At Alchemy Accountancy, we work within a lot of creative industries – including music. From freelance musicians to bands to record labels, in today’s internet-heavy world, it’s easier than ever to start creating great music.
But how exactly do you start your own record label in the UK and what are the most important things to remember when setting up an independent label?
Find your niche
I talked about this recently in regards to marketing agencies, that having a niche can often make you stand out from your competition, with potential clients more likely to want a company that knows their industry or can offer a service better than anyone else. The music industry is no different – in fact, many record label owners state that unless you can offer a specific genre of recording (think rock, punk, grime, rap etc.), with new advice and guidance – something that no one else is offering – you have to ask yourself why you’re starting a record label.
Choose a genre that you’re already passionate about and perhaps have a lot of background knowledge in. Perhaps you’ve noticed that there’s a lack of representation within a certain genre and you want to be the change to get those people noticed. Get a focus and drive your passion behind it. You could also try and do some competitor research, just to make sure you’re not entering a sector that’s saturated with labels.
Who are you?
Finding your niche can then provide you with more scope to create a name for your label. If you’ve already got some financial backing, it’s worthwhile consulting with a marketing or branding agency to help you decide on something, as designing your own label from scratch can be difficult. If you’ve found a name that you’re happy with, check out Companies House, so you can determine if that name has already been taken.
Decide on your business type
In any industry or sector, you need to know what type of business you want, whether that’s a sole trader, Limited Company, partnership etc. It’s better to choose this when deciding the above, as it will determine how your record label is run.
Choosing a Limited Company (Ltd) will give your label some clout – but might not be the right option if you’re just starting out and haven’t got many bands or artists. It might be easier to start as a sole trader and then, once you’ve built up your brand, you can make the steps to becoming a Limited Company. Having a Limited Company also means you protect your brand name.
If you’re not sure which is the best option for you, I’m more than happy to have a chat and explain the differences. It’s important to get this right from the beginning, so that you’re paying the right amount of tax or VAT. Having to think about this on top of setting up a record label can be tricky – and not exactly what a music mogul wants to be focusing on.
Hire an accountant
I’m not just plugging myself here, but it’s a crucial step in setting up any new business, particularly one that may be dealing with multiple artists and bands, as well as suppliers and distributors (more on this later).
Keeping your money in order from the very beginning is vital for understanding your cash flow, as well as knowing what your tax timeline is looking like. Even as a sole trader, it’s important to get it right and not end up facing the music (that’s right – it’s a pun).
You should also look into getting a lawyer, especially when it comes to signing your first band or artist. You want to have the proper documentation in place, so that you’re covered as a business and so are the artists you’re signing.
Get yourself online
Make sure you have an online presence. The music industry works and lives online so without regularly updated social media channels and a website, you’ll struggle to get your message and music out there. Think about where your audience might be lurking; this will all depend on your genre. Keep an eye out for up and coming social media networks too, don’t just focus on Facebook and Twitter i.e. the usuals. TikTok is extremely popular with a younger audience, who are very engaged in music and pop culture. You might just find your niche there.
You don’t necessarily need an all-singing, all-dancing website right away, but it would be beneficial, not only to promote your artists and bands, but also to attract them to sign to you. If it doesn’t look like you’re legitimate or active, you might miss out on hot new talent. Your website is a great asset to store and promote music too, as well as showcase who you’ve worked with before.
Find a distributor
Music streaming services are key to selling music in the 21st century. Simply relying on selling physical records to stores can be a dangerous tactic – and one that might not be successful. Finding a distributor however, someone who is skilled in finding the right stores to sell your records to, could be a way around this.
You can directly sell through iTunes or Spotify too, or even upload your music to your own website and sell it that way. Streaming services and larger companies like Apple, may make it easier to get your records out there at first and gather attention. You can still use a distributor to sort this out for you, if it isn’t something you want to deal with directly.
Make it official
Again, this might not be something you do straight away, but it’s something to bear in mind. Think about joining registered and recognised industry bodies, such as the BPI or Association of Independent Music. This is a great way to get your name out there, as well as find out about the latest industry events and trends – and even find your next big star.
Talk to us today if you’re considering setting up your own record label or have started the process – let’s make music together (and I promise I’ll stop the corny jokes).
For more resources on setting up your own record label, check these websites out below: