Any of us who have ever watched VH1, Behind The Music know
the story of the band or artist who lost his shirt because he
didn’t have his head in the game when the financial and legal
arrangements were made early in their career. Or sometimes the
problem is the artist just wants to play and live the life of a
performer and just doesn’t pay attention to the money trail,
where it comes from and where it goes.
From Ted Nugent to TLC to John Fogerty and Prince, problems with
contracts and record companies, accountants and lawyers seem to
plague musicians in every era of the evolution of popular music.
Do you ever wonder why it happens like that?
Well there are several plausible explanations.
* The eagerness to get going. A young performer or band
finally gets that break and has a chance to make a record or
get on that break-through tour. In their eagerness to land
that all important contract, they agree to some deals that
cripple them for decades to come.
* The Wrong Self concept. When an artist is starting out, he
or she will tend to see themselves as an amateur with a
hobby. Few young performers see themselves as professionals
and as successful performers down the road. So when the
chance to get a recording contract comes, they have little
to loose. That “what the heck” attitude can lead to foolish
spur-of-the-moment decisions that you can regret months or
years later.
* Bad advice. Like it or not, there are crooked people in the
world. If your management or accountant is not looking after
your best interest, they could easily guide you in a way that
is not good for you career. The result could be lost money
to you or even the inability to play and perform when your
career is in full bloom.
DOING YOUR HOMEWORK
The time to research how the money flows in the music business
is not after your first big hit and in the middle of your first
big tour. No, even though you may not yet be a huge star, now
is the time to get an understanding of the nuts and bolts of the
business side of the music business. Here are some topic areas
that are worth some research on your part:
* How does an artist get paid for his work in the music
industry? Research recoupments, royalties and what you can
expect as you begin to get creative material on the market.
* What is the role of the music publishers, Performance Rights
Organizations and your management? How much is their “cut”
and how can you know if they are treating you fairly?
* How can you set up your financial systems so that the money
due to you will be safely paid to you even if you are not
around to manage it and so that it will be safely cared for
and invested.
* Who can you trust and how to verify that you are dealing
with Solid business people who are looking out for your
best interest?
* What about investments? If you begin to see a significant
amount of money coming in, should you leave it sitting in a
checking account or buy The Dallas Cowboys? Seriously, what
kinds of investments are best to protect and grow your
financial holdings?
* How do you work with an accountant? Are certain accountants
better at dealing with musicians than others are and how to
find a good one that you can depend on?
* How do you track and keep tabs on your money even if you are
on a busy touring or recording schedule? What kind of reports
should you have delivered to you and how should you get them?
Is this a place where the internet can help?
Some of these questions you can research by reading articles or
online But don’t overlook the knowledge of those who have already
set this up or been trough certain ordeals. Discuss these topics
with successful bands and musicians and get some references and
tips on how to handle the flow of money that will come once your
art is discovered.
LEGAL JUNK
Try as we might, there are a lot of legal documents and lawyer
stuff involved with a successful musical career. Part of
building a business relationship with your agent, your record
company, touring agencies and many other business that will be
part of your team as your career expands, you will have to deal
with that dreaded word ------------ Contracts!!! Like those
found at http://www.MusicContractsOnline.com
As we talked about earlier, the time to think about what to do
with these documents is not after they are signed and you are
well into your tour or recording session. Get some help and
some information about how to handle them well in advance. Some
preliminary work you can do that will make this tricky part of
building your career easier are:
* Make contact with people who can help you well in advance.
You will need a lawyer who can read these contracts and who
is getting paid to protect you. You can find a good lawyer,
one that specializes in the music business by using a resource
like The Industry Yellow Pages, which can be found at
http://www.MusicBizPhoneBook.com . Now if you are still
starting out and cannot afford the hundreds to thousands of
dollars a lawyer may charge, use a software program like the
one available at http://www.MusicContractsOnline.com.
* When the record company hands you a contract, let them know
you want time to have your counsel review it. Insist on some
time with the document. This is a normal and expected part
of this kind of negotiation and do not let them pressure you
into signing it without that option. If they give you
trouble about taking to read and review with your lawyer,
there is probably something in there you should not agree to.
* Read it. It won’t be easy or fun to read a recording
contract or other kinds of contracts but force yourself to
sit down when you are fresh and read every word of it. You
will be amazed how many things you will find that you want
to discuss or negotiate.
* Don’t be afraid to negotiate. You have that right. If the
agent or representative says they will just not deal with
you if you negotiate, then drop them. You don’t want to be
in business with someone who won’t deal with you, find
another using a music industry directory like the one
available at http://www.MusicBizPhoneBook.com
* But remember, negotiate means back and forth. You might have
to give in a little to get a little. Make sure your demands
are reasonable and responsible.
BEAN COUNTERS
Just as important as a good lawyer and a good manager is to you
as your career grows, don’t over look the need for an accountant.
Your accountant will specialize in managing your money. He can
take care of a wide variety of financial details for you that
could become a big problem if they are not taken care of
including:
* Collections. An accountant who is knowledgeable of the music
industry can assure you get paid promptly for all of your
royalties, concert performances etc. He can also assure the
money is secured and available to you when and where you need
it.
* Credit. You will need reliable credit cards and other
credit resources as you set out on your quest to conquer
the music world. Your accountant can assure you have those
and that the payments are made on time.
* Bills. Many of us have trouble balancing a checkbook and
paying our bills on time, especially if you are never home.
By having all of those matters delivered to your accountant,
he can see to it those details are taken care of.
* Investments. If your financial holdings begin to build up,
you do not want the big paychecks you are making from your
recordings and concerts to sit in a checking account
somewhere. Your accountant can find out what your financial
goals are and choose the right kind of investments for you
to make sure your money “work for you” while you are out
working hard to build your music career.
* Taxes. This one may be the most important of all. Taxes
from income from royalties or payments from concerts have to
be handled with skill and training. Your accountant must be
on top of your tax situation to make sure your taxes are kept
up to date and paid on time. Many musicians have fallen into
a trap of not paying their taxes or paying them incorrectly.
The results are always severe and come at a time when
dealing with the government is “the last thing you need.”
You can see just from this short list, your accountant can take
care of a wide variety of financial issues that will make your
financial empire secure and growing. Yes, he will charge a fee
but the work he does and the expertise he brings to your
“business” is crucial to your success.
YOUR TROOPS
An important concept that we don’t always get our arms around
early is the people who work for you. Your accountant, your
agent and management and anyone else engaged to help with your
financial management are employed by you and you should view
them in that way. You do want reliable help but at the same
time, it is always YOUR money and YOUR finances involved here.
So the three commandments of being the master of your empire
are.
"YOU" ARE THE BOSS
Make sure the people you use know this. Even if your accountant
is your dads age and works for a big impressive accounting
company, he is still working for you and you pay him so he is
responsible to you for the outcome.
This doesn’t mean you are some big mean slave driver but is does
mean that you have the right to know what is going on and that
your representation is not permitted to conduct business without
your consultation and approval. Do not sign over approval for
investments and business ventures involving your money.
Be the boss and run your financial business so you will have
that sense of confidence that what is going on with your money
is what you want to happen with it. More importantly, once your
advisors and experts know you are the boss and are going to act
that way, they will respect you and your relationship with them
will be healthy and prosperous.
HOLD THEM ACCOUTABLE
Accountability means that the people who work for you must
answer to you for what happens. Meet with them often and make
sure nothing goes on that is not disclosed to you and explained
to you. Don’t be shy about letting your representation know
they are accountable to you and that you are able to change
representation if they do not perform. This is not out of line
and it is expected in the business world.
It might be difficult when performing, recording and touring to
make time to “meet” with your representatives. There are lots
of ways to do this. You can use phone teleconferences, email,
internet instant messaging or even video conferences. Set up
your relationships with those who are assisting you with your
money, so that they are expected to check in with you routinely
and any time there is a significant change to your financial
picture. Do this a few times routinely and soon it will be the
norm for you and them and your financial future will be much
more reliable.
KEEP YOURSELF INFORMED
The meetings and checkpoints we have already discussed will go
along way toward keeping you involved in your financial planning
and management. You can have reports delivered to you by email
or courier as you travel that are summarized in a way you can
understand. You don’t have to look at a bunch of impossible
to understand graphs and tables of numbers. Work with your
representatives to create a reporting system and format you
can easily and quickly understand. It’s their job to keep you
involved and informed so if they are good solid business people,
they will do all they can to make sure “the boss” is informed,
happy and prosperous.
TRUST BUT VERIFY
You will have such a strong sense of accomplishment and
confidence when you know your money is in good hands and that
the “money trail” is correct from the sale of your art through
to the payment of your bills. Once you have good people working
for you, the worry will be off of your shoulders and you can
concentrate 100% on your music and the growth of your career
and of your band.
Lastly, always be aware of the individuals who are handling your
money and review their progress often, keeping an eye open for
anything irregular. Yes, you want to trust them but at the same
time, always check up on them to make sure they are handling
things correctly. As you become more successful and the finances
become substantial, even the best and most responsible of money
handlers can do things that are not right.
You don’t want to assume they will steal from you but you want
to make sure they aren’t and let them know that if they do, you
will find out. Big companies even have an outside firm come in
and do what is called an “audit” of the books to make sure the
people working for them are being honest and not making mistakes.
You probably won’t impose audits when you are first starting
out but keep your options open as your financial empire grows.
Much of this is outside of the artistic side of music and the
art you so enjoy making for people. But it is important none
the less and once you have gone through the rigors of making
sure everything is in order, your feeling of security and the
long term health of your private accounts will be strong and
that will remove one big worry from your mind. Then you can
focus on being creative and giving dynamite performances on
stage.
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This article was written by Ty Cohen, the music industry's
most recognizable voice!
Ty is the C.E.O of Platinum Millennium Publishing, Platinum
Millennium Records as well as owner of:
http://www.MusicContractsOnline.com and
http://www.MusicBusinesSuccess.com
Some of his work includes: books, directories, mini-courses and
software programs including the titles: "How to Make a Fortune
in the Music Industry by Doing it Yourself" and "How to Make
$500,000.00 "or More" A Year in the Music Industry by Doing it
Yourself".
For nearly a decade, Ty Cohen's Get Amplified! Newsletter and
series of Free Music Industry Success “Mini Courses” has helped
over 40,000 independent musicians, singers, rappers, composers,
record label owners, producers, managers, agents and others
reach their music business goals. Using a unique combination
of tested and proven music business success resources, which
includes a series of books, directories, software programs,
videos, seminars and newsletters, our goal is to educate and
empower musical individuals just like you with the tools needed
to succeed!
To find out more about Ty Cohen, his services, products and how
he may be able to help you succeed in the music industry go to
http://www.MusicBusinesSuccess.com and sign up for his free
limited edition music industry success 10-part “Mini-Course”,
it will work wonders for you and best of all, it’s FREE, but
EXTREMELY VALUABLE!
Thank you for taking the time to read this article and I wish
you Much Success!
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