Record Label: How To Start A Record Label In 2020

How to start a record label

Starting a record label is one of the most rewarding things that an artist can do for several reasons.

First, starting a record label allows music creators to become their own boss. Secondly, you will be able to record the music that you love and feel in your heart without depending the approval of others for publication.

Best of all, you do not have to spend endless hours submitting your music to hundreds of record labels. That is because you are now own your own independent record label.

Finally, you will now become able to charter your own destiny and help others to realize their dreams in the music industry.

Duties to consider when starting a record label

Record labels are usually involved in activities like:

scouting for artists
artist development
managing your brand
coordinating music production
coordinating manufacture of hard and digital copies of the music
music distribution
music marketing and promotion
enforcement of copyright for your artistes’ sound recordings and music video. 

Steps to follow when starting a record label

1. Choose a name for the record label.

The name of your record label should reflect the image you want to portray. 

2. Register your company in the United States as a Limited Liability Corporation or n LLC. In other countries, you would go to the Office of Intellectual Properties or Copyright Office to do so.

It is a good idea in the USA to register as a LLC in order to be an actual, legal business. As a business you can register the business for a bank account or credit card. This simplifies the matter of business loan application, for example, at the Government’s Small Business Association.

In other countries you may need to register your business at the relevant government office. Ask questions in order to confirm exactly what you need to do. It may be possible to go ahead and register later if the funds are not available.

3. Document a simple business plan.

A business plan will help you to define many important elements of your company.  You will need to pay attention here if your company is formed with other partners. You would require a partnership agreemen that states:

the percentage of ownership each partner has.
how each partner can leave the business
how decisions will be made in the partnership
who will be responsible for various tasks
Please consult legal experts in your territory for guidance as this contract may need to be signed and may need to adhere to existing legislation.

4. Get a logo.

A great logo is a wonderful way to brand your business. You can make on yourself at

5. Obtain the required contract templates for artists etc. In some countries you may require a lawyer.

6. Obtain the required split sheets and music contract templates for artists etc. It might be a good idea to consult a lawyer.

Important questions to consider when starting an indie record label


Do you want musicians to deliver a master, or will you go in on recording costs?

Will you be paying advances, and if so, how much? (If you have a very small budget, your best bet is to try and convince your potential signings to keep any advance small so there is money left to promote their release)

How will any royalties from releases be divided up? Will your artists (cioyright holders) get a percentage, or will you split them 50/50? Will the label recoup manufacturing costs and promotional costs before paying?

Will the artists be permitted to approve promotional expenditures over a certain amount? If so, how much?

How many promos/free copies will the artist get? Over that limit, how much will they pay for additional copies?

What is the length of the deal?

Is the deal for just one album or several?

Will the musicians be entitled to audit your books? How often, and what kind of notice do they need to give?

I recommend that you consult an entertainment lawyer in your State before proceeding with contracts.

New resource for starting a record label

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Learn How to distribute your artists’ music as an indie record label


Record labels may wish to distribute their artists’ music or hire a music publisher to do the job. Distribution places the artists’ music in front of a wide audience. Check out my published ebook that gives more information on how to get your artists’ music into 150+ stores and streaming services like Amazon Music, Google Play and Spotify.


Record Label: How To Start A Record Label In 2020 1

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