Whether you’re intending to set up a home music studio to record your own tracks or have your sights set on the bigger picture of starting a record label or similar, finding your footing in the music business can be tricky. After all, almost everyone would be a pop star if they could, making this an already oversaturated market that’s made worse by starting costs as high as $100,000-$500,000.
That can make it tough to find funding for any music venture. After all, investors like to know that they’ll see their money back, and proving the viability of even a great music venture isn’t as clean-cut as saying that your product will sell this much in these places. Luckily, even this needn’t stop you from securing even the hefty funding package you need if you keep the following pointers in mind.
Know your options
While bank loans are a go-to funding solution for the majority of startup ideas, high overheads in the music biz mean a bank probably won’t be all that willing, or able, to help. That’s not to say you can’t still try, but it does mean you might also want to consider alternatives with more grounding in the music world, including –
- Crowdfunding: Already tried and tested by musicians like Amanda Palmer and the Pixies, Crowdfunding works well for the arts, and music is no exception. Success here requires you to reach out directly to the people who will be listening to your music and asking them for donations in return for rewards including free merch, gig tickets, etc.
- Angel investors: Targeting high net-worth individuals who could offer one-on-one funding for a percentage of your profits allows you to both secure funding, and develop relationships with industry experts who may be willing to mentor you along the way.
- Venture capitals: Venture capital funding is supplied by individuals working for risk capital companies looking to invest, and can secure high levels of funding, but does come with the downside of quick returns and sometimes strict stipulations on your enterprise itself.
Preach to the choir
Regardless of the specific funding path you choose, securing funding in something as niche as the music field requires somebody with a certain level of passion about what you’re attempting to do. After all, as is always the case in the creative arts, there are no guarantees for even a great business venture here. This level of risk, alone, could see the vast majority of uninterested investors running in the opposite direction, which is why you need investors who love music, and who want to help bring your vision to life.
Of course, Crowdfunding that taps directly into your fan base is a great example of this. Outside of that, seeking investors who have already got one foot in the music world, or who have simply expressed a love of great music in general, means that you won’t necessarily have to prove why your idea is a good one, but simply why they, in particular, could benefit from working with you over anyone else.
Get technical with your business plan
The most notable challenge to securing the music-based funding that you need comes when you try to turn this dream into a viable business venture. After all, you’re a creative person who might never have considered the business side of things, but you need to get technical if you’re to stand any chance. Specifically, you need to step away from the sounds that you know you can produce, and instead think about the things that investors actually look for, including profit margins, turnover timeframes, and expansion opportunities. Only once you’ve written a comprehensive business plan that may, admittedly, take you away from the music itself, do you stand any chance at proving why you deserve the funds to do this full-time.
Luckily, given that every music producer/artist in the world has been where you are at some point, there are plenty of resources to help you meet your music-specific needs. The most common suggestion is focusing on a music business plan that follows a standard basic outline, including –
- Executive summary
- Mission statement
- Vision statement
- Music industry overview
- Band/artist bio and history if applicable
- Intended audience
- Graphics and branding
- Press kit
Impress with your presentation
As is the case with any business venture, your ability to present your proposed idea is going to play a huge role in ultimate funding decisions. Given that music can be a much harder business idea to sell than many others, presentation only becomes more crucial in your case, meaning that you really can’t afford slip-ups here and that you need to make your case as well as you possibly can.
For one thing, this means practicing your public speaking and trying out your presentation in advance. In the modern age, it’s also essential to make use of the technology you have to hand. From simple but still effective PowerPoint presentations to a link-up that helps you to play your music in the background as people arrive, all of this is going to help investors more easily visualize your viability. Unfortunately, it also buys more room for error, meaning that complete tech setups, and practiced computer-based processes are also key. You’ll especially want to ensure fast and efficient access to all of your files by enabling cookies on your laptop or Macbook so that your passwords are ready to go for quick access in advance. Here is how to do that, but you can also further this benefit by simply keeping all of your presentation files in one folder, etc. Then, you’ll be more than ready to impress with your music and find yourself on the path to funding at last.
Finding funding for any small business can be hard, but the specifics of the music world mean that you’ll surely face a few additional challenges. Rise to greatness regardless by giving your music venture rhythm with these tips to hand.