I have been running a home/professional recording studio in Orlando for about one year now, and have done pretty well for myself. I managed to allocate finances for equipment, construction and a small marketing campaign. Now that I have a decent client list, I’d like to expand my business and form a record label to help represent and publish the talent that flourishes in Orlando. But, getting money to start a record label isn’t that easy.
When I was budgeting for the studio, it’s pretty black and white. I’ll charge so much per hour, averaging so many hours per week and my overhead is blank. The gear and supplies I’ll need for start up will cost blah, and I should only claim a loss for about the first year and a half before my revenue stream will bring me out of the red. It’s a service-based business, so crunching numbers was simple.
Now, trying to get funds for a record label is tricky. It’s almost impossible to calculate artist projections, target demographics, start up funding for promotion and all the other necessary funds required to make a band into a sellable product. Yes, I can tell you how much it will cost to produce and record the physical album, but beyond that, nothing is quite tangible. My associates and I are doing are best by researching other independent labels and their annual revenue streams, but even that isn’t enough to convince a financier to throw us a couple million dollars to represent a handful of artists. As an independent record label, our goal isn’t to get platinum records from all of our artists or have every single in the top ten billboard spots. We strive to sell a steady number of records on a monthly basis and have the artist booked for three quarters of the year for live shows. But, again, these numbers are hard to pin down.
If there is anyone else out there who has a similar desire to start an independent label, or has some financial insight on transforming a successful recording studio into a record label, please comment on this post.
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