Why you need to develop a business plan for your record label
What are the three main purposes of a business plan?
First, a business plan describes your business goals and activities that you would take to start and manage the business. Secondly, it helps you to identify possible threats and opportunities that you would face. Thirdly, business plans can help you to acquire funding from investors.
What is included in a business plan?
According to the US Small Business Administration, there are two types of business plans:
– Traditional business plans.
– Lean business plans.
The following elements are usually included in a traditional business plan:
This is a brief explanation that tell your reader about the company. It includesL
– your mission statement.
– your product or service.
– basic information about your company’s leadership team, employees, and location.
This provides more detail about the problems your business solves. It lists the consumers, organization, or businesses your company plans to serve.
In this section, you should also explain the competitive advantages that will make your business a success. For example, you should state whether or not your team has experts or the location of the company. As a record label, your uniqueness might be a particular genre or genres of music that might be popular. You might also provide worldwide distribution for the music and that would be a competitive advantage.
Go here to discover how you can distribute your music worldwide.
Industry or Market Analysis
This is the section in which you research the industry in order to understand what it is and who you need to target. Competitive research will show you what other businesses are doing and what their strengths are.
In your market research, look for trends and themes. What do successful competitors do? Why does it work? Can you do it better? Now’s the time to answer these questions.
Organization and management
This section describes the company structure and who will run it. The legal structure should be described. Will your company be:
– incorporated as a C or an S corporation,
– a general or limited partnership.
– a sole proprietorship
– a Limited Liability Coorporation.
Organizational charts could be included. These would show lines of communication in your company. Inclusion of team members’ curriculum vitae could also strengthen the presentation of your organizational structure.
Service or product line
This section describes the product or service that you offer. The benefits to the customer should be explained. Share your plans for intellectual property, like copyrighting of artists’ music.
Marketing and sales
This section describes hoow the company will attract and retain cusstomers. It also describes how the products or service will be sold.
This section outlines funding requirements if your plan is being presented to a bank, funding agency etc. Five year projections should be made.
You should also explain whether you want debt or equity, the terms of the funding contract, and the duration of the funding. Give a detailed description of how you’ll use your funds:
– buy equipment or materials.
– pay salaries.
– cover specific bills until revenue increases.
This section will describe the financial projections for your company. Your goal is to convince the reader that your business is stable and will be a financial success.
If your business is already established, include income statements, balance sheets, and cash flow statements for the last three to five years. If you have other collateral you could put against a loan, make sure to list it now.
A financial projection for the next five years should be presented and include:
– forecasted income statements.
– balance sheets.
– cash flow statements.
– capital expenditure budgets.
Supporting ducuments nad other materials should be included here. Examples include credit histories, resumes, product pictures, letters of reference, licenses, permits, or patents, legal documents, permits, and other contracts.
Nuts and bolts of a lean business plan
A lean business plan is less intenstive and complex than a formal business plan. It is usually a simple, oneppage document that summarizes the key elements of the business direction.
These are the components
The Lean Plan Template developed at leanplans.com
I love this lean plan template that I found over at leanplans.com. It is simple, easy to construct and very descriptive. This is a plus for visual learners and leaves a bigger imprint on the mind, in my opinion.
The elements are:
– Business identity: who you are.
– Problem you will solve.
– The solution you provide. (provide high quality music in a particular genre)
– Sales channels (where you will do your gigs, online distribution, streaming etc).
– Marketing activities (social media marketing, YouTube ads, radio plays, website etc).
– Revenue (you’ll generate revenue by merchandise like teeshirts, mugs; digital products, YouTube monetizaiton etc>.
– Milestones – key activities to be accomplished.
– Team and key roles.
– Partners and resources.
Go to this link to download the template.
Go to this great music publishing resource that will definitely help you to complete your lean business plan.
Parsons, N. (2017). An Easier Business Model Canvas Template: The Lean Plan Template. Retrieved from https://www.liveplan.com/blog/an-easier-business-model-canvas-template-the-lean-plan-template/
US Small Business Administration. (2019). Write your business plan. Retrieved from https://www.sba.gov/business-guide/plan-your-business/write-your-business-plan