The purpose of a business plan is to set some goals, primarily like figuring out how (and if) you should go to market and how to make it financially do-able. If it’s done well, a good business plan can also help motivate and improve the whole band.
Who Are You?
The first step in your plan is to define the structure of your business, A sole proprietorship is the simplest business structure for most musicians starting out. You can always upgrade to partners, LLCs, corporations, etc. but simple is better when bands have such short shelf lives. As an individual, you really don’t even have to declare yourself as a formal business entity. You can just use your social security number when a venue passes you a W9.
But a better step is to create a dba (“doing business as” aka tradename) and create a business name for yourself. The state of Colorado will be happy you did that, venues will be happier, as well as most bandleaders because it will indicate that you do have a business intent (and don’t plan on being some other band’s employee). Smart band leaders will make sure this is clear up front by having you sign an Independent Contractor agreement along with that W9. It currently costs $20 to reserve a tradename and $5 per year thereafter to renew it.
If you want to take it a step further, you could get an EIN (Employer Identification Number). This comes from the federal government and does not cost anything if you apply with form SS-4 online. The benefit of an EIN is that you won’t have your social security number floating around with various entities. You use the EIN on the W9 instead of your SSN.
Back to the dba. If you’re ready, you might try “doing business as” a band name. But if you think about it, band names often change. And you might want to be a sideman for somebody else someday. Think about creating a general company name that could be an umbrella for lots of different activities. For instance, apart from being a musician, you might also generate income providing sound for other musicians or teaching music lessons or even selling music gear. Why not keep your options open?
How will you go to market?
This concept is pretty critical. It’s an evaluation of your viability and how you will weather the competition. Is there a demand for your type of music? Have you reached the skill level to charge a fair market wage? And will you know how to ask for that fair market wage? What other barriers will you face?
If you’re planning on being a paid performer, how often are you going to play out? Where is this going to occur? Why will people come? How will you market yourself? When will you know that you have obtained your goals? If you take the time, this series of question marks will help you flesh out your place in the universe and your ultimate direction. But there’s more…
Are you unique?
In marketing, there’s a core concept know as your Unique Selling Proposition (or USP). This is what separates you from all of the other run of the mill, “me too,” unexciting musicians in the world. After all, practically everyone is in a band these days. What’s so special about you? Take the time to figure out what separates you from the competition, then amplify it and you’ll be onto a real plan. Follow this link for some more thoughts on a USP. And here are a few examples:
There are plenty of other ways to separate yourself from the competition. One of the most important is when you focus on a culture of quality. We’ll talk a little more about that next…