Whether you’re a songwriter, vocalist or play an instrument and wish to make a professional career in the music industry, you must be in-the-know about business financing when starting out as a musician. Being self-employed means you have full responsibility when it comes to handling your finances and understanding the UK tax laws.
One aspect that both small businesses and self-employed individuals strive for is to earn capital, regardless of the industry to stay afloat in such a competitive market – and this is, even more, the case for freelance musicians. As a result of poor management in this particular field, musicians are now becoming even more independent when it comes to managing their business finances, which is why it’s important to learn the basics. The way in which you choose to fund your music will also need to be detailed in your business plan.
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There are many different types of business finance options that should be learned if you wish to become a musician; including:
Crowdfunding
Many aspiring musicians turn to crowdfunding to finance their career, as an alternative to a bank loan. Although you may be embarrassed at the idea of asking others for money on such a public scale, there are several platforms such as the likes of Kickstarter and PledgeMusic which are specifically dedicated to musicians seeking sponsorships. When donations are made by fans, it is then often a standard procedure for the musician to send out a free album or even mention the sponsor by name in the acknowledgments.
The benefits of crowdfunding are that you don’t have to worry about paying back interest from a loan, while the downside is that you need to pay to gain access to this service, which will leave you with fewer profits after the initial costs.
Bank loans
As mentioned, there is the option of taking out a bank loan to fund your music career; however, due to the unstable nature of the industry, you’ll likely need to have a property and royalties to be taken seriously as a lender. Do take into consideration that if you’re relying on this option, that there are only a small proportion of banks that will be willing to offer loans to artists with only royalties to their name and it is often a long and drawn-out process.
Trading CFDs
If you don’t have any other funding option for your music career, you could research CFD traders and how to become one. There are thousands of markets including shares, indices, currencies, commodities, interest rates and bonds to consider, to earn profits from your investment and help find your business plan. As there is so much choice regarding the markets on offer, you’re bound to find an investment that suits you.
On a final note, you must have a clear understanding of the music market and the business side of the industry so you’re well-prepared for what is to if you’re striving to become self-employed as a musician.
