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You Would Be Absolutely Crazy Not to Start Your Own Record
Label... or Would You Be?
by Ty Cohen
Published on this site: March 24th, 2006 - See
more articles from this month
A business that produces and releasing original music CDs is called a record
label. Many artists dream about having their own record label.
In reality if you have produced and released your own music CD, you have for all
intents and purposes created your own record label. However, there are some additional
steps to becoming an "official" record label recognized in the music industry.
Many
of today's better-known labels were started by artists who just wanted to release
their own music to the public. Everyone in the music business has heard Heb Alpert's
story. He started A&M records with $500 and a dream. You can do the same thing.
Start out small by creating your own music and then releasing it the public. Later
after you are successful with your own stuff, you can sign on other artists.
Actually
Starting Your Own Record Label
The following are the steps necessary
to make your label "official":
- Decide on a business model -
I like to decide what form of business first because it will be important when
you actually choose your business name. The three most common forms of business
are the sole proprietorship, partnership and corporation.
- A
sole proprietorship is the simplest form of business. It has one owner who
provides all of the startup capital takes all of the risks and owns all of the
profits or losses. You must keep records of sales and expenses and file a schedule
C for the business as part of your personal income tax return each year.
- A partnership has more than one owner. Each partner provides a
portion of the startup capital and shares the risks and the profits and losses.
Never start a partnership without first drawing up a partnership agreement that
spells out exactly what each individual's duties, responsibilities and share of
the profits are. Partnerships must file a information return to the IRS and provide
each partner with a schedule K to attach to their personal income tax return each
year.
- A corporation is a legal entity that can own property,
sign contracts and be sued. A corporation also files an income tax return pays
its own income taxes. The corporation shields the owners from risking all of their
personal property while conducting business.
Each form of business has
a different registration process and different filing fees.
If you are
just starting out, a sole proprietorship or partnership is probably the best choice
unless you already have significant personal assets that need protecting. Talk
to a lawyer if you are not sure.
- Select a Name - Once
you decide on your business form, it's time to pick your business name. This can
be a lot of fun but takes some serious thought. You will have to live with the
name for a long time. Try to come up with three or four names that seem to fit
your style and reflect what you are all about.. Next list them in order starting
with the one you like best.
- Register the Name - There
is a good reason for choosing several names. You cannot legally use the same name
as another business. So, now you need to go to your state or county government
office and register your business. If you are lucky, the first name on your list
will be available. If not, try the next one on the list until you either find
one that is available of run out of names.
You will need to fill out all
of the necessary forms for the business form you selected. The most important
one is the "Doing Business As" form. This registers your business name and allows
you to start a business bank account, get a business credit card, etc.
- Buy
a License - You will need to get a business license if it is required by your
local or state governmental agency. Laws vary so always check to see what is required.
- Sales Tax Number - Like a business license, this may
or may not be required. Sales tax laws can be complex. Check with your local government
agency to see what is required where you live.
Basically, that's all there
is to starting your own record label. How much will it cost? It varies but should
cost anywhere between $50 and $500 dollars for the various filing fees. A sole
proprietorship is the cheapest and a corporation the most expensive.
The
Benefits of Starting Your Own Record Label
Congratulations! You are
now the proud owner of your own record label. Some of the advantages you now have
are:
- A unique identity - this is also called a brand name.
It gives you a more professional appearance and helps you establish the necessary
business contacts to promote your music.
- Business Bank account
- this will allow you to accept checks and for an additional fee, you can set
up a merchant account and accept credit cards as well. An individual cannot accept
credit cards.
- Registered business - you can now produce
other artists' works under your label.
- Enter into contracts
- your business can now enter into contracts to lease equipments, hire a hall,
etc.
- Join industry organizations - you may want to join
one of the publishers' organizations like the ASCAP or BMI to learn how to protect
the copyrights and royalties for your label.
Some Final Things
to Do
- Logo - design and copyright a logo for your label.
The easiest way to do that is to publish your new on a website with the proper
copyright notices.
- Set up a Website - you really need
to do this to promote your label.
- Stationary - get business
cards and stationary printed up.
Now, go forth and promote your new
record label..
Ty Cohen is the acclaimed author of over a dozen best-selling music
industry "How to" books and courses. Grab a copy of Ty Cohen's latest book title
by visiting http://www.MusicBooksByTy.com
and to learn more about starting or turning your existing record label into a
world wide, profit pulling record label visit: http://www.TheUltimateRecordLabel.com/landing_page.htm
Start A Record Label Today!
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