Manage for Success: Working with Professionals, Newsletter #37, May 2004
"Manage for Success" is a free monthly newsletter for record label executives who want to operate their companies efficiently and successfully, and who have indicated their desire to receive it. It's published by Keith Holzman of Solutions Unlimited, a management consultant, troubleshooter, and trusted advisor, and is based on his many years as a senior executive in the music industry.
Copyright 2004 by Keith Holzman, Solutions Unlimited. All rights reserved.
It's hard to believe, but this begins my fourth year of writing a monthly newsletter. I really enjoy it, and my only fear is running out of interesting and relevant topics. Therefore I'm requesting that you email me (address below) with any subjects you'd like me to discuss in future issues.
There are many occasions when effective managers may need to call on the services of a true professional. Even when you've been in the business a long time, good advice from a lawyer, accountant, or a management consultant (such as myself), can come in very handy and -- more important -- save you lots of grief and expense.
An attorney specializing in the music industry has many useful roles. First, of course, is the drafting of contracts -- most particularly artist agreements that embody your label's particular operating philosophy. As faithful readers of these messages know, I'm a firm believer in using simple, understandable, artist-friendly contracts that protect the label, but whose terms are fair. Your attorney can do this for you.
Many labels have their attorneys handle all contract negotiations with artists and their managers or legal reps. Your lawyer will be experienced at it, but more important, he can always buy time by saying to the opposing side that he needs to consult with you, his client. However, I recommend to those of you who've been in the business for a while and have had some experience, that you handle as much of this as you can, relying on your lawyer if things start getting sticky.
But then I also believe that if negotiations start getting difficult or worse -- acrimonious -- that you be prepared to walk away from such a deal. Frankly, life is too short to have to work with exceedingly difficult talent or their representatives.
Your lawyer can also write and, more important, review any other contracts that you're likely to encounter. These include distribution agreements, leases, licenses, etc. No matter how much experience you might have, it's always a good idea to make the most of a skilled professional's knowledge.
If you're a start-up, it's important to enlist the aid of a lawyer in advising you as to the best legal entity for your label. He can help you decide if you should form a sole proprietorship, a partnership, an LLC, an S-Corp, or a C-Corp.
Another advantage is that music industry attorneys can frequently provide an A&R assist by introducing you to exciting and interesting talent who they may know of or represent.
Since you're likely to be working with your lawyer a great deal, try to find one whose personality is compatible with your own.
Good lawyers are not cheap, so be prepared to spend quite a bit. Fees are fairly competitive, but sometimes you can save money by working with an experienced associate rather than a partner of one of the bigger firms. There are also many excellent small offices run by one or a handful of practiced and knowledgeable attorneys.
Some lawyers charge by the hour or fraction thereof; others work on a monthly retainer. Just be sure at the outset to get an estimate of what the billing might entail.
If you're thinking of starting your own record label, I recommend my new book, "The Complete Guide To Starting A Record Company."
Here's what people and writing about it.
Carl Caprioglio, President of Oglio Entertainment: "The Complete Guide To Starting A Record Company" is absolutely the best place to start when considering the plunge into the music business. Keith's style is fun, friendly and informative making the book an easy read. I only wish Keith had published this book 10 years ago when I started my label!"
Chris Morris of Billboard: "Holzman's 235-page tome is a crisply written and comprehensive look at label basics, from creating a business plan to putting records on the street."
Bob Feldman, President of Red House Records: "Keith has been an invaluable mentor to my label and me for over twenty years. He has finally put that knowledge and integrity into a book that I still find to be indispensable as a road map through the intricacies and complexity of the business of music. This is a common sense guide that could only be written by a true veteran. I'll refer to mine often."
Justin Goldberg, CEO, Indie 911, and author of "The Ultimate Survival Guide to the New Music Industry: A Handbook to Hell": I LOVE Keith Holzman's new book, ìThe Complete Guide to Starting a Record Companyî! I only wish that I had the book BEFORE I started our indie label in the late 90's. Keith's book skips past the hype, smoke and mirrors of most music industry books and arms you with the real information you need to set up a real label that will work and last; the kind that pays royalties, keeps books and sustains careers. Don't just buy it though, put it to use!
Clay Pasternack, Consultant and former Co-Executive Director, AFIM: This book is essential for anyone starting a new record company, and is a very well-worded refresher course for the experienced industry person. I highly recommend it!
John Michel, American Composers Forum Sounding Board: Holzman's book offers some of the best and most detailed explications of the "conventional wisdom" of planning, financing, recording, producing, marketing and distributing your own discs. His Guide is more thorough than many similar publications on the market at this moment.
"The Complete Guide To Starting A Record Company" can be ordered as a downloadable eBook (in Adobe AcrobatÆ PDF form) at $29.95, or as a printed, spiral-bound book at $44.95. You can read the complete Table of Contents and download the Introduction for free at <http://www.recordcompanystartup.com/>.
An accountant is another professional whose services you probably require, no matter how much you may know about business. He can help a start-up set up its books and chart of accounts, and advise on accounting software appropriate to the business.
This is one of those cases where someone looking over your shoulder can save you from yourself by ensuring that you're using your funds efficiently and not spending more than you can afford. The accountant should check your books at least once a year, preferably every quarter. He can also advise you on potential tax savings and how to stay on a solid financial footing.
It's particularly beneficial to work with a CPA, because the very act of certification may give you greater confidence in his ability.
Many labels, no matter their size, occasionally, or even frequently, bring in a management consultant such as myself to advise them in solving a myriad of problems that may be plaguing them. You'd be amazed at how quickly an experienced pro can see what may be causing difficulties, and recommend how to solve them.
Such situations include how to go from loss to profit, dealing with inefficiency in systems, procedures, or staff, reducing unnecessary costs, streamlining organization or its processes, reorganizing staff, or making better use of available information. Some experts focus on marketing, or specific aspects of it. Others, such as myself, specialize in areas devoted to successfully managing the business, occasionally to such an extent that he becomes a trusted advisor who can be relied upon to provide the best possible guidance. That's the kind of practice I devote myself to.
Until next month,
Keith Holzman -- Solutions Unlimited
Helping Record Labels Manage for Success.
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Copyright 2004 by Keith Holzman, Solutions Unlimited. All rights reserved.