MONETIZE YOUR MOVEMENT: REVENUE STREAMS, FINANCE & ACCOUNTING

Written By Jesse Atkinson, CEO of Urban Threshold Inc. and Founder of The A&R Power Summitwww.TheARPowerSummit.com and The Underground Music Awards www.UndergroundMusicAwards.com

THE KEY IS TO TRANSFORM YOUR ARTISTIC VALUE INTO MARKET VALUE AND GENERATE RETURNS.

If you’re running an indie record label or production company and you can’t account for your income, expenses, assets and liabilities, then you’re playing yourself.
What is the projected revenue for your indie label or production company this year? This is what you should be asking yourself. Then formulate a plan to get there.
A game plan or strategic plan can not be implemented without an adequate financial budget behind it.
If you can’t find a way to convert your huge buzz into a revenue stream, then you’re just a well known indie artist with diminished returns.
Monetize your thoughts and ideas. Convert your concepts into cash flow.
The key is to transform your artistic value into market value and generate returns.
It is very important that every artist and producer know and learn the multiple revenue streams in the music business. Some of the Music Biz Revenue Streams include: CD Sales, Digital Download Sales, Merchandising, Tour Income, Licensing Revenue, Publishing income, Ringtone Revenue, Endorsement Deals and Sponsorship Revenue.
You can finance your indie label or production company in a myriad of ways. Sources of business funding include: Borrowing from your 401K, Getting investments from angel investors like friends and family, taking out a second mortgage on your house, or using your tax refund. Additionally, try taking out a small business loan or personal loan at your bank. Learn from this site how to do it correctly. You can also have fund raisers, raffles or benefit concerts to finance a venture or project.
Look into getting a line of credit for your indie label or production company. Use the leverage of your assets to finance expansion and growth.
Equally important, have an executive summary or a full business plan ready to present to prospective investors. Gain their trust and demonstrate to them what their potential R.O.I (Return On investment) could be.
Your Business plan should show how you will do the following: 1) How You will Grow the business 2) How You will Achieve Profitability 3) How You will Repay any loans and 4) How You will Reward any investors
Most investors will want a very specific project to finance like an album, studio construction or a tour.
Also please Note that Most investors don’t like making out a check to an individual. They prefer to make a check payable to a company.
Set your budget and sales quota for the month. Tap into other revenue streams such as merchandising, Shows, ringtones , endorsements, licensing etc
A label owner or production company owner should know the valuation of his/her company. What is its value and net worth..etc
Every album release should have a Marketing strategy, Promotion implementation, Breakeven Analysis, ROI Assessment, weekly & monthly sales projections. Keep accurate book keeping and make sure you pay the taxes on earnings generated from your music endeavors.
Assets – Liabilities = Equity . That’s basic accounting and most upcoming entertainment companies don’t focus on basic accounting.
Get Quickbooks for basic accounting for your company. You can record new clients, sales info, expenses and Keep track of money coming in and going out.

Finding Funding For Your Music Business

Urban Threshold Enterprises Inc., The founders of The A&R Power Summitwww.TheARPowerSummit.com & The Underground Music Awardswww.UndergroundMusicAwards.com

Whether you’re releasing a single album or starting an actual music related business, more than likely you will find yourself looking for funding or capital to get your business venture started.

The obvious need is for recording and production costs, but as we just discussed, there is also a large cost for marketing and promotion which includes radio promotion, website development and maintenance, publicity, advertising, legal, small staff, promotional events, videos, shipping and the list goes on and on.

Some of the traditional means used to finance an endeavor have ranged from using personal credit cards to securing a bank loan to borrowing money from relatives.

In recent years new companies are springing up to help, by taking an old concept of fan funding and making it a whole lot easier

In this post, we will take a look at a couple of alternative funding sources available to get your music project or business going.

Fund Your Music Project Using KickStarter.com

Kickstarter targets those desiring to fund a creative project. Instead of investments or lending, the funding opportunity is donations based. This allows for 100% ownership and complete control over the projects by the creators. In return for their donations, donors receive perks or rewards such as products and experiences.

Kickstarter is rather open as to requirements and qualifications for obtaining financing. Funds can only be raised for creative projects and creators should offer rewards to their donors. The application process consists of a few quick questions. Kickstarter screens the applicants to make sure there are no violations of their guidelines (creative projects only and no financial incentives).

Kickstarter operates on an all or nothing funding model. This means that if the target funding amount is not met in a specific amount of time, Kickstarter cancels the funding campaign and no money changes hands. This protects the creators and the donors. Creators are not expected to complete a project with insufficient funds and donations are not given to projects that creators can’t complete.

The Kickstarter website provides a platform that allows potential donors to discover projects in need of funds. They also maintain a blog with information to assist creators and their projects.

KICKSTARTER

Fund Your Music Project Using Profoundercom

ProFounder targets those who are business owners. The financing opportunity is an investment model based on raising money for the business from those in the community. This is not a loan from investors, and business owners transfer no equity (ownership) to the investors. They employ a revenue sharing model where a percentage of revenues are paid to the investors.

Requirements and qualifications to obtain financing include filling out an online application and paying a $100 fee once ready to start raising funds. Business owners can only contact and present the investment opportunity to those people with whom they already have substantial pre-existing relationship with. As with Kickstarter, if the funding target is not met, ProFouner does not transfer the funds for use.

The ProFounder website includes resources to help with preparing for an investment, creating a pitch, and creating the offer terms. A support forum and blog are both available to offer assistance.

PROFOUNDER

Advantages and Disadvantages

The advantage to using the two before mentioned alternative financing services, known as crowdfunding, is that they allow a music creator or business owner to raise needed funds while remaining in control and keeping ownership of their project or business. The disadvantage to using those services is that if the person seeking funds does not have enough connections or is not able to connect with enough potential donors, funding is not possible.

Why You REALLY Need a Business Plan These Days

As the name implies, a business plan is a plan for your business. If your business idea is one that requires some capital (money) to launch or grow, then any investor or bank will request to see your business plan. The purpose of any good business plan, therefore, is to communicate the capabilities and talents of the principals (that’s you and other owner/partners).

However, there’s a more important reason for you to write a business plan. Even if you are not seeking investors or a loan, the process of thinking through and composing your business plan helps you to declare your intention to yourself and the universe, focus on and commit to a specific outcome, verbalize and write down your goals, harness your innate creativity, activate the power of your subconscious mind, mobilize your Higher Self, and change your vibrational state, and the frequency of your thoughts to one of hope and the possibility of a desired future, thereby bringing to you, by the Law of Attraction, the people, events and circumstances which will work in concert on seen and unseen levels of reality to manifest your dream.

For that reason, even if you are already in business and making money, writing a business plan can help you. In addition, since market conditions are constantly changing, writing a plan (especially the marketing and financials sections) can help you get a firmer handle on what you are and can and should be doing to grow your business, where your money is actually going every month, and how to monitor and reduce expenses and operating costs.

Additionally, a good business informs sales personnel, suppliers, and others about your operations and goals and, in-effect serves as an operations manual for your employees.

A business plan is not a one-time-only endeavor. As it serves as guide, as well as gauge, many entrepreneurs tweak their business plans on a monthly, even weekly basis.

Written By Walt Goodridge

CLICK HERE TO SEE AN EXAMPLE OF AN INDEPENDENT LABEL BUSINESS PLAN

Business Plan Table of Contents