How to Start a Small Record Label

Starting a record label

The music industry has changed dramatically over the past few years. Developments in technology and the rise of the Internet mean it is easier than ever before for individuals to produce and market music on their own. Starting your own record label is a way to earn a living and help artists---most of whom want to focus on playing music, not recording and marketing it.

Things You'll Need

• Business plan
• Computer
• Music software package
• MIDI interface
• Mixer
• Microphone
• Musicians
• Business bank account
• Business license

Instructions

1. Write a comprehensive business plan. Work out what type of music you want to produce, how you will market that music and how you are going to make money from your new music production company. This last point is critical and one that people often overlook. Yes, running a record label is fun but it is also a business. The most profitable music to produce might not necessarily be the music you would listen to at home. Come up with a strategy that will convince artists and investors that you know where you want to take your record label.

2. Join a performance rights organization. The American Society of Composers, Authors and Publishers (ASCAP), the Society of European Stage Authors and Composers (SESAC) and Broadcast Music Inc (BMI) are the three main performance rights organizations in the United States. One thing to bear in mind is that you can be an active member of only one of these organizations at any given time, so choose carefully. See resources section for links to websites.

3. Think about what you want your record label to be called. Make sure the name is professional, catchy and captures the vision you have for your label. Check with ASCAP, BMI and local government databases to make sure no one has registered your desired trading name. Have back-ups ready because chances are someone already might have taken your preference.

4. Register your music production company either as Sole Proprietor, General Partnership, Corporation or Doing Business As (DBA). This can be done when applying for a business license from local or state government. Do some research and work out which license is most suitable for your needs. If you have the money, discuss your options with a corporate lawyer.

5. Arrange meetings with potential investors to raise capital. If they say no, adjust your business plan accordingly. When you open a business bank account, inquire whether the bank does business loans. Cut production costs in your business plan if you are having difficulty raising finance. Release your new label's tracks online rather than pay to have CDs pressed. There are many ways to cut costs. Make your label work within budget.

6. Buy music equipment. Again, this depends on how much capital you have invested. You might rent out a high-end location and deck it out with the latest audio equipment. But as you are just starting out and looking to go small, it is advisable to buy a decent computer, music package, MIDI interface, mixer and microphone instead. These are the absolute essentials. You can always upgrade or buy equipment when your label starts making money.

7. Sign some artists. Now we're getting to the fun part. Keep an eye out for artists you think could make your label money. Websites like MySpace and Unsigned Band Review are popular with up-and-coming bands. Have a look and see if any decent ones live around your area. Put out ads on social networking sites and in the local press advertising your services. Hold a talent night for local bands and offer the winner a recording contract. There are many ways to attract talent. Once you have found some bands you like, get them in and record some material.

8. Release some tracks. You'll hear the fruits of your labor when your label has produced its first album. But don't kick back and relax quite yet. You still have to sell it. The first thing to consider is what format you want to release the album in. You might get a limited press of CDs done and market them through local record stores or online, but the best and most cost-effective way to release tracks is online, through sites such as iTunes. This will cut down on your production costs significantly. It is still worth getting a few CDs pressed to send off to local radio stations.

References

• Music Powers: Publishing

Resources

• ASCAP: Join
• BMI: Join
• SESAC: Join