Live bands are compensated for professionally performing music in front of crowds at bars, nightclubs, concerts, private parties, corporate events, and other public places. The selling of records and products might provide additional cash. Ownership in the firm might include the group’s management and anybody else with a financial interest, in addition to the musicians.
Follow these ten steps to start a live band:
Prepare your Live Band
Make your live band a legal entity.
For tax purposes, you must register your live band.
Create a Business Bank Account and a Credit Card
Create an accounting system for your live band.
Get the Permits and Licenses You Need for Your Live Band
Purchase Live Band Insurance
Create a brand for your live band.
Make a website for your live band.
Configure your Business Phone System
Starting a company entails more than just registering it with the state. We’ve put up this basic guide to getting your live band started. These stages will guarantee that your new company is well-planned, correctly registered, and legally compliant.
STEP 1: Make a business plan.
A well-thought-out strategy is vital for entrepreneur success. It will assist you in mapping out the intricacies of your organisation and uncovering some unknowns. Consider the following crucial topics:
What are the initial and continuing expenses?
Who is your intended audience?
How much money may you charge your customers?
Fortunately, we have done a lot of the legwork for you.
What are the expenses of starting a live band?
Your expenses may be quite minimal with a modest degree of commitment. It doesn’t have to be just you and your acoustic guitar. If you are at the mid-level, you may need to invest a few thousand dollars on equipment if you do not already have it. In addition, depending on the number of performers and the quantity of equipment involved, you may need to rent or purchase a van or other vehicle to carry. A old vehicle may be purchased for as low as $7,000 and hired on an as-needed basis for about $100.
Managers and agents often take a portion of your billings, so their involvement reduces your performance fees but does not increase your out-of-pocket expenses.
What are the recurring costs of running a live band?
If they already have their own equipment and band members arrange events and drive themselves to local venues, startup bands may have almost no out-of-pocket expenditures apart from petrol. However, bear in mind that your performance fee will be paid in gross rather than net terms. That means you’ll be responsible for paying your own taxes and withholdings, so hiring an accountant or tax preparer is a wise investment.
Your financial contribution will increase as your band expands. You’ll incur extra costs for travel, food, lighting, sound, roadies to assist you in setting up and breaking down your gear, and other employee expenditures such as taxes, healthcare, and other perks.
Pamplamoose, a well-known indie band, has listed their costs and earnings on Digital Music News. It demonstrates that a 28-day tour earned around $136,000 in ticket, merchandise, and related income but incurred approximately $147,000 in expenditures. Despite this, the tour was regarded commercially successful since it resulted in extra iTunes purchases. Examine the page for a comprehensive analysis of national touring costs.
Who is the intended audience?
The services are paid for by the direct clientele of a live band. Managers, proprietors, and booking agents at pubs, music halls, outdoor events, and other public and commercial places are included. However, depending on your company strategy, it may also include individuals who engage talent for weddings, corporate events, birthday and anniversary parties, bar and bat mitzvahs, and other occasions.
The admirers who will watch and listen to you perform are your ultimate customers. If your band can create enthusiasm and numbers from this audience, it will go a long way toward enticing hirers to continue hiring your group—possibly at greater costs.
How does a live band earn a living?
Bands often make cash by collecting event management fees. Larger and more popular bands may also have their tours partly or entirely sponsored by music labels (though this is becoming less common) or corporate sponsors/advertisers.
An additional or alternate source of money comes directly from individuals who see their performances, such as cash tips. This is most likely true for street entertainers.
Another source of cash for the band might be the selling of goods (often known as “merch” in the trade). This may include recorded music, t-shirts, hats, posters, buttons, and other memorabilia that can be sold at the performance venue before, after, or during the act, as well as online at sites like iTunes or Amazon.
How much money may you charge your customers?
Performance costs are determined by the popularity of the band, which translates into the capacity to pull consumers into the institution who will either pay for the performance and/or consume drink and food or otherwise spend while watching and listening. As a result, your income might vary from a few tips to hundreds of thousands of dollars.
You should also be aware of what your competitors are charging. Gigmasters is an excellent resource in this area. Although the website’s goal is to assist venues in booking talent, the breakdown of prices paid by talent and in different places throughout America, by genre/format, may be a helpful tool. For example, it’s clear that the Gatsby Gang Jazz Band in Phoenix costs between $1,000 and $4,500 every performance. To that the Stringtown Trio, an acoustic pop band from Fort Wayne, Indiana, charges between $650 and $3,600.
Price your product in accordance with comparable pricing obtained at other performances or online. Alternatively, just give away your merchandise to increase attention and reward fans.
What kind of profit can a live band make?
Your only restrictions are your skill, time, energy, and exposure. As previously said, the world’s finest bands may launch tours worth hundreds of millions of dollars. For others, being in a band may be a successful side hustle on evenings and weekends.
How can you increase the profitability of your company?
Talented band members may supplement their income in the following ways:
Record your music and sell it at venues or online via music services like iTunes, along with other band-related items.
Establish ties with music companies, producers, and other talent to work as session musicians on other artists’ albums.
Compose, create, and/or perform on soundtracks]for commercials, movies and television programmes, corporate audio/visual presentations, event sound, and other media.
STEP 2: Establish a legal entity
Sole proprietorship, partnership, limited liability company (LLC), and corporation are the most frequent business structure forms.
Creating a formal business organisation, such as an LLC or corporation, shields you from personal liability if your live band is sued.
STEP 3: File your taxes
Before you can begin for business, you must register for a number of state and federal taxes.
To register for taxes, you will need to get an EIN. It’s really simple and completely free!
Taxes on Small Businesses
Depending on the business form you choose, you may have multiple choices for how your company is taxed. Some LLCs, for example, may benefit from being taxed as a S company (S corp).
These guides will teach you more about small company taxes:
Taxes on LLCs
LLC vs. sole proprietorship
Corporation vs. LLC
S Corp vs. LLC
How to Form a S Corporation
S Corporation vs. C Corporation
There may be state taxes that apply to your company. In our state sales tax guides, you may learn more about state sales taxes and franchise taxes.
STEP 4: Establish a company bank account and credit card
Personal asset protection requires the use of distinct business banking and credit accounts.
When you combine your personal and business accounts, your personal assets (your house, vehicle, and other possessions) are at danger if your company is sued. This is known as penetrating your company veil in business law.
Furthermore, understanding how to develop corporate credit may help you get credit cards and other financing in your company’s name (rather than your own), lower interest rates, larger lines of credit, and other benefits.
Establish a business bank account.
Opening a business bank account is not only required when asking for business financing, but it also:
Separates your personal assets from the assets of your firm, which is required for personal asset protection.
It simplifies bookkeeping and tax reporting.
Create a net 30 account.
Net 30 accounts are used to develop and grow company credit while also increasing cash flow. Businesses use a net 30 account to purchase items and refund the whole debt within a 30-day period.
Many net 30 credit suppliers submit information to the main business credit agencies (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how firms establish business credit in order to get approved for credit cards and other lines of credit.
Apply for a business credit card.
Obtaining a business credit card benefits you in the following ways:
Put all of your company’s costs in one location to separate personal and business spending.
Build your company’s credit history, which will be important for raising funds in the future.
STEP 5: Establish business accounting
Recording your numerous costs and sources of revenue is crucial to assessing your company’s financial status. Keeping precise and thorough accounting also makes yearly tax filing much easier.
STEP 6: Obtain all required permissions and licences
Failure to get appropriate permissions and licences may result in significant penalties or possibly the closure of your firm.
Requirements for State and Local Business Licensing
To lawfully charge money as a live band, certain state permissions and licences may be required. Visit the SBA’s reference to state licences and permits to learn more about licencing requirements in your state.
Furthermore, local licencing or regulatory restrictions may apply. For additional information on local licences and permissions, please visit:
Check with the clerk’s office in your town, city, or county.
Contact one of the local organisations mentioned in the US Small Business Associations database of local business resources for help.
Licensing of Music
Permission from the composer or licence holder is required to play music in a commercial environment. Typically, a “blanket” licence permitting a company to play music held by a vast library of artists and recording studios is available. Performance Rights Organizations, such as ASCAP or BMI, may provide such rights.
Contract for Services (e.g. MSA)
Before beginning a new project, bands should demand customers to sign a services agreement. By defining payment terms and conditions, as well as service level expectations, this agreement should clarify client expectations and reduce the possibility of legal conflicts. Here’s an example of a service agreement.
STEP 7: Obtain commercial insurance.
Insurance, like licences and permits, is required for your company to operate safely and legally. In the case of a covered loss, business insurance protects your company’s financial well-being.
There are several sorts of insurance plans designed for various types of companies with varying risks. If you are unaware about the hazards that your company may encounter, start with General Liability Insurance. This is the most popular coverage required by small companies, so it’s a good place to start for yours.
Workers’ Compensation Insurance is another important insurance product that many companies need. If your company will have workers, your state may require you to purchase Workers’ Compensation insurance.
STEP 8: Establish your brand
Your company’s brand is what it stands for, as well as how the public perceives it. A strong brand will help your company stand out from the crowd.
How to Market and Promote a Live Band
It’s vital that you recognise and understand your audience, which includes people who may book or influence the scheduling of your concerts as well as music enthusiasts. Where do they congregate? Your early marketing techniques might be as simple as placing leaflets at coffee shops, pubs, or on telephone poles in areas where you’re likely to meet possible followers.
Create a Facebook band profile, publish performance photographs on Instagram, audio recordings on SoundCloud, and maintain an active presence on other social media platforms where the band may be found by fans and decision makers. Also, keep an eye out for and make yourself available for interviews on Internet, satellite, and terrestrial radio stations and podcasts, as well as blogs, magazines, newspapers, and other media outlets where you may reach your target audiences.
How to Keep Customers Returning
Your voice and image should be heard and seen everywhere. Hire a graphic designer to develop your band’s logo and accompanying graphics, which you can then use to manufacture t-shirts and other items. Make a recording of your music and share it online or at your events. This is now simpler and less costly than ever before. Most musicians know at least one person who is skilled in audio engineering and can capture your sound in a home office, on location, or in a rented performance space. You may either sell or give this music out for free to establish a fan base.
STEP 9: Create your company’s website.
After you’ve defined your brand and designed your logo, the next step is to build a website for your company.
While developing a website is an important step, some may be concerned that it is out of their grasp due to a lack of website-building skills. While this was a fair concern in 2015, online technology has made significant advances in recent years, making the lives of small company owners considerably easier.
The following are the primary reasons why you should not put off developing your website:
Every genuine company has a website, period. When it comes to bringing your company online, it doesn’t matter what size or sector it is.
Social media accounts, such as Facebook pages or LinkedIn company profiles, are not a substitute for your own business website.
STEP 10: Install your company phone system.
Getting a phone for your company is one of the finest methods to keep your personal and professional lives distinct and private. That isn’t the only advantage; it also helps you automate your company, provides it legitimacy, and makes it simpler for prospective clients to identify and contact you.