Are you about starting a record label online? If YES, here is a complete sample record label business plan template & feasibility report you can use for FREE.
Okay, so we have considered all the requirements for starting a record label. We also took it further by analyzing and drafting a sample record label marketing plan template backed up by actionable guerrilla marketing ideas for record labels. So let’s proceed to the business planning section.
Table of Content
- Executive Summary
- Market Analysis
- SWOT Analysis
- Financial Projection
- Marketing Plan
- Marketing ideas & Strategies
Are you a music lover? Did you know that even if you do not have an appealing voice to sing and make money that you can still make money from the industry? If you are an entrepreneur and you love music, one of the easiest ways of making money from the music industry is to start your own music label; and the truth is that it is not difficult to start your own music label from the scratch in any part of the world.
What Does It Take to Start a Record Label?
As mentioned earlier, one of the very things that you would be required to bring to the table is to first and foremost have the knack for music. And then all other things would fall in place as it were. Those who already have a thriving business in the musical scene know that talent is very key in making it big. This is irrespective of whether you are a performing musician, a studio manager, a disc jockey, et al.
Owning a record label is basically about helping recording artists release their music album or singles to the general public and the process starts with agreeing on a deal or contract and then writing out the music lyrics before entering the studio to start work.
If you have decided that you really want to own a record label, then it becomes really expedient that you begin to plot a graph on how you want all the things that you hope for your business to come to pass. One of the ways that you can do this by having a good business plan in place. You can write a business plan with an already made template. Check below for a sample record label business plan.
A Sample Record Label Business Plan Template
- Record Label / Music Industry Overview
In recent time in the music industry, a larger percentage of recording artists have become increasingly dependent on record labels to promote them and increase their consumer base. It is easier for a record label to attract influx of upcoming artists if the record label is well established and recognized.
Record label that are just starting out would have to go out there to search for music talents that can help launch them out. The truth is that it is a win – win situation when a record label discovers a good music talent. The music label will help promote the recording artist and the recording artist also will give publicity to the record label.
The global revenue of the music industry is estimated at 15 billion U.S. dollars in 2013, and that is about the lowest revenue recorded since 2002; of course it is an indication that the record label industry needs to become more creative and leverage on the changing tides in the world of technology. Even the strong growth in streaming revenues was not enough to stop the music industry globally from experiencing income dropping below US $15bn for the first time in recent years in 2014.
Statistics has it that in 2013 the three largest markets in the music industry, measured by the revenue they generated were the United States of America, Japan and Germany. Hence it is no surprise that the top three record labels who dominate the music industry in the globe are all headquartered in The United States of America.
Recent statistics from the IFPI revealed that overall global record industry revenues dipped by just 0.4% last year – but that was enough to pull the annual tally down from $15.03bn to $14.97bn. The biggest offenders for the fall were an 8.1% decline in revenues from physical format sales (to around $6.89bn, according to MBW calculations) and an 8.0% decline in download sales (to around $3.56bn).Single track downloads declined by 10.9% in the year, while digital albums sales saw revenues drop by 4.2%.
In the early years of the recording industry, record labels were just the leverage any music artistes need to become successful in the music industry. This is why upcoming artistes or music band sourced for good recording label to sign a contract with.
Well it is important to note that most upcoming artistes or even establish artists ensures that they engage the services of an entertainment lawyer to help them negotiate the terms and condition of the contract. From past experience, no artist wants to sign a contract that will enslave them.
With the advent of the internet, it has now become pretty much easier for music labels to increase their range of operations. A music label with a large follower on social media platforms can easily promote artists under their label. All they need to do is to release free downloads on their website.
If the music is good it wouldn’t be too long before it trends on a global stage. Good example is the famous 2012 dance pop single – the ‘PSY -gangnam style’ from far away South Korea.
One good thing about starting a record label is that even if you decided to start it in the United States of America, your market will not be restricted to artists in the U.S.; the world will be your target market. Many thanks to the internet that has made the world a global village. All you need to do is to strategically position your record label brand on the internet.
A Sample Record Label Business Plan Template – MARKET ANALYSIS
- Market Trends
Entrepreneurs who are venturing into the music industry are coming in with creativity and good business skills. The fact that revenue is nose – diving in the industry does not in a way stop some record label from declaring profits year in year out. The factors that is responsible for encouraging entrepreneurs to start their own music recording label is the fact that they can easily become an instant celebrity on the global stage if they can successfully produce a world class music artist.
The trend in the music industry is that most recording label companies are now leveraging on the internet to spread their tentacles and increase their revenues; they know that it pays not to concentrate only in the U.S. market. They are now more concern in spreading the marketing of their record label to the rest part of the world.
- Our Target Market
When it comes to music, there are no exemptions to who you can sell to. Different genre of music appeals to different group of people. Christians generally will prefer gospel music, older people naturally prefer countryside music and highlife, youths prefer pop, reggae, rhythm and blues et al. That is basically how the market is segmented.
But when it comes to sourcing for recording artist to sign on to your record label, you will probably get a good catch from the 16 – 35 age bracket. They are the group of people that are that are ready to music career. People outside that age bracket are either too old to start pursuing a music career or they are too young to consider pursuing a career as a musician.
Over and above, our target market cuts across people of different class and people from all walks of life. We are coming into the industry with a business concept that will enable us work with both established music artists and upcoming music artists in the United States and in other countries of the world. In other words, our target market is the musicians and aspiring musicians in the United States of America and subsequently other parts of the world.
- Our Competitive Advantage
The level of competition in the record label industry is on the increase as the years roll by. Which is why in the 1970s and 1980s, there were consolidation in the record industry which led to almost all major labels being owned by a very few multinational companies. The development led to CDs production to flow through a handful of sources, with the majority of the sales going through the “big three” record labels.
Dexterity® Record Label Company might be a new entrant into the record label / music industry in the United States of America, but we are coming into the industry with core professionals and of course a standard world – class recording studio with the best equipment in the industry. We will ensure that we give all artists under our label good value for their money, time and talent; these are part of what will count as a competitive advantage for us.
Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category (startups consulting firm) in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.
A Sample Record Label Business Plan Template – SALES AND MARKETING STRATEGY
We are aware that when one commences a record label, the profits might not come in immediately, but if there is continuity in the business, it wouldn’t be too long before one gains fame and fortune. All it takes to gain recognition in the music industry is to nurture a world – class music artist under your label.
We are mindful of the fact that there is stiffer competition amongst record labels in the United States of America; hence we have been able to hire some of the best business developer to handle our sales and marketing.
Our sales and marketing team will be recruited based on their vast experience in the music industry and they will be trained on a regular basis so as to be well equipped to meet their targets and the overall goal of the organization. We will also ensure that our excellent music production / top class music speaks for us in the market place; we want to build a standard record label company that will leverage on word of mouth advertisement from satisfied clients / artists.
Our business goal is to grow our record label to become one of the top 10 record label company in the United States of America, which is why we have mapped out strategy that will help us take advantage of the available market and grow to become a major force to reckon with not only in the U.S but in the world stage as well.
Dexterity® Record Label Company is set to make use of the following marketing and sales strategies to attract clients;
- Introduce our business by sending introductory letters alongside our brochure to organizations and key stake holders in the music industry in New York and other parts of the U.S.
- Organize music talent hunt shows to source for raw music talents
- Advertise our business in relevant magazines, newspapers, TV stations, and radio station.
- List our business on yellow pages ads (local directories)
- Attend relevant international and local music expos, seminars, and concerts et al
- Create different packages for different category of music artists (clients) in order to work with their budgets and still produce top notch music for them
- Leverage on the internet to promote our business and to sell or music
- Engage in direct marketing approach
- Encourage word of mouth marketing from our loyal and satisfied clients
- Our Pricing Strategy
It is important to point out that, though, record studio charge by the hour billing, so it is the responsibility of the record producer to ensure that set target are met within the stipulated time. The more time you spend on the studio, the more money you would have to pay.
No doubt, hourly billing for music studios is a long – time tradition in the industry. However, for some types of music / record contracts, flat fees are adopted. As a result of this, Dexterity® Record Label Company will charge our old clients (artists) a flat fee and charge new clients (new music artists) hourly when they make use of our music studio to record their music or produce music beats for their albums.
At Dexterity® Record Label Company, we will keep our fees below the average market rate for all of our clients by keeping our overhead low and by collecting payment in advance. In addition, we will also offer special discounted rates to start – ups, nonprofits, cooperatives, and small social enterprises who engage our services to help to produce musical jingles for advert purposes.
- Payment Options
Dexterity® Record Label Company, our payment policy will be all inclusive because we are quite aware that different people prefer different payment options as it suits them. Here are the payment options that we will make available to our clients;
- Payment by via bank transfer
- Payment via online bank transfer
- Payment via check
- Payment via bank draft
- Payment with cash
In view of the above, we have chosen banking platforms that will help us achieve our plans with little or no itches.
Record Label Business Plan – Publicity and Advertising Strategy
We have been able to work with brand and publicity specialist to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market. We are set to take the music industry by storm which is why we have made provisions for effective publicity and advertisement of our record label company.
Below are the platforms we intend to leverage on to promote and advertise our record label company;
- Place adverts on both print and electronic media platforms
- Sponsor relevant TV shows and radio programs
- Maximize our official website to promote our business
- Leverage on the internet and social media platforms like; YouTube, Instagram, Facebook ,Twitter, LinkedIn, Badoo, Google+ and other platforms (music online forums) to promote our business.
- Offer Pro Bono services as part of our community social responsibility (Organize community based musical talent hunt shows)
- Ensure that our banners are well positioned during our musical tours
- Brand all our official cars / buses and ensure that our trademark label is boldly printed in all our music album covers and CDs et al
List of Equipment Needed to Start a Record Label
Here is some of the key equipment and musical gadgets that we would need to set up our record label company;
- Mixing console
- Multi – track recorder
- Reference monitors, which are loudspeakers with a flat frequency response
- Acoustic drum kit
- Digital audio workstation
- Music workstation
- On Air or Recording Light
- Outboard effects, such as compressors, reverbs, or equalizers
- Pre amps
- Audio interfaces
- Effects racks
- CD duplicator
- CD printer
- Supply of CD
Generating Funding / Startup Capital for Dexterity® Record Label Company
Dexterity® Record Label Company is going to start as a private business that will be solely owned by Dexter Clinton and Mack Hamilton. Both of the will be the financial of the business, but may likely welcome other partners later which is why they have decided to restrict the sourcing of his start – up capital to 3 major sources.
These are the areas we intend generating our start – up capital;
- Generate part of the start – up capital from personal savings
- Source for soft loans from family members and friends
- Apply for loan from my Bank
N.B: We have been able to generate about $100,000 (Personal savings $60,000 and soft loan from family members $40,000) and we are at the final stages of obtaining a loan facility of $200,000 from our bank. All the papers and document has been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.
RECORD LABEL BUSINESS GROWTH: Sustainability and Expansion Strategy
It is easier for businesses to survive when they have steady flow of business deals / customers patronizing their products and services. We are aware of this which is why we have decided to offer a wide range of music services and also to work with both upcoming music artists and well established music artist.
We know that if we continue to produce hit songs and albums, there will be steady flow of income for the organization. Our key sustainability and expansion strategy is to ensure that we only hire competent employees, create a conducive working environment and employee benefits for our staff members.
We know that if we implement our business strategies, we will grow our record label / music business beyond New York City, New York to other states in the U.S in record time.
Check List / Milestone
- Business Name Availability Check: Completed
- Business Incorporation: Completed
- Renting of Office Facility: Completed
- Building of Music Studio: In Progress
- Intellectual Property Protection and Record Label Trademark: Completed
- Opening of Corporate Bank Accounts various banks in the United States: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of All form of Insurance for the Business: Completed
- Conducting Feasibility Studies: Completed
- Generating part of the start – up capital from the founder: Completed
- Applications for Loan from our Bankers: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents: In Progress
- Design of The Company’s Logo: Completed
- Graphic Designs and Printing of Packaging Marketing / Promotional Materials: Completed
- Recruitment of employees: In Progress
- Purchase of the Needed studio / musical gadgets, furniture, office equipment, electronic appliances and facility facelift: In Progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business (Business PR): In Progress
- Health and Safety and Fire Safety Arrangement: In Progress
- Establishing business relationship with key players in the industry: In Progress