Record Label Business Plan Template [Updated 2024]

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Record Label Business Plan Template

If you want to start a Record Label business or expand your current Record Label, you need a business plan.

The following Record Label business plan template gives you the key elements to include in a winning Record Label business plan.

You can download our Business Plan Template (including a full, customizable financial model) to your computer here.

I. Executive Summary

Business Overview

[Company Name], located at [insert location here] is a new, independent record label focusing on alternative rock music.

We seek to find and sign up-and-coming alternative rock bands based in the New York region. By finding underground talent and improving their marketing and appeal to a broader music audience, we will be able to build a stable of artists with significant customer bases. This will translate into significant music album sales, concert tickets, and related products (e.g., merchandise).

Products Served

[Company Name] will provides both a product and a service to two distinct audiences.

To alternative music artists which provide talent agent and artist representation functions. That is, we find and recruit talent. And then we manage our bands and provide the creative and marketing resources they need to develop music and sell music and merchandise.

We will also sell music, concert tickets and merchandise.

Customer Focus

[Company Name] will primarily serve alternative rock fans in the greater NY region. Simmons Research has found that these fans display the following demographic characteristics:

  • Gender skew is fairly balanced…56% males, 44% females.
  • Listeners tend to be well-educated, 41% more likely than the average adult to have attended or graduated from college.
  • Listeners tend to be 40-50% more likely than the average adult to be a heavy radio listener.
  • The majority of the audience remains firmly lodged in the 18-44 age range.

In addition to end-customers, we serve the needs of alternative rock bands. We will focus on currently unsigned bands. Typically, the members of these bands are in their 20s and have getting signed, generating revenues and becoming famous as their primary goals.

Management Team

[Company Name] is led by [Founder’s Name] who has been in the music business for 3 years. While [Founder] has never run an independent record label himself, he has been active in the industry for many years as a listener and as an intern at Alternative Rock Station WCDS in New York City.

Success Factors

[Company Name] is uniquely qualified to succeed due to the following reasons:

  • There is currently no independent record label in the NY metro area focused exclusively on up-and-coming alternative rock bands.
  • There has been a significant growth in alternative rock listeners in the area. Music stations catering to this market have been thriving.
  • The management team has a track record of success in the independent record label business.
  • Our business model will be profitable if we can grow in the metro-NY area. If any of our artists thrive nationally, then we will be even more successful.

Financial Highlights

[Company Name] is currently seeking $100,000 to launch. Specifically, these funds will be used as follows:

  • Build-out and Startup costs: $25,350
  • Salaries: $45,000
  • Marketing: $20,000
  • Lease expenditures: $12,000

Topline projections over the next five years are as follows:

Year 1Year 2Year 3Year 4Year 5
Revenue$323,400 $1,237,667 $2,986,908 $5,620,496 $9,506,911
Total Expenses$311,870 $1,192,261 $2,185,677 $3,658,341 $5,533,472
EBITDA$11,530 $45,406 $801,231 $1,962,155 $3,973,439
Depreciation$3,800 $3,800 $3,800 $3,800 $3,800
EBIT$7,730 $41,606 $797,431 $1,958,355 $3,969,639
Interest$6,653 $5,821 $4,990 $4,158 $3,326
PreTax Income$1,077 $35,785 $792,441 $1,954,197 $3,966,312
Income Tax Expense$377$11,625 $277,355 $683,969 $1,388,209
Net Income$700$24,159 $515,087 $1,270,228 $2,578,103


II. Company Overview

You can download our Business Plan Template (including a full, customizable financial model) to your computer here.

Who is [Company Name]?

[Company Name], located at [insert location here] is a new, independent record label focusing on alternative rock music.

We seek to find and sign up-and-coming alternative rock bands based in the New York region. By finding underground talent and improving their marketing and appeal to a broader music audience, we will be able to build a stable of artists with significant customer bases. This will translate into significant sales of music (CDs, MP3s), concert tickets, and related products (e.g., merchandise.

[Company Name]’s History

[Founder’s Name] conceived [Company Name] on [Date] after years of attending alternative rock concerts in the New York metro region and seeing the massive increase in attendance to most events.

[Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].

The business is currently being run out of [Founder’s Name] home office, but once the lease on [Company Name]’s retail location is finalized, all operations will be run from there.

Since incorporation, the company has achieved the following milestones:

  • Found office space and signed Letter of Intent to lease it
  • Developed the company’s name, logo and website
  • Created the mission statement
  • Determined equipment requirements
  • Began discussions to sign key alternative rock bands

[Company Name]’s Products & Services

[Company Name] will develop the following products for sale to consumers:

  1. Music (CDs, MP3s)
  2. Merchandise (shirts, hoodies, posters, etc.)
  3. Concert tickets

To the music artists it signs, [Company Name] will primarily offer the following services.

  1. Marketing support (to build each band’s customer base)
  2. Distribution (to sell music, merchandise and concert tickets)
  3. Tour support (arranging and managing tours)
  4. Promotions (working with radio stations and other entities to promote each band).


III. Industry Analysis

The following industry trends and statistics bode well for [Company Name].

The music industry is clearly vast. According to IFPI, which represents the recording industry worldwide, global music sales were $33.5 billion, with the U.S. accounting for $12.3 billion of that amount.

Within this industry, consider the following key statistics:

  • 30% of the global music market belongs to independent labels
  • Independent labels sell 900 million units annually
  • Artist signed by a major record label earn approximately $1 per copy sold
  • Artist signed by an independent record label earn approximately $5 per copy sold

Because independent record label artists earn 5 times the revenue per unit sold, [Company Name] is at an advantage in signing many up-and-coming alternative music bands versus major labels.

Other key information from IFPI includes the following:

  • The digital music business internationally saw a sixth year of expansion , growing by an estimated 25 per cent. Digital platforms now account for around 20 per cent of recorded music sales. Recorded music is at the forefront of the online and mobile revolution, generating more revenue in percentage terms through digital platforms than the newspaper (4%), magazine (1%) and film industries (4%) combined.
  • Single track downloads are up 24 per cent continue to drive the online market, but digital albums are also growing healthily (up 36%).
  • A-la-carte music downloads continue to grow, with Amazon MP3 joining the European market, broadening consumer choice. An increasing number of stores are licensed to sell DRM-free music tracks. iTunes, the leading download store, has millions of DRM-free tracks available at flexible pricing points.
  • Music companies are also increasingly licensing music to third parties. One notable success is the games sector, where music games were responsible for 15 per cent of overall game sales in the US. Guitar Hero and its sequels have sold more than 23 million copies in three years, generating more than US$1 billion in North America alone (PWC).


IV. Customer Analysis

You can download our Business Plan Template (including a full, customizable financial model) to your computer here.

Demographic Profile of Target Market

[Company Name] will primarily serve the alternative rock bands and fans in the New York metro area. Over time, we expect that our bands will gain regional and national attention.

Simmons Research has found that alternative rock fans display the following demographic characteristics:

  • Gender skew is fairly balanced…56% males, 44% females.
  • Listeners tend to be well-educated, 41% more likely than the average adult to have attended or graduated from college.
  • Listeners tend to be 40-50% more likely than the average adult to be a heavy radio listener.
  • The majority of the audience remains firmly lodged in the 18-44 age range.
New York County, New York
TotalMaleFemale
Total population1,644,518778,476866,042
AGE
Under 5 years5.20%5.60%4.80%
15 to 19 years4.30%4.20%4.40%
20 to 24 years7.20%7.00%7.30%
25 to 29 years12.10%11.90%12.40%
30 to 34 years10.60%10.90%10.30%
35 to 39 years8.00%8.30%7.60%
40 to 44 years6.70%7.00%6.30%

Customer Segmentation

With regards to alternative rock bands, we will focus on currently unsigned bands, independent artists and internet stars . Typically, the members of these bands are in their 20s and have getting signed, generating revenues and becoming famous as their primary goals.

record1


V. Competitive Analysis

Direct & Indirect Competitors

The following independent alternative rock record labels most directly compete with [Company Name]:

Fueled By Ramen

Fueled By Ramen is a record label based in New York City with an office in Tampa, Florida.

Fueled By Ramen released a self-titled EP from Jimmy Eat World, a five-song collection that proved a breakthrough for both the label and the Arizona-based band. With increased distribution demands and a rise in radio play, Fueled By Ramen set up its first real office space that same year.

Fall Out Boy’s Pete Wentz introduced Fueled By Ramen to fellow Chicago rock outfit The Academy Is… who released their acclaimed debut album Almost Here, the following year.

The label opened an office in midtown Manhattan and that same year Paramore’s album Riot! debuted in the Billboard Top 20, was certified gold and has recently gained platinum status. Panic at the Disco’s second album enjoyed similar success, debuting at number #2 on Billboard’s Top 200 chart, selling over 139,000 copies its first week and making it the fastest-selling album in the label’s history.

The following artists are currently signed to Fueled By Ramen:

  • The Academy Is…
  • The Cab
  • Cobra Starship
  • Cute Is What We Aim For
  • Fall Out Boy
  • Forgive Durden
  • The Friday Night Boys
  • Gym Class Heroes
  • The Hush Sound
  • Panic at the Disco
  • Paramore
  • Powerspace
  • A Rocket to the Moon
  • This Providence
  • VersaEmerge

Caroline Records

Caroline Records started out as a subsidiary of Richard Branson’s Virgin Records label during the early to mid 1970s. The label originally specialized in putting out budget price LPs by mainly progressive rock and jazz artists generally not considered to have a great deal of ‘mainstream’ or commercial appeal, but were often however creatively of great interest.

The first release on the label, and the artist who gave it its name, was Carol Grimes’ ‘Warm Blood’ LP, released in 1974. The original label was a photographic style variation on that of the Virgin label’s “Twins” logo designed by Roger Dean.

Both the U.S. and U.K. branches of Caroline Records are subsidiaries of Caroline Music, which includes Caroline Distribution and is in turn owned by EMI. Caroline has or had a number of subsidiary labels including Astralwerks, Gyroscope, Caroline Blue Plate, Rocks the World, Scamp, and Passenger.

Competitive Advantage

[Company Name] enjoys several advantages over its competitors. These advantage include:

  • Location: [Company Name]’s location is within New York City giving it better proximity to NY alternative rock bands and the throngs of customers who enjoy this genre of music.
  • Management: Our management team has years of business and marketing experience that allows us to market and serve both music artist and consumers in a much more sophisticated manner than our competitors.
  • Relationships: Having been a part of the local alternative rock community for the past 5 years, [Founder’s Name] knows all of the local leaders, media and other influences. As such, it will be relatively easy for us to build branding and awareness of our independent record label.


VI. Marketing Plan

You can download our Business Plan Template (including a full, customizable financial model) to your computer here.

The Marketing Plan describes the type of brand [Company Name] seeks to create and the Company’s planned promotions and pricing strategies.

The [Company Name] Brand

The [Company Name] brand will focus on the Company’s unique value proposition:

  • Offering high-quality service to independent alternative rock bands.
  • Offering high-quality bands and music to alternative rock fans.
  • Providing excellent customer service and allowing fans to get exciting experiences with their favorite independent alternative rock bands.

Promotions Strategy

[Company Name] expects to reach consumers through the following tactics:

Direct E-Mail

[Company Name] will collect physical email address at alternative rock concerts and via the websites of the bands it signs. It will market music (CDs, MP3s), concert tickets and merchandise to these consumers via email.

Public Relations

We will contact all local and area newspapers and television stations to tell them about each of our artists.

Advertising

[Company Name] will advertise in local newspapers and sponsor community events in order to gain awareness of our bands.

Sampling

[Company Name] will provide free tracks to customers to enable them to hear samples of our bands.

Ongoing Customer Communications

[Company Name] will maintain a website and publish a monthly email newsletter to tell customers about new events, products and more.

Pricing Strategy

[Company Name]’s pricing will be moderate so customers feel they receive great value when purchasing items from the bands we represent.


VII. Operations Plan

Functional Roles

In order to execute on [Company Name]’s business model, the Company needs to perform many functions including the following:

Administrative Functions

  • General & Administrative functions including legal, marketing, bookkeeping, etc.
  • Hiring and training staff

Artist Representation Functions

  • Finding/recruiting bands
  • Negotiating contracts
  • Promoting band events and products
  • Managing concerts and tours
  • Music development (recording studio management, etc.)

Retail Functions

  • Product development (e.g., manufacturing merchandise)
  • Product sales (direct via internet, and recruiting distributors)
  • Customer support functions

Milestones

[Company Name] expects to achieve the following milestones in the following [] months:

DateMilestone
[Date 1]Sign first band
[Date 2]Reach $X in sales
[Date 3]Sign [] band
[Date 4]Reach $Y in sales
[Date 5]Sign [] band


VIII. Management Team

You can download our Business Plan Template (including a full, customizable financial model) to your computer here.

Management Team Members

[Company Name] is led by [Founder’s Name] who has been in the music business for 3 years. While [Founder] has never run an independent record label himself, he has been active in the industry for many years as a listener and as an intern at Alternative Rock Station WCDS in New York City

[Founder] graduated from the University of ABC where he majored in Communications.

Hiring Plan

[Founder] will supported by a team of experienced music professionals. As the Company grows, we will need to hire the following personnel:

  • Director of Operations
  • Director of Marketing
  • General Manager
  • Assistant Manager


IX. Financial Plan

Revenue and Cost Drivers

[Company Name]’s revenues will come from the sale of:

  1. Music (CDs/MP3s)
  2. Merchandise
  3. Concert tickets

The major costs for the company will be music and merchandise production costs, distribution costs and staff salaries of the staff.

Capital Requirements and Use of Funds

[Company Name] is seeking a total funding of $370,000 to launch its store. The capital will be used for funding capital expenditures, manpower costs, marketing expenses and working capital.

[Company Name] is currently seeking $100,000 to launch. Specifically, these funds will be used as follows:

  • Build-out and Startup costs: $25,350
  • Salaries: $45,000
  • Marketing: $20,000
  • Lease expenditures: $12,000

Key Assumptions & Forecasts

Below please find the key assumptions that went into the financial forecast and a summary of the financial projections over the next five years.

Number of artists represented
Year 16
Year 218
Year 334
Year 450
Year 566
Number of sales per dayPer artist
Year 15
Year 26
Year 37
Year 48
Year 59
Total number of orders
Year 12,700
Year 29,316
Year 320,234
Year 434,220
Year 551,946
Average order price$12.00
Annual increase in order price5%

5 Year Annual Income Statement

Year 1Year 2Year 3Year 4Year 5
Revenues
Product/Service A$151,200 $333,396 $367,569 $405,245 $446,783
Product/Service B$100,800 $222,264 $245,046 $270,163 $297,855
Total Revenues$252,000 $555,660 $612,615 $675,408 $744,638
Expenses & Costs
Cost of goods sold$57,960 $122,245 $122,523 $128,328 $134,035
Lease$60,000 $61,500 $63,038 $64,613 $66,229
Marketing$20,000 $25,000 $25,000 $25,000 $25,000
Salaries$133,890 $204,030 $224,943 $236,190 $248,000
Other Expenses$3,500 $4,000 $4,500 $5,000 $5,500
Total Expenses & Costs$271,850 $412,775 $435,504 $454,131 $473,263
EBITDA($19,850)$142,885 $177,112 $221,277 $271,374
Depreciation$36,960 $36,960 $36,960 $36,960 $36,960
EBIT($56,810)$105,925 $140,152 $184,317 $234,414
Interest$23,621 $20,668 $17,716 $14,763 $11,810
PRETAX INCOME($80,431)$85,257 $122,436 $169,554 $222,604
Net Operating Loss($80,431)($80,431)$0$0$0
Income Tax Expense$0$1,689 $42,853 $59,344 $77,911
NET INCOME($80,431)$83,568 $79,583 $110,210 $144,693
Net Profit Margin (%)-15.00%13.00%16.30%19.40%

5 Year Annual Balance Sheet

Year 1Year 2Year 3Year 4Year 5
ASSETS
Cash$16,710 $90,188 $158,957 $258,570 $392,389
Accounts receivable$0$0$0$0$0
Inventory$21,000 $23,153 $25,526 $28,142 $31,027
Total Current Assets$37,710 $113,340 $184,482 $286,712 $423,416
Fixed assets$246,450 $246,450 $246,450 $246,450 $246,450
Depreciation$36,960 $73,920 $110,880 $147,840 $184,800
Net fixed assets$209,490 $172,530 $135,570 $98,610 $61,650
TOTAL ASSETS$247,200 $285,870 $320,052 $385,322 $485,066
LIABILITIES & EQUITY
Debt$317,971 $272,546 $227,122 $181,698 $136,273
Accounts payable$9,660 $10,187 $10,210 $10,694 $11,170
Total Liabilities$327,631 $282,733 $237,332 $192,391 $147,443
Share Capital$0$0$0$0$0
Retained earnings($80,431)$3,137 $82,720 $192,930 $337,623
Total Equity($80,431)$3,137 $82,720 $192,930 $337,623
TOTAL LIABILITIES & EQUITY$247,200 $285,870 $320,052 $385,322 $485,066

5 Year Annual Cash Flow Statement

Year 1Year 2Year 3Year 4Year 5
CASH FLOW FROM OPERATIONS
Net Income (Loss)($80,431)$83,568 $79,583 $110,210 $144,693
Change in working capital($11,340)($1,625)($2,350)($2,133)($2,409)
Depreciation$36,960 $36,960 $36,960 $36,960 $36,960
Net Cash Flow from Operations($54,811)$118,902 $114,193 $145,037 $179,244
CASH FLOW FROM INVESTMENTS
Investment($246,450)$0$0$0$0
Net Cash Flow from Investments($246,450)$0$0$0$0
CASH FLOW FROM FINANCING
Cash from equity$0$0$0$0$0
Cash from debt$317,971 ($45,424)($45,424)($45,424)($45,424)
Net Cash Flow from Financing$317,971 ($45,424)($45,424)($45,424)($45,424)
SUMMARY
Net Cash Flow$16,710 $73,478 $68,769 $99,613 $133,819
Cash at Beginning of Period$0$16,710 $90,188 $158,957 $258,570
Cash at End of Period$16,710 $90,188 $158,957 $258,570 $392,389
You can also click here to get our record label business plan sample pdf.