Music business plan template

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Business Plan for a musician

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Music business plan template

  1. 1. The Recorded Music Industry A Business Plan n. Contact n. Contact p. xxx-xxx-xxxx p. xxx-xxx-xxxx e. name@mail.com e. name@mail.com
  2. 2. Table of Contents I. Executive Summary............................................... 2 Highlights Objectives Mission Statement Keys to Success II. Description of Business......................................... 7 Company Ownership/Legal Entity Location Interior Hours of Operation Products and Services Suppliers Service Manufacturing Management Financial Management Start-Up/Acquisition Summary III. Marketing ...................Error! Bookmark not defined. Market Analysis Market Segmentation Competition Pricing IV. Appendix.....................Error! Bookmark not defined. Start-Up Expenses Determining Start-Up Capital Cash Flow Income Projection Statement Profit and Loss Statement Balance Sheet Sales Forecast Milestones Break-Even Analysis Miscellaneous Documents
  3. 3. THE RECORDED MUSIC INDUSTRY - APRIL 2014 2 Executive Summary The purpose of this business plan is to demonstrate the potential income earned through a successful musical record single release. This is intended to gain investment funds on behalf of said artist, in exchange for a portion of the profits of the expected returns. This is in no way a guarantee of income, but a risk to be considered by a sophisticated investor. Revenue In order to outline the details for such a campaign, an understanding needs to be met in regards to the music industry in general, and the genre of music for the said artist. The entertainment business is a very profitable one, existing in an industry that generates billions of dollars a year for musicians, executives, writers and publishers alike. There are multiple avenues of growth regarding the business model of a successful company and the same goes for a successful artist. In order to generate revenue as a musician, an aspiring artist has 5 basic forms of activity that needs to be mastered: 1. Single Distribution 2. Music Licensing 3. Shows/Concert Tours 4. Merchandise Sales 5. Endorsement Deals Each one of these is a separate stream of income that the artist can collect assuming they generate enough support from music consumers (fans) and industry executives. Platforms Before the artist can generate income in the aforementioned fashions, a legitimate music platform needs to be established, along with, generally, a strategic marketing plan outlining specific target goals to reach in the music campaign, as well as a target release date. Without a complete platform, an artist suffers the potential for funneling money into a project that cannot be sustained. Liken it to a crew of sailors who attempt to throw out cargo to save a sinking ship, yet have not plugged the holes. Below are the following platform components that every musician should have before commencing on his or her career: 1. Registered copyrights for all music 2. Associations with relevant music publishers and licensors 3. Active online presence 4. Effective public relations support 5. Relevant distribution platforms Marketing and Promotion Once these platforms are established and in effect, the artist can go ahead and promote their work! In order to do this, an effective marketing strategy needs to be implemented, as mentioned earlier. Without proper marketing, the artist will not gain the exposure he or she needs to convince music listeners to consumer their product via sales, or music licensors
  4. 4. THE RECORDED MUSIC INDUSTRY - APRIL 2014 3 to implement their product for commercial use. In order to create as much exposure as possible, the artist should factor in the following marketing strategies: 1. National, Regional and Local radio exposure 2. Positive features and placements in relevant media outlets 3. Collaborations with established artists or talented up-and-comers 4. An effective college marketing plan 5. Consistent interaction with fan base Financial Projections In this section, we will discuss our financial projections for the next 5 years. Our overall strategy is to generate revenue though sales of merchandise by developing mass commercial appeal to the Mackalevin brand. In year 4, merchandise sales take over as the largest revenue stream, followed by licensing and endorsements, booking and recorded music sales. Production • Develop Content • Create Online Platform Registration • US Copyright Office • Music Publisher Engagement • Touring • Radio • Social Media $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 Recorded Music Booking Merchandise Licensing and Endorsements Financial Projections: $36,000 Year 1 Revenue
  5. 5. THE RECORDED MUSIC INDUSTRY - APRIL 2014 4 Revenue Item Projected Units Sold Projected Price per Unit Revenue Expected Recorded Music 1,000 Singles $1 $1,000 Touring 100 Shows $100 average/show $10,000 Merchandise 1000 Items Sold $10 average margin/item $10,000 Licensing Revenue Amount Varies $10,000 worth of contracts $10,000 Brand Endorsements Amount Varies $5,000 worth of contracts $5,000 Total Revenue $36,000 Revenue Item Projected Units Sold Projected Price per Unit Revenue Expected Recorded Music 10,000 Singles $1 $10,000 Touring 100 Shows $1000 average/show $100,000 Merchandise 10,000 Items Sold $10 average margin/item $100,000 Licensing Revenue Amount Varies $100,000 worth of contracts $100,000 Brand Endorsements Amount Varies $10,000 worth of contracts $10,000 Total Revenue $320,000 Revenue Item Projected Units Sold Projected Price per Unit Revenue Expected Recorded Music 1,000,000 Singles $1 $1,000,000 Touring 100 Shows $10,000 average/show $1,000,000 Merchandise 100,000 Items Sold $10 average margin/item $1,000,000 Licensing Revenue Amount Varies $1,000,000 worth of contracts $1,000,000 $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 Recorded Music Booking Merchandise Licensing and Endorsements Financial Projections $320,000 Year 2 Revenue $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 Recorded Music Booking Merchandise Licensing and Endorsements Financial Projections $5,000,000 Year 3 Revenue
  6. 6. THE RECORDED MUSIC INDUSTRY - APRIL 2014 5 Brand Endorsements Amount Varies $1,000,000 worth of contracts $1,000,000 Total Revenue $5,000,000 Revenue Item Projected Units Sold Projected Price per Unit Revenue Expected Recorded Music 10,000,000 Singles $1 $10,000,000 Touring 100 Shows $100,000 average/show $10,000,000 Merchandise 10,000,000 Items Sold $10 average margin/item $100,000,000 Licensing Revenue Amount Varies $10,000,000 worth of contracts $10,000,000 Brand Endorsements Amount Varies $10,000,000 worth of contracts $10,000,000 Total Revenue $140,000,000 Revenue Item Projected Units Sold Projected Price per Unit Revenue Expected Recorded Music 20,000,000 Singles $1 $20,000,000 Touring 100 Shows $200,000 average/show $20,000,000 Merchandise 20,000,000 Items Sold $10 average margin/item $200,000,000 Licensing Revenue Amount Varies $20,000 worth of contracts $20,000,000 Brand Endorsements Amount Varies $20,000,000 worth of contracts $20,000,000 Total Revenue $280,000,000 $0 $20,000,000 $40,000,000 $60,000,000 $80,000,000 $100,000,000 $120,000,000 Recorded Music Booking Merchandise Licensing and Endorsements Financial Projections $140,000,000 Year 4 Revenue $0 $50,000,000 $100,000,000 $150,000,000 $200,000,000 $250,000,000 Recorded Music Booking Merchandise Licensing and Endorsements Financial Projections $280,000,000 Year 5 Revenue
  7. 7. THE RECORDED MUSIC INDUSTRY - APRIL 2014 6 Expenses Business expenses may vary. Business Licenses $1,000 Incorporation Expenses $3,000 Intellectual Property Registration $5,000 Music Production Costs $50,000 Business Development Software Recommended: Web Site Builder and Domain $350 Web Site Theme Plugin $100 Web Hosting Platform $150 Email Marketing Plug-In $150 Email Marketing Platform $3,000 Social Media Content Manager $150 Administrative Software Recommended: Project Management Tool $1,200 Database Management/CRM $3,600 Accounting Software $500 Task-Management Outsourcing $800 Contractors Recommended: Photographer $6,000 Video Production Team $18,000 Design Team $6,000 Public Relations Team $6,000 Independent Radio Promoter $6,000 Booking Agent $6,000 Rent $12,000 Advertising Budget Required: Radio Promotion $50,000 Artist Features $100,000 Digital Media Placements $50,000 Miscellaneous Budget $20,000 Total Startup Expenses $349,000
  8. 8. THE RECORDED MUSIC INDUSTRY - APRIL 2014 7 Description of Business Company Ownership/Legal Entity Company, LLC is a For-Profit business venture based in Brooklyn, NY. The company produces recorded music tracks for sale in the physical and digital marketplace, amongst other goods and services. I. Company Info a. Company Name: b. Business Structure: c. Business Type: Licensing, Merchandizing, Public Relations, Distribution d. Industry(s): Recorded Music, Media and Entertainment II. Licensing and Certifications a. Is a license needed for this business?: b. Has a license been obtained for this business?: i. If no, when is the expected date of purchase (or n/a): ii. If no, what is the expected method of purchase for the business license c. In what state will this business be licensed and incorporated?: d. In what state will this business operate and hold a headquarters?: e. Is the business eligible for any government certifications? i. If yes, which ones? (or n/a): III. Owners a. Who will be the owners of the corporation?: b. How will the membership shares be divided?: Through internal negotiations c. Existing candidates for ownership: Products and Services Music Company, LLC develops revenue streams through four major product/service offerings: recorded music sales, concert touring/booking, advertising partnerships and sales of merchandise. I. Recorded Music a. Overview i. Recorded music products are individual recording tracks composed, produced, song written and performed by a group of individuals. b. Sale i. Recorded music products can be sold in physical and digital form. The physical exchange for recorded music products currently exist in retail stores, while the digital marketplace is centralized in the iTunes service; but with players like Amazon Music and Tune Core rapidly emerging as contenders. c. Consumers i. Recorded music products can be purchased for personal consumer use, for-profit business use, non-profit organization use (including educational use) and artistic use. d. Royalties i. Whenever a recorded music product is played, financial requirements are made to compensate the owner(s) of the work. Performance Rights Organizations such as B.M.I. and A.S.C.A.P. provide enforcement measures to help musicians collect due royalties. e. Publishing
  9. 9. THE RECORDED MUSIC INDUSTRY - APRIL 2014 8 i. Often times, musicians will relinquish the rights of the recorded music product to an intermediary seller who will use its own resources to sell the recorded music product on the owner’s behalf for a portion of future earnings. f. Vertical Integration i. The intermediary sellers are often publishing companies or licensing agencies. However, music licensing can be established in-house. II. Concert Touring/Booking a. Overview i. Concert touring and booking references the public appearances and performances of musicians. b. Talent Buyers i. Talent buyers generally represent concert venues, colleges and universities, night life venues or private promotional companies. c. Payment i. A musician is generally paid for their services by a talent buyer. ii. On occasion, a musician may pay fees to a talent booker or booking agency to obtain performance opportunities with a promotional value. III. Advertising/Partnerships a. Overview i. When the musician has gained a significant following, brand marketers will often solicit the promotional capabilities of the musician for the product or service they are trying to sell. b. Digital Distribution i. A common way for musicians to promote a brand is to distribute content through digital intermediaries such as social media services and blogging platforms. c. Case Studies i. A popular example of a musician selling promotional services in exchange for a brand endorsement is Curtis “50 Cent” Jackson, who sold his share in the company Vitamin Water for over $100 million dollars. IV. Merchandise a. Overview i. Merchandise consists of the physical goods and products that a musician sells directly to their fans. b. Types of Merchandise i. Merchandise generally consists of clothing items, posters and other memorabilia representing the musician, however, it can be used for any product or service that is directly manufactured or sold by the artist (aside from just promoting it). c. Payout i. Merchandise items generally have a fairly large margin, comparable to price points for competing products. Therefore, payout on merchandise items are extremely lucrative. The most popular musician, selling a million items at a margin of $10 each, can make $10,000,000 just from the sale of the goods. The musician, in this case, asks as the promotional tool and the merchandise is the businessman’s product. Location Green Desk |Green-Desk.com |718-210-3650
  10. 10. THE RECORDED MUSIC INDUSTRY - APRIL 2014 9 Green Desk, LLC, is a Brooklyn-based work-space company that leases office space for rent to various types of tenants, with locations in Williamsburg, Greenpoint, Downtown Brooklyn, Dumbo, and Long Island City. Amenities include lobby/receptionist service, mail and package handling, 24/7 key card access, conference rooms, high-speed internet, copy/print/fax machine, cleaning service and more. The space is generally populated with companies with a primary focus in art and technology. This combination of convenience and affordability make Green Desk a prime HQ. *Principle target Interior Office Space | Function The office space will serve as the setting for the core business operations. This includes, but is not limited to:  Strategic Planning and Analysis  Business Development (Preparation and Execution)  Client Meetings  Document Services  Event Planning and Execution Office Space | Benefits  Increased work-flow professional  Professional environment  Client hub  Internal and external networking Office Space | Pricing 240 Kent Avenue Williamsburg 147 Prince Street Downtown Brooklyn 195 Plymouth Street Dumbo 68 Jay Street Dumbo 155 Water Street Dumbo 67 West Street *Greenpoint 34-18 Northern Blvd Long Island City
  11. 11. THE RECORDED MUSIC INDUSTRY - APRIL 2014 10 Pricing for office space and shared work-place settings range from $300 per month (single desk in a shared or open space) to $9,000 + (30 or more employees). Rentals can also be made for conference rooms, event spaces and on occasion, tenant-leased photography studios for video and photo shoots. *Recommended choice Studios and Event Space In addition to offices, Green Desk caters to event planners and creatives through their brand of loft-spaces and studios. 2 Desk Office Space $600/Month 3 Desk Office Space $750/Month 4 Desk Office Space *$1,000/Month 6 Desk Office Space $1,800/Month 8 Desk Office Space $2,400/Month 10-30 Person Space $3k-$9k/Month Greenpoint Loft 67 West Street Capacity: 700-800 Dumbo Loft 155 Water Street Capacity: 300-400 W Loft 240 Kent Street Capacity: 500-600 Dumbo Spot 160 Water Street Capacity: 200-300 Ruby Bird Studios 67 West Street Studio Space
  12. 12. THE RECORDED MUSIC INDUSTRY - APRIL 2014 11 Hours of Operation Music Company, LLC will operate during normal business hours (M-F, 9am-5pm), with additional night and weekend hours for event and networking functions. Suppliers I. Services Needed a. Booking Agent/Tour Manager i. A booking agent provides business development services by contacting venues and arranging for booking and payment. A Tour manager plans the strategic route of the booking tour and helps to sell the entire package to advertisers. b. Publicist i. A publicist writes content for the musician to be shown to the press. The press includes online, tv and radio media outlets. The publicist makes sure people know who the musician is and likes them. c. Independent Radio Promoter i. An independent radio promoter provides music recording placement on commercial and non-commercial radio outlets. This is a pivotal part of current music integration. d. Music Publishing/Licensing Agent i. A music publisher provides sales related services to a musician in exchange for a percentage of the profits made. A licensing agent acts as a broker and secures placements for commercial use. e. Entertainment Lawyer/Agent i. An entertainment lawyer provides contracts as an authority of the law and negotiates endorsement deals on behalf of the musician. Service The following process will be followed for all general types of business activities. This core strategy will drive growth, legality and publicity.

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