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Sunday, May 15, 2011

10 Business Principles and Practices Every Independent Artist Should Know

Successful businesses run based on sound, proven business practices. So should your music career. Here are some of the basic tenets that every wise business owner knows and adheres to.
  1. The law of supply and demand. If there is not enough demand for your kind of act or music, you will not make money. On the flip side, if there is more demand for your kind of act or music, you will stay working, sell more music and you can charge more.  (My comments) the law of supply and deman is only partially significant in the world of music.  Lets take British rock star “Jamiroquoi”.  His first three albums had digerdoos on them and he sold millions and millions of copies.  In music sometimes this law simply doesn’t have any validity.  Music is run on trends and fads and long term trends.  You could say that with the right circumstances anything can make it big in music. 
  2. You have to spend money to make money. If you are not willing to invest in yourself (lessons, coaches etc.) and your tools (instrument, gear etc.), then you will be unable to compete with those who do.  (my comments) once again this is only partially true.  youtube is “FREE” “Myspace and “Facebook” are Free.  All thee are the three of the top 5 promotional methods available today!
  3. The greater the risk, the higher the potential return. If you are always playing it safe and doing the same thing that everyone else is doing, you may make money but you will never get paid for being a groundbreaker or trendsetter. If you take a risk by getting creative and stretching the boundaries with your act and music just a bit, you may be unique enough to set yourself apart from the rest of the crowd.
  4. It costs 5 times as much to get a new customer as it does to sell something to a previous one. If you build relationships with your fans by collecting email addresses and sending out periodic newsletters, it is easy to sell your newest CD or downloads to them. The reason for that is because they already know you, trust you and like your music. It beats starting from scratch and trying to convince new fans that should spend their hard-earned money on you. (agreed on this one, but keep in mind some old customers don’t want to purchase what they already purchased, you will have to find new customers through new music promotions.)
  5. Customer service is king. If you don’t treat every fan and every audience like they are the most important people in the world, they will find someone who does. Become a friend. Give them what they want and more. (totally agreed here.  this is what separates short term success from long term success)
  6. Every industry has its own set of ‘best practices’. The music industry is no exception. Study the industry, learn the rules, find out what works for other artists, get a mentor, network with the movers and shakers etc. I guarantee you that your serious competition is doing all of these and more. (the music industry is like no other, the best practices here are subject very different marketing pricipals like building hype around an artist to sell, people are followers)
  7. Businesses with strong advisory boards and a strong management team make wiser decisions. As your career moves forward, surround yourself with a wise manager, a bookkeeper, an entertainment attorney and any other advisors and professionals you need on your team. (no doubt, you need to create your own music marketing team to accomplish what serious artists are doing)
  8. Smart business owners use attorneys. They don’t look at them as trouble or unnecessary. They look at them as security guards protecting the company from lawsuits, from breaking the law (even unknowingly), from signing bad contracts and more. You should also use an attorney for all of your legal matters. Keep in mind that ignorance of the law is not a valid excuse for breaking it. (in the music business you’ll have to have an attorney, just know that many of them are rip offs and you don’t need Donald Passman who wrote the best seller book)
  9. Keep good and accurate financial records and pay your taxes. There is no joy in tangling with the IRS, the state, the county or any other government agency you might owe money to. Instead, have a good accountant teach you how to minimize your tax liability. (being organized is huge, but what is even more important is planning ahead, which essentially makes organization a breeze)
  10. Successful business owners know their market and their competition. Define your most loyal fans. Where do they live? That’s where you want to book yourself. How do they listen to music and where do they shop for it? That is where you want your music to be available to them. What is their income bracket and how much are they willing to pay to see your shows or to hire you? Set your prices accordingly. Which do they respond best to – email, snail mail or text messaging? Use that method the most. What are your competitors doing successfully that you’re not.  Find out and at least copy them.  If possible do even more to take away their competitive advantage. (knowing your competition can give you insight into which music marketing techniques are working and which are not, just look at the dreaw of a band and you know if there is something to be discovered)
If you follow these 10 guidelines, you will be amazed at how quickly your career moves forward! Learn to be an entrepreneur as well as an artist. It will serve you well not only in your music career, but in any other kind of business venture you may decide to undertake or get involved in.
© 2010 Vinny Ribas

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