Do you want to start a music production company? If YES, here is a complete guide to starting a music production company with NO money and no experience.

Okay, so we have provided you an in-depth sample music production business plan template. We also took it further by analyzing and drafting a sample music production marketing plan backed up by actionable guerrilla marketing ideas for music production businesses. In this article, we will be considering all the requirements for starting a music production company. So put on your entrepreneurial hat and let’s proceed.

Why Start a Music Production Business?

Music is everywhere. Everyone gets moved by the music they love. In fact, music is one of the avenues that make people celebrities overnight. And you will realize that releasing a music album that is widely accepted is one of the ways youths and young adults carve a niche in the world today. Of course, good music recording and production companies always play a part in making celebrities and super stars out of ordinary folks who are gifted with singing.

If you have ears for good music and you have what it takes to mix sound to produce music that can be widely accepted, then you should consider starting your own music production company.

Although starting a music production company requires moderate startup capital, it is indeed a very profitable venture to go into especially if you live in an urban area, where the demographic composition has enough young adults within the age range of 16 – 35 years. These sets of people are ready to do anything to hit the lime light; and music is one of the avenues for them to make their millions and by extension become famous.

Much more than being skilled in mixing sounds, and also having the required capital to set up a music recording studio, you would also need to be socially inclined if you must truly do well in this kind of industry. You should be able to go all the way to promote artistes that sign under your recording label.

The truth is that once you are able to raise one celebrated music superstar under your label, you will struggle less to have artistes to work with. As a matter of fact, you will be screening artistes so that you can work with only the best.

Now that you have made up your mind to start a music production company, you are expected to map out strategies on how to a raise startup capital, run the business, as well as how to make profits. That is basically what your business plan document should contain.

You can start your music production business from a small town in the United States and if you are consistent and creative, it won’t be too long before your brand becomes a nationally recognized brand and your business network spreads across the length and breadth of the United States of America, Canada and other countries of the world.

Starting a Music Production Business – A Complete Guide

  • Industry Overview

The music production business is indeed a thriving business that has loads of players making huge profits from the industry. One thing is certain, if a music production company can successfully produce a major hit song / album, it won’t be too long before musicians and corporate organizations (for commercials and jingles) come calling from all over the united states.

Statistics has it that 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. This is an indication that the record label industry needs to become more creative and leverage on 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 drop below $15bn for the first time in recent years

Statistics also 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 most of the leading music production companies who dominated the music industry in the globe are all headquartered in the United States of America.

Recent statistics from the IFPI revealed that the overall global music production industry revenue 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%.

The Music production industry is indeed witnessing a steady growth over the years especially in developed countries, though for some underdeveloped countries where piracy is still on rampage, the growth is a bit redundant.

One good thing about starting a music production business is that even if you decide to start it in the United States of America, your market will not be restricted to artistes 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 music production brand on the internet and you will be amazed at the rate people interested in producing their music will be calling you from all parts of the world.

Some of the factors that encourage entrepreneurs to start their own music production business could be that the business has pretty moderate entry barriers, it is a thriving business and the business is easy to set up with relatively minimal startup capital and manpower, and the business is not location bound. You can have your music production business incorporated in the United States of America and work for clients in Singapore or any other country of the world.

Lastly, the music production line of business is a silent money spinner. Checkout the lifestyle of those who have produced for music legends and you would find out that it does pay to venture into this kind of business. However, have it at the back of your mind that it requires hard work.

Starting a Music Production Business – Market Research and Feasibility Studies

  • Demographics and Psychographics

The demographic and psychographic composition of those who patronize the services of music production companies cut across music artistes, aspiring musicians, choirs, branding and advertising agencies et al. The truth is that when it comes to music production business, there is indeed a wide range of available customers.

So, if you are thinking of opening your own music production company, then you should make target demographics all encompassing; it should include everyone with the flair to release a musical album.

List of Niche ideas Within the Music Production Business That You Can Specialize in

It is the norm for music production companies to be creative in order to come up with beats that will catch the fancy of their target audience. This is why it seem that there are no niche areas in the industry. But on the other hand, some music production companies may decide to major in some key areas such as;

  • Music Recording
  • Music Video Shoots
  • Sound Production
  • Studio Session
  • Production of Jingles and Soundtracks for Organizations
  • Marketing and Sales Music
  • Setting up of Recording Studios for Clients
  • Production of Audio Books
  • Sell of Musical Equipment
  • Music / Sound Consultancy and Advisory Services

The Level of Competition in the Music Production Line of Business

The competition that exists in the music production line of business goes beyond competition amongst music production companies in your location; you are expected to compete with music production companies both within your location and in the online community.

Thus, it will be right to say the competition in the music production industry is tough and as a matter of fact, you need to be highly creative before winning the heart of established music artistes. The bottom line is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your services or business properly, you will always make headway in the industry.

List of Well – Known Brands in the Industry

In every industry, there are always brands that perform better or are better regarded by the customers and general public than others.

Some of these brands have been in the industry for a long time, while others are best known for how they conduct their businesses and the results they have achieved over the years. These are some of the leading music production companies in the United States of America and in the globe;

  • Warner Music Group
  • EMI
  • Sony (known as CBS Records until January 1991 then known as Sony Music thereafter)
  • BMG
  • Universal Music Group
  • PolyGram Entertainment
  • Atlantic Record Label
  • Neutron Label (Owned by ABC)
  • Island Records, Ltd.
  • Downtown Music Publishing
  • Artist Publishing Group (APG)
  • Arthouse Entertainment
  • Crutchfield Music (country)
  • Don Williams Music Group
  • Green Hills Music Group (country)
  • HoriPro Entertaiment Group
  • Independent Music Group
  • Little Brother Music
  • CMT

Economic Analysis

If you are looking towards successfully launching a business and maximizing profits, then you need to ensure that you get your economic and cost analysis right and try as much as possible to adopt best practices in the industry.

The fact remains that the cost of setting up a music production company has reduced from what it used to be, many thanks to the advancement of technology and perhaps the internet. These days it is now easier to see people set up music studios in their houses. All they need to do is to register a music production business, set up a studio and pronto, they are in business.

If you are considering starting your own music production company in the United States, you might not start making profits immediately, but if you continue in the business, you would certainly gain fame and fortune. All it takes to gain recognition in the music production industry is to strive to produce a hit song for a popular music artiste and your services will be in high demand.

Starting Your Music Production Business from Scratch vs Buying a Franchise

There is no hard and fast rule when it comes to choosing how you intend starting a business. Basically, you should be guided by your overall business vision and mission statement.

If you want to own a music production company, you are only left with one option; you must be willing to start from the scratch. There is hardly any place where you can see the franchise of a music production company to buy. The option that is available to you if you don’t want to start from the scratch is to go into partnership with an existing music production company or out – rightly acquiring an existing music production company.

Please note that most of the successful music production companies around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.

Possible Threats and Challenges You Will Face When Starting a Music Production Company

If you decide to start your own music production business today, one of the major challenges you are likely going to face is the presence of well – established music production companies within your location and the online community.

Technology and the internet which of course is a major tool for the advancement achieved in the music production industry can also pose a threat to the industry. The truth is that with the advancement of technology, it is now easier for new music production companies to come into the industry and compete with existing companies.

The internet and social media platforms now make it easier for music producers to promote their company and attract new artistes as well. Just like any other business, government unfavorable government policies and also economic downturn can pose a threat to the survival of a music production company.

Starting a Music Production Business – Legal Matters

  • Best legal entity to use for this type of business

When considering starting a music production company, the legal entity you choose will go a long way to determine how big the business can grow.

You have the options of either choosing a general partnership, limited liability company, or even a sole proprietorship for your music production business. Ordinarily, sole proprietorship should have been the ideal business structure for a small scale music production business especially if you are just starting out with a moderate startup capital and working from your home or shared office space.

As a matter of fact, if your intention is to grow the business and work for clients all across the United States of America and other countries of the world, then choosing sole proprietorship is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.

Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholder meetings and other managerial formalities.

These are some of the factors you should consider before choosing a legal entity for your music production company; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation and of course taxes.

You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or ‘S’ corporation especially when you have the plans of going public. Upgrading to a ‘C’ corporation or ‘S’ corporation will give you the opportunity to grow your music production business so as to compete with major players in the industry.

Catchy Business Name ideas Suitable for a Music Production Company

When it comes to Choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. If you are considering starting your own music production company, here are some catchy names that you can choose from;

  • Captain Zed® Music Production Company, LLC
  • One Nation™ Music Production Group, LLC
  • De Cross® Music Production Company, Inc.
  • Sky™ Music Production Company, Inc.
  • King George™ Music Production Company, Inc.
  • Echoes™ Music Production Company, Inc.
  • Ox Gang© Music Production Group, Inc.
  • Inland® Music Production Co, LLC
  • Double Bars™ Music Production Company, Inc.
  • Beyond The Stars © Music Production Co, Inc.

Insurance Policies

The norm in the United States and in most countries of the world is that you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your music production business.

Here are some of the basic insurance covers that you should consider purchasing if you want to start your own music production business in the United States of America;

  • General insurance
  • Health / Medical insurance
  • Liability insurance
  • Workers Compensation
  • Overhead expense disability insurance
  • Business owner’s policy group insurance

Intellectual Property Protection / Trademark

If you considering starting your own music production company, then you should be prepared to secure your intellectual property. If the music you produced is not protected by the law, then you should be ready to share your income / profits with music pirates.

Music can be pirated with the snap of a finger, but when pirates know that songs under your production is protected by the law, the tendency for them to steer clear your musical work will be high. So, ensure that you legally secure your intellectual property.

To protect your music, you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.

Is Professional Certification Needed to Run a Music Production Business?

When it comes to music production business, you do not need to have any formal training or special certification before you can be allowed to start a music production business. All you need is informal training that will expose you to the in and out of music production business.

On the other hand, you come across any form of certification that can aid you to effectively manage your music production business, then by all means try and pursue such certification.

List of Legal Documents You Need to Run a Music Production Business

The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long hand of the law catches up with you.

These are some of the basic legal documents that you are expected to have in place if you want to legally run your own music production company in the United States of America;

  • Certificate of Incorporation
  • Business License
  • Tax Payer’s ID / Tax Identification Number
  • Business Plan
  • Employee Handbook
  • Employment Agreement (offer letters)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Online Terms of Use
  • Online Privacy Policy Document (for online payment portal)
  • Apostille (for those who intend operating beyond the United States of America)
  • VAT registration
  • Company Bylaws
  • Memorandum of Understanding (MoU)
  • Building License
  • Franchise or Trademark License (optional)

Financing Your Music Production Company

Starting a music production business can be cost effective especially if you choose to start on a small scale by operating from your home or shared office space. Securing a standard music studio, equipping the music studio and purchasing working tools and software apps needed for the business are part of what will consume a large chunk of your startup capital.

If you choose to start the business on a large scale, you would need to source for fund to finance the business because it is expensive to start a standard large scale music production business.

When it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.

Here are some of the options you can explore when sourcing for startup capital for your music production company;

Choosing a Suitable Location for a Music Production Business

When it comes to choosing a location for your music production business, the rule of thumb is that you should be guided by the demand for music production services. If you are able to secure a central location for your music production business, it will give people easy access to your office or studio.

The location you choose to open your music production business is key to the success of the business even though you can work for both online and offline clients, hence entrepreneurs should be willing to rent or lease a facility in a visible location; a location where the demography consists of people with the required purchasing power and lifestyle.

It is important to note that a business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing / renting in your budget. If you are new to the dynamics of choosing a location for your business, then you should feel free to talk to a business consultant or a realtor who has a full grasp of the city and perhaps country you intend starting your music production business.

Before choosing a location for your music production business, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across similar business that just closed shop in the location you want to open yours can’t be ruled out.

Some of the factors that you would need to look at for before settling for a location for your music production company are;

  • A location with an appreciable number of youths and aspiring musical artistes
  • A location that is close to the hub of music in your city or state
  • A location that is easily accessible and secure
  • A location notable for producing some of the finest musical artist in your city, or state.
  • A location that is free from noise; noise can frustrate your efforts.

Starting a Music Production Business – Technical and Manpower Details

You would need the following equipment in your music studio; Good Computer, Digital Audio Workstation (DAW), The Audio Interface, Good Micro Phones, Headphones, Studio Monitors, XLR Cables, Acoustic Panels, Bass Traps, Diffusors, a DAW Remote, a Control Surface, Software Plugins, an Uninterruptible Power Supply (UPS), Monitor Isolation Pads, Studio Monitor Stands, Secondary Monitors, Snake Cables, Direct Boxes, Virtual Instruments, CD Duplicators and a MIDI Controller.

Of course you would also need Air conditioners, good lighting systems and every other stuff needed to create the kind of ambiance that will give comfort and creativity. You will also need customized software apps and social media management software applications, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves).

As regards leasing or outright purchase of an office or studio facility to use as your operational base, the choice is dependent on your financial standings, but the truth is that to be on the safe side, it is advisable to start off with a short – term rent / lease while test running the business in the location.

If things work out as planned, then you go on a long – term lease or outright purchase of the property but if not, then move on and source for other ideal location / facility for such business.

When it comes to hiring employees for a standard music production business, you should make plans to hire a competent Chief Executive Officer (you can occupy this role), Studio Manager, Sound/Recording Engineer, Music / Record Producer, Song Writers and Editors, Instrumentalists, Sales and Marketing Officer. On the average, you will need a minimum of 3 to 5 key staff to run a medium scale but standard music production business.

The Business Services Process Involved in Music Production Business

The business process as it relates to music production is dependent on the project they are executing per time. For example, if a music production company is to handle a musical album production or theme song production for an organization, they are expected to meet to know exactly what they want and the scope of the job before they are billed for the job.

Once the contract is sealed and payment made, they first music/sound mix is submitted to the musical artiste or agency for constructive criticism. The corrections are penciled down and they are worked on and proper editing is done. If the production is accepted, then the balance payment will be made, if not, the process will be repeated until the client accepts the final output.

The same process also applies to individual music artistes who want to contract the lyrics of their songs and album to a music production company.

It is important to state that a music production business may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated music production business process is not cast on stone.

Starting a Music Production Business – The Marketing Plan

  • Marketing ideas & Strategies

Running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a music production business, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands that determine the market direction for music production industry.

Music artistes and organizations will hire your services if they know that you are going to produce highly creative music for them and they are going to get value for their money.

As a matter of fact, your marketing strategy will center on creativity, reliability, swiftness, pricing, thoroughness, and above all excellent customer service. You should ensure that whenever your customers hire your services, they will get excellent service.

If you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers. These are some of the marketing ideas and strategies that you can adopt for your music production business;

  • Introduce your music production company by sending introductory letters alongside your brochure to music artists, record labels, branding and advertising agencies both offline and online
  • Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, YouTube, LinkedIn and Instagram
  • Print out fliers and business cards and strategically drop them in offices, schools, sport facilities, libraries, public facilities and train stations et al.
  • Delivering consistent customer experiences to all your clients; making your first impression count positively to those that patronize our services for the first time
  • Make use of attractive hand bills to create awareness and also to give direction to your music production company
  • Create a basic website for your business so as to give your business an online presence
  • Engage in road shows in targeted communities from time to time to promote your music production business
  • Join local music production associations business associations for industry trends and tips
  • Advertise our business in community based newspapers, local TV and radio stations
  • List your business on yellow pages ads (local directories)
  • Encourage the use of Word of mouth marketing (referrals)

Factors That Will Help You Get the right product pricing

One key factor that will help you offer your music production services at rock bottom prices is to purchase your working tools / equipment directly from the manufacturers.

Another strategy that will help you offer your services at the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your services.

You can also try as much as possible to work with independent contractors and marketers; It will help you save cost of paying sales and marketing executives.

Strategies to boost your brand awareness and Create Your Corporate Identity

If you are in business and you are not deliberate about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be. One of the secrets of larger corporations is that they are willing to spend fortunes to boost their brand awareness.

If your intention of starting a music production business is to grow the business beyond the city where you are going to be operating from to become a national and international brand by working for top music artists and clients all over the globe, then you must be ready to spend money on promotion and advertisement of your brand.

No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your music production business;

  • Place adverts on both print (newspapers and entertainment magazines) and electronic media platforms
  • Sponsor relevant community based events / programs
  • Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your music production business
  • Install your billboards in strategic locations all around your city or state
  • Engage in roadshows from time to time in targeted neighborhoods to create awareness of your music production business
  • Distribute your fliers and handbills in target areas
  • List your music production business in local directories / yellow pages
  • Advertise your music production business in your official website and employ strategies that will help you pull traffic to the site.
  • Position our Flexi Banners at strategic positions in the location where your music production is located.
  • Ensure that all your staff members wear your branded shirts and all your vehicles and trucks / vans are well branded with your company logo
Ajaero Tony Martins