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Laneway: Business Basics (Section 3)
Written by:
Emily Plazek
Business Basics: the part of music careers most musicians hate, so we made it chill for them.

This is it. This is the part of the IMBM that many musicians will skip straight to. This is where the IMBM especially puts its money where its mouth is -- because a common trend in musicians is that they want to work on their music, not business (after all, music is in their name-- they’re not "businessicians").

It’s understandable because it’s the difference between being a “maker” or a “manager”, and most people enjoy being one over the other (read more in Paul Graham’s classic essay, “Maker’s Schedule, Manager’s Schedule”); however, the IMBM truly believes that indie musicians can be both, or at least build the team to cover both. Throughout history it wasn’t always possible to do the business stuff without a label, but in our technological world today, it is. That’s a freaking blessing.

Laneway means you’ll chip away consistently at these pieces of your music career daily, maintaining your progress and saving you the stress of emergency situations everyone hates (e.g. getting sued, bouncing a check, waiting to think about taxes ‘til it’s time to file them). Also, remember: these are the basics -- maybe you have a few more on your plate depending on what you do.

So let’s get to our *simplified* list of business basics you need to know and some actual “how-to’s” for accomplishing them. We spent these past 8 years testing out everything that you MIGHT need (CRM softwares, computer science interns, massive insurance policies, sales license, complex contracts) and boiled it down to what you actually need. Yes, you’re welcome.

3 Categories: General, Legal, Financial.

Always staying professional in our Slack team-communication app.

General

Weekly Team Update/Meetings and Communication

Maybe this is a weekly band practice or a weekly group text the leader sends out to everyone. For MIC, we use Slack communication software (for free!) and leader Emily (okay, me) writes out a weekly “MMU” or “Monday Morning Update” to summarize the last week and set schedules/goals for the coming week. Create some way to keep chipping away at your plans routinely and keep everyone’s head in the game.

Your Website Domain

Think of this like real estate -- claim that plot of land ASAP before someone else claims it! It can be pretty cheap (a handful of bucks a year) if you get creative with it, and very expensive if you're inflexible and care too much about specifics. True fact: One of my music colleagues, Jodie, looked into buying Jodie.com and the guy who had already claimed it offered to sell it to her for $14,000. So, feel free to name things as variations of your name like www.YourBandNameMusic.com or "Official", etc.

Brand Manual

Create one folder on a cloud that you and your team all have access to, including your official high-res pictures, logo files (include transparent PNGs), bios, font names, and color palette numbers. Who knows when you’ll need it, and this makes everything in your brand consistent. (Imagine ordering what you thought was forest green t-shirts, but your computer screen messed up the display and you didn’t have the palette number, and ended up with lime green shirts.)

Document Backup System

I spilled a cup of coffee on my Macbook Christmas Morning 2015 and lost not only a $1000+ computer, but also a ton of documents. Always work from a cloud (Dropbox, Google Drive, whatever you choose), or risk losing it. You could also buy physical backup hard drives for this.

+ BONUS:

  • Domain Email Addresses: If you want to look extra professional, get @[yourmusicname].com email addresses for you and your team (If you don’t want to spend the money, that’s okay, a ton of people don’t bother with this one). One hack for doing this is to set up *FREE* forwarding addresses instead of send-from addresses. We save hundreds of dollars a year by having @micpgh.com forwards for the interns, so people can email them, but the responses come from their personal emails. (FYI, save that money if no one minds.)
  • Email Tips: Having your email inbox organized into folders is a great idea to help yourself out later -- even years down the road when you want to remember who you met at xyz event, etc. Also, get into the habit of hitting “Archive” instead of “Delete” on your emails, because it’ll still look like they’re deleted, but if you accidentally deleted something you shouldn’t’ve, you can recall it with the search bar.
  • Business Cards: Maybe you want business cards for networking? Go for it.
Part of our website revamp discussions -- lots of whiteboard work here at MIC because Emily really enjoys them. There are some legal implications about managing a website as a company like ours, such as having a Privacy Policy page.

Legal

NOTE: We’ll cover music-specific legal items like Copyrights and different Licenses in Level 1.

Incorporate your band/artist name to be an LLC

I know musicians who skip this part, but without it you (1) risk not being in the protective bubble that an LLC provides (i.e. should you get sued for something, your non-music assets could get pulled in) and (2) can’t get a business bank account. So, if you’re very serious about your career, this is a big one.

You can file for LLC status on your own or use a service like Legalzoom. The service costs more money, but it saves you time and stress of missing a step. Your choice.

Once you become an LLC, you’ll get an EIN, which is like a social security number for your business. You’ll use this for a ton of things.

The IMBM’s goal to make you money is important here: If you don’t make a profit for 2 out of your first 5 years of existing as an LLC, you risk increasing your chance of getting audited by the IRS (they’d question whether you were actually a business with the goal of making money). This isn’t something you should worry about, because you already have that goal! You want to make money, as in, have a music career!

Ownership % Decisions

Talk with your songwriting team, band, or producers and decide who owns what percentage of the music you write. This is all you: If you want to buy a produced song from your producer so that you 100% own it, or split a song 3-ways among your duo + your beatmaker, you choose. Just make sure you have the conversation and everyone feels good about the decision. This will be very important in later lessons of royalties and other payment distribution.

Renter’s Insurance to cover your gear

Aside from your personal portfolio in life (your liquid assets like money in the bank, health insurance, life insurance, disability insurance, retirement accounts, stocks and bonds, etc.), your band needs a portfolio. Most important, in the IMBM’s opinion, is getting all your gear covered for gigging/touring.

Here’s an amazing hack: Get renter’s insurance (or something similar, like making sure this is under your homeowner’s policy) for the location wherein your gear usually sits. It’ll cover your gear even when you’re traveling with it! Renter’s insurance can be under $20/month-- it’s completely worth it for peace of mind over your thousands of dollars of equipment.

+BONUS:

  • Photo Use: Remember that if you ever want to use a photo you found on Google, it has to be “licensed for reuse and/or modification” (see the search settings). You can’t just go using anyone’s photos, just like people can’t go using your music for free without your permission.
  • Legal Loops and samples: Same concept as photo use, make sure you aren't using someone else's samples or loops, unless you pay the license to use them.
  • Cover Song Licenses: If you do a cover song and want to release it, apply for a license at a site like Loudr.fm.
  • Trademarks: If you want to Trademark ™ your name and logo, that’ll save you from someone else potentially claiming that you stole it (even if it was yours in the first place) and give you the power to let people/businesses “exclusively” use your logo, if you find that valuable in your plan.
  • Contracts: These can be complex documents to sign, or verbal agreements. Both are binding. Written contracts make it easier to clarify any confusion and provide a record of the agreement, but if you feel like you and your crew are all on the same page and adding paperwork would kill the vibe, you don’t have to.
Team work in action.

Financial

Business Bank Account and Credit Card

After you file to be an LLC, go to a bank and set up your Business Bank Account. Also, decide where you want to get your Business Credit Card.

If you want, you can learn way more about how to game the system and earn points and money from credit cards by looking into “churning.” (Rack up enough miles to do a world tour on the cheap? Yes please!)

Online Money-Exchange Service

A ton of money dealings happen through apps and sites like Paypal, Venmo, Cash, etc., because we’re all on our phones so much, so utilize those which you think make sense for you.

POS System & Merch Accounting Spreadsheet

Selling merch at shows and don’t want to lose out on people who don’t have cash on them, only a card? Get a POS system, one of those things you can swipe.

Speaking of merch, make sure you’re recording your inventory of merch pre-/post- shows and charging people the correct amount of sales tax. Google the state your show is in, see if your merch qualifies for sales-taxable items (for example, in PA you don’t charge the 7% sales tax on “everyday-wear” clothing like t-shirts, but you would charge it on things like CDs). Then collect the appropriate amount at each show and tuck it away until tax time (maybe you have an accountant or business manager on your team for this job).

Fun fact: No sales tax on services! Just products.

Accounting Spreadsheet & Receipt Folders (real-life and email)

You will hate yourself if you don’t collect receipts at all, or if you just stuff them all into a drawer until March rolls around (Talk about making your tax season overwhelming!). Do yourself a favor and make a Google Sheets spreadsheet --automatically saved in the cloud!-- with 3 columns: date, item purchased/thing paid for, and amount. Fill them out as you go, and during tax season (or earlier, if you want) you can do something like color-coding to classify the expense categories while filing your taxes.

Make one place in your house (I have a folder in my filing cabinet) and one folder in your email where you immediately stash physical and email receipts after you mark the amount on the spreadsheet. If you ever get questioned by the IRS, it’s all there waiting for you.

1099s for Independent Contractors (paid over $600 in a year)

If you pay someone over $600 for a service they did for you (or cumulatively throughout the year for multiple jobs), you have to remember to fill out a 1099 form for them at the end of the tax year and issue it to them.

+BONUS:

  • Tax-filing software: If you don’t want to do paper filings, and you don’t quite have the budget for an accountant, you can use a software (like TurboTax) to file your taxes. Sure, they take a fee, but maybe you’ll think that’s worth the ease and time-saving qualities.
  • Budgets: Write down what your monthly costs are to upkeep your music’s assets (cloud service, domain/email name service, website costs, average amount spent on online promotion, etc.) because, why wouldn’t you do this? It’ll keep you motivated not to say yes to everything -- it’s fun and tempting to pour money into your music career, until you run out of money.
  • “Registered Agent”: This is a tax-related thing that you can technically pay an outside company to cover (like if you incorporated through LegalZoom), but if you think your business phone number (probably your cell phone, right?) is answerable during business hours and you can make sure that mail can get delivered to a person at your business address (may just be your home), then you don’t need to pay the couple-hundred-dollar annual fee for this.

A look back on MIC: one of the first iterations of the IMBM as we started to simplify.

You should’ve seen the original Business Basics Book MIC had in our first few years of development (yes, a whole book -- way too much info; we were trying very hard, thank you very much). This list will serve you well and give you peace of mind so you can get back ASAP to your working on your music daily, young grasshopper.

Next up: Starting the Pyramid climb at Level 1 on the Fans Side.

Or, go back and read more about Business Basics here!

Laneway: Business Basics (Section 3)
Laneway: Business Basics (Section 3)
MIC is my baby.
Business Basics: the part of music careers most musicians hate, so we made it chill for them.

This is it. This is the part of the IMBM that many musicians will skip straight to. This is where the IMBM especially puts its money where its mouth is -- because a common trend in musicians is that they want to work on their music, not business (after all, music is in their name-- they’re not "businessicians").

It’s understandable because it’s the difference between being a “maker” or a “manager”, and most people enjoy being one over the other (read more in Paul Graham’s classic essay, “Maker’s Schedule, Manager’s Schedule”); however, the IMBM truly believes that indie musicians can be both, or at least build the team to cover both. Throughout history it wasn’t always possible to do the business stuff without a label, but in our technological world today, it is. That’s a freaking blessing.

Laneway means you’ll chip away consistently at these pieces of your music career daily, maintaining your progress and saving you the stress of emergency situations everyone hates (e.g. getting sued, bouncing a check, waiting to think about taxes ‘til it’s time to file them). Also, remember: these are the basics -- maybe you have a few more on your plate depending on what you do.

So let’s get to our *simplified* list of business basics you need to know and some actual “how-to’s” for accomplishing them. We spent these past 8 years testing out everything that you MIGHT need (CRM softwares, computer science interns, massive insurance policies, sales license, complex contracts) and boiled it down to what you actually need. Yes, you’re welcome.

3 Categories: General, Legal, Financial.

Always staying professional in our Slack team-communication app.

General

Weekly Team Update/Meetings and Communication

Maybe this is a weekly band practice or a weekly group text the leader sends out to everyone. For MIC, we use Slack communication software (for free!) and leader Emily (okay, me) writes out a weekly “MMU” or “Monday Morning Update” to summarize the last week and set schedules/goals for the coming week. Create some way to keep chipping away at your plans routinely and keep everyone’s head in the game.

Your Website Domain

Think of this like real estate -- claim that plot of land ASAP before someone else claims it! It can be pretty cheap (a handful of bucks a year) if you get creative with it, and very expensive if you're inflexible and care too much about specifics. True fact: One of my music colleagues, Jodie, looked into buying Jodie.com and the guy who had already claimed it offered to sell it to her for $14,000. So, feel free to name things as variations of your name like www.YourBandNameMusic.com or "Official", etc.

Brand Manual

Create one folder on a cloud that you and your team all have access to, including your official high-res pictures, logo files (include transparent PNGs), bios, font names, and color palette numbers. Who knows when you’ll need it, and this makes everything in your brand consistent. (Imagine ordering what you thought was forest green t-shirts, but your computer screen messed up the display and you didn’t have the palette number, and ended up with lime green shirts.)

Document Backup System

I spilled a cup of coffee on my Macbook Christmas Morning 2015 and lost not only a $1000+ computer, but also a ton of documents. Always work from a cloud (Dropbox, Google Drive, whatever you choose), or risk losing it. You could also buy physical backup hard drives for this.

+ BONUS:

  • Domain Email Addresses: If you want to look extra professional, get @[yourmusicname].com email addresses for you and your team (If you don’t want to spend the money, that’s okay, a ton of people don’t bother with this one). One hack for doing this is to set up *FREE* forwarding addresses instead of send-from addresses. We save hundreds of dollars a year by having @micpgh.com forwards for the interns, so people can email them, but the responses come from their personal emails. (FYI, save that money if no one minds.)
  • Email Tips: Having your email inbox organized into folders is a great idea to help yourself out later -- even years down the road when you want to remember who you met at xyz event, etc. Also, get into the habit of hitting “Archive” instead of “Delete” on your emails, because it’ll still look like they’re deleted, but if you accidentally deleted something you shouldn’t’ve, you can recall it with the search bar.
  • Business Cards: Maybe you want business cards for networking? Go for it.
Part of our website revamp discussions -- lots of whiteboard work here at MIC because Emily really enjoys them. There are some legal implications about managing a website as a company like ours, such as having a Privacy Policy page.

Legal

NOTE: We’ll cover music-specific legal items like Copyrights and different Licenses in Level 1.

Incorporate your band/artist name to be an LLC

I know musicians who skip this part, but without it you (1) risk not being in the protective bubble that an LLC provides (i.e. should you get sued for something, your non-music assets could get pulled in) and (2) can’t get a business bank account. So, if you’re very serious about your career, this is a big one.

You can file for LLC status on your own or use a service like Legalzoom. The service costs more money, but it saves you time and stress of missing a step. Your choice.

Once you become an LLC, you’ll get an EIN, which is like a social security number for your business. You’ll use this for a ton of things.

The IMBM’s goal to make you money is important here: If you don’t make a profit for 2 out of your first 5 years of existing as an LLC, you risk increasing your chance of getting audited by the IRS (they’d question whether you were actually a business with the goal of making money). This isn’t something you should worry about, because you already have that goal! You want to make money, as in, have a music career!

Ownership % Decisions

Talk with your songwriting team, band, or producers and decide who owns what percentage of the music you write. This is all you: If you want to buy a produced song from your producer so that you 100% own it, or split a song 3-ways among your duo + your beatmaker, you choose. Just make sure you have the conversation and everyone feels good about the decision. This will be very important in later lessons of royalties and other payment distribution.

Renter’s Insurance to cover your gear

Aside from your personal portfolio in life (your liquid assets like money in the bank, health insurance, life insurance, disability insurance, retirement accounts, stocks and bonds, etc.), your band needs a portfolio. Most important, in the IMBM’s opinion, is getting all your gear covered for gigging/touring.

Here’s an amazing hack: Get renter’s insurance (or something similar, like making sure this is under your homeowner’s policy) for the location wherein your gear usually sits. It’ll cover your gear even when you’re traveling with it! Renter’s insurance can be under $20/month-- it’s completely worth it for peace of mind over your thousands of dollars of equipment.

+BONUS:

  • Photo Use: Remember that if you ever want to use a photo you found on Google, it has to be “licensed for reuse and/or modification” (see the search settings). You can’t just go using anyone’s photos, just like people can’t go using your music for free without your permission.
  • Legal Loops and samples: Same concept as photo use, make sure you aren't using someone else's samples or loops, unless you pay the license to use them.
  • Cover Song Licenses: If you do a cover song and want to release it, apply for a license at a site like Loudr.fm.
  • Trademarks: If you want to Trademark ™ your name and logo, that’ll save you from someone else potentially claiming that you stole it (even if it was yours in the first place) and give you the power to let people/businesses “exclusively” use your logo, if you find that valuable in your plan.
  • Contracts: These can be complex documents to sign, or verbal agreements. Both are binding. Written contracts make it easier to clarify any confusion and provide a record of the agreement, but if you feel like you and your crew are all on the same page and adding paperwork would kill the vibe, you don’t have to.
Team work in action.

Financial

Business Bank Account and Credit Card

After you file to be an LLC, go to a bank and set up your Business Bank Account. Also, decide where you want to get your Business Credit Card.

If you want, you can learn way more about how to game the system and earn points and money from credit cards by looking into “churning.” (Rack up enough miles to do a world tour on the cheap? Yes please!)

Online Money-Exchange Service

A ton of money dealings happen through apps and sites like Paypal, Venmo, Cash, etc., because we’re all on our phones so much, so utilize those which you think make sense for you.

POS System & Merch Accounting Spreadsheet

Selling merch at shows and don’t want to lose out on people who don’t have cash on them, only a card? Get a POS system, one of those things you can swipe.

Speaking of merch, make sure you’re recording your inventory of merch pre-/post- shows and charging people the correct amount of sales tax. Google the state your show is in, see if your merch qualifies for sales-taxable items (for example, in PA you don’t charge the 7% sales tax on “everyday-wear” clothing like t-shirts, but you would charge it on things like CDs). Then collect the appropriate amount at each show and tuck it away until tax time (maybe you have an accountant or business manager on your team for this job).

Fun fact: No sales tax on services! Just products.

Accounting Spreadsheet & Receipt Folders (real-life and email)

You will hate yourself if you don’t collect receipts at all, or if you just stuff them all into a drawer until March rolls around (Talk about making your tax season overwhelming!). Do yourself a favor and make a Google Sheets spreadsheet --automatically saved in the cloud!-- with 3 columns: date, item purchased/thing paid for, and amount. Fill them out as you go, and during tax season (or earlier, if you want) you can do something like color-coding to classify the expense categories while filing your taxes.

Make one place in your house (I have a folder in my filing cabinet) and one folder in your email where you immediately stash physical and email receipts after you mark the amount on the spreadsheet. If you ever get questioned by the IRS, it’s all there waiting for you.

1099s for Independent Contractors (paid over $600 in a year)

If you pay someone over $600 for a service they did for you (or cumulatively throughout the year for multiple jobs), you have to remember to fill out a 1099 form for them at the end of the tax year and issue it to them.

+BONUS:

  • Tax-filing software: If you don’t want to do paper filings, and you don’t quite have the budget for an accountant, you can use a software (like TurboTax) to file your taxes. Sure, they take a fee, but maybe you’ll think that’s worth the ease and time-saving qualities.
  • Budgets: Write down what your monthly costs are to upkeep your music’s assets (cloud service, domain/email name service, website costs, average amount spent on online promotion, etc.) because, why wouldn’t you do this? It’ll keep you motivated not to say yes to everything -- it’s fun and tempting to pour money into your music career, until you run out of money.
  • “Registered Agent”: This is a tax-related thing that you can technically pay an outside company to cover (like if you incorporated through LegalZoom), but if you think your business phone number (probably your cell phone, right?) is answerable during business hours and you can make sure that mail can get delivered to a person at your business address (may just be your home), then you don’t need to pay the couple-hundred-dollar annual fee for this.

A look back on MIC: one of the first iterations of the IMBM as we started to simplify.

You should’ve seen the original Business Basics Book MIC had in our first few years of development (yes, a whole book -- way too much info; we were trying very hard, thank you very much). This list will serve you well and give you peace of mind so you can get back ASAP to your working on your music daily, young grasshopper.

Next up: Starting the Pyramid climb at Level 1 on the Fans Side.

Or, go back and read more about Business Basics here!

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