Here are twelve things you need to prepare in order to be ready for a record deal:
1. Practice, rehearse (together, if a band) and play live shows. Refine your music and develop a style. Don’t forget the advertising adage that you don’t want people to hear you (or your product) until you are ready to deliver – if you get the word out and people are not impressed, you will only speed up how fast people will find out you aren’t good. But you could be good if you waited and rehearsed!
2. Track everything. Get a copy of Quickbooks or at the least Excel and be sure to keep track of the money you’re spending and making, and more importantly, the number of CD’s or songs you’re selling. When asked should be able to give a number on how many units you’ve sold, the more specific the better.
3. Promote yourselves now. Get on Myspace and get friends and hits, do online marketing. Online presence is very important to A&Rs now. Read up sources like Jay Conrad Levinson’s Guerrilla Marketing and figure out how to establish awareness and interest in your city and then your region. Focus on being strong in a geographic region and then spreading out, and remember that if you build a fan base somewhere don’t neglect them. Be sure to get around a bit within an area though, don’t just play the same venues over and over again. That’s a problem we’re seeing with the Vegas talent pool right now – they’re not getting out to California, Arizona, New Mexico and Texas enough to build regional awareness.
4. Set up a business entity. Once you have cash coming and are signing contracts as a band, it is recommended that you have a business that is holding the money and named on contracts. This provides protection against certain debts and lawsuits. Limited Liability Companies (LLC) are the most popular entity right now due to favorable laws, flexibility and “pass-through taxation.” That means that the owners (called “members” of an LLC) pay taxes on the income they receive from the LLC, but the LLC itself doesn’t pay taxes on all of its income like a corporation does. Serious bands have business entities.
5. Get a Band Agreement. This outlines who owns what in the band, how things are shared, who has certain responsibilities, how people leave and join the band, what happens if a band member dies, and more. Get this out of the way as early as possible – it can blow up a band if things progress too far and members have different expectations of profit shares, responsibilities, etc.
6. Trademark your name. Search around and make sure no one is using the same name. Go to the USPTO website and search the TESS database, too. Your name is obviously integral to your brand and your identity. Once you have built up goodwill and recognition it has value. You should register it with the federal government in order to gain the extra protections of registrations, and put the rest of the world on notice that you are claiming it.
7. Copyright your music immediately. Download the forms from the Copyright Office and send in your music and/or lyrics. It’s cheap, and if you’re going to enforce your copyrights in court it’s necessary. Clear any samples, and of course the best advice is to make your own beats or find a producer to make you good beats.
8. Get your own website with your band name. Find someone to help you with Search Engine Optimization (SEO). Get your name out there, link it to your myspace, etc. Register any acronyms your band has, any unique performing names, band member names, etc. It’s better to pay the $10/year each to hold them then to try and wrest them from a cybersquatter who sees your band and registers it first, and all of your stage names. It’s even better to put content on all of the sites, too.
9. Find a lawyer, manager, agent and accountant. You should have a lawyer before you sign anything, even with your manager. Lawyer protects your interests as a band. Manager represents you to others and guides the business entity of the band – think of him as the president of your “company.” Agent books you gigs. Once you have cash flow, an accountant will help you manage it and plan for the future. Once you’re setting up for a big record deal an accountant/business manager is very useful to help budget, manage capital and investments. You don’t want to be like MC Hammer and burn through $30,000,000 in under 5 years.
10. Think of your music/band as a business, label is investment bank. Music is a business, and the point of record labels signing people is to make money. Used to be that record labels liked a performer they would sign them up, maybe to a development deal, throw money at them until they were ready to record, then throw more money at them to record, and then market them. Those days are gone, and the music industry has abandoned those lower levels of development. Record labels are like investment banks now. Investment banks (and private equity funds) go around looking for ESTABLISHED, PROFITABLE BUSINESSES to invest in or buy. They can’t afford to waste time on ideas or maybes. They want the MOST SURE THING. What this means for you the artist is that you have essentially have to have a functioning enterprise, a business machine already for them to plug into their marketing and distribution network. Labels want “buzz,” they want sales figures, MySpace hits, numbers of shows played, average audience size, venue size, touring coverage, radio airplay, articles, online mentions, festivals, features with major artists, samples cleared (or original producing). If they see you getting CD sales, playing shows and building fans in your region, then they can project out that you will have the same successes nationwide or internationally.
11. Remember advances are like loans to be repaid, not a salary. Advances may look big if they’re in the hundreds of thousands, but that can easily be spent on a CD production and your most basic living expenses for a few months. Don’t forget the other band members have to eat too, so even with your six-figure advance you’re probably not going up past ramen or canned chili any time soon. And then, you have to pay every penny of that advance BACK to the label before you get royalties from your record sales. Given the deductions in standard recording contract terms, producer/writer Moses Avalon projected that record advances were like credit lines with about 68% interest.
12. Touring and licensing are where to focus on making money, not record sales.* Most records never recoup their advances and promotional expenses. Get out there and play live shows. Find ways to license your music to TV shows, movies, video games, commercials, Broadway plays, fakebooks, ringtones… everywhere.
* Hip-hop and rap are different – there are still less opportunities to do live shows and your income is more tied to records.
