Having to pay for a music career is perhaps the hardest part about keeping it going. After all, musicians, labels, managers, promoters, and even agents are consistently facing the complications of having to complete a project while having to pay their own bills. How you actually acquire your music business funding and what you decide to do with the money you get can make a significant difference. Prior to getting yourself in debt, there are specific things you should familiarise yourself with to avoid having money issues be the cause of downfall.
Determine the Right Source
The source of your funding is perhaps the most important thing that will dictate how much it helps or hurts your efforts. By using a bad source for your funding, it can create a lot of insurmountable issues. A bad source can lead you towards having to pay sky-high interest rates or even force you to lose all creative control over your projects. Therefore, you want to avoid taking the ‘easy money’ whenever possible. Instead, you need to identify the right source for funding.
Understand How Much You Need
Finance experts at www.Maxfunding.com.au say, “One of the most common mistakes, when musicians are looking for music funding, is not knowing how much money they actually need“. They reiterate, “A lot of musicians make the mistake of thinking they need as much money as possible to achieve their objectives. You will note that this isn’t true once you come up with your business plan. As you write one, you will be able to come up with a realistic and practical budget that you will require to get your project completed and to the market”.
If you are going to skip the business plan creation portion, you will still need to do a lot of research into expenses that you can expect to incur. Figure out how much you can realistically expect to earn from the project and think about the expected duration it will take.
Choose The Proper Approach
There are all kinds of different funding sources that you could opt for and there are different approaches that you can take with all of them. Writing up a comprehensive music business plan is one of the best ways to ensure that you are able to take the right approach. Having a music business plan that you can rely on will allow you to focus on some of the essential aspects of your business and be completely aware of the end-goal. The process of crafting a business plan can provide you with a much better understanding of your respective place within the industry.
You will have a hard time being able to ‘make it’ if you are unable to speak about the intricacies of your project. By writing a comprehensive music business plan, you will be able to improve your level of focus on your thoughts and ideas. Prior to approaching anyone for business funding, you want to have all of the information they would expect to have available for them. This is exactly the type of information your business plan will cover. In fact, a lot of lenders won’t grant you any money without one in place.
Spend Business Funds Wisely
As soon as you get the funding that you need, you will want to fully understand how to go about spending the funding wisely. For example, if you are aiming to release a record, you will need to make specific decisions related to pressing, packaging, and even promotional expenses.
You will have options available including skipping the physical printing altogether and opting for a digital-only release. Likewise, you can decide to handle all promotion of your release in-house rather than paying someone else to do it. The use of AI in your music business is indeed an option. But if you do decide to opt for a physical release, your biggest expense will be the packaging for it. When you end up applying for this type of loan or funding, there are a few questions that you want to be able to answer properly:
- Who would be the ideal funding source for your project and how could you approach them?
- What is a realistic estimate for the total amount of money you need to complete your project?
- How can you optimise the way you spend money on your project that will minimise expenses and maximise your chances of having a successful project launch?
By figuring out all of the answers to these questions, you should be able to figure out how to put your project in the best position to succeed. If you happen to be unsure about some of the answers, you will want to go back to the drawing board to continue working on developing your plan further.