Things You'll Need:
- Artists
- Marketing experience
- Accountant
- Attorney
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Step 1
Set clear goals for your new record label. When a new owner decides to start a record label, it's important for her to decide whether that label will be run as a legitimate business or as a hobby. A hobby business doesn't necessarily have to make money, nor does its owner have to work especially hard to achieve her goals. However, a legitimate record label owner has to prepare herself for years of sacrifice and dedication to achieve lasting success. Profits may be hard to come by, and record labels often mount substantial debt. Setting those expectations early can help new record label owners establish boundaries around time and finances.
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Step 2
Confirm trademark availability and register a business. Most record label owners get personal gratification from selecting names for their new companies. However, it's important to make sure that a chosen name isn't already in use by another business, even if that entity isn't a part of the music business. Prospective label owners should run online searches on their favorite company names. Searching both major search engines and the U.S. Patent and Trademark Office should offer insight into the availability of a label name (see Resources below). After finding a suitable name, owners can register a domain name and publish a placeholder website to establish a minimal company presence. Then they can register for the appropriate trade license in the town where business will be conducted.
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Step 3
Secure distribution and marketing services. Record labels exist to market and distribute artist recordings. With a wealth of marketing and distribution options available to today's musicians, record label owners have to go the extra mile to add value for artists. Distribution services might include manufacturing physical products, securing rack space in record stores and establishing trade accounts with wholesalers and rack-jobbers. Marketing services often include setting up a public relations office, developing ad campaigns and hiring radio promotions experts.
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Step 4
Get contract advice from an experienced entertainment attorney. Signing an artist to a recording contract is often a contentious process. Inexperienced record label owners may not understand how to protect themselves if a larger label recruits an artist later in their career. On the other hand, contracts that don't provide clear value and returns for artists could drive them away. Experienced music business attorneys can help record label owners draft fair contracts quickly.
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Step 5
Sign your first artist. Signing an artist might be the main reason for most prospective owners to start a record label. Recruiting the right first artist for a roster can set the tone for a label, often defining the label's sound for critics and fans. Prospective artists should have developed a strong audience, making it easier for recordings to sell.
