Do You Need A Business Plan?

Hey guys, how are you today? Thanks for tuning in. Um, today we're going to talk about business plans and the importance of having one. Um, it's a necessary plan for your career. It's like a roadmap really for your career or your company. That you're building. It's necessary for anybody that's making money with their music, anybody selling music, performing, selling merchandise. You want to put together the— it's sort of like if, if I'm gonna travel someplace, I'm gonna use my GPS, especially if it's someplace I don't know how to get to. If I'm going from point A to point B, I'm I'm gonna plug in my GPS, and that's really what a business plan is for your career or for your business. Um, and it's certainly necessary not only for yourself to show you where you're going and how you're going to get there and how to avoid the obstacles, but it's also important for raising money. And if you're going to take the music business seriously and you're going to build a career in music You're absolutely going to have to have some sort of money to do this. This is not a free industry. In fact, it's quite the opposite. It's a very expensive industry to get into. You've got to market, you've got to promote, you've got to be able to move around. You want to print t-shirts, you want to give out music, you want to record, you want producers, you want to mix and master. There are a whole lot of things you could be doing more cheaply than the music business. Um, even if your goal is to get a record deal, you've got to build some sort of a buzz in your area to attract the label folks to you, right? So, um, for me, the reason I put a business plan together is so that I can really think about where I'm going, what I'm going to do, how I'm going to do it, how I'm gonna pay for it, and what my goal is. It just, it gives me a laser focus to accomplish what I need to accomplish. A business plan is not something that you write and you stick in your drawer. It's something that you refer back to repeatedly throughout the year to make sure that you're on course and to make sure that you're sticking to your plan. My business plans are always works in progress. There's always stuff changing. There's always new stuff popping up that I want to accomplish. Um, there's also new clients all the time that are hiring me to help them put out music. Um, so what do you put in your business plan? Um, you certainly want a table of contents so that when you're showing it to somebody, you can allow them to look at the parts that they want to get to, especially somebody that's an investor. An investor is going to want to know what are you planning to do, how much do you need to get there, when are they going to get their money back, and do you have the right team in place to really make it happen. That's what an investor is going to look at. So you're going to want to have a table of contents in the front of your, um, in the front of your business plan so that somebody can skip around to the parts that matter most to them. You're also going to want to have an executive summary And this is usually the part that you do last, that you put together last. It really is basically a summary of the plan so that when somebody looks at it, they can look at your executive summary and know exactly what you're going for and whether or not they should continue reading, right? Um, after that, you're going to have a general company description. This is going to explain, um, what your business is. It's your mission statement, like why you're doing this, if there's a reason that you're doing it. I assume that there is. We all have reasons that we do what we do. It's going to list your company's goals and objectives. It's going to describe your industry, which in our case is the music industry, and it's going to explain the type of company that you own. Is it an LLC? Is it a corporation? Um, in order to get information on the music industry to put into this general company description, um, you can Google for information, or you can go to the RIAA— that's riaa.org— and get information on the music industry. Um, Nielsen also has information on the music industry, has a lot of stats on, um, the percentage of people that stream, the percentage of people that still buy CDs, and the percentage of people that download. Okay, um, you're going to want to have a section for your products and services. This is where you list everything that you're going to be marketing and promoting. So your music, your shows, your merchandise, whatever you're going to be, um, selling, you're going to want to have an in-depth explanation of what those products and services are. The next section is going to be your marketing plan and your strategies. That's going to explain how you're going to sell whatever it is that you're selling. How are you going to get yourself out there? Who are your customers? Um, list your competition in here. You know, who are the other artists, producers, or companies that are similar to you that are— that you consider your competition? If you say you have no competition, um, you really don't understand what you're doing for a living. Everybody has competition. You want to also outline your unique strategy of— for marketing and sales. And then you also want to explain how you're going to get your product to the final customer. How are you going to distribute it? How are you going to sell it? The next section is going to be your operational plan, and that's going to explain the daily operation who you're gonna hire, where you're gonna store inventory if you have inventory, um, what supplies you need, what are your accounts payable and receivable plans, how are you going to get paid, how are you gonna track your money so that you know what's coming in and who's supposed to pay you. You're gonna have a section for management and organization, and it's gonna explain your day-to-day operations, who are your key advisors, who are your team members, who you're going to hire. If you're seeking investors, what type of investors are you looking for? Is there somebody on your team that has a history of success in the music business? You know, do you have somebody like me on your team? If you do, you're going to want to put the bio in there and explain who that person is. Obviously, the more experienced your team members are, the easier it's going to be to find investors. You're going to want to have a section in there for your startup expenses. You're going to want to list what your initial fundings are, your funding needs are, where's that money going to come from. Are you putting in— what are you putting in to the company in order to, um, get it moving forward? Did you put in the seed money? Have you already started your company and, and now you found it viable and you're just looking for somebody to help get you the rest of the way financially? And then the last thing you're going to want to put in is the financial plan. And if you're seeking an investor, this is really the most important part. This is going to have your profit and loss projections. It's going to have your projected cash flow— how much is it going to cost you to run this company? It's going to have a balance sheet, and it's going to have a break-even analysis. And a break-even analysis is, um, is a financial estimation of how much product you need to sell, or how long are you going to be in business before you recoup all of the money that you've spent, and that's your break-even point, right? Um, all of your projections should be for the next 5 years. They should be 5 years out. That's what most investors are looking for. And again, you should be doing a business plan even if you aren't seeking investors. I have a business plan that that I update every September that structures my company and shows me exactly where I'm going and what I plan to be doing this year, next year, and for the next 5 years. I don't plan 10 years out. Some people do. Um, the music industry for what I do changes so quickly, um, and my attention span changes so quickly that I tend to plan just 5 years out. But you'll find a lot of people in the music business planning 10 years out. For their career, for their company. A business plan needs to be really concise, and it's something that— that the best part of it is that it forces you to think about your company, especially the competition part, because a lot of us, when we start to write this, we think, oh, we don't have any competition. But then we realize that, you know, for music, our competition isn't just music. We're competing for people's attention, and there's a lot of things that take their attention. There is film and TV. People spend time watching TV instead of listening to music. If you're counting on live performances for, um, as a way for you to make money, you know, you're competing with other events. You're competing with, um, people that would rather go to a restaurant with their friends you know, instead of seeing a live show. So you do have competition, you just really have to think about it. And once you think about what you're competing with, it really gives you a laser focus on how to market and promote yourself. For artists like rappers and singers, your competition is also other rappers and singers, and it's important for you to really think about how you are different from what's already out there. You know, we've already got Beyoncé, we've already got Jay-Z, we've already got 2 Chainz, we've already got Future. So how are you going to stand out from these people that are already out there and they've been doing it for, you know, decades longer than you? And the great thing about putting together this plan is that it gives you that laser focus so that when you step into the studio and you start to record you take into consideration the type of music that you make and who your competition is, and most importantly, who your market is. Because if you're going to make money with your music, you're not just making music that you want to hear and share to the world, you're making music that people want to listen to and that people want to buy and that people want to see live. You're really a product, and you have to think about who's gonna pay me to do what I do, you know, in— unless you want to get a job and just do this on the side for the rest of your life, which is absolutely fine, you know. If you're going to do this as a business though, you have to treat it like a business, and you've got to deliver music that your fans are willing to spend money on, they're willing to part with money for. It's hard to get people to spend money in, in today's world. So that is business plans. Thank you for tuning in. If you check out below, there is a link to a blog that I wrote about business plans. Um, it breaks down all the different sections. It probably covers things that I forgot to mention here. Um, but take a look at it and also make sure you subscribe to this so that you know that every Monday, Wednesday, and Friday at 11 o'clock my videos are posting. They're free and they're here to help you. Okay, y'all, take care. Thanks.