Income And Expenses For Developing Your Music Career

To start the new year out right, I want you to think about money. Where does it come from, and what will you do with it, if you get any. In case you ever forget that it takes money to make money with your music, here is a summary of some general income and expense categories that may factor into your business/budgeting forecasts. As you can see there are very few sources of income from music, and inevitably the expenses you incur must come from those income sources. So, this is a beginning-of-the-year wake-up call to financial planning.

(Note: please don't ask me what the 'average' income will be for the 'average' musician or band, or what to budget in each expense category. Whatever you can raise is what you have to work with, and there is never enough money to promote and market music. There are too many variables in those questions to give you accurate answers. In general, to establish yourself as a professional artist... expenses for all the categories listed below will be five times higher than whatever you are thinking they may be.)

As you look over the income sources remember that outside of some live performance fees, and sales of your music and merchandise (like T-shirts, etc) most of the income sources take years to develop. I get questions all the time about where will the money come from to start up a label, or your own business? The answer is this. From wherever you can get it... loans, sugar daddies, lottery winnings... whatever. Raising the funds to start your own business is your own business. Perhaps now you understand why so many musicians and bands want those record deals. Record labels front the money to develop, market, and promote their artists. Record labels are businesses that understand it costs a lot of money to sell an artist's recordings, and the successful labels are well funded so that they can go out there and fight the good fight... marketing the records they have released.

Read this and weep, or better yet... read this and plan!

A Musician or Band's Source of Income

  1. Live Performance Fees
  2. Sales of your own recording or
  3. Record Label Recording Contract Royalties
  4. Songwriter/Publishing Income Sources
    • Mechanical Royalties
    • Performance Royalties
    • Synchronization Fees
    • Sheet Music Sales
    • Commercials/Jingles Income
    • Internet Streaming Fees (pending)
  5. Merchandising Royalties (T-Shirts, etc.)
  6. Misc. Income Sources
    • Investment Income
    • Endorsements
    • Songbook and Video Sales
    • Multimedia Product Sales

Expenses for a Musician or Band (Putting out their own record)

  1. Recording fees:CD/Tape
    • Producer/Engineer
    • Studio Costs (From Pro Tools to 24 Track)
    • Tape and other studio supplies
    • Equipment Rental charges
    • Guest Musician fees
    • Mixing and Mastering fees
  2. Graphic Artist/Cover Art Design costs
  3. CD/Tape/Vinyl Manufacturing/Duplication charges
  4. Promotional Expenses (Independent Radio Promo Reps/Independent Sales Reps,)
  5. Marketing and Sales Plan costs (One sheets, Co-op advertising dollars, Ad money)
  6. Publicity/Promotional Material Costs
    • Publicists Fees
    • Promo/Publicity Kit Design costs
    • Flyers, Posters, Envelope Design costs
    • Printing/Copying charges
    • Photographer fees and duplication charges
  7. Office Expenses
    • Rent
    • Stationary and office supplies/furniture
    • Postage
    • Phone and utilities bill
    • Office equipment ( computers, fax machines, phones et al.)
  8. Taxes
    • Local, State, and Federal taxes
    • Tax preparation costs/Bookkeeper fees
  9. Band Equipment Costs
    • Instrument purchases/rentals
    • Tour Luggage
    • Misc. equipment repair/maintenance costs (strings, drumsticks etc.)
    • CDs and Tapes ( for listening and study purposes)
    • Misc. recording/playback equipment (4 track recorder/mixer etc.)
    • Sound system
    • Rehearsal space costs
  10. Songwriting
    • Copyright registration filing costs
    • Performance Rights Organization Fees ( ASCAP-BMI-SESAC)
    • Talent Lessons ( vocals, instrument instructions, etc)
    • Conferences/ Seminars budget
  11. Artist Business Team Costs
    • Personal Manager/Consultant fees
    • Business Manager/Accountant fees
    • Booking Agent fees
    • Publicist fees
    • Music Attorney fees
  12. Transportation costs
    • Auto/ Van purchase/rental/Insurance costs
    • Maintenance costs (gas, service, repair)
    • Airline, bus, and/or train tickets
    • Highway/Ferry tolls
  13. Touring expenses
    • Per Diem ( for food, lodging etc.)
    • Road Manager/Roadies salaries
    • Lighting/Sound equipment purchase/rental costs
  14. Merchandise (T-Shirts etc.)
    • Design costs
    • Manufacturing and shipping costs
  15. Website and Internet Fees
    • Website design, maintenance, connection fees etc.)
    • E-commerce setup and processing fees
    • Email setup and processing fees
  16. Miscellaneous Expenses
    • Costumes/Stage clothing
    • Insurance (health, equipment, life etc.)
    • Union dues
    • Video production and manufacturing costs
    • Whatever else comes along that you forgot about

Throughout his fprty year career in the music business, FourFront Media & Music's Christopher Knab has shared his experience at many industry conventions and conferences, including the New Music Seminar and the Northwest Area Music Business Conference.

Knab was owner of a San Francisco music store, co-owner of the 415 Records label, and station manager at KCMU Radio in Seattle.

He currently provides a unique consultation and education service for independent musicians and record labels. His new book is entitled "Music Is Your Business".

Christopher Knab