If you are starting a record label, you have a challenging process ahead. However, with tenacity and attention to the details, you’ll be well on your way to success. We’ve gathered the following tips to make your entry into this business clear and well-defined. Take a look at these six tips to start your own record label:
Tip #1 Create the Name of Your Record Label
Why is this tip at the top of the list? Because, in this industry, your record label name is crucial to success. Your name defines who you are, who your artists may be, and how you plan to distribute. In short, your name is your calling card. With this in mind, take time to reflect on the name you believe fits your goals and mission. Get advice from people you trust and think through the process of signing artists, recording, and distributing. When you have the right name for your record label; you’ll know it.
Tip #2 Create Your Mission Statement and Objectives
Yes, we understand this will take time and thoughts in all directions before you determine the mission of your company and the objectives you have for the future of it. However, this platform is like the compass for your business. With it, you’ll always be able to determine if the decisions you’re making conform and point toward your mission and objectives or not. You’ll refer to both of these elements again and again. A wise person once said (we don’t know who said this, but it sounds right), “Take all the time you need to create your mission statement and objectives.”
Tip #3 Define the Audience for Your Record Label: Who is Listening?
Who will listen to your record label artists? Just as importantly, who isn’t listening? And, why? The target audience for your record label should be robust so your company can break even within 12 to 18 months (which would be good, right?). Check out the artists you are considering. What type of music is the center of the sound?
Whether you represent one or various styles or types of music, you may find your target audience will be diverse, splitting over artists and music genres. Either way, you’ll want to create the largest download and streaming totals possible. Work to understand your audience, the music types and styles preferred, and the songs that will keep your audience coming back. The returning audience member is the one you are most concerned about: research your audience.
Tip #4 Bring Structure to Your Record Label
Honestly, it’s pretty tough to bring stability to your record label company if you don’t have a solid structure behind it. It takes some time, but the best step you can take is to develop your business plan. If you don’t have one, use this business plan for a record label for comprehensive guidance. This plan, when completed, will hold your record label mission and objectives, a set of marketing strategies, research of your audience and competitors, financial projections and more.
To add an incentive to creating your business plan (not nagging, just suggesting), your completed plan will be ready to present to potential investors, lenders, banks and financial institutions for startup funding or investment. This is one huge advantage to having a record label business plan.
Tip #5 Sign Artists and Recording Contracts
With Steps 1 through 4 completed, you are ready to sign artists to your record label and get contracts underway. If needed, search Spotify for new music artists or use a musician friend to be your first client; however, don’t settle for music or recording contracts that don’t align with your mission, objectives and target audience. Use an entertainment attorney to assist in drawing up all contracts.
Tip #6 Create Your Goals and Meet Them
Without clearly-defined goals for years 1 through 5; it will be easy to let your business slip away. This is true of all startups. Why? Because the way at the beginning may not be clear, but the goals can be. With 2 or 3 goals in front of you for each year, your success in reaching them will probably be real. What could these goals look like?
Don’t go crazy. Be reasonable.
- Year 1: Sign 2 artists; release 3 singles, break even after 12 months.
- Year 2: Sign 4 more artists; release 1 album with follow-up single
- Year 3: Sign 12 more artists; have a combined download and streaming total of over 100K units
- Year 5: Sign 20 more artists; have a combined download and streaming total of over 2M units
*Plus, create healthy merch sales via a record label website.
We hope these tips kickstart your record label into action and keep it growing from there. And, we wish you the best of success!