business plan outline record label

Record Label Business Plan

Written by Dave Lavinsky

Record Label Business Plan Template

You’ve come to the right place to create your record label business plan.

We have helped over 100,000 entrepreneurs and business owners create business plans and many have used them to start or grow their record label companies.

Below is a template to help you create each section of your Record Label business plan.

Executive Summary

Business overview.

Broadbase Records is a startup record label located in Nashville, Tennessee. Broadbase Record’s mission is to sign and promote local aspiring musicians and talent to establish or further their career in the music industry. Based in Nashville, Broadbase Records will work with various country musicians because of the proximity to its local talent, but will also be open to working with various artists across a range of music genres. Broadbase Records will sign, promote album sales, and book their signed artists to various concerts and festivals around the country. Broadbase Records is made up of a team of two seasoned music executives, Marty Cole and Sasha Gray, with decades of experience in the music industry.

Service Offering

The following are the services that Broadbase Records will provide:

• Artist Recruitment & Development (A&R)
• Record Contract
• Marketing & Promotion
• Collecting & Distributing Royalties
• Music Distribution
• Licensing Deals

Customer Focus

Broadbase Records will target new and existing musicians in Nashville, Tennessee that are looking to either establish or expand their music presence in the industry as potential clients. They will also target music venues to partner with, music distribution channels such as Google Music, YouTube Music, Apple Music, Spotify, etc. The other target market is recording studios that have produced local talent and need a record label to represent them.

Management Team

Marty and Sasha will be in charge of scouting talent and working one-one-one with music venues, concert promoters, and music distribution channels. While Marty and Sasha will be operating the business at the higher level, they will also employ a CFO to handle all financial forecasts, tax, and licensing obligations of running a profitable record label. A CMO will also be hired to manage and promote not only each signed talent, but the marketing of Broadbase Records as well.

Success Factors

Broadbase Records will be able to achieve success by offering the following competitive advantages:

• Friendly, knowledgeable, and highly qualified team of music producers and executives that come with a long list of industry contacts.
• Dedicated team that will be able to provide its full attention and focus to its signed artists.
• Broadbase Records already come with a long list of partners for artists to choose how they want their music to be distributed and which music venues they want to perform at.
• Clients before profit – Broadbase Records will ensure the artists’ satisfaction with every aspect of the process before taking account profitability. Broadbase Records is about supporting the success of its artists, not just about making money.

Financial Highlights

Broadbase Records is seeking $500,000 in debt financing to begin operations of the business. The funding will be dedicated towards securing the office space and the office build-out. Capital will be required for the upfront costs needed for the first three music artists Broadbase Records signs. Funding will also be dedicated towards three months of overhead costs to include payroll of the staff, rent, and working capital. The breakout of the funding is below:

• Securing office space, build-out, and design: $100,000
• Three months of overhead expenses (payroll, rent, utilities): $75,000
• Marketing & advertising: $25,000
• Capital required in order to promote new signed artists: $300,000

Company Overview

Who is broadbase records.

Broadbase Records is a startup record label located in Nashville, Tennessee. Broadbase Record’s mission is to sign and promote local aspiring musicians and talent to establish or further their career in the music world. Based in Nashville, Broadbase Records will work with various country musicians because of the proximity to its local talent, but will also be open to working with various artists across a range of music genres. Broadbase Records will sign, promote album sales, and book their signed artists to various concerts and festivals around the country. Broadbase Records is made up of a team of seasoned music executives with decades of experience in the music industry. Owners Marty Cole and Sasha Gray have had immense success in the world of music working with other large record labels in the United States. They both have represented numerous Grammy award-winning musicians and have lifted their success due to their industry knowledge and relationships. Marty and Sasha have been wanting to begin their own record label so they can operate based on their own values and have the chance to sign emerging talent that would otherwise be overlooked by larger-scale record labels.

Broadbase Records History

Broadbase Records is owned by Marty Cole and Sasha Gray, both seasoned music executives that have worked for two major record labels in the United States. Through their tenure, Marty and Sasha have compiled numerous contacts and networks to further musicians’ careers and sustainability. Both Marty and Sasha have signed, promoted, and achieved success in the millions for various artists they have signed over the years.

Recently, Marty and Sasha have found that there are not enough record labels that exist to promote untapped talent in the market. Through their extensive research, they have learned that hundreds and even thousands of musicians with promising potential are not receiving any attention because there are not enough record labels to give them the opportunity. With Nashville being the country music capital of the world, Marty and Sasha found that thousands of aspiring artists and musicians flock to the city at the chance of one day being signed by a label. There are just not enough record labels in Nashville that can accommodate or even have the time and energy into seeking out new, fresh talent.

Since incorporation, Broadbase Records has achieved the following milestones:

• Found office space for lease that is located in Nashville, Tennessee.
• Registered Broadbase Records, LLC to do business in the State of Tennessee.
• Began networking with local music venues and recording studios in hopes of finding local talent.
• Began the branding image, logo, website, and social media accounts for the label.

Broadbase Records Services

The following will be the services Broadbase Records will provide:

Industry Analysis

The music business and record label industry are expected to grow over the next five years to over $11 billion. The industry’s performance will be bolstered by the following factors:

Number of broadband connections: Keeping abreast of new systems and technology can provide producers with stronger distribution models and revenue streams while reducing costs of production. Online music has fundamentally changed how consumers enjoy their favorite artists.

Per capita disposable income: An increase in disposable income is likely to increase consumers’ purchases of new music, whether via digital or physical outlets. Although physical album sales have continually dropped for over a decade, sales of streaming music subscriptions increase as consumer purchasing power rises, benefiting the industry as a whole.

Median age of population: All age demographics consume different types of music and discover music through different platforms. Conversely, older individuals are more likely to reduce their total spending on new music. As labels shift toward online distribution, the industry benefits most from a lower median age of the US population.

Customer Analysis

Demographic profile of target market.

Broadbase Records will target new and existing musicians in Nashville, Tennessee that are looking to either establish or expand their music industry presence in the industry as potential clients. They will also target music venues to partner with, music distribution channels such as Google Music, YouTube Music, Apple Music, Spotify, etc. The other target market are recording studios that have produced local talent and need a label to represent them.

Customer Segmentation

Broadbase Records will primarily target the following customer profiles:

• Aspiring and existing musicians looking for an independent label
• Local music venues who showcase new and emerging talent
• Music distribution channels
• Recording studios

Competitive Analysis

Direct and indirect competitors.

Broadbase Records will face competition from other record label companies. A description of each competitor company is below.

Capitol Records Nashville

Capitol Records Nashville is a major United States-based record label located in Nashville, Tennessee operating as part of the Capitol Music Group. Capitol Nashville was formerly known as Liberty Records from 1991 until 1995 when it was changed back to Capitol. In 1993, Liberty opened a sister label, Patriot Records, but it was closed in 1995. In 1999, EMI launched Virgin Records Nashville but by 2001 Capitol absorbed the short-lived label. Capitol Nashville remained a stand-alone label until 2010 when it launched EMI Nashville.

Thirty Tigers

Thirty Tigers is a Nashville-based entertainment company, founded in 2001 by Grammy Award-winning producer David Macias and Deb Markland. In just over a decade, Thirty Tigers has gone from two employees working out of David’s guest bedroom to thirty employees, most of whom now work out of their Wedgewood-Houston office in Nashville, Tennessee. Thirty Tigers also has offices in Los Angeles, New York, North Carolina, and London. Their collective experience in the music industry ranges from record retail to the film industry to major labels.

Third Man Records

Third Man Records is an independent record label founded by Jack White in Detroit, Michigan in 2001. Third Man established its first physical location – a combination of a record store, performance venue, and headquarters for the label in Nashville, Tennessee in 2009. The label opened a Detroit branch location in 2015, which added a pressing plant (Third Man Pressing) in 2017.

Competitive Advantage

Broadbase Records will be able to offer the following advantages over their competition:

Marketing Plan

Brand & value proposition.

Broadbase Records will offer a unique value proposition to its clientele:

• Experienced team of music professionals that come with a long list of contacts and connections.
• Focused and individualized attention to each client it signs.
• Broadbase Records doesn’t need to knock on any doors. The doors are already open due to their reputation and industry knowledge.
• They put their artists’ satisfaction before profitability.

Promotions Strategy

The promotions strategy for Broadbase Records is as follows:

Social Media

Broadbase Records will invest in advertising their record label on social media platforms Facebook, Instagram, Snapchat, TikTok, and Twitter. By using targeted social media marketing, Broadbase Records will be able to reach the local music talent of Nashville.

Music Venues & Networking

Marty and Sasha will frequent music venues around Nashville that hold amateur nights where local aspiring musicians get a chance to take the stage. By scoping out the talent, they will approach those musicians that they see potential in and let them know their record label might be interested in working with them. By networking around the local scene, people will also recommend Broadbase Records to their associates.

Website/SEO Marketing

Broadbase Records will invest in a strong SEO presence so that when someone enters “Nashville record label” or “record label near me” in their Google or Bing search bar, Broadbase Records is at the top of the list. Their website will list all of Marty and Sasha’s accomplishments with the clients they have worked with in the past to showcase all of their experience and ability to take musical artists to the next level.

The pricing of Broadbase Records will be moderate and on par with competitors so customers feel they receive value when purchasing their services.

Operations Plan

The following will be the operations plan for Broadbase Records.

Operation Functions:

• Marty and Sasha will jointly own and manage the record label. They will be in charge of scouting local talent, networking with recording studios, music venues, concert promoters and music distributors, and be the point of contact for all signed musicians.
• Chief Financial Officer to handle all financial aspects of the business to include but not limited to accounts payable and receivable, billing, royalty payouts, tax obligations, licensing and permitting, budgeting, and cash forecasting. As the record label grows and profits are stabilized, more accountants will be added to support the CFO.
• Chief Marketing Officer will be in charge of all marketing and promoting of each signed music artist or band. The CMO will be responsible for increasing the awareness and popularity of each artist. The CMO will also handle the social media and website for Broadbase Records as well.
• Administrative Assistant will be employed to manage all administrative assistant tasks of the record label on an everyday basis. This will include being the personal assistant for Marty and Sasha.

Milestones:

Broadbase Records will have the following milestones completed in the next six months.

7/1/202X – Finalize contract to lease record label office space.

7/15/202X – Begin build-out and design of record label office.

8/1/202X – Begin reaching out to their list of contacts in the industry to inform them of the new Broadbase Records.

8/15/202X – Begin social media and website advertising campaign.

8/30/202X – Start scouting out local music venues for local aspiring talent.

9/1/202X – Final walk through of completed office space.

9/5/202X – Hire CFO, CMO, and Assistant.

10/1/202X – Grand Opening of Broadbase Records.

Broadbase Records will be jointly owned by Marty Cole and Sasha Gray.

Marty Cole is a former Capitol Music executive with over 15 years of experience. He helped find, produce, and book dozens of music artists and bands that have amassed huge success due to his diligence and industry knowledge. Marty has a strong reputation in the industry as he has always been known to put his clients first without sacrificing their happiness for profit. Many artists respect and recommend Marty to other emerging talent due to his impressive resume and respect for the artist.

Sasha Gray has worked at Virgin Records and Capitol Music over her 10 year career as a music industry executive. She has traveled all over the world and her client list encompasses not only the United States, but five other countries as well. Sasha is known for her creativity and diligence when working with her clients. She usually has creative solutions for marketing and promotions and is not afraid to step outside the box when representing a client. Sasha’s reputation has garnered her a long list of successful clients and she is known as the record label executive that is willing to do anything to ensure the happiness and success of her clients.

Marty and Sasha will be in charge of scouting talent and working one-one-one with music venues, concert promoters, and music distribution channels. While Marty and Sasha will be operating the business at the higher level, they will also employ a CFO to handle all financial, tax, and licensing obligations of running a profitable record label. A CMO will also be hired to manage and promote not only each signed talent, but the marketing of Broadbase Records as well.

Financial Plan

Key revenue & costs.

The revenue drivers for Broadbase Records are the royalty fees and commissions earned when booking one of their signed musicians. Broadbase Records will earn a commission as a percentage of total ticket sales for live music shows and concerts. They will also earn royalties for music that is streamed on music streaming services and albums sold.

The cost drivers will be the capital required upfront to support the artist, such as upfront marketing and promotion and costs for getting their album produced. Broadbase Records will be reimbursed for all expenses made upfront by the commissions and royalties earned once the album begins selling and people pay for their live music appearances. Other cost drivers are the payroll for the staff, rent and utilities for the office space and working capital.

Funding Requirements and Use of Funds

• Securing record label office space, build-out, and design: $100,000

Key Assumptions

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Initial Number of Clients per Month: 5
• Annual Lease: $150,000

Financial Projections

Income statement.

Balance Sheet

Cash Flow Statement

Record Label Business Plan FAQs

What is a record label business plan.

A record label business plan is a plan to start and/or grow your record label business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

What Are the Main Types of Record Label Companies?

There are many types of record label companies. Most of the time, record label companies concentrate on a particular music genre. There are also three major types of record label companies - major record labels, major label subsidiaries, and independent labels. There are also some record labels that have a recording studio subsidiary attached to it. 

What Are the Main Sources of Revenue and Expenses for a Record Label Business?

The primary source of revenue for record label companies are the royalties and commissions they earn when booking a client for a concert or live performance. They also earn royalties based on album sales their client produces.

The key expenses for a record label business are the costs of upfront marketing and promotion of their client before they earn album sales or perform live music events. Other costs associated with a record label business are leasing an office space, employee costs and marketing/advertising costs.

How Do You Get Funding for Your Record Label Business?

Record label businesses are most likely to receive funding from banks. Typically you will find a local bank and present your business plan to them. Angel investors and other types of capital-raising such as crowdfunding, credit cards and personal savings  are other common funding sources.

What are the Steps To Start a Record Label Business?

Starting a record label business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Record Label Business Plan - The first step in starting a business is to create a detailed music label business plan that outlines all aspects of the venture. This should include market research on the music industry and potential target market size, information on the services you will offer, marketing strategy, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your record label business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your record label business is in compliance with local laws.

3. Register Your Record Label Business - Once you have chosen a legal structure, the next step is to register your record label business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your record label business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Record Label Equipment & Supplies - In order to start your record label business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your record label business. Marketing efforts includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising to reach your target audience.

Learn more about how to start a successful record label business and how to create a record label business plan:

• How to Start a Record Label Business

Where Can I Get a Record Label Business Plan PDF?

You can download our free record label business plan template PDF here. This is a sample record label business plan template you can use in PDF format.

How To Write a Successful Record Label Business Plan + Template

Creating a business plan is essential for any business, but it can be especially helpful for record label businesses that want to improve their strategy and/or raise funding.

A well-crafted business plan not only outlines the vision for your company, but also documents a step-by-step roadmap of how you are going to accomplish it. In order to create an effective business plan, you must first understand the components that are essential to its success.

This article provides an overview of the key elements that every record label owner should include in their business plan.

Download the Ultimate Record Label Business Plan Template

What is a Record Label Business Plan?

A record label business plan is a formal written document that describes your company’s business strategy and its feasibility. It documents the reasons you will be successful, your areas of competitive advantage, and it includes information about your team members. Your business plan is a key document that will convince investors and lenders (if needed) that you are positioned to become a successful venture.

Why Write a Record Label Business Plan?

A record label business plan is required for banks and investors. The document is a clear and concise guide of your business idea and the steps you will take to make it profitable.

Entrepreneurs can also use this as a roadmap when starting their new company or venture, especially if they are inexperienced in starting a business.

Writing an Effective Record Label Business Plan

The following are the key components of a successful record label business plan:

Executive Summary

The executive summary of a record label business plan is a one to two page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.

• Start with a one-line description of your record label company
• Provide a short summary of the key points in each section of your business plan, which includes information about your company’s management team, industry analysis, competitive analysis, and financial forecast among others.

Company Description

This section should include a brief history of your company. Include a short description of how your company started, and provide a timeline of milestones your company has achieved.

If you are just starting your record label business, you may not have a long company history. Instead, you can include information about your professional experience in this industry and how and why you conceived your new venture. If you have worked for a similar company before or have been involved in an entrepreneurial venture before starting your record label firm, mention this.

You will also include information about your chosen record label business model and how, if applicable, it is different from other companies in your industry.

Industry Analysis

The industry or market analysis is an important component of a record label business plan. Conduct thorough market research to determine industry trends and document the size of your market. 

Questions to answer include:

• What part of the record label industry are you targeting?
• How big is the market?
• What trends are happening in the industry right now (and if applicable, how do these trends support the success of your company)?

You should also include sources for the information you provide, such as published research reports and expert opinions.

Customer Analysis

This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.

For example, the clients of a record label business may include brick and mortar stores, digital music retailers (e.g., iTunes, Amazon), and streaming services (e.g., Spotify, Pandora).

You can include information about how your customers make the decision to buy from you as well as what keeps them buying from you.

Develop a strategy for targeting those customers who are most likely to buy from you, as well as those that might be influenced to buy your products or record label services with the right marketing.

Competitive Analysis

The competitive analysis helps you determine how your product or service will be different from competitors, and what your unique selling proposition (USP) might be that will set you apart in this industry.

For each competitor, list their strengths and weaknesses. Next, determine your areas of competitive differentiation and/or advantage; that is, in what ways are you different from and ideally better than your competitors.

Below are sample competitive advantages your record label business may have:

• Established name and credibility in the industry
• Strong relationships with artists and other industry players
• Robust marketing and promotional capabilities
• Proven ability to create chart-topping hits
• Extensive catalog of music

Marketing Plan

This part of the business plan is where you determine and document your marketing plan. . Your plan should be clearly laid out, including the following 4 Ps.

• Product/Service : Detail your product/service offerings here. Document their features and benefits.
• Price : Document your pricing strategy here. In addition to stating the prices for your products/services, mention how your pricing compares to your competition.
• Place : Where will your customers find you? What channels of distribution (e.g., partnerships) will you use to reach them if applicable?
• Promotion : How will you reach your target customers? For example, you may use social media, write blog posts, create an email marketing campaign, use pay-per-click advertising, launch a direct mail campaign. Or, you may promote your record label business via PR or at industry events.

Operations Plan

This part of your record label business plan should include the following information:

• How will you deliver your product/service to customers? For example, will you do it in person or over the phone only?
• What infrastructure, equipment, and resources are needed to operate successfully? How can you meet those requirements within budget constraints?

The operations plan is where you also need to include your company’s business policies. You will want to establish policies related to everything from customer service to pricing, to the overall brand image you are trying to present.

Finally, and most importantly, in your Operations Plan, you will lay out the milestones your company hopes to achieve within the next five years. Create a chart that shows the key milestone(s) you hope to achieve each quarter for the next four quarters, and then each year for the following four years. Examples of milestones for a record label business include reaching $X in sales. Other examples include winning a certain number of Grammy Awards or signing a contract with a major artist.

Management Team

List your team members here including their names and titles, as well as their expertise and experience relevant to your specific record label industry. Include brief biography sketches for each team member.

Particularly if you are seeking funding, the goal of this section is to convince investors and lenders that your team has the expertise and experience to execute on your plan. If you are missing key team members, document the roles and responsibilities you plan to hire for in the future.

Financial Plan

Here you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix). 

This includes the following three financial statements:

Income Statement

Your income statement should include:

• Revenue : how much revenue you generate.
• Cost of Goods Sold : These are your direct costs associated with generating revenue. This includes labor costs, as well as the cost of any equipment and supplies used to deliver the product/service offering.
• Net Income (or loss) : Once expenses and revenue are totaled and deducted from each other, this is the net income or loss.

Sample Income Statement for a Startup Record Label Firm

Balance Sheet

Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:

• Assets : All of the things you own (including cash).
• Liabilities : This is what you owe against your company’s assets, such as accounts payable or loans.
• Equity : The worth of your business after all liabilities and assets are totaled and deducted from each other.

Sample Balance Sheet for a Startup Record Label Firm

Cash Flow Statement

Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include:

• Cash Flow From Operations
• Cash Flow From Investments
• Cash Flow From Financing

Below is a sample of a projected cash flow statement for a startup record label business.

Sample Cash Flow Statement for a Startup Record Label Firm

You will also want to include an appendix section which will include:

• Your complete financial projections
• A complete list of your company’s business policies and procedures related to the rest of the business plan (marketing, operations, etc.)
• Any other documentation which supports what you included in the body of your business plan.

Writing a good business plan gives you the advantage of being fully prepared to launch and/or grow your record label company. It not only outlines your business vision but also provides a step-by-step process of how you are going to accomplish it.

Remember to keep your business plan updated as your company grows and changes. Review it at least once a year to make sure it is still relevant and accurate.  

Finish Your Record Label Business Plan in 1 Day!

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How to Write a Record Label Business Plan (Free Template)

Your business plan should set realistic goals, address any issues early on, and develop a clear path for the future of your record label. A solid business plan is also essential when you come to secure loans or new investment in the future.

But what should you include in a record label business plan? For starters, it should include: ‍

- An overview of your business idea

-Your aims and goals

- How you’ll earn/spend money

- Any potential problems

- How you’ll measure progress ‍

We’ve created a free-to-use Record Label Business Plan Template, to help budding entrepreneurs get started writing their plan. You can access the template below, but before you dive in, you can scroll down a little further to learn more about some of the topics you’ll need to include.

Free record label business plan template

How to start a record label

What should a record label business plan include.

History and experience

What is your music industry experience? Do you have a track record of discovering and breaking new bands, or a string of successful previous releases? Make sure to sell yourself and demonstrate your value when setting up a record label .

You’ll need to write an executive summary – in other words a short, inspiring pitch designed to showcase and create interest in your business. What are the unique selling points of your label? What makes it different, potentially profitable and more exciting than the other independent labels out there?

Strengths, weakness, opportunities, threats

Set out your strengths, weaknesses, opportunities and threats – known as a SWOT analysis.

Your strengths could include the following and reputation of your artists or access to studios and influential contacts, while weaknesses could include a current lack of funding. Your opportunities could be any events or deals you’ve already secured, while threats could be strong competition from other labels, or a limited music scene in your local area. These are just some examples, so your SWOT analysis will depend entirely on your own situation

Your aims and how you’ll measure progress

What are the main aims of your record label? You’ll want to plan at least 1 to 3 years ahead, explaining your fundamental goals and how’ll you achieve them.

It’s also important to demonstrate how you’ll measure your achievements by identifying your Key Performance Indicators (KPIs). KPIs could include your expected profits margins, streaming and download targets, or expected media coverage.

Operations and management

Who’ll be running the day-to-day operations of your label? Will you be taking on any staff or partners to help you run the business? Make sure you’re realistic about what you and your team can achieve.

Also, do you have access to a studio or any other facilities to help your label thrive? What useful equipment do you currently own or have access to? ‍

Your marketing strategy and analysis ‍

You’ll want to set out a solid strategy for making your label a success. How will you promote and market your artists, events and releases? Have you carried out any market research, and do you have any opportunities, clients or deals already lined up?

‍ Financial forecasts and sales

How will your label turn a profit? What are your areas of incomes and expenses? If you already have a financial history, make sure to set it out clearly and make realistic projections for the future.

Long term, short term & contingency plan

A good way to sum up your business plan is with a short-term, long-term and contingency plan, to demonstrate foresight and the ability to adapt to new challenges.

A few more things to keep in mind

Keep it concise If you’re trying to attract funding and investment , make sure would-be investors can quickly and easily decipher the aims and opportunities of working with your label. Give them plenty of good reasons to invest!

Be professional Make your plan look and feel professional. This could include a front cover, contents page, detailed charts and forecasts, as well as a clear and inspirational executive summary or mission statement at the very beginning. Print out your plan and present in an eye-catching folder or binder.

Understand your market Demonstrate a clear understanding of the music industry and your target market. Who are your competitors and where are your opportunities for success?

Understand your finances Whether you’re in it for the money or not, understanding your financial limitations and objectives is extremely important, especially if you’re hoping to grow and develop your label, or attract investment now or in the future.

 Don’t forget to access the free Record Label Business Plan Template above and get started writing your own business plan!

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Record Label Business Plan Template [Updated 2024]

Record Label Business Plan Template

If you want to start a Record Label business or expand your current Record Label, you need a business plan.

Fortunately, you’re in the right place. Our team has helped develop over 100,000 business plans over the past 20 years, including thousands of record label business plans.

The following record label business plan template and example gives you the key elements you must include in your plan. In our experience speaking with lenders and investors, the template is organized in the precise format they want.

You can download our Business Plan Template (including a full, customizable financial model) to your computer here.

Record Label Business Plan Example

I. executive summary, business overview.

[Company Name], located at [insert location here] is a new, independent record label focusing on alternative rock music.

We seek to find and sign up-and-coming alternative rock bands based in the New York region. By finding underground talent and improving their marketing and appeal to a broader music audience, we will be able to build a stable of artists with significant customer bases. This will translate into significant music album sales, concert tickets, and related products (e.g., merchandise).

Products Served

[Company Name] will provides both a product and a service to two distinct audiences.

To alternative music artists which provide talent agent and artist representation functions. That is, we find and recruit talent. And then we manage our bands and provide the creative and marketing resources they need to develop music and sell music and merchandise.

We will also sell music, concert tickets and merchandise.

Customer Focus

[Company Name] will primarily serve alternative rock fans in the greater NY region. Simmons Research has found that these fans display the following demographic characteristics:

• Gender skew is fairly balanced…56% males, 44% females.
• Listeners tend to be well-educated, 41% more likely than the average adult to have attended or graduated from college.
• Listeners tend to be 40-50% more likely than the average adult to be a heavy radio listener.
• The majority of the audience remains firmly lodged in the 18-44 age range.

In addition to end-customers, we serve the needs of alternative rock bands. We will focus on currently unsigned bands. Typically, the members of these bands are in their 20s and have getting signed, generating revenues and becoming famous as their primary goals.

Management Team

[Company Name] is led by [Founder’s Name] who has been in the music business for 3 years. While [Founder] has never run an independent record label himself, he has been active in the industry for many years as a listener and as an intern at Alternative Rock Station WCDS in New York City.

Success Factors

[Company Name] is uniquely qualified to succeed due to the following reasons:

• There is currently no independent record label in the NY metro area focused exclusively on up-and-coming alternative rock bands.
• There has been a significant growth in alternative rock listeners in the area. Music stations catering to this market have been thriving.
• The management team has a track record of success in the independent record label business.
• Our business model will be profitable if we can grow in the metro-NY area. If any of our artists thrive nationally, then we will be even more successful.

Financial Highlights

[Company Name] is currently seeking $100,000 to launch. Specifically, these funds will be used as follows:

• Build-out and Startup costs: $25,350
• Salaries: $45,000
• Marketing: $20,000
• Lease expenditures: $12,000

Topline projections over the next five years are as follows:

II. Company Overview

Who is [company name].

We seek to find and sign up-and-coming alternative rock bands based in the New York region. By finding underground talent and improving their marketing and appeal to a broader music audience, we will be able to build a stable of artists with significant customer bases. This will translate into significant sales of music (CDs, MP3s), concert tickets, and related products (e.g., merchandise.

[Company Name]’s History

[Founder’s Name] conceived [Company Name] on [Date] after years of attending alternative rock concerts in the New York metro region and seeing the massive increase in attendance to most events.

[Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].

The business is currently being run out of [Founder’s Name] home office, but once the lease on [Company Name]’s retail location is finalized, all operations will be run from there.

Since incorporation, the company has achieved the following milestones:

• Found office space and signed Letter of Intent to lease it
• Developed the company’s name, logo and website
• Created the mission statement
• Determined equipment requirements
• Began discussions to sign key alternative rock bands

[Company Name]’s Products & Services

[Company Name] will develop the following products for sale to consumers:

• Music (CDs, MP3s)
• Merchandise (shirts, hoodies, posters, etc.)
• Concert tickets

To the music artists it signs, [Company Name] will primarily offer the following services.

• Marketing support (to build each band’s customer base)
• Distribution (to sell music, merchandise and concert tickets)
• Tour support (arranging and managing tours)
• Promotions (working with radio stations and other entities to promote each band).

III. Industry Analysis

The following industry trends and statistics bode well for [Company Name].

The music industry is clearly vast. According to IFPI, which represents the recording industry worldwide, global music sales were $33.5 billion, with the U.S. accounting for $12.3 billion of that amount.

Within this industry, consider the following key statistics:

• 30% of the global music market belongs to independent labels
• Independent labels sell 900 million units annually
• Artist signed by a major record label earn approximately $1 per copy sold
• Artist signed by an independent record label earn approximately $5 per copy sold

Because independent record label artists earn 5 times the revenue per unit sold, [Company Name] is at an advantage in signing many up-and-coming alternative music bands versus major labels.

Other key information from IFPI includes the following:

• The digital music business internationally saw a sixth year of expansion , growing by an estimated 25 per cent. Digital platforms now account for around 20 per cent of recorded music sales. Recorded music is at the forefront of the online and mobile revolution, generating more revenue in percentage terms through digital platforms than the newspaper (4%), magazine (1%) and film industries (4%) combined.
• Single track downloads are up 24 per cent continue to drive the online market, but digital albums are also growing healthily (up 36%).
• A-la-carte music downloads continue to grow, with Amazon MP3 joining the European market, broadening consumer choice. An increasing number of stores are licensed to sell DRM-free music tracks. iTunes, the leading download store, has millions of DRM-free tracks available at flexible pricing points.
• Music companies are also increasingly licensing music to third parties. One notable success is the games sector, where music games were responsible for 15 per cent of overall game sales in the US. Guitar Hero and its sequels have sold more than 23 million copies in three years, generating more than US$1 billion in North America alone (PWC).

IV. Customer Analysis

Demographic profile of target market.

[Company Name] will primarily serve the alternative rock bands and fans in the New York metro area. Over time, we expect that our bands will gain regional and national attention.

Simmons Research has found that alternative rock fans display the following demographic characteristics:

Customer Segmentation

With regards to alternative rock bands, we will focus on currently unsigned bands, independent artists and internet stars . Typically, the members of these bands are in their 20s and have getting signed, generating revenues and becoming famous as their primary goals.

V. Competitive Analysis

Direct & indirect competitors.

The following independent alternative rock record labels most directly compete with [Company Name]:

Fueled By Ramen

Fueled By Ramen is a record label based in New York City with an office in Tampa, Florida.

Fueled By Ramen released a self-titled EP from Jimmy Eat World, a five-song collection that proved a breakthrough for both the label and the Arizona-based band. With increased distribution demands and a rise in radio play, Fueled By Ramen set up its first real office space that same year.

Fall Out Boy’s Pete Wentz introduced Fueled By Ramen to fellow Chicago rock outfit The Academy Is… who released their acclaimed debut album Almost Here, the following year.

The label opened an office in midtown Manhattan and that same year Paramore’s album Riot! debuted in the Billboard Top 20, was certified gold and has recently gained platinum status. Panic at the Disco’s second album enjoyed similar success, debuting at number #2 on Billboard’s Top 200 chart, selling over 139,000 copies its first week and making it the fastest-selling album in the label’s history.

The following artists are currently signed to Fueled By Ramen:

• The Academy Is…
• Cobra Starship
• Cute Is What We Aim For
• Fall Out Boy
• Forgive Durden
• The Friday Night Boys
• Gym Class Heroes
• The Hush Sound
• Panic at the Disco
• A Rocket to the Moon
• This Providence
• VersaEmerge

Caroline Records

Caroline Records started out as a subsidiary of Richard Branson’s Virgin Records label during the early to mid 1970s. The label originally specialized in putting out budget price LPs by mainly progressive rock and jazz artists generally not considered to have a great deal of ‘mainstream’ or commercial appeal, but were often however creatively of great interest.

The first release on the label, and the artist who gave it its name, was Carol Grimes’ ‘Warm Blood’ LP, released in 1974. The original label was a photographic style variation on that of the Virgin label’s “Twins” logo designed by Roger Dean.

Both the U.S. and U.K. branches of Caroline Records are subsidiaries of Caroline Music, which includes Caroline Distribution and is in turn owned by EMI. Caroline has or had a number of subsidiary labels including Astralwerks, Gyroscope, Caroline Blue Plate, Rocks the World, Scamp, and Passenger.

Competitive Advantage

[Company Name] enjoys several advantages over its competitors. These advantage include:

• Location: [Company Name]’s location is within New York City giving it better proximity to NY alternative rock bands and the throngs of customers who enjoy this genre of music.
• Management: Our management team has years of business and marketing experience that allows us to market and serve both music artist and consumers in a much more sophisticated manner than our competitors.
• Relationships: Having been a part of the local alternative rock community for the past 5 years, [Founder’s Name] knows all of the local leaders, media and other influences. As such, it will be relatively easy for us to build branding and awareness of our independent record label.

VI. Marketing Plan

The Marketing Plan describes the type of brand [Company Name] seeks to create and the Company’s planned promotions and pricing strategies.

The [Company Name] Brand

The [Company Name] brand will focus on the Company’s unique value proposition:

• Offering high-quality service to independent alternative rock bands.
• Offering high-quality bands and music to alternative rock fans.
• Providing excellent customer service and allowing fans to get exciting experiences with their favorite independent alternative rock bands.

Promotions Strategy

[Company Name] expects to reach consumers through the following tactics:

Direct E-Mail

[Company Name] will collect physical email address at alternative rock concerts and via the websites of the bands it signs. It will market music (CDs, MP3s), concert tickets and merchandise to these consumers via email.

Public Relations

We will contact all local and area newspapers and television stations to tell them about each of our artists.

Advertising

[Company Name] will advertise in local newspapers and sponsor community events in order to gain awareness of our bands.

[Company Name] will provide free tracks to customers to enable them to hear samples of our bands.

Ongoing Customer Communications

[Company Name] will maintain a website and publish a monthly email newsletter to tell customers about new events, products and more.

Pricing Strategy

[Company Name]’s pricing will be moderate so customers feel they receive great value when purchasing items from the bands we represent.

VII. Operations Plan

Functional roles.

In order to execute on [Company Name]’s business model, the Company needs to perform many functions including the following:

Administrative Functions

• General & Administrative functions including legal, marketing, bookkeeping, etc.
• Hiring and training staff

Artist Representation Functions

• Finding/recruiting bands
• Negotiating contracts
• Promoting band events and products
• Managing concerts and tours
• Music development (recording studio management, etc.)

Retail Functions

• Product development (e.g., manufacturing merchandise)
• Product sales (direct via internet, and recruiting distributors)
• Customer support functions

[Company Name] expects to achieve the following milestones in the following [] months:

VIII. Management Team

Management team members.

[Company Name] is led by [Founder’s Name] who has been in the music business for 3 years. While [Founder] has never run an independent record label himself, he has been active in the industry for many years as a listener and as an intern at Alternative Rock Station WCDS in New York City

[Founder] graduated from the University of ABC where he majored in Communications.

Hiring Plan

[Founder] will supported by a team of experienced music professionals. As the Company grows, we will need to hire the following personnel:

• Director of Operations
• Director of Marketing
• General Manager
• Assistant Manager

IX. Financial Plan

Revenue and cost drivers.

[Company Name]’s revenues will come from the sale of:

• Music (CDs/MP3s)
• Merchandise

The major costs for the company will be music and merchandise production costs, distribution costs and staff salaries of the staff.

Capital Requirements and Use of Funds

[Company Name] is seeking a total funding of $370,000 to launch its store. The capital will be used for funding capital expenditures, manpower costs, marketing expenses and working capital.

Key Assumptions & Forecasts

Below please find the key assumptions that went into the financial forecast and a summary of the financial projections over the next five years.

5 Year Annual Income Statement

5 Year Annual Balance Sheet

5 Year Annual Cash Flow Statement

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Record Label Business Plan Template & Guidebook

How to write a record label business plan in 7 steps:, 1. describe the purpose of your record label business..

It also helps to include a vision statement so that readers can understand what type of company you want to build.

2. Products & Services Offered by Your Record Label Business.

When you think about the products and services that you offer, it's helpful to ask yourself the following questions:

3. Build a Creative Marketing Stratgey.

If you don't have a marketing plan for your record label business, it's time to write one. Your marketing plan should be part of your business plan and be a roadmap to your goals. 

Target market

Customer base , product or service description, competitive analysis, marketing channels, form an llc in your state, 4. write your operational plan., what equipment, supplies, or permits are needed to run a record label business, 5. management & organization of your record label business..

The second part of your record label business plan is to develop a management and organization section.

6. Record Label Business Startup Expenses & Captial Needed.

Startup costs are typically the first expenses you will incur when beginning an enterprise. These include legal fees, accounting expenses, and other costs associated with getting your business off the ground. The amount of money needed to start a record label business varies based on many different variables, but below are a few different types of startup costs for a record label business.

You should include any costs associated with marketing and sales, such as advertising and promotions, website design or maintenance. Also, consider any additional expenses that may be incurred if you decide to launch a new product or service line. For example, if your record label business has an existing website that needs an upgrade in order to sell more products or services, then this should be listed here.

7. Financial Plan & Projections

Here are some steps you can follow to devise a financial plan for your record label business plan:

Frequently Asked Questions About Record Label Business Plans:

Why do you need a business plan for a record label business, who should you ask for help with your record label business plan.

It is advisable to ask a professional business consultant or a knowledgeable attorney for help with your record label business plan. They can provide advice and resources that may prove beneficial in creating a successful business plan. You may also research online to find sample business plans, or contact organizations such as SCORE, an organization that offers free business advice and counseling services for entrepreneurs.

Can you write a record label business plan yourself?

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I'm Nick, co-founder of newfoundr.com, dedicated to helping aspiring entrepreneurs succeed. As a small business owner with over five years of experience, I have garnered valuable knowledge and insights across a diverse range of industries. My passion for entrepreneurship drives me to share my expertise with aspiring entrepreneurs, empowering them to turn their business dreams into reality.

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Record Label Business Plan Sample

Published May.12, 2018

Updated Apr.23, 2024

By: Jakub Babkins

Average rating 5 / 5. Vote count: 6

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Table of Content

Do you want to start record label business?

Are you thinking about starting music production company ? A music production or a record label company is a trademark or brand associated with music videos and recordings. A record label company manages the production, manufacture, marketing, distribution, promotion, and copyright enforcement for the music recordings while also engaging itself with the development of new artists and talent sourcing.

The music industry is one of the biggest and most profitable industries since music is loved by nearly every person out there. But starting a business in this industry isn’t easy and there are a lot of things which need to be considered and addressed before this startup. In case, you don’t know how to start your own record label business , you can take help from this business plan written for a record label startup ‘R&N Entertainment.’

The first thing you must do is to make a comprehensive business plan for your startup. The professional business planning will help you in acquiring the license for your business and will also help you take important decisions for the startup. It will help you define your services, identify your target market, prepare your sales and marketing strategies, and develop a personnel and financial plan. Most importantly, it will help you acquire investors for your startup if you need any.

Executive Summary

2.1 the business.

R&N Entertainment will be an international record label which will manage the production, manufacture, marketing, distribution, promotion, and copyright enforcement for the music recordings.

2.2 Management

R&N Entertainment is a joint venture started by Randy Hilsly and Nash Jonson, whereby both parties have equally shared investment, shared ownership, shared governance, as well as shared returns and risks. Both Randy and Nash have served at executive positions in Warner Music Group, which is among the Big-Three Labels. Due to their extensive experience, the owners know how to write a business plan for a record label and how to start music production company .

2.3 Customers

With the advent of the internet, it has now become very easier for the record labels to enhance their range of operations and target a broader audience. We will be targeting a global audience and our customers will include people from all backgrounds, areas, religions, and colors.

2.4 Business Target

Our main business targets are as follows:

Company Summary

3.1 company owner.

R&N Entertainment is a joint venture started by Randy Hilsly and Nash Jonson, whereby both parties have equally shared investment, shared ownership, shared governance, as well as shared returns and risks. Both Randy and Nash have served at executive positions in Warner Music Group, which is among the Big-Three Labels.

3.2 Why the Business is being started

Both the owners of the R&N Entertainment share a common vision of bringing the music industry back to its past heights. The quality of music is getting deteriorated day-by-day due to many reasons. We, at R&N Entertainment, will ensure that the new generation gets the best of music, and also gets a touch of the contemporary classical music. With this shared mission in mind, the owners have created an ingenious record label business model which is meant to succeed and excel the competitors.

3.3 How the Business will be started

R&N Entertainment will be started in Houston in a leased location which was previously used as a restaurant. The facility requires a lot of work so that it can be converted into a recording studio and the company will hire a contractor for that purpose. In addition to the usual inventory, the company will procure professional headphones, microphones, track recorders, mixing consoles, reference monitors, keyboards, a music workstation, audio editing software, computers and other accessories. The financial experts have forecasted following costs needed to start a music production company :

The detailed startup requirements are given below:

Services for customers

Before you think about how to make your own music production company , you must decide what services will you provide to the singers and musicians you will be contracting with so as to attract them towards your company. You must also consider what kind of music will you be providing to the audience that will guarantee sales and will add value to your company. This will also help you in deciding the record label business structure for your company that’s why it must be considered before starting your own recording studio .

R&N Entertainment will manage the production, manufacture, marketing, distribution, promotion, and copyright enforcement for the music recordings.

The services of the company with reference to the revenue generation are categorized as follows:

• Record Retail Sales: The company will distribute its records and albums to various music retail outlets located across the country. It will contribute the biggest chunk of our revenue after the revenue generated by online sales.
• Online Record Sales: The company will engage in a large-scale sale of records and albums through digital channels and online platforms. Online record sales will be the biggest revenue generator for the company since sales trends are changing and most of the people prefer to buy online as compared to retail outlets.
• Live Concerts: The company will also arrange concerts and events whereby the contracted singers and musicians will perform. The live concerts are being planned for two reasons, to generate sales and to promote the brand.
• Contract Buy-outs: In the music industry, it is a usual trend that bigger labels buy the contracts of emerging and promising artists from the smaller labels. This contract buy-out rapidly generates a high revenue for the smaller and newly-emerging labels.

Marketing Analysis of music studio business

The most important component of an effective record label business plan is its accurate marketing analysis and a good music studio business plan can only be developed after this stage. If you are starting on a smaller scale, you can do marketing analysis yourself by taking help from this record label business plan sample or other sample record label business plans available online. If you are starting on a larger scale, it is always best to seek the counsel of marketing experts for developing a good recording studio business plan . The success or failure of a business totally depends upon its marketing strategy which can only be developed on the basis of accurate marketing analysis. Therefore, it must be considered before you develop your record company business plan .

R&N Entertainment acquired the services of marketing experts to carry out the marketing analysis for its music label business plan . The owners also went through various recording studio business plans available online before developing their own music production business plan .

Operational and Strategic Planning

5.1 market trends.

For learning the market trends in this industry, you will have to carry out an in-depth research. You can take help from this record label business plan template or other record label business plans available on the internet. This record label business plan template free can be freely used for getting all industry and market trends, you should know to start a record label business plan . The record label industry is an older one but it spread widely in the 1990s, when the independent tables, home studios, and consumer recording technology became more common. The global revenue of the music industry started decreasing from 2002 due to many factors, the biggest one of which was the changing tides in the world of technology which enabled artists to release their tracks directly on the internet without the need of record labels. The industry kept dropping until 2013 when it was valued to be $15 billion, the lowest revenue recorded since 2002.

However, it again started increasing in magnitude and grew by 8.1% till 2017, making its value to be around $17.3 billion. This renewed growth was the result of record companies’ ongoing investment, not only in music artists but also in digital innovation that enriched fans’ experiences and harnessed technology like voice-controlled home speakers and similar devices. With the increasing digitalization, fans’ engagement with streaming and especially the paid subscription audio streaming also increased. The result was that digital revenues accounted for more than half (54%) of the revenue generated by the global recording industry. By the end of 2017, 176 million users were estimated to be paid subscribers and out of those 176 million, 64 million were added during the same year. Still, the total revenue generated by this industry was just 68.4% of what it was during its peak in 1999. These stats show the struggle, this industry has faced due to increased digitalization but, on the other hand, this digitalization can also prove a useful tool for record labels industry provided that use it wisely. If we were to summarize the whole thing, we can say that a record label startup can succeed only if it pays special attention to its strong online presence.

5.2 Marketing Segmentation

After you have identified the industry and market trends, you should now identify your target market and must observe how your target market is categorized into your customer groups. Identifying the target market segmentation is very important for music production company business plan since it helps in creating effective marketing strategies. And since the target market of a record label is usually the people living across the globe, the marketing segmentation is more or less the same for nearly all businesses in this industry. That’s why you can also have an idea about your target market segmentation from this record label business plan example or free record label business plan samples available online. A successful and efficient marketing strategy can only be developed after you completely know your potential customers hence you must pay special attention to this part of your music production studio business plan . Previously, when the internet wasn’t as popular as it is now, the record labels just relied on sales of recordings from the retail outlets and their target market used to be somewhat limited. But with the advent of the internet, it has now become very easier for the record labels to enhance their range of operations and target a broader audience. So, if a record label is based in the United States, its target market isn’t just restricted to the United States. Thanks to the internet, record labels can now target a global audience.

R&N Entertainment will also target a global audience, out of which, our experts have identified the following categories:

The detailed marketing segmentation of our target audience is as follows:

5.2.1 Digital Customers:

Our first and the most important group will be the customers which will be digitally linked to us. As mentioned earlier, we plan to target a global audience which is only possible by maintaining a strong online presence across all online platforms including company website, social media pages, the official app as well as online retailers like Amazon and Alibaba. Our digital customers can access our records by various means. Music files from the artists may be downloaded free of charge or for a fee that is paid via PayPal or another online payment system. Hard copy CDs can also be purchased by online retailers in addition to direct downloads. Digital sales contributed to more than half (54%) of the revenue generated by global record sales as of 2017, so this is the main area where we will focus our efforts. We will create special strategy for business for targeting our digital customers located across the globe.

5.2.2 Retail Customers:

Our second target group comprises of those customers who will buy our records from the retail outlets located across the United States. Initially, we will provide our records in the hard form, only in the United States but by the end of the second year, we hope to create a distribution network in Europe. This customer group will also generate a lot of revenue since music is loved by nearly every teen and adult in the United States.

5.2.3 Live Audience:

The third target group comprises the audience or customers who will attend our live events and concerts. We will arrange concerts on a regular basis in all major cities of the United States. Through these concerts, we not only aim to generate sales but we also aim to promote our artists and our brand. Although these live events will not directly create a lot of revenue they will indirectly do so by promoting us.

The detailed market analysis of our potential customers is given in the following table:

5.3 Business Target

After the global recording market endured about 15 years of revenue decline, the companies in this industry are striving for fueling this recent return to growth and for ensuring that the artists receive fair value for music creation. Our main business targets to be achieved as milestones over the course of next three years are as follows:

• To become the best record label in Houston within next three years of launch by providing high-quality services
• To achieve the net profit margin of $10k per month by the end of the first year, $15k per month by the end of the second year, and $25k per month by the end of the third year
• To balance the initial cost of the startup with earned profits by the end of the second year
• To increase the retail distribution setup and target European market by the end of the second year

These business targets are extremely realistic and can be achieved by creating engaging ways for fans to access music on multiple services and platforms.

5.4 Product Pricing

This sample business plan for a record label will also help you in deciding the product pricing strategy for your record label company. After considering the market demands, we have priced our services in the similar ranges as of our competitors. This pricing strategy has been carefully selected considering many factors, especially the competition provided by the established record labels, especially the Big-Three Labels of the United States.

Great company

Great company, reliable, professional, and really organised!

After you have identified the market demand, market trends, and the potential customers of the startup, you must now define an effective strategy for attracting those customers toward you. Like marketing analysis, sales strategy is also an important component of a good dental business plan and it must be properly developed before thinking about how to write a business plan for a record label .

6.1 Competitive Analysis

The record label industry is one of the most competitive industries in the United States and it is nearly impossible for a startup to survive in such environment unless it has a clear competitive edge over its competitors. Therefore you must consider it before you start your own recording studio . Our main competitive advantage will be our talented artists which will be sought by proper talent sourcing methods. We will also attract the famous artists by making “360” deals with them which will give us rights and percentages to artist’s touring, merchandising, and endorsements. In exchange for these rights and for ensuring the maximum retainage of good artists, we will pay higher percentages of CD sales, will have more patience with artist development, and will give higher advance payments to artists.

6.2 Sales Strategy

After carrying out a detailed analysis, our experts came up with the following brilliant ideas to advertise and sell ourselves.

• We will ensure a strong presence across all online platforms including company website, social media pages, the official app as well as online retailers like Amazon and Alibaba.
• We will advertise ourselves in magazines, newspapers, TV stations, and social media.
• We will arrange free concerts for the initial three months of our launch so as to promote ourselves.
• Sponsor relevant TV shows and radio programs.
• Place adverts on both print and electronic media platforms.

6.3 Sales Monthly

Our monthly sales are forecasted as follows:

6.4 Sales Yearly

Our yearly sales are forecasted as follows:

6.5 Sales Forecast

Our forecasted sales are given below.

Personnel plan

Preparing personnel plan is also an important to start music production company so make sure to duly consider it before thinking about how to start your own recording studio . The personnel plan of our company is as follows.

7.1 Company Staff

Randy will act as the General Manager of the company while Nash will act as the chief financial officer. In addition to that, the company will initially hire following people:

• 3 Accountants for maintaining financial and other records
• 5 Sales Executives responsible for marketing and discovering new ventures
• 5 Recording Artists for recording the tracks of musicians
• 10 Technical Assistants for providing technical support throughout the process
• 4 Assistants for undertaking various day-to-day tasks.
• 4 Social Media Assistant for managing the company’s social media pages.
• 4 SEO/SEM specialists for ensuring a strong online presence across all platforms.
• 2 Customer Representatives for interacting with customers
• 4 Editors for editing the audio/video recordings
• 10 Distributors/ drivers for distributing the recordings to the retail outlets located across the country
• 3 Cleaners for maintaining a clean environment

All the employees will be hired by following strict testing procedures and will also be trained before onboarding.

7.2 Average Salary of Employees

The following table shows the forecasted data about the salaries of the employees for the next three years. These salaries are just an estimate and are also expected to deviate but the overall expenses will be more or less the same.

Financial Plan

Just like the other plans, you must also prepare a detailed financial plan covering all financial aspects of your startup. You can also take help from this sample business plan for record label . The financial plan should craft a detailed map of the costs of startup, inventory, payroll, equipment, rent, utilities and how these costs will be covered by the earned profits. Also, make sure to carry out a detailed profit and loss analysis before getting to think about how to start your own music production company . Our financial plan outlines the development of the company over the next three years and is specifically developed to achieve the company’s short-term as well as the long-term objectives.

8.1 Important Assumptions

8.2 Brake-even Analysis

8.3 Projected Profit and Loss

8.3.1 Profit Monthly

8.3.2 Profit Yearly

8.3.3 Gross Margin Monthly

8.3.4 Gross Margin Yearly

8.4 Projected Cash Flow

8.5 Projected Balance Sheet

8.6 Business Ratios

Download Online Record Label Business Plan Sample in pdf

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Here is a free business plan sample for a record label.

If you're passionate about music and envision launching your own record label but are unsure of the first steps to take, you've come to the perfect spot.

In the content that follows, we will present you with a comprehensive sample business plan tailored for a record label.

As you might be aware, a meticulously developed business plan is crucial for any aspiring entrepreneur. It serves as a roadmap, outlining your vision, objectives, and strategies for your venture.

To craft a winning plan with ease and precision, you can utilize our record label business plan template. Additionally, our specialists are on hand to review and refine it at no extra cost.

How to draft a great business plan for your record label?

A good business plan for a record label must capture the unique dynamics of the music industry.

Initially, it is crucial to provide a comprehensive overview of the music market. This includes current statistics and the identification of emerging trends within the industry, as illustrated in our record label business plan template .

Your business plan should articulate your vision clearly. Define your niche (such as a specific music genre), your target audience (independent artists, established musicians, or both), and your label's distinctive brand (innovative, traditional, genre-specific, etc.).

Market analysis is a key component. This requires an in-depth look at the competitive landscape, understanding the shifts in music consumption, and recognizing the potential fanbase for your artists.

For a record label, it's imperative to detail your artist roster and catalog. Describe the type of artists you aim to sign, the genres you will focus on, and how you plan to support and develop your talent.

The operational plan should outline the structure of your label, including A&R (Artists and Repertoire) processes, recording and production facilities, distribution channels, and partnerships with music platforms.

Quality of production, artist development, and intellectual property management are critical areas to emphasize for a record label.

Marketing and sales strategies must be addressed next. How will you promote your artists and releases? Consider your approach to PR campaigns, social media marketing, touring, merchandise, and fan engagement.

Incorporating digital strategies is non-negotiable in the modern music industry. This includes streaming services, digital downloads, and a robust online presence.

The financial section is vital. It should encompass the initial investment, revenue projections, cost analysis, and the point of profitability.

Record labels often deal with variable income streams, so a thorough understanding of your financials is essential. For assistance, refer to our financial forecast for a record label .

Compared to other business plans, a record label's plan must pay special attention to the rapidly changing technology in music distribution, the importance of intellectual property rights, and the strategies for artist development and branding.

A well-crafted business plan will not only help you to define your strategy and operations but also to attract artists, partners, and investors.

Investors and lenders are looking for a solid market analysis, realistic financial projections, and a clear plan for artist management and growth.

By presenting a detailed and substantiated plan, you showcase your knowledge of the music industry and your commitment to the success of your record label.

To achieve these goals efficiently, you can start with our record label business plan template .

A free example of business plan for a record label

Here, we will provide a concise and illustrative example of a business plan for a specific project.

This example aims to provide an overview of the essential components of a business plan. It is important to note that this version is only a summary. As it stands, this business plan is not sufficiently developed to support a profitability strategy or convince a bank to provide financing.

To be effective, the business plan should be significantly more detailed, including up-to-date market data, more persuasive arguments, a thorough market study, a three-year action plan, as well as detailed financial tables such as a projected income statement, projected balance sheet, cash flow budget, and break-even analysis.

All these elements have been thoroughly included by our experts in the business plan template they have designed for a record label .

Here, we will follow the same structure as in our business plan template.

Market Opportunity

Market data and figures.

The music industry is a dynamic and evolving sector with significant impact.

As of recent estimates, the global recorded music market revenue is valued at over 20 billion dollars, with projections indicating continued growth driven by streaming services and digital sales.

In the United States, there are thousands of record labels, ranging from major companies to independent labels, contributing to a multi-billion-dollar industry that plays a vital role in the country's cultural and economic landscape.

These figures underscore the record label's critical position in the entertainment sector and its substantial contribution to the global economy.

Current trends in the music industry show a shift towards digital consumption, with streaming services dominating the market.

The rise of social media platforms has revolutionized music promotion, allowing artists to engage directly with their fans and build their brands independently.

There is also a growing interest in vinyl records and other physical formats, as consumers seek tangible connections with music in the digital age.

Artists are increasingly exploring innovative revenue streams, such as live streaming performances, merchandise, and fan-funded projects.

Moreover, there is a heightened focus on diversity and inclusion within the industry, with movements advocating for equal representation and opportunities for underrepresented groups.

These trends highlight the music industry's adaptability and responsiveness to the changing preferences and values of modern consumers.

Success Factors

The success factors for a record label are multifaceted and crucial for its sustainability.

First and foremost, discovering and nurturing talent is at the heart of a record label's success. Signing artists with unique sounds and strong market potential is essential.

Effective marketing and promotion strategies are also key to ensuring that artists and their music reach the widest possible audience.

Building strong relationships with distribution channels, including streaming services, radio stations, and retailers, is vital for maximizing sales and exposure.

Adaptability to the rapidly changing music landscape, including technological advancements and consumer behavior shifts, is necessary for long-term viability.

Lastly, a commitment to artist development and support, coupled with sound financial management, will help a record label thrive in a competitive and ever-changing industry.

The Project

Project presentation.

Our record label project is designed to cater to the evolving landscape of the music industry, focusing on the discovery and promotion of artists who bring unique sounds and innovative music. Situated in a vibrant cultural hub, our label will specialize in a variety of genres, with an emphasis on supporting independent musicians and providing them with a platform to reach a wider audience.

We aim to harness the power of digital distribution, social media marketing, and live events to showcase our artists' talents. Our commitment is to produce high-quality recordings that capture the essence of each artist's creativity and style.

Our record label aspires to be a beacon for music innovation, nurturing talent and delivering fresh and compelling music to a global audience.

Value Proposition

The value proposition of our record label lies in our dedication to nurturing and promoting independent artists with a distinct voice and sound. We offer a partnership that extends beyond traditional record deals, providing comprehensive support including production, marketing, and distribution.

Our commitment to artistic integrity, combined with cutting-edge promotion strategies, ensures that our musicians receive the exposure and recognition they deserve. We strive to create a collaborative community where artists can thrive and fans can discover new music that resonates with them.

Our label is more than a business; it's a movement to empower musicians and redefine the music industry by prioritizing talent and authenticity over commercial conformity.

Project Owner

The project owner is a music industry veteran with a passion for discovering and fostering musical talent. With a background in A&R, music production, and artist management, they possess the expertise to identify potential hits and guide artists to success.

With a deep understanding of the challenges faced by independent musicians, the owner is committed to creating a supportive environment that allows artists to focus on their craft while the label handles the complexities of the music business.

Driven by a love for music and a desire to disrupt the industry with a fresh approach, the project owner is the visionary leader of the label, dedicated to making a lasting impact on the music scene and providing a voice for the next generation of groundbreaking artists.

The Market Study

Target market.

The target market for our record label is segmented into various groups.

Firstly, we have music enthusiasts who are constantly seeking new and unique sounds, especially from emerging and independent artists.

Additionally, there are fans of specific genres that our label specializes in, who are dedicated to supporting and discovering artists within that niche.

Another segment includes aspiring musicians looking for a label that can provide personalized attention and support to kickstart their careers.

Lastly, industry professionals such as music producers, event organizers, and other labels could form strategic partnerships, enhancing our reach and influence in the music scene.

SWOT Analysis

Our SWOT analysis for the record label identifies several key factors.

Strengths include a dedicated team with a keen ear for talent, strong industry connections, and a commitment to artist development and creative freedom.

Weaknesses might involve the challenge of breaking new artists into a saturated market and the financial risks associated with artist promotion and production costs.

Opportunities can be found in the rise of digital music platforms, which can amplify our artists' reach, and in the potential for live event promotion as a revenue and exposure stream.

Threats include the rapidly changing music industry landscape, the dominance of major labels, and the volatility of music trends and consumer tastes.

Competitor Analysis

Our analysis of competitors within the music industry indicates a mix of large-scale and independent record labels.

Major labels have the advantage of extensive resources and established distribution channels, while other indie labels offer a more grassroots and artist-centric approach.

To compete effectively, we must leverage our unique selling points, such as our genre specialization, artist-friendly contracts, and innovative marketing strategies.

Understanding the strengths and weaknesses of these competitors will be crucial in carving out our niche and establishing a loyal artist and fan base.

Competitive Advantages

Our record label's competitive advantages lie in our passion for music and commitment to our artists.

We focus on discovering and nurturing talent, providing them with the resources and guidance to develop their artistry and reach their full potential.

Our hands-on approach ensures that artists feel supported and valued, which in turn fosters loyalty and long-term partnerships.

Additionally, our adaptability to the ever-evolving digital music landscape allows us to stay ahead of trends and offer our artists innovative platforms for exposure.

You can also read our articles about: - how to start a record label: a complete guide - the customer segments of a record label - the competition study for a record label

The Strategy

Development plan.

Our three-year development plan for the record label is designed to establish a strong foothold in the music industry.

In the first year, we will concentrate on talent acquisition and establishing a solid artist roster, while also building our brand identity and reputation.

The second year will focus on expanding our distribution channels, both digital and physical, and increasing our presence in key music markets.

In the third year, we aim to diversify our music portfolio, explore cross-promotional opportunities with other entertainment sectors, and consider international expansion.

Throughout this period, we will remain dedicated to discovering and promoting innovative music, supporting our artists, and staying ahead of industry trends to ensure the growth and success of our label.

Business Model Canvas

The Business Model Canvas for our record label targets emerging and established artists seeking innovative production and promotion strategies.

Our value proposition lies in providing a platform for artists to develop their careers, utilizing cutting-edge marketing techniques, and offering a fair and transparent profit-sharing model.

We distribute music through various channels, including streaming services, physical sales, and live performances, relying on our industry connections and marketing expertise.

Key activities include talent scouting, music production, marketing, and artist management.

Our revenue streams are generated from music sales, streaming royalties, merchandise, and live event promotions, while our costs are associated with production, artist advances, and promotional activities.

Access a complete and editable real Business Model Canvas in our business plan template .

Marketing Strategy

Our marketing strategy is centered on creating a strong brand presence and fostering a loyal fan base for our artists.

We aim to leverage social media platforms, music videos, and strategic collaborations to increase visibility and engagement.

Our label will also host showcase events and participate in music festivals to promote our artists and releases.

Additionally, we will partner with influencers and other brands to expand our reach and tap into new audiences.

Our commitment to artist development and innovative marketing will help us stand out in a competitive industry.

Risk Policy

The risk policy for our record label is focused on mitigating risks associated with the volatile nature of the music industry.

We will carefully select artists with growth potential and diversify our music portfolio to reduce dependency on any single genre or artist.

Our contracts will be structured to balance investment with potential returns, and we will maintain a flexible approach to adapt to changing market trends.

We will also secure comprehensive insurance to protect against legal and financial liabilities related to our business activities.

Our priority is to build a sustainable label that supports artists and delivers quality music to our audience while managing risks effectively.

Why Our Project is Viable

We are passionate about launching a record label that nurtures talent and introduces fresh sounds to the music scene.

With our strategic approach to artist development, marketing, and distribution, we believe we can carve out a unique space in the industry.

We are excited to empower artists and deliver exceptional music experiences to audiences worldwide.

We are prepared to adapt to the industry's dynamics and are optimistic about the future of our record label.

You can also read our articles about: - the Business Model Canvas of a record label - the marketing strategy for a record label

The Financial Plan

Of course, the text presented below is far from sufficient to serve as a solid and credible financial analysis for a bank or potential investor. They expect specific numbers, financial statements, and charts demonstrating the profitability of your project.

All these elements are available in our business plan template for a record label and our financial plan for a record label .

Initial expenses for our record label include setting up a professional recording studio, acquiring high-quality sound equipment, securing licenses and rights for music production, hiring experienced music producers and sound engineers, as well as costs related to brand creation and launching targeted marketing campaigns to promote our artists and releases.

Our revenue assumptions are based on a thorough analysis of the music industry trends, digital streaming growth, and the potential fanbase for the genres we aim to produce.

We anticipate progressively increasing sales, starting modestly and growing as the reputation of our record label and the popularity of our signed artists develop.

The projected income statement indicates expected revenues from music sales, streaming, licensing, and artist performances, production costs (studio time, equipment maintenance, artist advances), and operating expenses (rent, marketing, salaries, etc.).

This results in a forecasted net profit crucial for evaluating the profitability of our business over time.

The projected balance sheet reflects assets specific to our business, such as studio equipment, music catalogs, and liabilities including debts and anticipated expenses.

It shows the overall financial health of our record label at the end of each period.

Our projected cash flow budget details incoming and outgoing cash flows, allowing us to anticipate our cash needs at any given time. This will help us effectively manage our finances and avoid cash flow problems.

The projected financing plan lists the specific financing sources we plan to use to cover our startup expenses.

The working capital requirement for our record label will be closely monitored to ensure we have the necessary liquidity to finance our daily operations, including artist development, production costs, and salary payments.

The break-even point specific to our project is the level of sales needed to cover all our costs, including startup expenses, and start making a profit.

It will indicate when our business will be profitable.

Performance indicators we will track include the profit margin rate on our music sales, the liquidity ratio to assess our ability to cover financial obligations, and the return on investment to measure the effectiveness of our capital invested in the project.

These indicators will help us evaluate the financial health and overall success of our record label.

If you want to know more about the financial analysis of this type of activity, please read our article about the financial plan for a record label .

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Record Label Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business ideas » Entertainment Industry » Music Industry » Record Label

Are you about starting a record label online ? If YES, here is a complete sample record label business plan template & feasibility report you can use for FREE .

Are you a music lover? Did you know that even if you do not have an appealing voice to sing and make money that you can still make money from the industry? If you are an entrepreneur and you love music, one of the easiest ways of making money from the music industry is to start your own music label; and the truth is that it is not difficult to start your own music label from the scratch in any part of the world.

As mentioned earlier, one of the very things that you would be required to bring to the table is to first and foremost have the knack for music.

And then all other things would fall in place as it were. Those who already have a thriving business in the musical scene know that talent is very key in making it big. This is irrespective of whether you are a performing musician, a studio manager, a disc jockey, et al.

Owning a record label is basically about helping recording artists release their music album or singles to the general public and the process starts with agreeing on a deal or contract and then writing out the music lyrics before entering the studio to start work. Below for a sample record label business plan.

A Sample Record Label Business Plan Template

1. industry overview.

In recent time in the music industry, a larger percentage of recording artists have become increasingly dependent on record labels to promote them and increase their consumer base. It is easier for a record label to attract influx of upcoming artists if the record label is well established and recognized.

Record label that are just starting out would have to go out there to search for music talents that can help launch them out. The truth is that it is a win – win situation when a record label discovers a good music talent. The music label will help promote the recording artist and the recording artist also will give publicity to the record label.

The global revenue of the music industry is estimated at 15 billion U.S. dollars in 2013, and that is about the lowest revenue recorded since 2002; of course it is an indication that the record label industry needs to become more creative and leverage on the changing tides in the world of technology.

Even the strong growth in streaming revenues was not enough to stop the music industry globally from experiencing income dropping below US $15bn for the first time in recent years in 2014.

Statistics has it that in 2013 the three largest markets in the music industry, measured by the revenue they generated were the united states of America, Japan and Germany. Hence it is no surprise that the top three record labels who dominate the music industry in the globe are all headquartered in The United States of America.

Recent statistics from the IFPI revealed that overall global record industry revenues dipped by just 0.4% last year – but that was enough to pull the annual tally down from $15.03bn to $14.97bn.

The biggest offenders for the fall were an 8.1% decline in revenues from physical format sales (to around $6.89bn, according to MBW calculations) and an 8.0% decline in download sales (to around $3.56bn).Single track downloads declined by 10.9% in the year, while digital albums sales saw revenues drop by 4.2%.

In the early years of the recording industry, record labels were just the leverage any music artistes need to become successful in the music industry. This is why upcoming artistes or music band sourced for good recording label to sign a contract with.

Well it is important to note that most upcoming artistes or even establish artists ensures that they engage the services of an entertainment lawyer to help them negotiate the terms and condition of the contract. From past experience, no artist wants to sign a contract that will enslave them.

With the advent of the internet, it has now become pretty much easier for music labels to increase their range of operations. A music label with a large follower on social media platforms can easily promote artists under their label. All they need to do is to release free downloads on their website.

If the music is good it wouldn’t be too long before it trends on a global stage. Good example is the famous 2012 dance pop single – the ‘PSY -gangnam style’ from far away South Korea.

One good thing about starting a record label is that even if you decided to start it in the United States of America, your market will not be restricted to artists in the U.S.; the world will be your target market. Many thanks to the internet that has made the world a global village. All you need to do is to strategically position your record label brand on the internet.

2. Executive Summary

Dexterity® Record Label Company is a standard record label company that proposes to be based in 500 Madison Avenue New York, NY 10011, USA.

Our aim of starting this business is to work in tandem with both established and upcoming music artist in the United States of America and other countries of the world to help to launch their musical career or take their musical career to the next level as the case maybe.

Our Head Office will be located in New York City, but we will have our branch offices in major cities in all regions of the United States of America – with the first two years of operation we would have set up our offices in the following locations; Las Vegas, Los Angeles, Dallas, Texas and Boston.

Dexterity® Record Label Company is going to be a self-administered and a self-managed record label / musical company. We will work towards becoming one of the largest managers of reigning musical artist in the United States of America and other parts of the world with musical album hits back to back in the music industry.

We are quite aware that record label / music business requires huge capital base- especially for the purchase of world – class studio equipment and music / artist promotion, which is why we have perfect plans for steady flow of cash from private investors who are interested in working with us.

We can confidently say that we have a robust financial standing and we are ready to take on any challenge that we encounter in the industry.

As part of our plans to make artists under our label and our customers our number one priority and to become one of the leading record label company in New York City, we have perfected plans to work with our clients to deliver music projects that can favorably compete with the best in the industry at an affordable and reasonable price, within the stipulated completion date barring any unforeseen circumstance and also to help artistes under our record label gain international recognition within a short period of time.

Dexterity® Record Label Company is to become a specialist in turning upcoming musical artists into starts / celebrities and already made music artists / starts into mega – super stars. Dexterity® Record Label Company will at all times demonstrate her commitment to sustainability, both individually and as a record label, by actively participating in our communities and integrating sustainable business practices wherever possible.

Dexterity® Record Label Company will be owned majorly by Dexter Clinton and Mack Hamilton. This duo have been able to cut their teeth in the musical industry both at national level and international level. They have appreciable year of experience working with some of the leading international record label companies in the United States of America prior to start their own record label company.

3. Our Products and Services

Dexterity® Record Label Company is going to offer varieties of services within the scope of the music industry in the United States of America. Our intention of starting our record label company is to make profits from the music industry and we will do all that is permitted by the law in the US to achieve our aim and ambition.

Our business offering are listed below;

• Music Recording
• Music Video Shoots
• Promotion of Music Artists / Music Tours
• Sound Production
• Studio Session
• Production of Jingles for Organizations
• Marketing and Sales Music
• Managing of Music Artist
• Setting up of Recording Studios for Clients
• Sell of Musical Equipment
• Music Consulting Services

4. Our Mission and Vision Statement

• Our vision is to help upcoming music artists to become stars and to help established music artists to become mega – super stars
• Our mission as a record label is to build a business that will help our clients achieve their highest dreams within the shortest time possible and to be listed amongst the top 10 record label companies in the world.

Our Business Structure

The fact that we are set to compete with other leading record label companies in the world, means that we must build a business structure that can support our business goal. Dexterity® Record Label Company will build a solid business structure that can support the growth of our business.

We will ensure that we hire competent hands to help us build the business of our dream. Below is the business structure that we will build Dexterity® Record Label Company;

• Chief Executive Officer

Entertainment Lawyer / Legal Secretary

• Talent Hunt Manager

Studio Manager

Music / Record Producer

Sound / Recording Engineer

Admin and HR Manager

Marketing and Sales Executive

Front Desk Officer

5. Job Roles and Responsibilities

Chief Executive Office:

• Responsible for providing direction for the firm
• Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for handling high profile clients and deals
• Responsible for fixing prices and signing business deals
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization
• Reports to the board
• Responsible for drawing up contracts and other legal documents for the company
• Advise artists and the organization accordingly before signing any musical artists under the company’s label
• Welcomes guests and clients by greeting them in person or on the telephone; answering or directing inquiries.
• Produces information by transcribing, formatting, inputting, editing, retrieving, copying, and transmitting text, data, and graphics; coordinating case preparation.
• Provides historical reference by developing and utilizing filing and retrieval systems; recording meeting discussions; maintaining transcripts; documenting and maintaining evidence.
• Updates job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations.
• Enhances department and organization reputation by accepting ownership for accomplishing new and different requests; exploring opportunities to add value to job accomplishments.

Tour Coordinator / Talent Hunt Manager

• Responsible for sourcing for music talents and grooming them
• Responsible for coordinating music tours for the company
• Assists in writing music lyrics for music artists
• Handles any other responsibility as assigned by the Chief Executive Officer
• Responsible for tracking hours during studio session and billing clients.
• Responsible for managing the company’s recording studio
• Part of the team responsible for selecting the songs that will be promoted and the songs that will be sold as singles.
• Responsible for recording and producing music and jingles for music artists and clients
• Helps to decide the order the songs will play in throughout the album (i.e. the songs’ track numbers).
• Responsible for choosing top notch album cover for music artists
• Responsible for handle any sound related job for the company; helps achieve certain specific sounds or feelings to portray through that matches with the lyrics.
• Responsible for mixing and producing beats and sounds for our clients; mix the songs into the final version for the music album.
• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of studio equipment by completing preventive maintenance requirements; calling for repairs.
• Defining job positions for recruitment and managing interviewing process
• Carrying out staff induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Designs job descriptions with KPI to drive performance management for clients
• Regularly hold meetings with key stakeholders to review the effectiveness of HR Policies, Procedures and Processes
• Facilitates and coordinates strategic sessions.
• Works directly with clients in a non-advising capacity, such as answering questions, scheduling appointments and making sure all training concerns are properly taken care off
• Oversee the smooth running of the daily office activities.
• Once the album is ready, then the marketing team will go out to market and promote the album
• Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
• Identifies business opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of music projects.
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients and music artists
• Develops, executes and evaluates new plans for expanding increase sales
• Documents all customer contact and information
• Represents the company in strategic meetings
• Helps to increase sales and growth for the company
• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting for one or more properties.
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensuring compliance with taxation legislation
• Handles all financial transactions for the company
• Serves as internal auditor for the company

Client Service Executive

• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the manager in an effective and timely manner
• Consistently stays abreast of any new information on the company’s products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients when they make enquiries
• Receives Visitors / clients on behalf of the organization
• Receives parcels / documents for the company
• Handles enquiries via e-mail and phone calls for the organization
• Distributes mails in the organization
• Handles any other duties as assigned my the line manager

6. SWOT Analysis

Dexterity® Record Label Company engaged the services of a core professional in the area of record label and music consulting and structuring to assist the organization in building a standard record label company that can favorably compete with other leading record label company in the United States of America.

Part of what the business consultant did was to work with the management of the company in conducting a SWOT analysis for Dexterity® Record Label Company. Here is a summary from the result of the SWOT analysis that was conducted on behalf of Dexterity® Record Label Company;

Our core strength lies in the power of our team and the state of the art music studio equipment that we have. We have a team that can go all the way to give our clients value for their money; a team that can make an upcoming music artist a star within a short period of time. We are well positioned and we know we will attract loads of clients from the first day we open our doors for business.

As a new record label company, it might take some time for our organization to break into the market and attract some well – established music artists to sign under our label; that is perhaps our major weakness.

• Opportunities:

The opportunities in the music industry are massive and we are ready to take advantage of any opportunity that comes our way.

Technology and the internet which of course is a major tool for the advancement and gains achieved in the music industry can also poses a threat to the industry. The truth is that with the advancement of technology, it is now easier for new record labels to come into the industry and compete with existing record label.

The internet and social media platforms now makes it pretty easier for record labels both legally registered and un – registered to promote their company and attract new artist as well. Just like any other business, government unfavorable government policies and also economic downturn can pose a threat and challenge to the survival of a record label company.

7. MARKET ANALYSIS

• Market Trends

Entrepreneurs who are venturing into the music industry are coming in with creativity and good business skills. The fact that revenue is nose – diving in the industry does not in a way stop some record label from declaring profits year in year out.

The factors that is responsible for encouraging entrepreneurs to start their own music recording label is the fact that they can easily become an instant celebrity on the global stage if they can successfully produce a world class music artist.

The trend in the music industry is that most recording label companies are now leveraging on the internet to spread their tentacles and increase their revenues; they know that it pays not to concentrate only in the U.S. market. They are now more concern in spreading the marketing of their record label to the rest part of the world.

8. Our Target Market

When it comes to music, there are no exemptions to who you can sell to. Different genre of music appeals to different group of people. Christians generally will prefer gospel music, older people naturally prefer countryside music and highlife, youths prefer pop, reggae, rhythm and blues et al. That is basically how the market is segmented.

But when it comes to sourcing for recording artist to sign on to your record label, you will probably get a good catch from the 16 – 35 age bracket. They are the group of people that are that are ready to music career. People outside that age bracket are either too old to start pursuing a music career or they are too young to consider pursuing a career as a musician.

Over and above, our target market cuts across people of different class and people from all walks of life. We are coming into the industry with a business concept that will enable us work with both established music artists and upcoming music artists in the United States and in other countries of the world. In other words, our target market is the musicians and aspiring musicians in the United States of America and subsequently other parts of the world.

Our competitive advantage

The level of competition in the record label industry is on the increase as the years roll by. Which is why in the 1970s and 1980s, there were consolidation in the record industry which led to almost all major labels being owned by a very few multinational companies. The development led to CDs production to flow through a handful of sources, with the majority of the sales going through the “big three” record labels.

Dexterity® Record Label Company might be a new entrant into the record label / music industry in the United States of America, but we are coming into the industry with core professionals and of course a standard world – class recording studio with the best equipment in the industry. We will ensure that we give all artists under our label good value for their money, time and talent; these are part of what will count as a competitive advantage for us.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category (startups consulting firm) in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Dexterity® Record Label Company is established with the aim of maximizing profits in the music industry and we are going to go all the way to ensure that we do all it takes to attract music artists that will sign under our record label. Dexterity® Record Label Company will generate income by offering the following services;

10. Sales Forecast

One thing is certain when it comes to music; music never dies and the demand for good music will continue to grow. This goes to show that any record label that is known to always produce good music will continue to attract talented music artists and that will sure translate to increase in revenue generation for the record label.

We are well positioned to take on the available market in the U.S. and we are quite optimistic that we will meet our set target of generating enough income / profits from the first six month of operations and grow the business and our clientele base beyond New York City, New York to other states in the U.S. and even the global market.

We have been able to critically examine the business consulting market and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projection is based on information gathered on the field and some assumptions that are peculiar to startups in New York.

Below is the sales projection for Dexterity® Record Label Company, it is based on the location of our business and other factors as it relates to record label start – ups in the United States;

• First Year-: $75,000
• Second Year-: $250,000
• Third Year-: $750,000

N.B : This projection is done based on facts and figures that are obtainable in the music industry.

• Marketing Strategy and Sales Strategy

We are aware that when one commences a record label, the profits might not come in immediately, but if there is continuity in the business, it wouldn’t be too long before one gains fame and fortune. All it takes to gain recognition in the music industry is to nurture a world – class music artist under your label.

We are mindful of the fact that there is stiffer competition amongst record labels in the United States of America; hence we have been able to hire some of the best business developer to handle our sales and marketing.

Our sales and marketing team will be recruited based on their vast experience in the music industry and they will be trained on a regular basis so as to be well equipped to meet their targets and the overall goal of the organization. We will also ensure that our excellent music production / top class music speaks for us in the market place; we want to build a standard record label company that will leverage on word of mouth advertisement from satisfied clients / artists.

Our business goal is to grow our record label to become one of the top 10 record label company in the United States of America, which is why we have mapped out strategy that will help us take advantage of the available market and grow to become a major force to reckon with not only in the U.S but in the world stage as well.

Dexterity® Record Label Company is set to make use of the following marketing and sales strategies to attract clients;

• Introduce our business by sending introductory letters alongside our brochure to organizations and key stake holders in the music industry in New York and other parts of the U.S.
• Organize music talent hunt shows to source for raw music talents
• Advertise our business in relevant magazines, newspapers, TV stations, and radio station.
• List our business on yellow pages ads (local directories)
• Attend relevant international and local music expos, seminars, and concerts et al
• Create different packages for different category of music artists (clients) in order to work with their budgets and still produce top notch music for them
• Leverage on the internet to promote our business and to sell or music
• Engage in direct marketing approach
• Encourage word of mouth marketing from our loyal and satisfied clients

11. Publicity and Advertising Strategy

We have been able to work with brand and publicity specialist to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market. We are set to take the music industry by storm which is why we have made provisions for effective publicity and advertisement of our record label company.

Below are the platforms we intend to leverage on to promote and advertise our record label company;

• Place adverts on both print and electronic media platforms
• Sponsor relevant TV shows and radio programs
• Maximize our official website to promote our business
• Leverage on the internet and social media platforms like; YouTube, Instagram, Facebook ,Twitter, LinkedIn, Badoo, Google+ and other platforms (music online forums) to promote our business.
• Offer Pro Bono services as part of our community social responsibility (Organize community based musical talent hunt shows)
• Ensure that our banners are well positioned during our musical tours
• Brand all our official cars / buses and ensure that our trademark label is boldly printed in all our music album covers and CDs et al

List of Equipment Needed to Start a Record Label

Here is some of the key equipment and musical gadgets that we would need to set up our record label company;

• Mixing console
• Multi – track recorder
• Microphones
• Reference monitors, which are loudspeakers with a flat frequency response
• Acoustic drum kit
• Digital audio workstation
• Music workstation
• On Air or Recording Light
• Outboard effects, such as compressors, reverbs, or equalizers
• Audio interfaces
• Effects racks
• CD duplicator
• Supply of CD

12. Our Pricing Strategy

It is important to point out that, though, record studio charge by the hour billing, so it is the responsibility of the record producer to ensure that set target are met within the stipulated time. The more time you spend on the studio, the more money you would have to pay.

No doubt, hourly billing for music studios is a long – time tradition in the industry. However, for some types of music / record contracts, flat fees are adopted. As a result of this, Dexterity® Record Label Company will charge our old clients (artists) a flat fee and charge new clients (new music artists) hourly when they make use of our music studio to record their music or produce music beats for their albums.

At Dexterity® Record Label Company, we will keep our fees below the average market rate for all of our clients by keeping our overhead low and by collecting payment in advance. In addition, we will also offer special discounted rates to start – ups, nonprofits, cooperatives, and small social enterprises who engage our services to help to produce musical jingles for advert purposes.

• Payment Options

Dexterity® Record Label Company, our payment policy will be all inclusive because we are quite aware that different people prefer different payment options as it suits them. Here are the payment options that we will make available to our clients;

• Payment by via bank transfer
• Payment via online bank transfer
• Payment via check
• Payment via bank draft
• Payment with cash

In view of the above, we have chosen banking platforms that will help us achieve our plans with little or no itches.

13. Startup Expenditure (Budget)

The cost of setting up a recording label company to a larger extent has reduced from what it used to be; many thanks to the advancement of technology and perhaps the internet. These days it is now easier to see people set up a recording studio in their house. All they need to do is to register a recording label and pronto! They’ll be in business.

Basically, it is not expensive starting a record label company in the United States of America. The amount required to start a record label company may vary slightly from country to country and from states to states. Part of the factors that can influence the start – up cost of a record label is the amount needed to rent or lease a facility, the cost of the equipment you would need and the money needed to brand your business et al.

On more serious note, starting your own record label is to a large extent dependent on your preference and budget. You could budget and spend millions of dollars, or you could choose to spend moderately; far below a million dollar. When it comes to purchasing microphones and head phones, we will go for Neumann u87; it will cost us about $2000 or more.

For mixer, we will opt for the Euphonix or any other brand of our choice. But Euphonix is great (especially with is sweet sounding preamp and on board compressors). It will cost us about $30,000 or more. On the alternative, we can choose to go for purely digital and skip the mixer altogether. This means that we will need a good audio inter face with multiple inputs. 12 stereo pairs minimum. The emu 1820m is a good one.

Then cables (nothing else but mogami cables. these are the best audio cable in the market for now; although we may explore other options). We would need to create budget for pre amp. Avalon is perhaps our best bet and we can get it for about $2500 or less.

We have also prepared a good budget for monitor; monitor is one of the most important gadgets we would need in starting our own record label and record studio. We have made provision for a Yamaha monitor; it is simply one of the best we can get in the market.

When it comes to acquiring a computer, we just have to budget for high end computer designed for such purpose. It is important for computer to have a very large memory, high end graphic card, and 2.6 GHz quad core processor and we will search for good software to work with.

Essentially, this is the area we are looking towards spending our start – up capital on;

• The Total Fee for incorporating the Business in New York – $750.
• The budget for Liability insurance, permits and license – $2,500
• The Amount needed to acquire a suitable Office facility with enough space for standard music studio in a business district 6 months (Re – Construction of the facility inclusive) – $40,000.
• The Cost for equipping the office (computers, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) – $2,000
• The cost for equipping the music studio with the required gadgets – $100,000
• The Cost of Launching your official Website – $600
• Budget for paying at least 5 employees for 3 months and utility bills – $100,000
• Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – $2,500
• Miscellaneous – $1,000

Going by the report from the research and feasibility studies, we will need about $300,000 to set up a small scale but standard record label company in the United States of America.

Generating Funding / Startup Capital for Dexterity® Record Label Company

Dexterity® Record Label Company is going to start as a private business that will be solely owned by Dexter Clinton and Mack Hamilton. Both of the will be the financial of the business, but may likely welcome other partners later which is why they have decided to restrict the sourcing of his start – up capital to 3 major sources.

These are the areas we intend generating our start – up capital;

• Generate part of the start – up capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from my Bank

N.B: We have been able to generate about $100,000 (Personal savings $60,000 and soft loan from family members $40,000) and we are at the final stages of obtaining a loan facility of $200,000 from our bank. All the papers and document has been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.

14. Sustainability and Expansion Strategy

It is easier for businesses to survive when they have steady flow of business deals / customers patronizing their products and services. We are aware of this which is why we have decided to offer a wide range of music services and also to work with both upcoming music artists and well established music artist.

We know that if we continue to produce hit songs and albums, there will be steady flow of income for the organization. Our key sustainability and expansion strategy is to ensure that we only hire competent employees, create a conducive working environment and employee benefits for our staff members.

We know that if we implement our business strategies, we will grow our record label / music business beyond New York City, New York to other states in the U.S in record time.

Check List / Milestone

• Business Name Availability Check:>Completed
• Business Incorporation: Completed
• Renting of Office Facility: Completed
• Building of Music Studio: In Progress
• Intellectual Property Protection and Record Label Trademark: Completed
• Opening of Corporate Bank Accounts various banks in the United States: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of All form of Insurance for the Business: Completed
• Conducting Feasibility Studies: Completed
• Generating part of the start – up capital from the founder: Completed
• Applications for Loan from our Bankers: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents: In Progress
• Design of The Company’s Logo: Completed
• Graphic Designs and Printing of Packaging Marketing / Promotional Materials: Completed
• Recruitment of employees: In Progress
• Purchase of the Needed studio / musical gadgets, furniture, office equipment, electronic appliances and facility facelift: In Progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business (Business PR): In Progress
• Health and Safety and Fire Safety Arrangement: In Progress
• Establishing business relationship with key players in the industry: In Progress

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How to Start a Record Label

ON THIS PAGE

• 15 Steps To Start a Record Label Business
• How big is the Record Label industry?

What are the Key Segments of the Record Label Industry?

What external factors affect the record label industry.

• Who are the Key Competitors in the Record Label Industry?

What are the Key Customer Segments in the Record Label Industry?

What are the key costs in the record label industry, what are the typical startup costs for a new record label, recording studio setups, helpful videos.

• Additional resources in the Record Label market

If you’re looking to start a Record Label, you’ve come to the right place. Since we’re going to show you exactly how to do it.

We’ll start with key Record Label industry fundamentals like how big the market is, what the key segments are, and how revenues and profits are generated.

Then we’ll discuss keys to not only starting a Record Label, but succeeding in it!

Importantly, a critical step in starting a record label is to complete your business plan. To do this, you should download Growthink’s Ultimate Record Label Business Plan Template here.

Download our Ultimate Record Label Business Plan Template here

15 Steps To Start a Record Label Business:

Starting a record label business can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful record label business.

1. Choose the Name for Your Record Label Business

The first step to starting a record label business is to choose your business’ name.

This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your record label business:

• Make sure the name is available: Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also, check to see if a suitable domain name is available.
• Keep it simple: The best names are usually ones that are easy to remember, pronounce, and spell.
• Think about marketing: Come up with a name that reflects the desired brand and/or focus of your record label business.

2. Determine the Type of Record Label Business You Will Launch

When determining the type of record label business you will launch, consider several factors, including your musical interests, target audience, industry trends, and your overall vision for the label.

Here are some common types of record label businesses you can consider:

• Independent Record Label: An independent record label focuses on signing and promoting independent artists and bands. It often operates on a smaller scale compared to major labels but offers artists creative freedom and a more personal approach.
• Genre-Specific Record Label: Specialize in a specific music genre, such as hip-hop, rock, electronic dance music (EDM), country, jazz, or classical. This allows you to establish a niche and build a dedicated fanbase within that genre.
• Local or Regional Record Label: Concentrate on discovering and promoting local or regional talent from a specific geographic area. This approach can help support local music scenes and foster a sense of community.
• Subsidiary or Imprint Label: Create a subsidiary label or imprint under an existing record label, focusing on a particular genre or style within the parent company’s portfolio.
• Digital-Only Record Label: Embrace the digital era by operating a label that exclusively releases music through online platforms and streaming services. This model is often associated with smaller overhead costs.
• Vinyl Record Label: Cater to vinyl enthusiasts by producing and releasing music on vinyl records. Vinyl labels appeal to collectors and audiophiles who appreciate the tactile and analog experience of vinyl.

3. Develop Your Record Label Business Plan

One of the most important steps in starting a record label business is to develop your record label business plan . The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.

To enhance your planning process, incorporating insights from a  sample record label business plan  can be beneficial. This can provide you with a clearer perspective on industry standards and effective strategies, helping to solidify your own business approach.

Your business plan should include the following sections:

• Executive Summary: This section should summarize your entire business plan so readers can quickly understand the key details of your record label business.
• Company Overview: This section tells the reader about the history of your record label business and what type of record label business you operate. For example, are you an independent record label, digital-only record label, or vinyl record label business.
• Industry Analysis: Here you will document key information about the record label industry. Conduct market research and document how big the industry is and what trends are affecting it.
• Customer Analysis: In this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing services like the ones you will offer?
• Competitive Analysis: Here you will document the key direct and indirect competitors you will face and how you will build a competitive advantage.
• Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
• Product: Determine and document what products/services you will offer
• Prices: Document the prices of your products/services
• Place: Where will your business be located and how will that location help you increase sales?
• Promotions: What promotional methods will you use to attract customers to your record label business? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization, and/or social media marketing.
• Operations Plan: In this section, you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
• Management Team: This section details the background of your company’s management team.
• Financial Plan – finally, the financial plan answers questions including the following:
• What startup costs will you incur?
• How will your record label business make money?
• What are your projected sales and expenses for the next five years?
• Do you need to raise funding to launch your business?

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4. choose the legal structure for your record label business.

Next you need to choose a legal structure for your record label business and register it and your business name with the Secretary of State in each state where you operate your business.

Below are the five most common legal structures:

1) Sole proprietorship

A sole proprietorship is a business entity in which the owner of the record label business and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.

2) Partnerships

A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a record label business together. The partners share in the profits and losses of the business.

The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.

3) Limited Liability Company (LLC)

A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a record label business include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.

4) C Corporation

A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a record label business is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.

5) S Corporation

An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.

Once you register your record label business, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.

5. Secure Startup Funding for Your Record Label Business (If Needed)

In developing your record label business plan, you might have determined that you need to raise funding to launch your business.

If so, the main sources of funding for a record label business to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a record label business that they believe has high potential for growth.  

6. Secure a Location for Your Business

Finding the right space for your record label business is important for creating a productive and inspiring work environment.

Here are some factors to consider when searching for the ideal space:

• Location: Choose a location that is accessible to your target audience, artists, and collaborators. Consider proximity to music venues, recording studios, and other music-related businesses.
• Size: Determine the space requirements for your record label operations, including office space, recording or production studios, storage areas, and common areas. Ensure the space can accommodate your current needs and potential growth.
• Soundproofing: If you plan to have recording studios or music production areas, invest in proper soundproofing to minimize noise interference both within and outside the space.
• Security: Ensure the space has adequate security measures in place to protect valuable equipment, recordings, and intellectual property.
• Accessibility: Choose a space that is accessible to individuals with disabilities and complies with relevant accessibility regulations.
• Parking and Transportation: Evaluate parking availability for employees and visitors. Consider access to public transportation for convenience.

7. Register Your Record Label Business with the IRS

Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).

Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.

Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.  

8. Open a Business Bank Account

It is important to establish a bank account in your record label business’ name. This process is fairly simple and involves the following steps:

• Identify and contact the bank you want to use
• Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
• Complete the bank’s application form and provide all relevant information
• Meet with a banker to discuss your business needs and establish a relationship with them

9. Get a Business Credit Card

You should get a business credit card for your record label business to help you separate personal and business expenses.

You can either apply for a business credit card through your bank or apply for one through a credit card company.

When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.

Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.  

10. Get the Required Business Licenses and Permits

Starting a record label business involves several legal requirements, including obtaining the necessary licenses and permits. The specific licenses and permits you need can vary based on your location, the type of music you intend to produce, and other factors.

Here are common licenses and permits to consider:

• Business License: Obtain a general business license or registration from your city or county government to operate as a legal entity.
• Copyrights and Trademarks: While not a license or permit, registering copyrights for musical compositions and trademarks for your record label name and logo is crucial to protect your intellectual property.
• Music Licensing and Distribution Agreements: Secure licenses for the music you plan to distribute or produce. This may include mechanical licenses for reproducing copyrighted songs, synchronization licenses for music used in films or commercials, and master use licenses for using recorded tracks.
• Music Publishing License (if applicable): If you plan to publish music or handle publishing rights for artists, consider obtaining a music publishing license.
• Performance Rights Organization (PRO) Membership: Join a PRO like ASCAP, BMI, or SESAC to ensure that you receive royalties when your music is performed publicly, such as on radio, in live venues, or on streaming platforms.
• Sound Recording Copyright: Register sound recordings with the U.S. Copyright Office or the relevant copyright authority in your country to protect your recordings.

Depending on the type of record label business you launch, you will have to obtain the necessary state, county and/or city licenses.  

11. Get Business Insurance for Your Record Label Business

Other business insurance policies that you should consider for your record label business include:

• General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
• Auto insurance: If a vehicle is used in your business, this type of insurance will cover if a vehicle is damaged or stolen.
• Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
• Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
• Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
• Professional liability insurance: This protects your business against claims of professional negligence.

Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.  

12. Buy or Lease the Right Record Label Business Equipment

To run a record label business effectively, you’ll need several equipment to manage your business.

Here’s a list of essential equipment for your record label:

• Computer and Laptops: High-performance computers for audio production, graphic design, and general business operations.
• Studio Equipment (if applicable): If your record label has an in-house recording studio, you’ll need audio interfaces, microphones, headphones, studio monitors, mixing consoles, and soundproofing materials.
• Musical Instruments: Instruments for recording demos, creating arrangements, and assisting artists during songwriting and production.
• High-Quality Cameras: Cameras and video equipment for creating music videos, promotional videos, and behind-the-scenes content.
• Printers and Scanners: For printing contracts, promotional materials, and other documents.
• Furniture and Office Supplies: Desks, chairs, filing cabinets, and general office supplies for day-to-day operations.
• Storage Solutions: External hard drives, network-attached storage (NAS), or cloud storage for backing up and organizing digital assets.
• Physical Media Duplication Equipment (if producing CDs, vinyl, or other formats): CD duplicators, vinyl pressing equipment, and packaging materials.

The specific equipment you need may vary depending on the scope and focus of your record label business. Invest in quality tools and stay up to date with the latest technologies to help your label succeed in the competitive music industry.  

13. Develop Your Record Label Business Marketing Materials

Marketing materials will be required to attract and retain customers to your record label business.

The key marketing materials you will need are as follows:

• Logo: Spend some time developing a good logo for your record label business. Your logo will be printed on company stationery, business cards, marketing materials, and so forth. The right logo can increase customer trust and awareness of your brand.
• Website: Likewise, a professional record label business website provides potential customers with information about the services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
• Social Media Accounts: Establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn, and/or other social media networks will help customers and others find and interact with your record label business.

14. Purchase and Setup the Software Needed to Run Your Record Label Business

Running a record label business requires various software tools to manage music production, distribution, promotion, finances, and administrative tasks efficiently.

Here are essential types of software for your record label:

• Digital Audio Workstations (DAWs): Industry-standard DAWs like Pro Tools, Logic Pro, Ableton Live, or FL Studio for recording, mixing, and mastering music.
• Virtual Instruments and Plugins: Access virtual instruments and audio plugins for enhancing music production, including synths, drum samples, and effects.
• Music Notation Software: Use notation software like Sibelius or Finale for composing and transcribing sheet music.
• Digital Distribution Platforms: Sign up with digital distribution platforms like DistroKid, TuneCore, or CD Baby to release and distribute music to online stores and streaming platforms.
• Email Marketing Software: Create and manage email marketing campaigns using platforms like Mailchimp or Constant Contact to engage with fans and promote music releases.
• Press Release Distribution Services: Use services like PR Newswire or PRWeb to distribute press releases and announcements to media outlets.
• Music Analytics Tools: Utilize analytics platforms like Spotify for Artists, Apple Music for Artists, and YouTube Analytics to track streaming data and audience engagement.

Choose the software that aligns with your label’s specific needs and budget, and consider staying updated with emerging technologies and industry trends to remain competitive in the music business.  

15. Open for Business

You are now ready to open your record label business. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.  

How Big is the Record Label Industry?

According to IBISWorld, the Record Label industry has been in decline for the past five years, at a rate of -2.9% per year. In spite of this, the industry’s 756 companies had total revenues of $7.3 billion last year.  

Record Labels sell products in physical and digital formats. Physical formats, which include CDs, DVDs, Cassettes, and Vinyl account for almost half of all industry revenue. Digital formats are the second-largest industry segment, followed by Digital singles and albums Streaming services and subscriptions have seen a significant increase in popularity in the past few years, but still account for a much smaller percentage of revenue.

A number of factors affect the performance of the Record Label industry. These drivers include:

Album Sales – Album sales constitute the largest portion of industry revenue; therefore, the industry depends on demand for albums.

Per Capita Disposable Income – Consumers buy more albums when they have more disposable income.

Median Age of the Population – Though all age groups are consumers of music, the industry trend toward digital and streaming distribution appeals to younger audiences. Therefore, a younger median age is better for the industry.  

Who are the key Competitors in the Record Label Industry?

The biggest independent record labels are Concord Music Group (CMG) and Sub Pop. Major record labels include Warner Music Group (WMG), Universal Music Group (UMG), and Sony Music Entertainment.  

The largest customer segment for the Record Label market are those aged 35 and up, but is closely followed by those age 18-34.  

Purchases are the largest expense for Record Labels. Purchases can include merchandise for distribution, video production, studio rental, tours, and databases for digital distribution.

Wages are a Record Label’s second-largest expense, in part because of the savvy required to recognize and acquire new talent, and in part due to the high level of skill required record, mix, and master an album.

Marketing is also a significant expense. Independent labels spend a larger proportion of revenue on marketing, simply because they do not have the recognition that major labels have, and they have to work harder to connect with fans.

Other expenses include equipment depreciation, distribution costs, production costs, and legal fees.

The one-time costs of starting a Record Label include:

• Licensing and startup legal fees
• Recording equipment purchase or lease
• Instrument purchase or lease
• Studio purchase or lease
• Office equipment and supplies

Ongoing costs:

• Rent and utilities
• Equipment maintenance
• Manufacturing physical albums
• Accounting and legal fees
• Databases for storing digital music

Additional resources in the recording industry market

For additional information on the recording industry, consider these industry resources:

• Recording Industry Association of America: www.riaa.com
• Billboard: www.billboard.com
• International Federation of the Phonographic Industry: www.ifpi.org
• Variety: www.variety.com
• American Association of Independent Music: a2im.org
• Record Label Mavericks: www.recordlabelmavericks.com

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