business plan to start a record label

How To Write a Successful Record Label Business Plan + Template

Creating a business plan is essential for any business, but it can be especially helpful for record label businesses that want to improve their strategy and/or raise funding.

A well-crafted business plan not only outlines the vision for your company, but also documents a step-by-step roadmap of how you are going to accomplish it. In order to create an effective business plan, you must first understand the components that are essential to its success.

This article provides an overview of the key elements that every record label owner should include in their business plan.

Download the Ultimate Record Label Business Plan Template

What is a Record Label Business Plan?

A record label business plan is a formal written document that describes your company’s business strategy and its feasibility. It documents the reasons you will be successful, your areas of competitive advantage, and it includes information about your team members. Your business plan is a key document that will convince investors and lenders (if needed) that you are positioned to become a successful venture.

Why Write a Record Label Business Plan?

A record label business plan is required for banks and investors. The document is a clear and concise guide of your business idea and the steps you will take to make it profitable.

Entrepreneurs can also use this as a roadmap when starting their new company or venture, especially if they are inexperienced in starting a business.

Writing an Effective Record Label Business Plan

The following are the key components of a successful record label business plan:

Executive Summary

The executive summary of a record label business plan is a one to two page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.

• Start with a one-line description of your record label company
• Provide a short summary of the key points in each section of your business plan, which includes information about your company’s management team, industry analysis, competitive analysis, and financial forecast among others.

Company Description

This section should include a brief history of your company. Include a short description of how your company started, and provide a timeline of milestones your company has achieved.

If you are just starting your record label business, you may not have a long company history. Instead, you can include information about your professional experience in this industry and how and why you conceived your new venture. If you have worked for a similar company before or have been involved in an entrepreneurial venture before starting your record label firm, mention this.

You will also include information about your chosen record label business model and how, if applicable, it is different from other companies in your industry.

Industry Analysis

The industry or market analysis is an important component of a record label business plan. Conduct thorough market research to determine industry trends and document the size of your market. 

Questions to answer include:

• What part of the record label industry are you targeting?
• How big is the market?
• What trends are happening in the industry right now (and if applicable, how do these trends support the success of your company)?

You should also include sources for the information you provide, such as published research reports and expert opinions.

Customer Analysis

This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.

For example, the clients of a record label business may include brick and mortar stores, digital music retailers (e.g., iTunes, Amazon), and streaming services (e.g., Spotify, Pandora).

You can include information about how your customers make the decision to buy from you as well as what keeps them buying from you.

Develop a strategy for targeting those customers who are most likely to buy from you, as well as those that might be influenced to buy your products or record label services with the right marketing.

Competitive Analysis

The competitive analysis helps you determine how your product or service will be different from competitors, and what your unique selling proposition (USP) might be that will set you apart in this industry.

For each competitor, list their strengths and weaknesses. Next, determine your areas of competitive differentiation and/or advantage; that is, in what ways are you different from and ideally better than your competitors.

Below are sample competitive advantages your record label business may have:

• Established name and credibility in the industry
• Strong relationships with artists and other industry players
• Robust marketing and promotional capabilities
• Proven ability to create chart-topping hits
• Extensive catalog of music

Marketing Plan

This part of the business plan is where you determine and document your marketing plan. . Your plan should be clearly laid out, including the following 4 Ps.

• Product/Service : Detail your product/service offerings here. Document their features and benefits.
• Price : Document your pricing strategy here. In addition to stating the prices for your products/services, mention how your pricing compares to your competition.
• Place : Where will your customers find you? What channels of distribution (e.g., partnerships) will you use to reach them if applicable?
• Promotion : How will you reach your target customers? For example, you may use social media, write blog posts, create an email marketing campaign, use pay-per-click advertising, launch a direct mail campaign. Or, you may promote your record label business via PR or at industry events.

Operations Plan

This part of your record label business plan should include the following information:

• How will you deliver your product/service to customers? For example, will you do it in person or over the phone only?
• What infrastructure, equipment, and resources are needed to operate successfully? How can you meet those requirements within budget constraints?

The operations plan is where you also need to include your company’s business policies. You will want to establish policies related to everything from customer service to pricing, to the overall brand image you are trying to present.

Finally, and most importantly, in your Operations Plan, you will lay out the milestones your company hopes to achieve within the next five years. Create a chart that shows the key milestone(s) you hope to achieve each quarter for the next four quarters, and then each year for the following four years. Examples of milestones for a record label business include reaching $X in sales. Other examples include winning a certain number of Grammy Awards or signing a contract with a major artist.

Management Team

List your team members here including their names and titles, as well as their expertise and experience relevant to your specific record label industry. Include brief biography sketches for each team member.

Particularly if you are seeking funding, the goal of this section is to convince investors and lenders that your team has the expertise and experience to execute on your plan. If you are missing key team members, document the roles and responsibilities you plan to hire for in the future.

Financial Plan

Here you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix). 

This includes the following three financial statements:

Income Statement

Your income statement should include:

• Revenue : how much revenue you generate.
• Cost of Goods Sold : These are your direct costs associated with generating revenue. This includes labor costs, as well as the cost of any equipment and supplies used to deliver the product/service offering.
• Net Income (or loss) : Once expenses and revenue are totaled and deducted from each other, this is the net income or loss.

Sample Income Statement for a Startup Record Label Firm

Balance Sheet

Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:

• Assets : All of the things you own (including cash).
• Liabilities : This is what you owe against your company’s assets, such as accounts payable or loans.
• Equity : The worth of your business after all liabilities and assets are totaled and deducted from each other.

Sample Balance Sheet for a Startup Record Label Firm

Cash Flow Statement

Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include:

• Cash Flow From Operations
• Cash Flow From Investments
• Cash Flow From Financing

Below is a sample of a projected cash flow statement for a startup record label business.

Sample Cash Flow Statement for a Startup Record Label Firm

You will also want to include an appendix section which will include:

• Your complete financial projections
• A complete list of your company’s business policies and procedures related to the rest of the business plan (marketing, operations, etc.)
• Any other documentation which supports what you included in the body of your business plan.

Writing a good business plan gives you the advantage of being fully prepared to launch and/or grow your record label company. It not only outlines your business vision but also provides a step-by-step process of how you are going to accomplish it.

Remember to keep your business plan updated as your company grows and changes. Review it at least once a year to make sure it is still relevant and accurate.  

Finish Your Record Label Business Plan in 1 Day!

Other helpful articles.

4 Types of Record Label Contracts & Tips For Creating Your Own [+Templates]

How To Write a Successful Record Store Business Plan + Template

Creating a Budget For Your Record Label + Budget Template

How To Write a Winning Musician Business Plan + Template

How To Write a Winning Artist Management Business Plan + Template

How To Write a Winning Music Artist Business Plan + Template

How To Write a Winning Music Business Plan + Template

How To Write a Winning Music Production Business Plan + Template

How to Write a Record Label Business Plan (Free Template)

Your business plan should set realistic goals, address any issues early on, and develop a clear path for the future of your record label. A solid business plan is also essential when you come to secure loans or new investment in the future.

But what should you include in a record label business plan? For starters, it should include: ‍

- An overview of your business idea

-Your aims and goals

- How you’ll earn/spend money

- Any potential problems

- How you’ll measure progress ‍

We’ve created a free-to-use Record Label Business Plan Template, to help budding entrepreneurs get started writing their plan. You can access the template below, but before you dive in, you can scroll down a little further to learn more about some of the topics you’ll need to include.

If starting your own label isn't for you, then why not check out our top tips on how to get signed to a record label instead?

Free record label business plan template

How to start a record label

What should a record label business plan include.

History and experience

What is your music industry experience? Do you have a track record of discovering and breaking new bands, or a string of successful previous releases? Make sure to sell yourself and demonstrate your value when setting up a record label .

You’ll need to write an executive summary – in other words a short, inspiring pitch designed to showcase and create interest in your business. What are the unique selling points of your label? What makes it different, potentially profitable and more exciting than the other independent labels out there?

Strengths, weakness, opportunities, threats

Set out your strengths, weaknesses, opportunities and threats – known as a SWOT analysis.

Your strengths could include the following and reputation of your artists or access to studios and influential contacts, while weaknesses could include a current lack of funding. Your opportunities could be any events or deals you’ve already secured, while threats could be strong competition from other labels, or a limited music scene in your local area. These are just some examples, so your SWOT analysis will depend entirely on your own situation

Your aims and how you’ll measure progress

What are the main aims of your record label? You’ll want to plan at least 1 to 3 years ahead, explaining your fundamental goals and how’ll you achieve them.

It’s also important to demonstrate how you’ll measure your achievements by identifying your Key Performance Indicators (KPIs). KPIs could include your expected profits margins, streaming and download targets, or expected media coverage.

Operations and management

Who’ll be running the day-to-day operations of your label? Will you be taking on any staff or partners to help you run the business? Make sure you’re realistic about what you and your team can achieve.

Also, do you have access to a studio or any other facilities to help your label thrive? What useful equipment do you currently own or have access to? ‍

Your marketing strategy and analysis ‍

You’ll want to set out a solid strategy for making your label a success. How will you promote and market your artists, events and releases? Have you carried out any market research, and do you have any opportunities, clients or deals already lined up?

‍ Financial forecasts and sales

How will your label turn a profit? What are your areas of incomes and expenses? If you already have a financial history, make sure to set it out clearly and make realistic projections for the future.

Long term, short term & contingency plan

A good way to sum up your business plan is with a short-term, long-term and contingency plan, to demonstrate foresight and the ability to adapt to new challenges.

A few more things to keep in mind

Keep it concise If you’re trying to attract funding and investment , make sure would-be investors can quickly and easily decipher the aims and opportunities of working with your label. Give them plenty of good reasons to invest!

Be professional Make your plan look and feel professional. This could include a front cover, contents page, detailed charts and forecasts, as well as a clear and inspirational executive summary or mission statement at the very beginning. Print out your plan and present in an eye-catching folder or binder.

Understand your market Demonstrate a clear understanding of the music industry and your target market. Who are your competitors and where are your opportunities for success?

Understand your finances Whether you’re in it for the money or not, understanding your financial limitations and objectives is extremely important, especially if you’re hoping to grow and develop your label, or attract investment now or in the future.

 Don’t forget to access the free Record Label Business Plan Template above and get started writing your own business plan!

Subscribe to our mailing list to get tips, tricks and hacks straight to your inbox!

By subscribing you agree to our privacy policy

Do you have any questions about your business plan we’ve not covered here? Let us know in the comments and we’ll get to back you.

Related Posts

Ditto Perks: Exclusive Industry Tools, Discounts & Features

The Best UK Music Conferences in 2024

How to Get Signed By a Record Label in 2024

Best Mental Health Resources for Musicians

++ Comments

Learnings from the frontlines of music creation.

Proudly brought to you by LANDR

Create, master and release your music in one place.

How to Start a Record Label in 2024 (Without Going Broke)

Starting a record label isn’t a totally crazy idea.

In fact, local independently curated labels are becoming more and more important. But, if you want to learn how to start a record label of your own there’s a handful of things to plan for and pay attention to.

In this article, we’ll unpack everything you need to know about starting a record label. From practical operations to marketing and design, to your overall branding strategy.

There’s a lot to be thinking about—but fortunately, we’ve got some expert advice and helpful tricks and tools to help you along the way.

Let’s get started.

Unlimited Releases for $23.99/yr

Get fast releases to 150+ streaming platforms, promotional tools, & unmatched support. Your music stays live forever with no hidden fees when you release with LANDR.

Why start a new record label?

Let’s do some soul searching—starting a record label is no easy feat, so let’s make sure you’re getting into it for the right reasons.

Money is not a reason to get into founding a record label.

Are you starting a record label because you want to make a lot of money really fast?

If so, you might want to manage your expectations. Making money with music is not impossible, but it takes a plan and dedication.

Unless you’ve somehow lined up some A-list talent and you have some serious marketing dollars, your label won’t be profitable for the foreseeable future.

Even with more and more top-tier artists staying away from major labels and opting to go the independent route, it takes years of experience and connections to land that kind of talent.

So, If that’s the case congrats! Stop reading this and get to work planning your rollout.

Your scene deserves to have someone representing it.

For the rest of us, money is not a reason to get into founding a record label.

That being said, let’s look at four (very good) non-monetary reasons to start a record label.

You love discovering and curating new artists and material

Maybe you’re connected with an undiscovered local scene. Or maybe you love spending your time digging around new releases on Bandcamp.

You know your taste is amazing and through your passion for under-appreciated music, you probably have some personal connections with many artists.

If you want to elevate your favorite artists and help them potentially find a bigger platform for their art, starting a record label is an excellent and totally righteous way to do that.

Your scene deserves to have someone representing it—so why not take up the burden and help give the yet-to-be-discovered artists in your world some well-deserved attention.

It’s so rewarding to be that special supportive presence in a music scene, whether online or in person.

You need a central platform to publish your own art

If you create and collaborate under a variety of monikers or in different configurations with different creators—it’s not a bad idea to have all those projects represented under one umbrella.

Having a central place to find everything you’ve worked on makes it super easy for fans of one project to discover other things you’ve done.

It’ll also work well as the central vehicle for selling all your merch.

Plus, having everything under one label takes the pressure and confusion out of correspondence for each project.

It’s more efficient and easier to have your label as the central place for correspondence and planning—you won’t have to be scattered between different email and social accounts anymore.

You’re interested in accessing funding resources and patrons

It’s more efficient and easier to have your label as the central place for correspondence.

Record labels are incredibly useful for generating awareness about your projects—they make you look like a serious entity that is really doing something.

They also have a business-like appearance and give you some added legitimacy in the eyes of those with access to funding.

So, record labels are useful if you live in a country with a grant system that supports independent labels or if you want to attract funding partners and arts patrons.

But keep reality in check, you need a killer roster, multiple planned releases and smart branding to catch industry attention—work on that first and you’ll find it easier to secure funding.

End-to-end music production

Get unlimited Mastering and Distribution, 30+ plugins worth over $2,000 and more.

You want a marketing channel to engage new audiences

For many artists marketing is a mundane, even painstaking activity that takes away from creative time.

At the end of the day, you got into this because you love creating music—not because you love marketing.

Starting a record label takes some of the pressure off of the marketing for your individual projects.

Instead, you’ll now have a central place to serve as the marketing arm for all your projects.

In my past experiences with starting a small tape label, it was easier to get radio stations and press to care about my emails once I started emailing them from my independent label.

How to start a record label

Alright, now that you have an idea of why you should get into the record label business in the first place let’s look at a few practical steps to consider on your journey.

Having some know-how and a bit of planning will go a long way—you’ve got some big decisions to make before launch day so let’s tackle the main areas you need to think about.

Here’s seven steps for starting your record label.

1. Make the different roles in your label abundantly clear

Is it just you running the show? Or are you going to have other people involved?

To make sure expectations are in line with who’s doing what, make sure you meet with your team and clearly lay out who does what.

If you’re founding the label with someone else make sure each person has committed to specific things.

One person could be responsible for handling the business side— getting artists on board , A&R , finding PR opportunities, writing grants and planning album rollouts .

While another person might be in charge of creative direction, design, running social media accounts , and planning events.

There’s so many roles and responsibilities that come with operating a label and ultimately it will take teamwork to make the dream work.

So while no one person should be pigeonholed into any specific role, having some clear expectations laid out won’t hurt down the road.

2. Decide on a vision

Your vision for your label involves everything about where you’re at right now and where you want to be.

It’s healthy to have a written mission statement about who you want your label to be

It’s healthy to have a written mission statement about who you want your label to be in the eyes of the world.

Will you focus on your immediate community, are you looking for certain kinds of people to support? What genres of music should fans expect to see curated?

Being clear on this from the outset is valuable for setting the course and it may even excite your fans and get people on board with what you’re doing.

This is especially true if you plan on representing your community—consider bringing in diverse opinions and voices about how your label will exist and make sure to include the artists who live and work around you.

3. Develop a brand aesthetic

With your vision ready to go, it’s time to come up with the brand aesthetic you want your record label to have.

Branding is more than just the name of your record label, it encompasses everything from the kinds of artists you sign to the tone of your copy, website design, typeface, logo, cover art and merchandise.

Will you be a cassette tape-only label and keep costs low? Are you going to invest in runs of vinyl?

How will you present your label?

Will you sell t-shirts? Hoodies? Mugs? Perfume? Underwear? With e-commerce platforms, your merch options are pretty much endless!

Think carefully about your social media presence too. How will you present your label on Instagram and Bandcamp versus on Twitter or other platforms like TikTok and even Facebook?

It’s also recommended to build your own custom website with an e-commerce aspect—this is a blank slate that you can turn into anything you want aesthetically and it’s the place where fans will purchase your products.

Be creative and make your brand a special, unique and memorable entity!

4. Create guidelines for signing new artists

Signing any artist is a big move and it’s the crux of why you’re doing this.

With any record deal , there’s two sides to the equation.

You’re agreeing to work hard to promote the artist under your label, in return, the artist will get some percentage of the proceeds from sales, streaming and royalties generated from their music.

The terms, length and percentages of how you’ll split profits is between you and the artist—but it’s in your interest to make sure everyone is clear and agreed on how money will be distributed.

You’ll regret it if things aren’t clear—your brand and name will be hurt if you have a falling out or if an artist feels like they’ve been taken advantage of, so make sure everything is clear and fair.

You’ll regret it if things aren’t clear.

It’s highly recommended to have a written contract that’s been reviewed by a music lawyer and signed by both parties just so that everything is stated and agreed to from the start.

You can find record label contract templates online, but speak with a music lawyer if you really want to make sure everything is air-tight.

It never hurts to chat with labels in your niche to hear how they handle the details, contracts and splits —but in general, going half and half on any direct profits from merch and streaming is a rule of thumb.

5. Plan your album launch calendar

Every time you sign an artist your signing should come with some kind of plan around the artist’s next release.

We’ve written about developing a music marketing plan before—but in general, you should work back anywhere from two to three months before launch day at minimum.

Important dates include deadlines for the album’s final master , album and insert artwork , social media campaigns, video shoots, press release and radio sampler mailouts, social media content and beyond.

Every little element—especially if you plan to do a music video shoot, produce merchandise or vinyl—will add extra deadlines that you’ll need to plan around.

Typical rollout timelines for album launches include a minimum of

• Two to four weeks for mixing and mastering
• One month for organizing and producing a photoshoot
• One month for finishing designs and album artwork
• Two to three months organizing and producing video content
• Three months for vinyl production
• One to two months for tape and cassette production

This also doesn’t include any planning around paid advertising, live performances or other promotional activities, rather this is just a picture of the moving pieces and timelines involved with the most basic of album releases.

So once you’ve got an artist signed be ready to roll up your sleeves and start planning.

6. Plan your merchandising

What kind of products will your label sell? Where will you sell them? How much will you charge?

The merchandise your label will sell is a huge part of how you’ll make money, especially in the early days.

Like any business, starting a label requires an investment. It’s on you to put up the cash to purchase tapes, vinyl, CD’s, t-shirts and whatever else.

If you’re looking to get started on a budget, I’d suggest tapes and CDs to begin with.

These are significantly less expensive than vinyl to produce and there’s still a surprising number of passionate tape and CD collectors out there.

T-shirts can produce really good margins if you have a good designer and a decently priced (hopefully fairtrade) wholesale supplier.

Some helpful tools for your early days

Starting your record label won’t be a walk in the park, there’s going to be a lot of work, some sleepless nights and tough decisions.

But there’s no greater satisfaction than seeing an artist take off on launch day.

Here’s a few tools to help you get the best out of your first handful of releases.

Pick a good digital distribution service

It goes unsaid that you’ll want your artists to be streamable on Spotify, Apple Music and everywhere else.

To get music up on these platforms you need to work with a digital distribution service — LANDR Distribution is an excellent option with affordable plans for record labels, for example.

Look for a plan that offers lot’s of flexibility and allows you to release as many albums, singles and EPs as you want.

You’ll want to make sure that releases can be scheduled for a specific day and have clear payout breakdowns and analytics about where in the world fans are listening.

Build relationships with playlist curators

Playlists are a huge way to get your artists in front of audiences who’ve never heard of them before.

So make sure you’re taking advantage of every legitimate opportunity to apply for playlisting spots—this can be done directly through Spotify and with a handful of curators on the web.

But be careful, you never want to pay for a playlisting spot—playlist scams can result in your music getting taken down, and you want to generate interest in your music organically anyways.

How to Get Playlisted on Spotify

Discover the secrets of getting playlisted on Spotify with industry veteran Peggy Hogan. In this LANDR Original course, you'll learn how to create a simple and achievable Spotify success strategy.

Save money on mastering with automatic mastering

If you don’t have a ton of cash to shell out on a professional human master, your second best option is to turn to much more affordable automatic AI mastering services.

LANDR is the pioneer of AI mastering —these masters have been reviewed to critical acclaim many times over. In many cases, a LANDR master will sound just as good if not better than a human master.

A LANDR master will give your releases the best chance of sounding as possible on any speaker they’re played on and they’ll get your tracks up to the proper loudness standards to ensure they sound just as loud as everything else out there.

The best part is that LANDR’s service comes at a fraction of the price of a professional mastering engineer.

Studio quality sound

Our powerful, AI-driven mastering engine listens to your song and delivers pristine, studio-quality music that’s ready for release.

Don’t be afraid to network and find support if you need it

You can’t expect yourself to do it all and have a final result that’s any good.

If you need a good designer, videographer, or professional bio writer don’t hesitate to hire a freelancer who knows what they’re doing.

Top-quality content is the kind of content that sells, so be ready to invest in it.

If you’re looking for somewhere to find professional help that’s focussed specifically on music check out LANDR Network —it’s a better option than the other freelance networks out there because these freelancers understand the music industry and are just as passionate as you.

Connect with a pro

From session musicians to marketing wizards, LANDR Network is the fast simple way to find the help you need to kick your project up a notch.

Ink the deal

If you love music and want to become an important member of the music industry, you’ve got to start somewhere.

Just by launching something exciting and new is proof enough that you’re serious about your career in music.

That’s enough to get the art scene around you excited about what your doing.

Stick to your vision, aesthetic and goals. Success will come with hard work as long as your in it for the right reasons.

Now that you know how to start a record label, good luck out there!

Alex Lavoie is a drummer, music producer, songwriter and marketing professional living in Montreal, Quebec. He works as a staff writer at LANDR by day and writes indie post-punk tunes in his band UTILS while moonlighting as drummer for folk-rock outfit The Painters . Connect with Alex Lavoie on LANDR Network!

Gear guides, tips, tutorials, inspiration and more—delivered weekly.

Keep up with the LANDR Blog.

Latest posts

Vital Synth: How to Use It and Where to Begin

8 Cinematic Chord Progressions for Epic, Dreamy Sound

Song Starters: 10 Sample Packs for Starting Your Songs

Record Label Business Plan Template

Written by Dave Lavinsky

Over the past 20+ years, we have helped over 1,000 entrepreneurs and business owners create business plans to start and grow their record labels. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a record label business plan template step-by-step so you can create your plan today.

Download our Ultimate Record Label Business Plan Template here >

What Is a Record Label Business Plan?

A business plan provides a snapshot of your record label as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Creating a business plan is one of the first and perhaps most important steps in starting a record label.

Why You Need a Business Plan for a Record Label

If you’re looking to start a record label or grow a successful record label, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your record label in order to improve your chances of success. Your business plan is a living document that should be updated annually as your company grows and changes.

Source of Funding for Record Labels

With regards to funding, the main sources of funding for a record label are bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

The second most common form of funding for a record label is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan. Venture capitalists will not fund a record label.

Finish Your Business Plan Today!

What should a record label business plan include.

The record label business plan should include the following 10 sections:   1. Executive Summary 2. Company Analysis 3. Industry Analysis 4. Customer Analysis 5. Competitive Analysis 6. Marketing Plan 7. Operations Plan 8. Management Team 9. Financial Plan 10. Appendix

How to Write a Business Plan for a Successful Record Label

Below is a guide to help you create all 10 sections of your business plan:

1. Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of record label you are operating and the status; for example, are you a startup or do you have a record label that you would like to grow.

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the music ndustry. Discuss the type of record label you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.

2. Company Analysis

In your company analysis, you will detail the type of record label you are operating.

There are three types of record labels. These are major labels, their subsidiaries (major label subsidiaries) and indie or independent labels. Major labels include Universal Music Group, Sony Music Entertainment, and Warner Music Group. These are regarded as the “big three”.

Each of these three major labels has several subsidiary companies under their banner. If you’re considering starting your own record label, then it would fall under the independent label.

In addition to explaining the type of record label you operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include sales goals you’ve reached, new store openings, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

3. Industry Analysis

In your industry analysis, you need to provide an overview of the record label.

While this may seem unnecessary, it serves multiple purposes.

First, researching the music industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your strategy particularly if your research identifies market trends. For example, if there was a trend towards decaffeinated record label consumption, it would be helpful to ensure your plan calls for plenty of decaffeinated options.

The third reason for market research is to prove to readers that you are an expert in the music industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section:

• How big is the music industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the music industry?
• What is the music industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your record label. You can extrapolate such as figure by assessing the size of the market and then applying that figure to the music genre(s) you will be serving.

4. Customer Analysis

The customer analysis section must detail the customers you serve and/or expect to serve.

Record labels serve two types of customers: music artists and their fans.

In this section of your plan, start by detailing the music artists you represent or hope to represent.

With regards to the music artists’ fans, you should then detail the customer segments they include. Sample segments are college students, sports enthusiasts, soccer moms, techies, teens, baby boomers, etc.

If the artists you represent are in the same music genre, the fans of each should share similar demographic profiles.

Finish Your Record Label Business Plan in 1 Day!

Don’t you wish there was a faster, easier way to finish your business plan?

With Growthink’s Ultimate Record Label Business Plan Template you can finish your plan in just 8 hours or less!

5. Competitive Analysis

Your competitive analysis should identify the direct competitors your business faces.

Direct competitors are other labels serving artists similar to the ones you want to serve. In your business plan, provide an overview of these competitors and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective (the music artists). And don’t be afraid to ask your competitors’ artists what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide superior record label services?
• Will you provide services that your competitors don’t offer?
• Will you provide better customer service?
• Will you offer better contract splits?

Think about ways you will outperform your competition and document them in this section of your plan.

6. Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a record label, your marketing plan should include the following:

Product : in the product section you should reiterate the type of music artists you serve/hope to serve and the services you offer.

Price : Document the general contract pricing (revenue and profit splits) you will offer clients.

Place : Place refers to the location of your record label. Document your location and mention how the location will impact your success. For example, is your record label located in an urban area with access to lots of musicians?

Promotions : the final part of your record label marketing plan is the promotions section, which details how you will get new clients and customers.

As a record label you need to market your company in order to get more clients, and you have to market your clients so they succeed and you both make money. Fortunately, when you do a great job marketing your clients, other artists hear of you and thus little additional marketing to them is needed.

As such, below are the most common and effective ways to market your record label’s clients:

• Collecting Email and Text Addresses : Developing an email and/or text list of music listeners who enjoy the bands your label represents may take time, but eventually offer a built-in base of potential buyers for each new album release or set a new tour date. It is important to make it easy to sign-up to the label’s email list at multiple points of contact – at concerts, via social media, and on the websites of the label and music artist.
• Building Release Schedules : It’s important to release songs in wanes. This helps to retain the audience’s interests. Whenever a new song is released, it will draw the most attention before tapering off. As interest begins to wane, release a new track. This keeps the momentum going and keeps people going.
• Concerts and Tours : The most immediate, direct way to get consumers to appreciate the music of your artists is for them to hear the artists live. This may become a bit of a “chicken and the egg” problem for you: concertgoers have to know of the artists, and have heard their music before, to want to attend their concerts, but concerts are a key way to market the artists. This is why newer artists are often sent out as opening acts for more established artists. As long as your label is skilled at successfully pairing your artists on concert tickets, you can benefit both groups of artists through this strategy.
• Public Relations : The release of a new album is newsworthy and, even if it does not seem newsworthy, it is the job of your company’s public relations director or firm to make it so. By encouraging new articles about the release and feature articles about the artists, PR people can create what amounts to free advertising in magazines and newspapers. Press releases must be tailored to the media outlet as much as possible, spoon-feeding them the “story” that should interest their readers.
• Offering Free Downloads : Releasing free tracks is an excellent way to attract interest because people are always in search of new songs. Consider placing these behind a download gate to ensure you get their email address and other contact information in return. If you prefer not to offer free songs, consider cover songs or demos.
• Creating Music Videos : Most fans search for songs on YouTube. Their video-sharing platform is an integral aspect of a record label’s marketing strategy. You may opt for an abstract video to a performance-based shoot. Lyric videos are also an excellent option.
• Hosting Contests : The relationship your label builds with the fans is a powerful step in building a brand. Each you include them in the project, you’re strengthening the relationship. Encourage fan involvement by inviting them to share ideas for t-shirt designs, videos, etc. Incentivize these tasks and offer prizes.
• Social Media Marketing : Conducting social media marketing will connect artists with existing and new fans. It not only builds brand loyalty and awareness, but can generate significant sales of concert tickets and merchandise.

7. Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your record label. These tasks include marketing, publicity, sales and distributions, promotions, production, and creative services among others.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to serve your 10,000th customer, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth employee or launch a new location.

8. Management Team

To demonstrate your record label’s ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally you and/or your team members have direct experience in the music production business. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in the music industry, industry contacts, and/or successfully running retail and small businesses.

9. Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

When an artist signs up with your record label, your company will receive a percentage of the royalties. In return, the artist will receive a myriad of services, professional connections, and specialized campaigns.

In developing your income statement to forecast these revenues and expenses, you need to devise assumptions. For example, will you serve 1 client per year or 20? And will per-client sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets : While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $100,000 on building out your record label, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. For example, let’s say a company approached you with a $100,000 performance contract, that would cost you $50,000 to fulfill. Well, in most cases, you would have to pay that $50,000 now for supplies, equipment rentals, employee salaries, etc. But let’s say the company didn’t pay you for 180 days. During that 180 day period, you could run out of money.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a record label:

• Recording: Depending upon where the record will be produced, you can expect the recording costs to range from $0 to $15,000. If you’re an audio engineer or have partnered with a music producer, then they might have their own at-home studio.
• Manufacturing: Most labels release digital music, but if you’re opting for vinyl or CDs, the cost can range from $1.2 to $6 per unit.
• Networking and Entertaining: This includes items such as travel, tickets, drinks, recruitment, attending shows, etc.
• Graphic Design: Developing the label’s logo, product design, cover design, etc.
• Legal Services: This can range in price greatly.. There are artist contract templates online but it’s always best to seek professional guidance with the first contract.
• Promotion: This can cost thousands of dollars because you’re going to be working with booking agents, music promoters, publicists, etc. to increase the artist’s awareness. It also helps spur ticket sales and record sales.
• Office lease and office supplies expenses
• Administrative salary expenses

10. Appendix

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include any signed contracts you have.

Putting together a business plan for your record label is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the music business, your competition and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful record label.  

Record Label Business Plan Template PDF

You can download our free record label business plan PDF to help you get started on your own business plan.

Don’t you wish there was a faster, easier way to finish your Record Label business plan?

Other Helpful Business Plan Articles & Templates

• Testimonials
• Free Resources
• Members Login Here

8 Essentials for a Record Label Business Plan

In this article we look at the eight elements that make up a record label business plan, and work through the template providing examples you can edit for your own record label .

Writing a business plan

Running a successful record label is like running any other successful business, first and foremost you need a plan.

Every business I have started has begun with a plan. It doesn't need to be fifty pages worth of the minutiae account details but it is important to write down what your goals are for the first 12 months.

It's not just the final result that is important, the  process of creating a business plan is equally important as it forces you to make realistic decisions on how you are going to move forward and make the label a success . 

“If you fail to plan, you are planning to fail“

- Benjamin Franklin -

We can keep things simple and the whole document can be no longer than 6 brief pages. The main goal of the plan is to help clearly define what your brand will look like, which areas of music you want to focus on, and create a short summary that you can use to explain the label to new industry contacts.

In some countries you need a business plan if you are opening a business bank account. Some distributors also require a business plan before considering working with you, and you will definitely need one if you are an electronic record label and want a Beatport label account.

The good thing is that we have created The Label Machine business plan template that you can follow, which includes plenty of examples you can edit and customize yourself which will result in a comprehensive business plan for your label!

I would suggest before starting a label that you have at least three releases planned, with the first one ready to go.  By ready to go, I mean you have a finished single or EP of music that is fully mixed down, mastered and ready to go out to the public without any more changes. The business plan will focus on these first three releases.

As you progress at The Label Machine, your business plan will change too, and it should. It is meant as a reference document that you can use to show others that you have a plan and well thought out goals.

Essential Record Label Business Plan Template

Download the full record label template to follow along with this article, including examples to edit for your own record label.

Download the template and open in your document editor and then we’ll go through each of the sections.

Below is a brief description of each section. Follow along and edit each section as we go along.

This is the title section and front page of your business plan. This simply states your 

• Record label name
• Business address
• Email address
• Phone number

This is the section that will summarise the main objectives of your label. This section will actually be written last. After you have completed the rest of the document, you need to come back and s ummarise it into a short paragraph here.

Zonderling Records is an electronic record label based out of Seattle, that aims to represent a genre of music heavy influenced by early rave, garage, jungle, and grime. We will produce limited edition runs of vinyl via vinylised.com, use interesting marketing ideas such as cassette mixtapes alongside traditional press and marketing channels.

2. Business overview

Introduction:  In this section you want to introduce the key people who are involved in the label and what experience, qualifications and training they might have, along with where you will be based and the future goals of the record label.

Joe and Rich have been involved with dance music for a long time and have over 4 years experience in music production and running small music related businesses. After releasing on various record labels in the past, the next logical step, to take their careers in the music business to the next level is to start a record label. The label will be Seattle based to begin with, but has the potential to be based out in LA within a few years of trading. Music will be the only product sold to begin with, but eventually the record label will be transformed into a brand big enough to sell clothing and other non-music related products .

Current position:  This is a summary of where you are right now with your music plans .

So far, Zondiling Records has the first release signed which is a Remix EP of Joe and Rich’s previous releases. ‘Juke da Luke’ and 'Pressure Fresh' have been singled out as potential first outside signings amongst other potentials such as ‘Idle Kids’ and ‘Origins of 90’

Growth plan:  This is a summary explaining how you aim to grow your record label with your financial goals

After releasing our first three EP’s we will expand into more releases from other artists, pulling remix favours to associate as many established acts to validate the label as possible. Using Joe and Rich’s releases will help to attract an established audience to the label initially. After a year, we aim to be signing artists exclusively under 360 deals and pulling in profit from the labels merchandise as well.

3. Strengths, Opportunities and Core Values

Strengths and Opportunities: This is where you will list your strengths and opportunities as a record label. It gives you an opportunity to create a USP and critical success factors . If you have something unique that will ensure success, such as a link to a key industry contact, or opportunity, this is where you should list it.

Strengths: -Understanding of the current music landscape via our current DJing bookings -Links to multiple artists with established fan bases -Advise and industry support via The Label Machine

Opportunities: -Access to industry database, press and music industry contacts -Access to other artists in local area

Core values:  What is important to you as a label? Are you going to be pushing underground music , or are you pushing experimental music? Is this to release your own album to support a tour, or are you interested in working with more mainstream music and artists?

-To build a brand that people can trust and turn to for good quality music -To have the confidence to push new music as opposed to just following recent trends -To build on personal relationships within the music industry in order to create a successful brand that people trust and want to be associated with

4. Business strategy

Outline your business strategy for the first five years. These are your tangible goals . How many releases do you aim to have? Do you want to sign new artists? When do you aim to break even on the revenue? 

As a bare minimum your goals should aim to release at least 3 singles or EP’s in your first year if you are a DJ or band, and 6-8 records of you aim to sign artists to your label. I would also aim to be breaking even from 12 months of your first release so the label is supporting itself financially .

The 3-5 year goals are what you will be doing should you achieve your first 1-2 years goals. These goals that are more flexible, and are likely to change but ensure you do write goals of where you intend to go.

1-2 Years -To have a steady flow of quality releases, building the labels reputation. -To have discovered and signed at least 2 exclusive acts to the label. -To have broken even on all costings

3-5 Years -To have a full roster of exclusive artists releasing under Zonderling Records. -To have had at least 3 overall Beatport number ones within their relative categories. -To be hosting smaller stages at festivals worldwide. -To have office space in either London, Bristol or LA with 3 or more staff members.

5. Distribution and Label Products

List your distributor and any other label products you aim to offer at the label such as merchandise or running events. 

Distribution channels:  Who will you distribute your music through?

Music distribution to all major stores of iTunes, Spotify, Apple Music, Deezer, Amazon, and Google Play via the DistroKid distribution platform.

Find the best distributor now

Use this handy tool to find your ideal distribution partner

Events (optional) If you are doing events, who will run the events and how will they be promoted ?

Label events will be arranged with our contact ‘Zeal Promotions’ throughout North America, with our focus being on our home state Washington. Events will be promoted through local and national media coverage via ‘3rd Eye PR’

Merchandising (optional) If you are doing merchandising, who will be responsible? Where will you sell and manufacture your merchandise? What prices will you use?

Abbie Street will organise and implement the merchandise for the label. It will be hosted on Shopify website, and manufacturing will be carried out by a print-to-order manufacturer based in Seattle.

6. Label Management and Operations

This is where you list who will be managing the label and any other team members you will have. You can also list here any key partners you will use, such as The Label Machine, merchandise companies, or management companies.

Label Management Team

Joe Stone – Label Manager

• Responsible for A&R, signing and managing new artists
• Managing the music distribution and royalties
• Administrating and registering the catalogue

Rich Fever – Marketing Manager

• Responsible for online marketing and PR activities for releases
• Overseeing the artwork and marketing asset creations

Abbie Street – Merchandise Manager

• Organise and implementing the merchandise for the label.
• Maintaining the Shopify website
• Fulfilling the manufacturing and shipping

7. Marketing

What are your marketing goals, objectives, targets and promotional activities for the label? You will want to answer these questions in the sections below.

Goals and objectives Describe your goals and objectives around the marketing; list the campaigns and plans that you have in place and your strategies for the future.

-Research blogs and press publications that support your genre of music to create label brand recognition -Develop innovative marketing plans that utilise chatbots and other cutting edge technologies to build an audience -Increase sales through social media campaigns and PR strategies -Increase awareness of artists and label with 3rd party revenue streams such film, TV and game sync deals

Target Market Here is where you can clearly define your target market . Important to put the genre of music you will be releasing, locations and age group as a minimum.

We aim to sell to all audiences, but with a more biased approach by making sure we appeal to the up and coming bass music markets such as the U.S.A. and a core demographic of end users between the age of 14 and 30

Advertising and promotion activities Describe what advertising platforms you will use to promote the label and the releases. You might want to list any  creative ideas to get the brand out there, any PR companies you might use for your first release, and which social media platforms you will promote on. Click here to learn how to build your own music PR machine in a day.

-Using physical assets such as vinyl and cassette mixtapes we will create a rich online experience based on real life products, which we believe is missing from a lot of digital labels today. -We will use a DJ promotion service ‘The 6th Degree’ to garner maximum DJ support from the industry. -We will run Instagram promoted stories and sponsored Facebook posts to create awareness of new releases to fans of similar genres.

8. Financial budget and forecasts

This is the section where you can provide financial budget and forecasts, such as:

• Startup Label Expenses
• Release Expenses
• Optional Expenses
• Cashflow Forecast
• Optional Revenue Streams
• Profit and Loss Projection

There is a  budget template and course on how to create your budget that will go into more detail. Once you have completed this and have your budget you can copy and paste the summary page into this section of the business plan.

Writing a business plan isn't easy, but with the downloadable template (which includes extra examples not here in the blog) you should be armed with enough information to put a great record label business plan together. 

And don't put off starting! Start today, and spend just 15 mins working on your plan, you'll be surprised how much you will get done and you'll be in a much better place to start your record label. 

Prefer to watch a video? Check out Nick's business plan walkthrough below.