How To Start Your Own Record Label

By February 18, 2020Record Labels

If you’re looking for a way to distribute your music and maintain full control over your music, you might consider starting your own label. 

While many artists over the years have started their own labels, it doesn’t always end with success.

Like with any other venture, starting a label can fall prey to bad decisions, lack of funds, or just poor timing. 

Having a plan and knowing your options can increase your chances of success. 

So read on for an overview of the essential steps to starting your own record label.

Choose a Name and Register It

There are a lot of labels out there, so choosing a unique name won’t be as easy as you might think. 

Take advantage of a free name search to see if your desired name is already being used. 

Take the time to research how to incorporate your label as a business, and register it as a partnership, LLC, or other appropriate legal entity.

What you choose will depend on whether or not you have partners, investors, or plan to go it solo. 

Consider forming an LLC to protect your personal assets if something should go wrong with your business. 

Other variations in incorporation include Limited Liability Partnership (LLP) or Corporation (INC).

A Sole Proprietorship is not recommended for something as risky as a record label, because it doesn’t put a barrier between your business and personal funds. 

Having your business incorporated helps protect your personal assets from being seized if your label should go into debt or be sued. 

Decide on the Partnership / Payment Structure

If you’re going it alone, this part will be a bit simpler–but you may still want to think about what happens when should someone want to join you as a partner in the future. 

How will investments be handled? 

How will payments and taxes be structured?

Once investors come on board, what is your plan for making management and acquisition decisions?

Who will be in charge of looking for and screening new artists to sign?

If your label starts to grow, you won’t be able to make all of the decisions by yourself, so you’ll need to think about how you will add people to your group.

If you’ve created an LLC with certain people as members, you can change them to managers later, or use outside managers to help you run your label. 

What Music Will You Represent?

Pick a genre of music, and don’t spread yourself too thin. 

You can’t represent everything. 

Most labels specialize, and it’s because building expertise requires a lot of work in one particular area. 

You can have two or three related genres, but don’t choose to represent, say, both rap and opera. 

Your areas of expertise should be somewhat related, like representing rap and hip hop, classical and opera, country and blues, and so on. 

Basically, you want to keep your focus on genres that the same fans would tend to like. 

Introducing your fans to more than one of the artists you represent is a great way to spread your influence, so that’s why you don’t want to be all over the map. 

Once you’ve gotten established, you have the option of branching out later. 

How Much Will It Cost?

The cost to start a label will depend on what you want your first actions to be. 

If you want to distribute an album that has already been produced, you won’t need need to raise production costs. 

If you plan to have only yourself as an employee, you won’t need the money for an additional salary. 

But, the more tasks you take on, the more responsibility will be on you alone. 

Realistically consider your options and leave room to improvise. 

Your initial investments will involve creating a name, registering it, and filing some kind of incorporation documents with your state.

This should range from a few hundred dollars if you go the route of self-service and use something like LegalZoom, to a lot more if you spend time in consultation with a lawyer. 

Again, which option you choose will depend on how complicated you want to make it. 

Learn from Others

While lots of artists start their own labels and make it big, they have their fame and resources to help them out. 

Even so, lots of successful artists started labels that soon folded or got acquired by other companies. 

Even the best teams can go awry if they don’t maintain their focus on the ultimate goal, which is getting artists in front of new fans. 

Not everyone can be like Eminem, who started his own label, Shady Records, in part to bring his ol’ band pals of the D12 into the spotlight along with him. 

His label hasn’t signed too many artists since it began, but it has a respectable roster, and of course, Eminem can release his own work on his own schedule. 

And when you start a label just to have a vanity press, you may not make the hard management decisions necessary to make it a success. 

If you do start a label, make sure it’s for the right reasons: to fill a legitimate need and bring an underserved genre of music to appreciative fans. 

Don’t start a label just to skip the hard work of earning your chops in the industry. 

 

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Craig Kelley

About Craig Kelley

Craig helps indie artists book more gigs, promote their music and submit to record labels @ GigFaster and GigFaster University . His latest release is his 7th album, Not So Blue. His band has supported Grammy artists including Kenny Wayne Shepherd, Rick Derringer, Gary Hoey, Joan Jett, Fuel and many more. http://craigkelley.com He is also the host of The 5 Minute Podcast For Musicians.

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