How To Manage Your Music Career Finances (PT1): Planning For Your Business Budget

At Artist Collective, we take in starry-eyed musicians with dreams of stardom and fame and we start the arduous process of demystifying while educating folks on the realities of the industry. One of the hardest topics to navigate without completely bumming folks out is FINANCIAL MANAGEMENT and BUDGETING.

I'm sure some of ya'll already went cross-eyed just reading those words in all caps, but bear with me, because I truly believe that grabbing your finances by the neck like Homer Simpson is going to be the turning point for your careers. It definitely was for mine, and now, in my best year of DIY music, I made about $88k. And if we're being honest, that's fucking amazing considering I didn't even get past Hollywood Week of American Idol XV!

So in this 4 Part Series, I'm going to teach ya'll some introductory lessons that I learned from co-hosting with Personal Finance Coach Tere Wang during our November 2020 Monthly Topic: Using A Budget To Build A Full-Time Music Career

For Part 1, I'm going to dive into the Pre-Budget Planning Process that is key for setting the right mindset, expectations, and timetables for building your career. They may seem to be unrelated to finance, but finessing these themes into your budget will guarantee your success, so make sure you read all the way to the end of this article!

#1 - IDENTIFY YOUR VALUES:

You'll hear us talk about values over and over and over again at Artist Collective and that is not only because it's what moves us as humans, but it's how consumers connect with a brand! And in the music business, you are the brand! 

But before you can fully form your brand, you need to figure out its foundation: values. Identifying what core values you want to carry the torch for in your career will make every career decision in the future infinitely easier. 

Perhaps the best way that I've seen to identify your true core values can be found in the first module of the Artist Collective Course - How To Be Your Own Music Manager, created by our CEO, Evan Price. Members, login and complete the course, non-members click that link!

#2 - AUDIT YOUR CURRENT LIFESTYLE:

Dreamers like us rarely take a hard look at our current lifestyle and honestly audit ourselves. An ex of mine, an Australian dancer I dated while I was living on cruise ships, would ask me regularly, "What have you done to be a real-life rockstar, today?" It was usually our end of the day pillow talk where we recounted what progress we were proud of. It's important to look inward and at your productivity before diving into budgets to make sure you set the tone correctly.

So ask yourself:

What are my current non-negotiable expenses? (Categorical)

Rent? Mortgage? Phone? Vehicle? Insurance? Debt Repayment? Retirement? Emergency Funds? Medical? Grocery? Travel Costs? Entertainment?

What are my current non-negotiable responsibilities? (Time Restraints)

Kids? Pets? Partners? Part-Time Jobs? Family Business? Enlisted? In College? Religious Duties? 

 

How much time can I dedicate to building this right now? (Timing Your Growth)

Am I able to travel, relocate or go on tour, if needed? (Reach of Opportunity)

There are great times in your life where pure education might be best or your ability to travel is tied up. Maybe you can't pull away from your current life just yet, but you can optimize what opportunities you have at hand and prepare to take off! The current lockdown situation is a perfect example.

Identifying your values and answering these questions above lay the groundwork for reverse engineering your budget creation to prioritize what's most important to you now and what you're aiming for in the future. You gotta make sure the juice is worth the squeeze and your timing is right.

 

PLEASE: Give yourself grace and focus on creating a sustainable, long-lasting career in music, not just sprinting until you break. I've been there, Ed Sheeran's been there, and the low is almost never worth the growth. Stay motivated, balanced, and pace yourself. (We talk more about your realistic timetable below, so keep reading...)

#3 - IDENTIFY YOUR CAREER GOALS:

After taking a hard look at your current lifestyle, work to identify your goals. For me, I realized early on that my strong suit was live performance. I love getting on a mic, doing crowd work, telling jokes, and then belting my little Italian heart out for the world. Seeing how folks responded to that, I quickly realized that my career goals needed to be directed at that, and therefore, so did my financial goals. Here are just a few general goals and some categorical expenses that might be coming next:

What expenses are tied to building my streaming royalties and getting radio play?

Studio Monitors, Cables, Microphone(s), Instrument(s), Programs, Interfaces, Soundproofing Materials, Playlisting Budget, Marketing Budget, Distribution Budget, Website Hosting/Domain Fees, Mixing/Mastering Fees, PR Budget

What costs are involved in having a successful tour?

Tour Vehicle/Rental, Tow Assistance, Food Costs, Hotel/Lodging, Lot Fees, Parking Fees, Tolls, Durable Gear, Instrument Insurance, Event Insurance, Travel Insurance, Gas Cost, Flights, Taxi/Uber/Lyft Fees, Public Transportation, Liquor Costs, MGMT/Team Salaries, Strings/Picks, Emergency Funds, Vehicle Maintenance

What expenses can I expect when building my live streams and fan subscriptions?

Streaming Camera, Subscription to Streamyard, Audio Interface, XLR Mic Cables, Microphone, Ring Light, Marketing Budget, Dropshipping Merch Site, Fan Subscription Platform Fee, Newsletter Platforms, Merch Costs, Printing Costs

I'm not ready for the spotlight just yet, how do I master my instrument/craft?

Gear Maintenance, Online Classes, Personal Tutoring, Books/CD's, Concert Tickets, College Tuition, Travel Costs, Practice Space Rental, Recurring App Fees, Gear Replacement/Depreciation, Gear Insurance, Mentorship, Consultation Calls

Long story short, every single career goal has expenses and they only increase and get bigger as you scale your reach from local hobbyist to national star. Luckily, Tere Wang and @AC_Vinnie have made it incredibly easy for members to itemize their budget using their FREE BUDGET TEMPLATE DOWNLOAD. You'd be amazed at the expenses and categorical necessities that we've listed specifically for music businesses. We've also included a detailed budget walkthrough of those exact documents to make sure you know our tips/tricks to cut costs and what tricky categories you should look out for.

#4 - CREATE A REALISTIC TIMETABLE!

After downloading and filling out the comprehensive budget sheet we mentioned above, it's time to get your mind right about one of the trickiest concepts in human thought: TIME

How do you take this hunger for a music career and set a realistic pace? How do you keep yourself from sprinting ahead until you're broken?

First, you need to set the expectation that most businesses take 2-3 years to become profitable. Music businesses are no different. Yes, music success (as a whole) isn't measured by dollar signs, but your music business success is. Set your goals and define your success by them.

Once you've got your mind right, you need to use your lifestyle notes to block out your time. Luckily for you, Evan Price, our CEO has created an amazing Excel Sheet Template just for that, outlining the process in the module Music Business Mindset of his course How To Be Your Own Music Manager. (I highly recommend checking it out.) 

He asks simple questions that will help you create a sustainable pace.

What are your personal sleep requirements?

How often/when do you work out? Further your education and read?

What hours do I work my part-time job? My side hustles?

How many hours/week do you work on your Music Business & AC Courses?

How am I wasting my time? Netflix & chilling too often?

Where can you adjust these engagements? Find more time?

{Dont forget! Log in and find the module called  Music Business Mindset in Evan Price's Course. Non-Members, click here ---> How To Be Your Own Music Manager}

Asking these questions and getting some more from an unbiased source can be eye-opening, to say the least, and I personally was amazed at how stacked my schedule was. I quickly realized I need to set my expectations to a realistic pace and look at my progress in months and years, not days and weeks. Please remember that momentum in this industry is key, but longevity is the difference between a lifelong career and a one-hit-wonder.

Keep grinding, keep learning and get #backtothemusic

PS: Stay tuned for Part 2 of this Series - How To Manage Your Music Career Finances! And in the meantime, be sure to log into your AC Membership to stay current with Using A Budget to Build A Full-Time Music Industry.

Cheers, Ya'll!

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Connect with the author, Vinnie Hines AKA @ac_vinnie today! 

https://solo.to/ac_vinnie

EMAIL: [email protected]

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Signup for Artist Collective HERE!

 

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