Tag Archive for: Budget

finance tips for musicians

There are many articles out there telling indie musicians about all the cool ways they can make money in today’s music industry.

However, all that money that you could potentially make probably won’t equate to very much if you don’t have an understanding of personal finance and budgeting.

Without a sense of finance you could see your hard-earned cash going down the drain as a result of impulse buys, unstructured saving, and over-spending for your projects and tours.

If you’re far enough along in your career, your manager or accountant may take care of budgeting and finance, but, especially in today’s industry, most musicians starting out may only have a friend or classmate acting as their manager.

With all the stuff you need to get done, something as mind numbing as finance tends to get pushed under the rug in favor of more glamorous activities like recording, writing, and talking with fans on social media. But the fact of the matter is, it’s not glamorous to throw money away. And that’s exactly what you could be doing with poor budgeting and finance.

So how can you get a better handle on your finances and get the most money out of your music? It’s actually a lot easier than you would think – no boring accounting lecture necessary!  With just 5 finance tips for musicians, you can be more organized and make more money.

Want more music career tips? Download this free ebook to learn how to find your place in today’s music industry:

1. You Are a Business – Act Like One

The indie musicians who are truly successful think of themselves as a business and act accordingly. That is the first finance tip for musicians.

I know, it’s really easy to just pocket the money or split it up with your band mates on the spot after a gig, especially if you’re paid in cash. This method is fine if you’re a hobby musician, but if you want this to become your career, you’ll want to get more organized.

A great option is to have a secure place to put the cash you get from live performances. Envelopes and small lock boxes are great options depending on how secure you want to be. The key is to make sure that everyone in the band knows where to put the money so it stays safe and accounted for. No one wants to be in the position of telling their band that they misplaced a couple hundred dollars!

Beyond the gig itself, you’ll want to set up a separate bank account for your music income and deposit any money you get from your music in there. This will allow you to resist spending all your music income before dealing with the band’s expenses. Have a set time to pay your band members or yourself. This could be once a week, every other week, or once a month. It’s important to remember that you are all part of the business and should be paid in an organized fashion.

2. SAVE!

We all want a big pay check, but saving is really important too. You need to pay for the band’s expenses, and pay your band members, but remember to leave something in the bank. Even better, take a little bit off the top and save it. If you’re just starting out and not making very much it can be a very small percentage. The key is to just get in the habit of saving something.

This will be really beneficial finance tip when you are looking to record a new song or album or go on tour. Instead of having to ask band members to fork over money for the recording studio costs, you’ll be able to pull some dough out of your business bank account.

3. Spreadsheets Are Your Best Friend

The next finance tip for musicians is to use spreadsheets. I know, a lot of musicians (actually a lot of people in general) hate spreadsheets and avoid them at all costs. But keeping track of your income and expenses is one of the smarter things you can do for your music career.

As an indie musician, you have an extremely irregular income stream. Meaning you don’t bring a set amount each month. Your income is entirely dependant on the time of year, how often you gig, when you release an album, and a huge list of other variables. If you keep track of everything on a spreadsheet, your income becomes a lot more predictable.

Set up a spreadsheet to track your income and expenses over a full year. Divide everything up into categories like touring, recording, and publishing (you could even get more specific) and separate everything into months. Have total income for each month and another for the full year. There’s no better feeling than being able to look back at your yearly income from a few years ago and see how much better off you are now.

Aside from that, spreadsheets let you notice other trends in your career. You may find out that your average monthly income is $2,000 but it peaks above this in the summer months when you tend to gig more often. With these kinds of insights you’ll be able to avoid over-spending on the good months to compensate for the slower times.

The important thing is to get organized. You can get a bunch of spreadsheet templates for keeping track of your income and expenses and budgeting projects in the New Artist Model online courses.

4. Bootstrap

Don’t wait for someone to come along and lay a big advance on you. Start making and distributing your music now with what you have. Just like entrepreneurs starting a business, musicians need to learn how to make money, even it it is just a little bit every month.  This is one of the good musician habits to get into.

This really goes along with the Lean Startup philosophy. Make your music as good as you can with the resources you have available, release it, get out and gig, make some money, and use the money you gained to create your next recording. It’s a slow process, but in the end it’s better than waiting for some advance that may never come or putting yourself into debt by taking out a big loan to record a full album. The important thing is to start your business by generating some income.

5. Budget

The last finance tip for musicians is to budget. When you’re looking to go into the studio to record some new tracks or hit the road for some gigs, take time to budget of all your expenses beforehand. Make a spreadsheet for each project that splits everything up into categories. For example, an album budget could include rehearsal studio and recording studio costs, equipment purchase or rentals, session musician fees, producer and engineer fees, album artwork and/or photography, and digital distribution costs.

By laying all these costs out before you even go into the studio, you’ll have a better idea of just how much money you’ll need. If you’re figuring out the expenses as you go, you’ll always end up spending a lot more than if you plan ahead. If it looks like you’re going to go over budget you can choose to cut out that track that would require you to buy or rent a banjo, you could even record some tracks at home on your computer to cut down the amount of days you have to be in the studio.  The important thing is to plan ahead and develop a strategy for success.

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The New Artist Model is an online music business school for independent musicians, performers, recording artists, producers, managers and songwriters. Our classes teach essential music business and marketing skills that will take you from creativity to commerce while maximizing your chances for success. We’re offering access to free lessons from the New Artist Model online courses to anyone who signs up for our mailing list.

 

Photo by Mark Thorsen on Flickr

Photo by Mark Thorsen on Flickr

For musicians, video is an extremely powerful media. Many music fans use sites like YouTube to keep up with news from their favorite bands, discover new bands, and listen to music.

Indie musicians with a limited budget do not need to be intimidated or discouraged by the big-money major label videos. You can create great video content on a budget. As a musician, you are creative. Use that creativity to come up with great video ideas that don’t require millions of dollars! Your fans will appreciate the thought you put into the video and the fact that you didn’t follow the default “we’re playing our song in the woods” approach.

Kelley James is a singer/songwriter. This article he wrote for Hypebot is a great example of how real musicians are doing great things on a limited budget. Here’s a short excerpt from the article. You can read the full article on Hypebot

1. When creating content, think outside the box.

Everyone is pretty familiar with the two main standbys that most artists will utilize when it comes to creating videos: the video-blog update and, of course, music videos. One is low budget with the potential to be stale and contrived while the other often seems like too big of an investment for artists who are still growing. That’s why it’s very important to think outside the box when it comes to video content. What are your viewers getting from your videos that they can’t get elsewhere? If the answer is “nothing”, they probably won’t be tuning in any time soon. When I’m creating content for my channel, I like to give my fans something they can’t see at a show or buy on iTunes, so I like to do one of my signature freestyles on-the-spot. Other times, I’ll mash up two songs into one streamlined acoustic performance. Once your viewers realize that they’re getting in on something special when they watch your videos, you can bet they’ll be back again next time.

2. More is less.

There’s proof all over the web that a clever idea can be as valuable, if not more, than a bloated budget. A lack of funds can be a blessing more than a curse in that it forces you to think creatively and work with whatever resources are immediately available. In 2012, I released my single “Summertime On My Mind” and wanted to create a unique video to promote it without spending a ton of cash. I was involved in a campaign for Patagonia at the time called “Repair, Reuse, Recycle” which was aimed at promoting cleaner environmental practices and conserving resources, and I saw one that one of the logos was an acoustic guitar with only one string. Inspiration struck. With the goal of showing that you can create something awesome with only simple tools, I rounded up five friends and six guitars – each with only one string. We played the entire song together, one string per person, and over 13,000 views later, I was able to prove that it doesn’t take more than a few buddies and some ingenuity to make something special. Don’t get caught up in trying to copy the music videos you see on TV, because the average major label video usually has a budget somewhere between $200,000-$500,00. Use your brain and remember, more is less.

For more tips from Kelley James, check out the full article on Hypebot.

How do you make the most of your  video budget? Share in the comment section below!