life.
-Dick Clark
Sponsors, investors & endorsements
Other possible incomes
Any time you can take advantage of OPM (other people's money) consider the deal. If you can earn a profit while not investing your own money it's an ideal route...as long as it won't cost you your soul or anything.
All good deals should be win-win or they are not really good deals. Many well known artists are bitter toward a previous record label when they speak in interviews. Even if the label was the only reason we are watching them on an interview!
I suspect they got the short end of the stick. They can't all be ignorant about the business contract they signed. Maybe they were lied to. As an artist you are up against the music industry lawyers. Most could only outsmart them with a premium priced attorney.
Sponsors
One of the first things I did was research "how to get sponsorship" when I got started engineering T's career. I soon discovered it is a full time job and a very specialized part of any entertainment business.
I was able to get a few business associates to spend money on a few projects before I realized this was why these 'sponsorship contractors' made six figures. Yet it ended up being the most educational experience that laid the foundation for TMoody.com.
When I had to think through all the facets needed to obtain sponsorship it forced me to clearly define who we were and what we were trying to accomplish. I'm so grateful I learned this sponsorship stuff in the first month.
A sponsor does not have to be a business. A friend of ours has a lady that is a long time friend of the family. He is very talented on 4 instruments and she loves his music. She helps him financially on special projects he wants to do. She gets mentioned in his projects as any sponsor would. That's her way of giving to 'the arts' and to a boy she watched grow up.
Investors
Don't confuse a sponsor and an investor. A few times I have been told by musicians that they know this rich guy that will invest in them if they can impress him with their music. I cannot begin to explain how this is the dumbest statement someone can make to me.
I am an investor. There is no way I could invest big money in TMoody. There is no sustainable business there. T is the business. Without him there is not much income in this business. There are not enough music sales to make the company worth that much.
And why would an investor want to get in the music business when the market has already been mastered and dominated? There is nothing to invest in that will guarantee my money back plus.
T is simply self employed. That's not the type of business that investors buy. We buy profit and cash flow. Not potential cash flow or potential profit. Now if you own the rights to The Beatles you have value and cash flow worth investing in!
The best idea is to ask your potential investor if he wants to sponsor a specific project. Show him your vision, your focus, your budget and how it can benefit him. He'll probably be glad to do it. But don't embarrass yourself by asking him to invest in your music!
Endorsements
I love endorsement deals. I am a big NASCAR fan, so the whole complexity of those sponsor and endorsement deals fascinate me. I once saw the father of a skater kid get endorsement deals by sending off a bazillion video tapes to potential sponsors.
So the day T informed me he got an endorsement deal I was excited. He told me the guitar brand and naturally I asked "what does that pay?" He said 'it doesn't pay money'. This did not compute for a few seconds. I assumed that meant they just give him a guitar. When I brought this up T said "No, but they said I could get everything at cost."
After I got off the floor from laughing, I explained my thinking. If you use that gear AND if you bought it new then maybe, just maybe it would be worth it. But otherwise that is a f*%#ng joke! If an endorsement doesn't benefit us, why would we promote a product we don't use?
So please don't brag to me about your endorsement deals unless they make or save you cash. Then you can brag to me all you want. :)
All lasting business is built on friendship.
-Alfred A. Montapert
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