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People from outside the industry don’t realize how crucial is it for a musician, artist manager, or record label owner to receive financing.
Music is not a money-in-money-out type of business that enables you to grow gradually and budget yourself in the same fashion as other businesses. Music is a form of art, man, and there’s so much going on that doesn’t depend on you.
My DJ friend just got invited to a large festival in central Europe last month but was not able to attend because he could not afford plane tickets and the expensive insurance he would be forced to pay to ship his gear over there.
The festival organizers were reluctant to pay an advance, for some reason, and he was left with a choice of begging for a high-interest-rate loan from his bank or giving up on the opportunity.
He chose to forfeit because he knew nothing is certain in life but death and taxes – he may not get paid on time to pay back the loan and did not want to risk putting his car or house as collateral.
Is it my friend’s fault for not having enough liquidity to afford $2,000 in one go? Probably. Could he have anticipated an invite from a festival in mid-February when snow blizzards were wreaking havoc throughout Europe? Absolutely not. Could he have anticipated a house burglary just a few months ago that put him in the state he’s in? Maybe.
The bottom line is that apart from playing the blaming game, he has nothing much to do at this stage. What he should have done is to formulate a better business and finance plan for himself ahead of time.
The 3 Golden Rules for Financially Savvy Musicians
The first thing any serious person in the music industry must do is treat it like a business. Music is a hobby and a passion for so many of us that we tend to forget that behind all that glamorous rock and roll lifestyle (yeah right) there needs to be a rock-solid plan that dictates what are we trying to achieve, when, and how much we need to spend on any given thing.
The second thing you need to remember is that regardless of your position in the music industry, unless you have already made incredible amounts of money (in which case you probably would have skipped this article), financing is possible.
Instead, go with your rock-solid business plan to the bank and get a medium to short term loan in comfortable conditions. Even better, find a patron (online or otherwise) – you won’t have to pay him back!
Alternatively, you can also seek financing through grants, depending on where you live and what’s available to you. Whatever you choose – take the financing at the beginning of your journey so you have a tank full of oxygen instead of being in desperate need of oxygen when you’re suffocating underwater.
The third obvious rule is save for a rainy day. Although it may sound like a cliché it’s true! And it is a particularly good advice for musicians who are notorious for their fast living antics.
Keep in mind that this industry is volatile, which means that you are on top of the world one day and hitting rock bottom the next. If you don’t save today, then tomorrow you may have nothing to feed off.
Why Most Musicians Don’t Care
Many musicians live under the false assumption that because they are talented, they should be devoting their life to their art. Meanwhile, they let their managers or accountant “take care of the money”, to think of the best ways to spend it. That is a bunch of baloney on many levels.
The first fib is that artists don’t handle money because it’s not their strong suit. They are not money experts, so they let others who are take care of their money. T
Realistically, you don’t need much expertise to supervise your own finances. All you must do is have the willingness to devote a little time into it. The reason most musicians don’t take care of their own money is due to sheer laziness, nothing more, nothing less.
The second fib is that all artists have their qualified money guys standing beside them at any given moment. Very few highly successful artists have access to world-class services while the rest of us must take care of it ourselves (or leave this to a manager who most certainly does not have a higher level of expertise in this area).
The third and ultimate fib is that musicians need to justifiably spend enormous amounts of money. They need narcotics of some sorts to “keep creative”. They need lavish clothing and expensive PR to sell more. They need exclusive instruments to make their sound more unique.
Think of all your expenses – how many of them are truly taking your business forward as opposed to making old dreams come true?
Today is a good day to stop lying to yourself and start taking care of your finances. If you don’t – no one else will.