I decided to follow up the last article about commercial production, with the funding article a little quicker than planned –and write it today – so that they flow closer together.
Note: this is not a comprehensive list but gives a few general ideas on funding your CD project to help you consider options and achieve a result that allows you to get your music out there and out there with the goal from the last article being – to do as much as can, budget as high as can – so quality and end product is the best it can be to have the most penetration and affect from your music.
So here are some of the funding options you may consider
Save it till you get it
Obvious but often forgotten. Delayed gratification is not a pleasant thing to do – but it is the simplest option.
You not only have the satisfaction of having accumulated the funds but it is your cash, you are in total control of the spend, etc.
So whether a solo performer or band – gig your butt off, reduce social activity that costs money and save, spend less on ‘now non essentials’ etc, maybe even get a second job/part time work until funds accumulated – may take a while but if the project is worth it – so is the effort and time.
Borrow from family and friends? Mmmm!
Too many friendships and family relationships have been adversely affected over money – and false expectations as to a positive return on investment (in you) can be the cause of relationship breakdowns, especially when the money wasn’t that disposable to the lender in the first place. So unless you are going to be totally honest about the chances of recovery of their money (and the real chance of never seeing any of it again), maybe this is one of the options you may consider as a last resort or for the final small amount needed to get you over the line……… if at all.
Instead of borrowing – pre-order sales
I have a philosophy in business and fund raising that has stood me in good stead for many years – “If all you can get is a ‘no’ and you can handle the ‘no’ with grace/well – why not ask the question?”
You see I am not afraid to ask people for help – even family and friends – but I want to be content if they say no, be sure I manage expectations and don’t burn relationships in the process.
So rather than just getting them to give you money, or borrow money – why not ask them to invest in you by pre-purchasing one or more copies.
Maybe even go the next step and ask them to give more for some extra benefits in return. For example,
– for $XX they can sit in on one of the recording days, or maybe,
– for $$XXX+ they can be in the chorus, BVs and noted in the credits as well (make sure only offering this to people who can
sing of course :-))
Effectively you are setting up your own mini fan funding campaign just within your own circle of influence – and their friends (those involved can really help you by getting on to their friends and networks to get involved as well).
The one suggestion I have here – make sure you keep a record and also put the money aside. That way, if targets aren’t reached or circumstances change for any reason and the recording doesn’t go ahead – you can give back the money (again ensuring no friendships burnt)
Fan Funding/ Kickstarter//Crowd funding
The next stage of development of the pre-sales idea.
Between you, your band members and family have you a wide circle of friends and followers who would be interested in ‘investing in to the future project’ and helping you succeed? Then definitely consider the fan funding alternative. Sometimes by doing it through an organised facility it is seen as ‘easier’ to give – but also there is a chance to extend beyond your own networks.
This to me is a very worthwhile way to raise all or part of the funds needed for a CD. But be warned – a lot of people have jumped on this band wagon recently, and a lot have failed – – MOST failed because;
- They didn’t have enough friends and supporters to get the whole thing kicked off and some momentum in place – both from directly investing themselves but believe enough I the project to help extend the reach/spread the word to their friends and networks etc, and/or,
- They didn’t get the preparation in place properly, target levels determined etc, and/or.
- They didn’t spend the time and effort to market ‘outside of themselves – to broader communities nor have the resourcing/support to get the following they did have leveraged to work their networks for the project. And these programs require you to work it hard, especially in the run down to the deadline.
There is a lot of information on the web about how to cost, promote, incentivise, etc a kick-starter or crowd funding campaign. Just Google ‘crowd funding’, ‘kick-starter’ etc, go to Pozzible’s website or check out http://launchandrelease.com/what-does-a-music-kickstarter-project-budget-look-like/ and posts like it (and this one gives a great example of how they costed their project)
Angel investors are affluent people who have a little extra cash and enjoy investing in start-ups and creative projects. Angel investors often offer smaller amounts of money – maybe $5000 or $10000 – and enjoy watching the projects they support flourish. Often, for their money they retain ownership equity – share in the profits. There may be friends of friends or family who fit into this category. If not, there are plenty of websites dedicated to helping small business owners (and that’s essentially what you are) find angel investors. Find one in your state or country and set up a proposal. You may have to supply other details like a budget, business plan and resume, as well as samples of your music.
Remember, usually an angel investor owns a share of your project (your company if you will) and is entitled to a percentage of profits ongoing. However, the advantage of Angel investors is that the quick injection of capital can be a great way to quickly grow a project to completion.
Small Business Promotional/Sponsorship
Sponsorship can be another great way to fund a music project. Businesses pay you money, which goes toward funding your project, in return for having their logo and marketing message displayed. Competition for sponsorship is intense, but with a unique idea and the right attitude, you might find yourself partnering with a brand.Companies are usually looking to sponsor events, because they’re more likely to attract media attention and offer greater opportunities for displaying the brand message, but albums and other projects can be sponsored, too. If packaged properly (and legitimately) the company may get the sponsorship as a tax deduction under their marketing/advertising budget.
First of all, as in most of these ideas, you need to know how much money you need.
Producing an accurate budget of your project will show you the level of support you require. You need to approach companies that have this level of money to offer – your local record store probably can’t give you $20 000, but a major energy-drink company might.
The company will want to know what you’re offering in return for their money, so make it worth their while.
Show them you’re capable of bringing in a crowd and attracting media attention and they’ll be happy to help.
In addition you can offer, for example, signed pre-release copies of the recording, their name and or logo on the CD and release posters and mention of the sponsor in your newsletter and on your website – packaged to allow them to justify to their board or investors the return on investment is worthwhile. Make a list of companies that would fit will with your project.
Do you or your family have contacts with small to medium business owners that may consider this a win-win investment? Who do you know who would know?
Then – Think of products and services that would appeal to your fans and approach only those companies.
This is important in demonstrating your integrity to fans as well as others (and yourself). If you don’t have a personal contact, contact their PR and marketing departments and put in an application. Try and see someone with decision making authority and personalise the approach, making an appointment if possible.
Grants and arts funding
While grant funding for some commercial projects is possible as part of a total artist/arts promotional strategy approach – – – If there is a specific purpose/ benefit to others from the project – there are a lot more portals open to you.
So if your CD is to benefit/involving a community or special interest group, especially regional or the proceeds from the project go to raising money for charitable purposes – and you, or someone you know are confident in writing a good presentation – start googling and investigating suitable funding/grants programs.
Be creative in your packaging and application – for example, if the grant is for regional touring and music promotion into regional areas – can you combine the production of a CD that you give away on tour, with a tour itself in to the those areas (and then do further pressing and sell ongoing into the future if needed).
By the way, it is probable you are not a registered charity or have tax exempt status for charitable purposes – and so deductible giving, grants required to give to non taxable entities etc are out of the picture – so don’t even bother. Look at opportunities within portals where you exist (music and the arts) – there are plenty.
Having said that – if the project is for charitable fund raising or special group/interest awareness etc – you may be able to approach a registered charity or organisation working in the field and do a joint submission/joint venture.
Small Business Funding
This is different from the above. This is tapping into the private/corporate market. If arts funding isn’t there, but you’ve got a savvy business head on your shoulders (under all that wild musician hair) you might even find success looking for a small business grant.
Small business grants are offered by various organisations to help people get started running a small business. They’re often seeking creative, off-the-wall ideas, and your musical project might just fit the bill, especially if it’s something designed to make a profit into the future or is a lead in to something even more inovative.
Start by joining your local small business associations and getting on mailing lists of any awards or grants available in your area. Then apply for any that your project might conceivably fit with. To apply you’ll need to produce a business plan, create a budget and compile a resume. The business association will have advisers on hand who can help with this.
** Be careful not be get confused with grants and loans – you’ll be required to pay back a small business loan with interest, whereas you don’t have to pay back a grant.
NOTE: I STRONGLY recommend that you DO NOT take out a bank loan nor especially use a credit card facility to fund your CD project – unless you are very experienced, really know your potential sales and absolutely sure of breaking even/paying out the loan quickly.
You have to sell a heck of a lot of CD’s very quickly to repay the capital and not have the interest bill hurt you. This is especially true when your credit card interest is 12-14% or even up in the 20%. Remember at 20% a fully drawn $10,000 credit card facility (if you can get it) is costing you $2000 a year in interest – — that’s another 200 CD’s you need to sell just to cover the possible interest bill).
Even an extension to your home mortgage, personal loan at current low interest rates – not only do you have all the set up costs, mortgage docs etc – but again the interest is more debt and more potential CD sales required to break even.
I hope that gave you some ideas to help fund your next CD project or possibly increase the level of production possible and therefore increase the potential return/commercial positioning of the project.
If you would like assistance developing any of these areas further, again please contact us.
And as an aside – if needed, and as a part of the pre-production process, we often help clients who have committed to working with us in the production area, look at their funding and, where possible within realistic expectations and project boundaries, assist gaining the best avenue of funds to ensure our joint project achieves maximum results.
Cheers till next time.