starting record company -- this is not a poll

[gullyjewelz]

I have done this before but I am thinking of "doing it" again. Yes, I started a label only to realize I was far too green, uneducated, inexperienced, and unconnected to really run a label.

NOt much has changed, only now I know what types of defeats to expect. I am going to "reopen" my music business, so to speak. My new plan: generate a buzz!!

Step 1: Acquire Business License from Local Govt. Tax Asessor's Office.
Step 2: Keep receipts of everything I purchase, i.e. cds, cd paper, printing supplies, etc.
Step 3: Employ 1 or 2 workers to man the phones and hit up a shi-t - load of local stores to get them to agree to sell my cd n post my flyer.

** I could do this without a bus. license, but I figure if I am going to really shell out a few bucks, I should be able to get them back on my taxxes at the end of the year. I am quite sure that "turning a profit" is not exactly on the hnorizon . . . just based on the laws of physics and the universe . . but i got my fingers crossed and im shootin for the moon!!!!

NOW -- CRITIQUE ME PLEASE!!!!

[2lim]

Get a more detailed business plan. how much will your employees be paid? What hours will they work? How much of the production work will YOU be doing, and how much will you be subletting out? What style of music/styles ofmusic will you be producing? How will you judge who will be involved with your label? Where will you search out these bands/groups that will be involved with your label? etc etc. Once you figure all of this out, it will be more clear.


Simon


Ps

I have never run anything even remotely close to the music business..... this is just straight up common knowledge for starting any business.

[glynb]

Businessess serve a need in the market.

Before doing anyhting find out if there's a need for the goods you're gonna sell. Market research.

No point in setting up a business to sell something that noone wants to buy.

Are your artists in demand?

[gullyjewelz]

well i want to "find" artists and help build their buzz -- perhaps i am more geared to being a promoter rather than a record label --

admittedly, i am one of the artists and there are four other artists that i am working with
production work: i do all the music production adn studio recording
the employees will be doing the "phone contact" work and the "street vendoring: passing out flyers, sample cds, getting the cds in various stores . . "

employees get paid? hunh? (lol - for real: ) nah, i figure $100/month max is all i can afford right now [this is the main reason i want to use this element of the "busines" to write off these expenses for tax purposes . . .

employees - work hours: i'll just strong arm em into workin sun up to sun down!!!

music style: hip hop who will be involved: who i feel like i can help, who i feel like i can sell (a mixture of these two elements)

[2lim]

Ummmmm where do you generate your funds? If you are promoting and recording artists, then are you going to be taking the cash(if any) from CD sales? Where is the income in the business?


Simon

[gullyjewelz]

im a self starter -- right now, i do what i can with what ever spare cash i can scrape up -- the artists are also chipping in -- its a joint effort --
like i said, i am just at the beginning stage -- have no investors, n not going to any banks for money (not yet anyhow -- plus too many have advised that such would be waist of time)

my biggest thing is this: rather than just taking money out of my pocket and putting it towards the hopes n dreams of any of the artists i believe in -- (as this is required!!!) i figure, if i at least have a "few" of the business issues taken care of -- then i can at least use these "ventures" on my taxxes . . . no?

that way, if nothing ever comes of the artists - i can atleast get something for my troubles . . . a tax write off . . .
?

[juststartingout]

I guess what 2lim is trying to say, is that you are going to the government and starting a business. As a business, you need to show incoming cash otherwise, you are not a business. Also, there is a yearly cost to be a business, so are the tax write-offs worth it? (accountant, business taxes, lawyer, paperwork to the state, feds, county, city, etc...)

Now as far as me, I agree with him totally. You need a full fledged plan, or at least some basic research before jumping in. For instance, if you want to get any money for what you are doing, you need to produce quality products, that includes, mixing, mastering and mass CD production. You are talking a minimum of $5,000 for the first 1000 cds. If you are only marketting your area, that's about all the CDs you will sell. So you need to go national in order to sell enough CDs to make it worth it and that gets into promotors, radio play and advertising. Those are just a few of the things to think about. Answer one question, "Where is the money? ". It's the most important question.

Last thought; When I opened my business, my brother in law tod me 'Hey, the idiots down town start businesses all the time. I am sure you can!!' So if you are going to open a business, do it with the intentions of making money.

[gullyjewelz]

ok let me start over

lets just say that i am an artist
i want to get a few songs together and put em on a cd
i want to then pass out (and hopefully sell cds ) to help get my name out there a little bit
i want to do shows also

i have to pay for the cds out of my own pocket
(price = anywhere from $300 -$1,000)
once i pay for these cd's -- i have to be able to sell them [or the initial investment was either a waist of time completely or at best - an extremely expensive hobby ]

would it be beneficial then, to atleast be able to claim the expenses for this venture as a tax write off?

who has $300 -$1,000 lieing around that they can just "lose" if all goes bad ?

the goal: sell the cds i pay to burn/manufacture . . . take the $ and put back into my "business" . . . then try to do the same thing . . . perhaps in a different area . . . .

the cycle continues . . .

???

later down the road, i can get more legalistic with it (yeah i made up a word!!!) and begin stepping up the levels . . .

[juststartingout]

What we are saying is it's not worth starting a business over. Say you dump $500 into CDs. That's maybe about $50 back from the government and a whole mess of paperwork to get it. I know in PA it cost me $1,000 to just start my business. That is just to file the paperwork with the various agencies, it is not something you want to do unless you plan on MAKING $30,000 a year at doing it. If you don't believe us, go talk to an accountant. There is a cutoff of what you need to clear before it is even worth it and they will know what that figure is in your area.

Why not just do what the rest of us do. If you believe in yourself and the music, then take the chance. If things work out, then think about starting a business, till then, just pocket the sales.

[gordone]

You can do tax write-offs even if you're not "officially" a business. I do some freelance music (leading worship) and I do a Schedule C at Tax time. I take my income (what the congregations pay me) and subtract all my expenses - guitar strings, mileage, any paper I use for songsheets. Then I have to pay a butt load of taxes on my net income (income-expenses=taxable income). No government or state forms to fill out, but I do have to pay a fair amount of taxes at tax time (in addition to my accountant who charges more to file a Schedule C). Now if you use this method for awhile and aren't making any profit, the IRS might take notice.

[gullyjewelz]

tlhkanks for the feed back

and just startin out -- thanks for the advice

any one got any accountants i can speak with ?