What Do I Need to Start My Own Record Label?

Written by sam williams
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What Do I Need to Start My Own Record Label?
You could be one hit away from starting your own record label. (record image by Pefkos from Fotolia.com)

There are a number of reasons to start your own record label. Artists who want to earn a living from their own music start record labels to avoid signing over their rights to a traditional company. Producers start record labels to help discover talented artists. Whatever your reasons, there are a few things you'll need before you start promoting your sounds to radio station programmers.

Business Plan

A business helps you clarify what you want to accomplish with your label. In "The Complete Guide to Starting a Record Company," Keith Holzman says your plan should detail "who you are, the type of music you'll be releasing, what you're trying to achieve, and who your audience will be." You will also need to explain how you plan to reach that audience and monetise your business. The business plan will be a major tool in securing investment capital or getting approved for a business loan.


Your record label will need money to finance promotion and recording costs. If you decide to seek financing from investors, hire an accountant to help you determine percentage and shares of your company you are willing to share with investors. An accountant can review your projects and expenses listed in your business plan and make a recommendation on how much capital you shook seek to hold your business over until it starts to turn a profit.

Entertainment Attorney

When you have to sign any contracts with other record companies for partnership deals or with distribution companies, they will have their lawyers present. You will need your own entertainment attorney to review the contract before you sign your rights away. One of your acts could file a lawsuit against you for any reason. Attempt to build a long-term relationship with an attorney so that he gets to know how you operate and what you are trying to do with your business.

Business Accounts

To be seen as a legitimate business by others in the industry, you will need to fund accounts that are separate from your personal accounts. Open a business account in your record label's name. Business banking accounts generally require a £975 deposit and tax identification number. Start accounts with online distribution companies as digital downloads account for a growing percentage of music sales.

Marketable Recordings

Barry Gordy built Motown around a few hits by the Supremes and The Miracles. Phil Spector collected hits for decades to build his career. In the book "Confessions of a Record Producer," Moses Avalon writes "distribution of free singles has proven to be a good way to get the public interested in a new release." He says marketable singles are those that get audiences interested in hearing more from your label. Find a few recordings that may appeal to a larger audience and build your label around them.

Publishing Division

Publishing allows you to sell the rights to use the music your label owns to corporations to use in commercials, movie studios to use in their soundtracks and other entities to use your music as you see fit. Keith Holzman writes in "The Complete Guide to Starting a Record Company" that as a publisher, "you exploit the usage rights and collect royalties for its copyright to maximise the song's value."

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