- Sit down and think about your long- and short-term goals. Even if you are recording only your own material, it is a good idea to think about what you want to get from starting your own label. Daylle Deanna Schwartz, author of "Start and Run Your Own Record Label," suggests thinking about where you would like to be one year from recording the first album. Think about where you want to sell your records, who your market is and if you eventually want to combine with a major record label. The most important thing to decide is who your market is, because without a market there is no one to buy your albums. If your market is college-aged students, think about venues where your musicians can play that will attract college-aged students. Promote your artist on websites such as MySpace and Facebook, which are frequently used by college students. Try to get your artist on college radio stations.
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Figure out your finances before you start recording. If your first record sells out and you get orders for more but do not have the money to supply them, the stores that are waiting will not care, and people will forget about your album. Have enough albums made so that you can have a backup stash to break into, and figure out how to obtain more money if you have to. Schwartz said that she called all her friends to find out how much they could loan her if she needed money fast.
Another option is to find a larger label or distributor that can fit your target market and do a pressing and distribution deal. This means you will get an advance on distribution payment to help pay for manufacturing and promoting the album. Sometimes the larger label will want a cut of the profits, but the types of deals available vary on how well it thinks your product will sell. -
Write down your business plan. If you are going to try and find a loan, the lender will ask to see your business plan to decide if it will provide you with money. Start your business plan with a summary of who you are and what your project is. Follow this with how you are going to finance your project and your major short-term and long-term goals. Then, write down how you got to the point of wanting to start your own record label. What steps brought you to this point?
List if you are going to hire a staff, have a partner or if it is all going to be run by you. Describe your target market and how your product will compete with others in the music industry. Write how you will market your product and what specific places you will go to to reach your market. Know all the equipment you will need and where you will do your recording, even if it is in your basement. Figure out how long the process will take from recording to production of your product and how long each specific step will take. Make a specific list of costs, including phone bills and other miscellaneous expenses. Decide how much money you will need to keep your business moving for the next three years.
