By Tony Hinds
The world of business administration might not be the first thing that leaps to mind when you decide to release an album, or schedule a tour. However, if you plan to make money from your music, business administration is an important part of that process.
Before you panic, we have answers. Ruben Ramalheiro -- Manitoba Music's market development coordinator and Union Events' production representive -- shared some wisdom at our February 24 DIY Series workshop on business admin. During our chat, Ramalheiro outlined three simple but essential tips to help up-and-coming musicians stay on top of the business side of music.
1. Keeping a Budget
Budgeting is key to maintaining responsible control of your finances, whether it be during a tour, a new album, or just day to day band business. What are your expenses? On a tour, this would include everything from food and lodging to guitar strings and saxophone reeds. Remember to track everything vigilantly. If you forget even one thing, it will skew the numbers.
"When you take on being a musician and bringing income into the fold, it's no longer just an artistic endeavor," Ramalheiro says. "You're now a business owner."
2. The Importance of Bookkeeping
At its purest form, bookkeeping is income versus expenses. With your tallied expenses, you can now list and compare those numbers against your income. You can find top notch bookkeeping software online and in stores, programs such as Excel, which can be user-friendly tools for tracking income and expenses.
At the end of this process, don't fret if you're not rolling in dough. Many artists struggle with the fact that they have more expenses than income in their initial years in the business. Despite this reality, it's still advised to have all documentation in order for tax time. Proper filing and accounting can be a benefit in the long run: your listed expenses as losses may help to reduce your payable taxes, and help prevent costly fines for not declaring income, or even filing a late return. Naïveté is no excuse when the taxman calls.
"This is just another step in saying: 'This is my business and I'm taking care of it,'" Ramalherio says. "You're doing what needs to be done."
3. Use the Data
It's important to implement what you've learned from all of this data, with the continued intent of moving forward and improving the operation of your business. Analyze and study your data. What can you learn? You had bigger audiences in Vancouver than in Saskatoon? Make British Columbia a higher touring priority. These kind of adjustments may seem small, but when it's your art and your business, every dollar counts.
"You want to be proactive, not reactive," Ramalheiro says. "You want to know where you stand before you make your choices, as opposed to finding out afterward whether or not you made the right move."
- DIY Tips MusicWorks DIY Series Ruben Ramalheiro Manitoba Music Union Events Tony Hinds Business Administration Professional Development