Applying Expert Tips to My Own Music Business Idea

Throughout my Entertainment Business Masters of Science degree program at Full Sail University I had to come up with a new business concept and wrap all my learnings into a final Business Plan (BP) for that start-up company.  The new nighttime venue I created is a live performance competition based nightclub that I call Battle Bar.  This new drinking establishment would have a fun, creative atmosphere with local indie performers up on stage every night battling it out to win the audience vote (and 10% of that evening’s cover charge). 

Battle Bar wasn’t the original idea I had for my BP project however.  I knew from the beginning I wanted to create a new venue in the Orlando, Florida area for local artists to perform and I kept thinking of open mic nights at coffee houses and originally came up with what I called “Orlando Indie Lounge.”  Orlando Indie Lounge was going to be a coffee house/bar that could provide live entertainment to an older coffee-loving crowd earlier in the day, as well as cater to a younger alcohol-consuming, party-going crowd later at night.  BP expert, Tim Berry, would probably have said the Orlando Indie Lounge concept was too complex (Berry, n.d.).  And along the same lines, Jeff and Rich Sloan would have probably told me that I would need to more clearly spell out my business idea (Sloan & Sloan, n.d.).  I’m glad I took away the coffee concept and can now focus all my efforts on reaching a more specific bar-going target market for Battle Bar. 

The Sloan brothers also helped me to refine my Battle Bar BP by pointing out how important it is have my financials sorted out and to “know the type of capital, how much [I] need and when [I] need it” (Sloan & Sloan, n.d.).  By focusing my sales on just cover charge and alcoholic beverages (and not also coffee), it was easier to put together my financial estimates for monthly sales, figure out when I can expect to break even and start earning a profit, and learn how much money I will need to start-up. 

Another important learning I’ve taken away from Mr. Berry about developing a good BP is to make sure it is complete and includes all necessary components (Berry, n.d.).  Of all the pieces that make up a good BP whole, I plan to put the most time and effort into my Executive Summary, Management and Organization, and Financial sections.  According to Rhonda Abrams (1991), author of Successful Business Plan Secrets and Strategies, “the Executive Summary is crucial” (p. 53).  If an investor reading my BP isn’t intrigued by this opening summary of my company idea, then they will not want to read on to find out further details about my business and I can kiss their investment goodbye.  Being a start-up company, the Management and Organization section of my Battle Bar BP is also very important, because the investor will want to know all about who is leading the company, how many people are onboard and all of their qualifications.  If the investor doesn’t feel confident the company has a strong team to support it they won’t want to invest.  Lastly investors care a lot about the Financials.  I want to impress them with my allocation of start-up funds and realistic sales figure projections that will show how my business will be profitable, and how making an investment in my company is worth the investor’s time and money. 

Hopefully reading about this thought process behind my first BP will help you to further develop a great music industry BP of your own!  Best of luck and happy planning!

References:

Abrams, R. (1991). Executive Summary. In Successful business plan secrets and strategies (5th ed.) (pp. 53-65). Palo Alto, CA: The Planning Shop.

Berry, T. (n.d.). What makes a good plan?. Bplans. Retrieved September 4, 2011, from http://articles.bplans.com/writing-a-business-plan/what-makes-a-good-plan/37
Sloan, J., & Sloan, R. (n.d.). 3 key components of a business plan. StartupNation. Retrieved September 4, 2011, from http://www.startupnation.com/podcasts/episodes/1371/podcast-3-components-business-plan.asp

Images:
[business plan]. Retrieved September 25, 2011, from http://learnthat.com/2010/02/how-to-write-a-great-business-plan/
[open mic]. Retrieved September 25. 2011, from  http://doobious.org/open-mic-7/ 

Every Music Business Needs a Plan, so here are Some Tips from the Experts to Make it a Good One

Have you ever thought about starting your own artist management company, booking agency or recording studio?  Whether one of the above or any other business in the music industry, the best way to get it going is to create a Business Plan (BP).  There are many important elements that make up a good BP and here are a few of them straight from a couple of BP experts.

Jeff and Rich Sloan

Jeff and Rich Sloan are two brothers that founded StartupNation in 2002, a business that uses "broadcast, online, print and event channels" to "offer entrepreneurs the ultimate resource for starting and growing a company" (About StartupNation, n.d.).  In addition to creating StartupNation, the Sloans have experienced a number of other business ventures together to amass their wealth of entrepreneurial and BP knowledge, including purchasing and then reselling HUD homes and starting a "venture development and financing firm" called Sloan Ventures (About StartupNation, n.d.), as well as founding Aria International to breed and sell Arabian horses.  In one of their podcasts entitled "3 Key Components of a Business Plan," Jeff and Rich describe how important it is to (1) clearly spell out your business model, (2) display a financing strategy that is "practical" and "fits the growth needs" of your business, and (3) set a "milestone timeline" for your business (Sloan & Sloan, n.d.).
(1) Whether you want to start an online business or a physical store/office/studio location, a limited liability company or a corporation, the Sloans suggest clearly defining your business model early in your plan as this lays the groundwork on which the rest of your BP is based.
(2) You'll want to "know the type of capital, how much you need and when you need it" for your BP, say the Sloan brothers.  You have to figure out how you will get your financing (i.e. whether saved start-up capital, family and friends, angel investors, bank loans, etc.) and lay it out in your BP so you can be sure to start making those relationships early on.  You also have to forecast how much money you will need to get started and grow, as well as the projected ebb and flow of your business so you are prepared for slow sales periods.
(3) A milestone timeline is also a great tool to add to your BP, the Sloans say, because it gets you to focus on completing "certain progress at certain times along the way."  Example milestones to celebrate could be the date your company opens for business or the date you reach a goal number of sales.  If you miss a milestone, you have to hold yourself accountable and adjust your BP to work around it.
You can listen to the full podcast here: http://www.startupnation.com/podcasts/episodes/1371/podcast-3-components-business-plan.asp or go to http://www.startupnation.com/ to find more great BP advice from the Sloan brothers.

Tim Berry

Tim Berry is the founder of Palo Alto Software Company that sells BP and Marketing Plan software, as well as the founder of Bplans.com, which offers sample BPs and BP advice from various experts including Berry himself.  Berry also taught about business start-up for 11 years at the University of Oregon (Tim's Bios, n.d.).
According to Berry, a good BP should "set goals, responsibilities and deadlines to guide your business."  Berry also says a good BP should be (1) simple, (2) specific, (3) realistic and (4) complete (Berry, n.d.).
(1) It's important that your BP be communicated well and easily understood so anyone looking to possibly invest does not have to struggle to grasp the concept.
(2) You want your BP to be specific, meaning you have "concrete and measurable" objectives and specific budgets, actions, responsibilities, etc. spelled out, says Berry, so it is clearly understood what needs to be achieved to get the business up and running successfully.
(3) You BP should be realistic because if you set outrageous goals that you can never achieve, you are only setting your business up for discouragement and probable failure.
(4) Make sure your BP is complete and includes all important sections such as Mission Statement, Executive Summary, Industry Analysis and Trends, Management and Organization, Financials, etc.  Visit http://www.bplans.com/business_planning_resources/videos/fundamentals_part_1_of_5 to hear Tim talk about all the specific elements that make up a complete BP.

Now that you've read what some of the experts have to say, go out and start crafting your BP to get that Music Business you've always dreamed about off the ground.  Good luck!


References
About StartupNation. (n.d.). StartupNation. Retrieved September 4, 2011, from http://www.startupnation.com/about
Berry, T. (n.d.). What makes a good plan?. Bplans. Retrieved September 4, 2011, from http://articles.bplans.com/writing-a-business-plan/what-makes-a-good-plan/37
Sloan, J., & Sloan, R. (n.d.). 3 key components of a business plan. StartupNation. Retrieved September 4, 2011, from http://www.startupnation.com/podcasts/episodes/1371/podcast-3-components-business-plan.asp
Tim's Bios. (n.d.). Retrieved September 4, 2011, from http://timberry.bplans.com/bio

Images
[Jeff and Rich Sloan]. Retrieved September 4, 2011, from http://www.mlive.com/business/mid-michigan/index.ssf/2010/08/entrepreneurs_and_former_flint.html                  [Tim Berry]. Retrieved September 4, 2011, from https://plus.google.com/107679108639721009245/posts