Record Label Business Plan Example
Record Label Business Plan Example
Record Label Business Plan Example
Business
Plan
Executive Summary 3
Introduction 3
Mission 3
Objectives 3
Keys to Success 4
Financial Highlights 4
3 Year profit forecast 5
Business Summary 6
Start-up Summary 6
Startup cost 7
Funding Required 7
Ownership 8
Products and Services 9
Market Analysis 10
Market Segmentation 10
Market Analysis 11
Target Market Segment Strategy 11
Service Business Analysis 12
Competition and Buying Patterns 12
Strategy 13
Sales Strategy 13
Sales Forecast 13
Sales Yearly 14
Detailed Sales Forecast 14
Marketing Strategy 15
Competitive Edge 15
Milestones 15
Web Plan Summary 16
Website Marketing Strategy 16
Development Requirements 16
Management Plan 17
Personnel Plan 17
Financial Plan 18
Important Assumptions 18
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Brake-even Analysis 18
Projected Profit and Loss 19
Profit Yearly 20
Gross Margin Yearly 20
Projected Cash Flow 21
Projected Balance Sheet 22
Business Ratios 23
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Executive Summary
Before you think about how to start a Record Label business, you must create
a detailed Record Label business plan. It will not only guide you in the initial
phases of your startup but will also help you later on.
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Introduction
Mission
upmetrics.co Fearless Records exists as a locally based record label whose mission is to
promote local music groups, increasing live appearances and record sales.
Fearless Records have been established to promote its bands and at the same
time make a fair profit.
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Objectives
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Keys to Success
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Financial Highlights
15.00k
10.00k
5.00k
0
Year1 Year2 Year3
We seek to find and sign up-and-coming alternative rock bands based in the
New York region. By finding underground talent and improving their marketing
and appeal to a broader music audience, we will be able to build a stable of
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artists with significant customer bases. This will translate into significant sales
Start-up Summary
Fearless Records will purchase the following equipment needed for the start-
up phase of the business:
Laptop computer
Various printed material
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Fearless Records will initially be located in Dexter's home. For years two and
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Amount
2.50k
2.00k
1.50k
1.00k
500
0
Expenses Assets Investment
Expenses 1550
Assets 1800
Investment 2050
Funding Required
The detailed startup requirements and expenses are given in the table below.
Ownership
The company has been founded and is primarily owned by Dexter Clinton.
Dexter has invested personal funds in the business and will seek additional
investment money from friends and family.
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Before starting a Record Label company, you must take many things into
consideration such as you must consider what types of services will you be
providing to your clients. Deciding your services is extremely important since it
helps you plan other components of your business so make sure to consider it
before you think about how to start a Record Label business.
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Fearless Records will target two primary market segments, record stores and
consumers at live shows. These will be the sources of income so they will be
the main targets. Initially, Fearless Records focus will be to develop visibility
within the community, enough to be able to sign up bands which are the key to
revenue generation. The need to sign up bands will drive the marketing
activities that Fearless Records will undertake in order to generate revenue in
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the future.
Market Segmentation
upmetrics.co Fearless Records has identified two target market segments which will be the
main targeted customers.
Record Retailers - This segment sells CDs to the end consumers. This is the
retail channel that typically moves the greatest quantity of CDs. The ability of
the record stores to move decent quantity takes time, it does not occur initially.
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The bands must develop a name for themselves, through the compilation CD
Record Stores 30
Fearless Records has chosen these two distinct market segments because
they are the main source of revenue. Fearless Records will remain focused on
their important marketing activities aimed at developing visibility for the record
label, however, ultimately it comes down to CD sales for business viability and
the record stores and consumers at live performances being the source of this
revenue. This is a fairly intimate industry, most of the industry participants
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within a region know each other. Keeping this in mind, networking will be the
In general, the record industry, at least when based on overall sales, is a highly
concentrated national industry. There are several huge international
corporations that control the bulk of record sales. For bands looking to break
through into national stardom and significant record sales, this is the
distribution/promotion channel that they must concentrate on.
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There are also the "Indie" labels which are broader than regional companies but
National record labels - Atlantic, Sony, BMG labels, etc. These distributors care
about one thing, CD sales. The more CDs they sell, the more money they make.
Bands do not get much individual attention. They are carefully trained to
develop mass appeal. Commercialization is key. These companies' mantra is
widespread acceptance, not niche fringes.
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Indie labels - Sub Pop, Ropeadope, Ozone, etc. These companies are also quite
After identifying the market demand, market trends, and the potential
customers of the startup, the next step is to define an effective strategy for
attracting those clients. Like marketing analysis, sales strategy is also an
important component of a Record Label business startup and must be properly
planned before you think about starting your own Record Label Business.
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Fearless Records will leverage their competitive edge of low overhead and low
band count ensuring intimate specialized care and promotion for the lucky few
bands that it represents. Fearless Records will employ a marketing strategy
that concentrates on developing a large web of networks to assist the visibility
of their label as well as developing visibility for the brands it represents.
Fearless Records will be extremely active in the local music scene as Readan More
effective way of plugging their bands. Lastly, Fearless Records will have an
Sales Strategy
upmetrics.co Fearless Records' sales strategy will focus on the two main sources of
revenue: record retailers and consumers at shows. Fearless Records will be in
constant communication, always attempting to negotiate agreements for
record sales with retailers. Because Fearless Records is small in terms of the
bands that they represent, they are able to offer retailers an unusual
arrangement where unsold CDs can be returned for credit. This is quite similar
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to the magazine industry where retailers of magazines can get credit for unsold
Sales will be slow initially. It is forecasted that the first two compilation CDs will
be handed out for free. Sales revenue is not anticipated yet. By the third
compilation, Fearless Records will have signed two bands and this will be the
beginning of revenue-generating CD sales. Once bands are signed, Fearless
Records' legitimacy will be developed and they will be able to begin to generate
revenue both on band CDs as well as the compilations. Read More
Sales Forecast
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Record retailer sales Live concert record sales CD sales from website
Contract buy-outs
Year1
Year2
Year3
Fearless Records' marketing strategy recognizes the fact that the value in the
label is intrinsically based on their reputation within the music community. Mt
Hood Records needs to be known as a premier label, creating a compelling
reason for bands to sign up with them.
Fearless Records will develop its industry visibility through the releaseRead
of the
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various compilation CDs. The goal of these CDs is to get the word out about
Competitive Edge
Fearless Records will employ a two-pronged competitive edge. The first edge
prong is having a low overhead. Fearless Records' office will be in Dexter's
home. There is not an immediate need for offices, as all work can be
transacted from her home office. Additionally, unlike many record labels, there
will not be a recording studio to support. Significant costs are saved by renting
studio time as needed. There appears to be no time in the foreseeableRead
future
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that would dictate the need for a dedicated studio.
Milestones
Several milestones have been established and will act as a set of goals and a tracking mechanism for
achieving the goals. While the milestones are initially static, they can be dynamic if needed. Please see
the following table for detail regarding the milestones.
The different bands will be listed with information about their music, bios,
etc.
Music samples of the bands will also be available. The samplesRead
will More
be
available as streaming media as well as downloads in a compressed
The site will be linked to the various Portland entertainment guides such as
Willamette Weekly. Fearless Records will also submit the site to several
different search engines. Lastly, the URL address will be prominent on all
printed material and correspondence.
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Development Requirements
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Dexter Clinton first got her feet wet in music after college. After graduating with
a Bachelor of Arts degree, Dexter and band-mates of 180 South decided to
start their own record label to support a regional tour. The goal of the record
label was primarily self-promotion and personal satisfaction. By creating their
own label, they could release their one studio CD. They did not expect to
generate profits from this, they saw it as an opportunity to support their tour
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with a CD. They toured for a month straight, throughout NY, PA, and NJ,
Personnel Plan
upmetrics.co Dexter will be the primary employee. She will be working long hours, often with
her husband's help, but after some sweat equity, the business model will begin
producing revenue. Dexter will not take a salary for the first two years in order
to build the business. For year three she will draw a salary. Dexter will hire two
other employees to assist her.
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Sales- this position will sell CDs at concerts by being present at a booth
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Important Assumptions
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The financial projections of the company are forecast on the basis of the following assumptions.
These assumptions are quite conservative and are expected to show deviation but to a limited level
such that the company’s major financial strategy will not be affected.
Brake-even Analysis
Monthly Units Break-even 5530
Monthly Revenue Break-even $159 740
Assumptions:
Average Per-Unit Revenue $260,87
Average Per-Unit Variable Cost $0,89
Profit
15.00k
10.00k
5.00k
0
Year1 Year2 Year3
Year1 10000
Year2 12000
Year3 14000
Gross Margin
Year1
Year2
0 1.00k 2.00k 3.00k 4.00k 5.00k 6.00k 7.00k 8.00k 9.00k 10.00k 11.00k 12.00k 1…
Year1 10000
Year2 12000