chapter9

The Music Gladitator Manual

A must read for any artist or label wanting to succeed in the music industry

9 BASIC LABEL REQUIREMENTS
“And I have filled him with the spirit of God, in wisdom, and in understanding, and in knowledge, and in all manner
of workmanship”

Before stepping headfirst into the music business arena, it’s important to know running a label is also demanding
work. After all, you don’t want to find yourself in a competition which you weren’t completely prepared for. The first
decision you’ll need to make is with how your business will be legally structured. Typically it will fall under one of
the following categories: sole proprietorship, general partnership or limited partnership. You could also
incorporate your company and even share stock in your company. The following are the first three basic
mentioned business structures and descriptions:

Sole Proprietorship
A sole proprietorship is exactly what it sounds like. You and you alone own and operate your label. A sole
proprietorship is a one-person business. A business which is not registered with the state as a corporation or a
limited liability company

Sole proprietorships are so easy to set up and maintain. However, even though a sole proprietorship is the
simplest of business structures, you shouldn't fall asleep at the wheel.
You must comply with local registration, business license, or permit laws to make your business legitimate. And
you should look sharp when it comes to tending to your business, because you are personally responsible for
paying both income taxes and business debts.

As a sole proprietorship, you will be held liable for any business-related obligation. This means if your business
doesn't pay a supplier, defaults on a debt, or loses a lawsuit, the creditor can legally come after your house or
other possessions.

General Partnership
A general partnership is a balanced partnership of two or more people. If a business is going to be owned by
more than one owner, the simplest business form to create and operate is a general partnership.

Although a partnership is more complicated to form than a sole proprietorship, it is not as complicated as
incorporating.

Forming a partnership entails an agreement between two or more prospective partners. The agreement can be
oral, but should be written and signed by all partners to avoid later conflicts. Virtually anyone can be a partner. A
partner can be an individual, a partnership, a corporation.

The flexibility of a partnership allows the business to operate in a manner which best suits the business needs at
the time the business starts and later when the business has matured.

For example, when the business is just beginning, one partner may have skills which are valuable to the business,
but little capital. Another partner may have capital, but not the requisite skills. The partner with skills can
contribute services to the partnership while the other partner contributes capital.

Later, when the business has grown, new partners can be admitted, yet their management capacity can be limited
to prevent the new partners from usurping the original partners. When a partner contributes capital to a
partnership, that partner receives an ownership percentage.

This percentage is in all assets of the partnership, not just in the property contributed.

All partners in a general partnership are jointly and severally liable for the obligations of the partnership. Joint and
severally liability means each individual partner can be held responsible for all obligations of the partnership. A
partner who pays an entire obligation can collect the other partners' pro rata share of the debt. Of course, the
other partners may not be in a position to repay the partner.

Make sure you have a written agreement about each partner’s legal relationship to the company in addition to the
amount of each person’s contribution and the distribution of the profits to each partner involved.

Money has away of creating unnecessary problems.

Limited Partnership

A limited partnership is a partnership with one or more general partners, who manage the business and assume
legal debts and obligations, and one or more limited partners, who are liable only to the extent of their
investments.

Limited partners also enjoy rights to the partnership’s cash flow, but are not liable for obligations. Limited
partnership can have one or more of the partners considered as silent. They have no say in the business beyond
their financial investment. Limited partnerships are useful for raising funds, but they can become difficult when it
comes to stricter tax regulations and the general partners’ liability.

THE MONEY
Every label needs money to start, and most labels have a start-up cost anywhere from $3000 to $10,000. This
money goes to the printing of CDs artwork, promotion, distribution, recording costs and even the most benign
business expenses, such as paper and office supplies.

If you have a good credit rating, you might even be able to score a loan or two. And lets not forget grants; a great
deal of grant money goes unclaimed each year, and it’s your duty as a business owner to seek out those
opportunities.

SONGS
Tracks containing mind-blowing instrumental musical arrangements topped off with a great song, performed by an
artist or band with emotions is a must. No product equals no money.
A great song could go far, as long as it is promoted correctly.

THE DISTRIBUTION
Your releases will need to reach the general public and having distribution is the only way to do such. The
method of distribution you choose is only partially in your control. Many larger distributors choose not to work with
new indie labels unless they have a built-in credibility, so you might be forced to start consignments first.

You can place product on cdjahma.com for internet and mail order distribution.

PROMOTIONS
Even the best distribution doesn’t make up for a lack of promotion. You’ll need to decide exactly how your artists
will be marketed.

You will also have to know what other parties you’ll involve in your strategy. Are you planning radio promotion? If
so, will you attack the college or commercial radio stations? It’s wise to start your radio promotion with college
stations.

Publicists and radio promoters generally take up a large chunk of money, so you’ll need to weigh these options
against your budget. If you’re dead set on hiring outside help for all your promotional activities, be sure to include
it in your business plan so you can count on it.
T
he basic weapon of a gladiator is the sword. The basic weapon for the music gladiator is the CD and some
business cards.

Once you have your discs and cards... now the hard work really begins. From this point on, you are a walking
advertisement. You don't have a day off and if someone asks you for a CD, you should have one in your bag or
car. Always be prepared to grab opportunities as they come up. Everyone is a spectator, and the more spectators
magnetized to your presence, the more people you have cheering you on when they are needed the most.
Spectators can become fans.

And you will need fans. Because once you've sold some CDs to all your family members and friends (resist the
temptation to give them away), you will need to start finding other methods to make your music known to the world
at large.

The easiest and best way to sell CDs is to perform live as often as you can. It does not matter where you
perform.

Just perform as often as you can.

Performing will make you a better artist and immediately show spectators what they could take as a souvenir of
you home for a small fee. Always keep a mailing list of your fans.

This decade's biggest equalizing factor in music industry promotions today is the Internet. Before, an artist had to
pay for advertisements and media coverage to promote their CD in a new city, and then hope word of mouth
would continue their promotions after the money was gone. Right now, you can promote your music to people
across the world for the same price as mailing a couple of press kits. Get a website up and running if you can. It is
a vital tool to get your info out to interested people.

Put up short sound clips of your music wherever possible; your potential audience wants to know how you sound.

Now you are aware of what it takes overall to succeed in the music business, are you up to the challenge? If so,
get started!

Clarification. You can have a job and still make headway in the music industry. But if you have a job, you must
spend most of your free time working on your career. The key word here is….WORK!

Complements of JaHMa.net Written by; Kenneth Bosket

M.B.A.

Talk the talk; to
yourself.

Walk the talk; with
others.