Are You Sure You Want To Start An Artist Management Company?
When you start your own company, you can choose which artists you work with, define your own vision, and keep the full management commission. When you work under someone else’s management company, there are a few ways to go about it. You could be hired on as an associate manager to an existing roster on a salary (or a commission if you’re lucky), or asked to join the management team and bring on your own roster, as two potential examples. In these two cases, your commission rate would be less than if you were the sole manager of an artist. However, if you’re working for a company, the revenue could be higher. In all cases it really depends what works for you and what opportunities come to your door (or what you bang down doors for).
Would you rather have support from an existing company? Would you rather be an entrepreneur? Would you rather choose the artists you work with? Would you rather bust your butt starting from scratch? Would you rather be in control? Would you rather share responsibilities?
It’s a tough ride, and there are lots of lessons to be learned no matter how much training you have, but it’s a fun ride. I can promise that. Below, we skim the surface of how to start an artist management company and some things that required.
1. Must Haves
You have to have your head on your shoulders. The music business is a relationship business. Being able to network and make friends and business colleagues is absolutely critical to success. Even more importantly, it’s maintaining them that counts. The music business is a very small world, and you don’t want to go around burning bridges. This goes for artists and business people. It’s imperative to be an honest (sometimes brutally honest), and trusting person. Understanding people (especially your artist!!) is also absolutely key.
By starting your own artist management company you are in a position to do things your own way, but a successful manager requires a vision that is compatible with a professional attitude and business acumen. This is a business of long-term gain. Keep your eye on where you want to be and make decisions that can get you there. Running a management company is running a business, and an artist manager must understand that you need to have the same management skills that any other business owner has. A business isn’t a business without revenue, so as a manager it’s your job to get out there and bring in revenue for your artists, and in turn, yourself. Make sure their performing live and touring, selling records, try to get radio airplay, try to get a publishing deal (for the songwriters) and get their songs in TV and film, set up YouTube for ads, etc. You must have a very strong work ethic and a high level of responsibility. You’re managing someone else’s entire career (your artists) and must take that responsibility seriously. This is a fun business but it is a business!
Dedication To Your Artists
Managers dedicate their lives to their artists. Yes, not just their careers, their lives. Your main reason for working with artists in the first place must be for the love of the artist and the artistry. You have to put your artists ahead of yourself. You have to put their needs ahead of your needs. You must understand that you are dealing with other people’s lives, other people’s money.
Creative Problem Solving and Fast Decision Making
A manager should be able to calmly and efficiently jump through hoops on a daily basis. There are going to be problems that arise every day. They could be good problems or bad problems, but you’re going to need to figure out how to solve them fast, without dwelling. The manager is the centre of the wheel, if you’re not solving problems fast, the wheel won’t roll forward.
I talk about being patient quite a bit on this blog, but I’ll say it over and over again. Be. Patient. It takes years for artists to perfect their craft. And it’ll take years for you to perfect your business. You could be coming into your artists life at time when their craft isn’t quite ready to become a business yet, or they may be in between album cycles and are creating right now. So you have to ask yourself if you’re ready to join them in the developing phase, or creation phase of their career. Because in both of these phases, you’ll be on the sidelines waiting, with no income coming in unless they are constantly performing live. Or, let’s say you start managing them at a time where the artist is ready to release an album and you’re sure it’s a hit and that there’s no creative development needed. Even if that album or one of the singles does become a hit, you still won’t see any revenue for at least 10-12 months later. If you don’t have a hit, you might not see much revenue at all (from album sales). Again, this is a long-term business. Don’t expect to pop up overnight.
2. Build Your Artist Roster
You don’t have an artist management company with an artist. If you don’t manage any artists yet, get out there and start looking because it could take a while. You could see 100 bands and only fall in love with one of them, or you could go see a band tomorrow and fall in love them. The important piece to note here is that you need to ‘love’ them. As mentioned above, you dedicate your life to this person/these people (aside from your family), and the best motivating factor for dedication is love. You need to love their music, their songs, their vibes, and them as individuals.
The good news is, there are PLENTY of ways to find talent to manage. The hard part is finding the one, or the next one. Read 12 Ways To Discover And Sign Artists To Management (True Stories) to find out how some top managers discovered their artists. Some of which have been managing for 15-25 years.
3. Sign A Contract
Yes, a lot of business in the music industry is done over a handshake, but it’s just better to cover yourself by signing an agreement. You can make the agreement as simple and as easy as you’d like. Just get something, anything, in writing, that you’re earning a certain commission as so-and-so’s sole world-wide manager, and save it in a safe place. Here is an article explaining all the different line items that are included in a standard long-form artist management agreement.
4. Don’t Quit Your Day Job Just Yet
DO NOT quit your day job to become an independent manager…. yet. If you’re reading this article I’m assuming it’s because you’re independent. Keep your day-job, or contracts, or part-time job, or whatever else you’re doing to earn a living, until your artists are making enough money to replace it. Is your current roster, or prospective roster making any money yet? Before you start managing someone you need to find out how much money they are making, so that you can decide if your 15-20% cut of that is worth it for you. If they aren’t earning enough money yet, then you need to be willing to dedicate time and energy as a longer term investment in order to gain profit later. Find ways to earn money for your artist, which will in turn earn money for you. The average Canadian makes, what, $40,000 per year? If you want to quit your day job and earn that same amount, and you’re on a 20% commission rate, your artist needs to be making over $200,000 per year. Or, you manage 2 artists making $100,000 each, and so on. Still, let’s say you’re managing one artist, they make $400,000 in one year, and then they decide to go off the radar and not perform or release anything for another 2 years or more. This is where you need to have other sources of income. If it’s not a job, than it’s multiple artists that are earning well.
5. Create a Business Plan
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6. Build Your Knowledge and Network
Always be building your knowledge and your network. Always. For ever and eternity! Read books, read music business news, stay on-top of business trends, research what the biggest companies are doing, take courses, go to conferences, go to networking events, reach out to people, and make friends in the business. All of this is completely imperative to moving forward.
7. Make a Name for Yourself
Literally and figuratively. Now that you have a roster and a plan, come up with a business name and register it with the government. This should also allow you to open a checking account under your business name. This is important to keep business and personal separate. Different managers have distinctive artist management methods. Think about what you stand for as a manager. Don’t be afraid to be yourself, while you may also want to think of ways to brand yourself to stand out. If artists do it, why can’t you? Get business cards, a website, a new email, a Facebook page, Twitter account, and any other means to promote yourself as a professional manager, which is also another means to promote your artists.
8. Be Organized
You have to be the one that’s the most organized, since you’re the one “organizing” the artists career. Have all the right documentation and keep track of all your business functions appropriately. We here at SBM created a tool kit so you can download all the most important financial and tour related organizational documents you need, instantly.
9. Hire an Accountant
Now that you have all the documents you need to be organized in step 9, you’ll want to discuss accounting procedures with your accountant so that you can organize your documents effectively. I also recommend finding an accountant that works specifically in the entertainment busi
9. Hire an Accountant
Now that you have all the documents you need to be organized in step 9, you’ll want to discuss accounting procedures with your accountant so that you can organize your documents effectively. I also recommend finding an accountant that works specifically in the entertainment business, as there is a whole different set of tax write-offs available to you.
10. Hire a Lawyer
You’ll want to find and hire an entertainment attorney to aid you with all contracts you will have to deal with when doing business on behalf of your artist, with record labels, booking agencies, publishers, etc. Entertainment law is extremely specialized, so be absolutely sure to hire an entertainment lawyer, not a lawyer from any other specialization.
To summarize, if you’re considering starting an artist management company, you’ll want to get the following items in place: artists to manage, a lawyer, an accountant, internal organization tools, a business plan, management contracts; while also ensuring that you’re patient, dedicated, brand yourself and be yourself, constantly develop your knowledge (business and music business) and network all the time while developing your people skills