Manage for Success: Belt-Tightening, Newsletter #92, December 2008


"Manage for Success" is a free monthly newsletter for record label executives who want to operate their companies efficiently and successfully. 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 2008 by Keith Holzman, Solutions Unlimited. All rights reserved.


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As we approach the end of a generally difficult if not tumultuous year, I thought this might be a good time to look at how labels -- and individuals who run them -- can belt-tighten their companies, operations, and budgets in order to prepare for a hopefully healthy 2009.


This is an excellent opportunity to look at all aspects of your business and the way you go about doing the many things that you and your employees do.


Does everything you -- and your staff -- do get accomplished with as few steps as possible, yet in an efficient way? If not, this is the time to see how common everyday actions might be performed in as simple and uncomplicated a way as possible. Streamlining here can be beneficial to all concerned, because it might make life more simple, and tasks may take less time to be done. An economy of action might mean that more work can be completed effectively -- and perhaps by fewer people.


I'm not suggesting that you let staff go, especially if you're happy with their work habits and achievements, but you may be able to situate them so that they can get more done in less time, saving you from having to hire additional help.


Do you have a good handle on your distributors and your accounts receivable? In the current business environment increasingly more companies are finding it difficult to pay their bills. In a climate where Lehmann Brothers fails, and General Motors and Chrysler are close to bankruptcy, it's vital that you know if the people through whom you sell your CDs and downloads are financially stable. You don't want to be in a position that you find yourself not getting paid for the goods you'd thought you had sold.


And if a distributor fails, not only will you not get paid, your inventory may well be tied up in bankruptcy proceedings and therefore be unavailable for sale to others. This has happened way too often in recent years, so don't find yourself in such a trap.


Look at all your expenses to see what can be reduced or even eliminated without doing harm to how you operate. Tightening the belt is usually sound practice every so often, and now is definitely the time to purge unnecessary or frivolous expenses.


In addition, when buying goods, try to take advantage of any available discounts. The less you spend, the more you'll save.


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If you need advice on how to tighten the belt at your company, or are suffering from so much work that you no longer have perspective on your label, then let me help you as I've helped so many other firms "manage for success." Email me at <mailto:keith@holzmansolutions.com> so we can discuss how I can improve your business.


And if you're looking for a stocking-stuffer for someone considering setting up their own label I suggest you gift them with the Second Edition of "The Complete Guide To Starting A Record Company" which can be ordered as a downloadable eBook in PDF form, or as a printed, spiral-bound volume. Read the complete Table of Contents and download the Introduction at <http://www.recordcompanystartup.com/>.


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In previous years I've written a number of newsletters that you might want to review at this time.


For example, I made suggestions on useful ideas that might make the next year easier and more successful in an article "Year End Ideas Revisited" that was sent out in December of 2006..

http://www.holzmansolutions.com/articles/68-dec06.html


I've addressed the importance of financial planning many times, most recently with "More Planning Ahead" in November of 2006.

http://www.holzmansolutions.com/articles/67-nov06.html


Ideas on how to survive and be profitable appeared in "Staying Alive" from April 2007.

http://www.holzmansolutions.com/articles/72-apr07.html


Last December I looked into "A Cloudy Crystal Ball."

http://www.holzmansolutions.com/articles/80-dec07.html


Let's see how my predictions turned out.


I was right about consolidation at the majors and wide-ranging layoffs. Unfortunately many hundreds of people were left go at the four mega-monsters.


Indie labels are, as I predicted, having a much harder time getting media attention for their artists. CD sales have dropped precipitously, if not the 25 to 30 percent I forecast. But unfortunately, I wasn't far off the mark.


As foreseen, the year saw the demise of a number of independent record and book retailers, and many of the remaining stores have reduced the space they used to make available for stocking CDs.


I was wrong about Universal pulling it's music away from iTunes, but I was right that Apple's music store did "continue to dominate the downloadable market," and my projections of "a probable thirty to forty percent increase in the volume of downloaded music" was pretty accurate -- at least for some labels.


I was only partially correct about Congress enacting wide-ranging legislation for protection of intellectual property. It was less wide-ranging than I'd hoped for, and no " intellectual property protection czar" was appointed. Perhaps in the coming year.


At this time I'm not making any predictions for 2009, however I would like to take this opportunity to wish you and yours a very happy Holiday Season and best wishes for a healthy and prosperous New Year.


Until next month,

Keith Holzman -- Solutions Unlimited

Helping Record Labels Manage for Success.

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You may use or reprint the above article provided that you include complete copyright and attribution with a link to this web site. Please let me know when and where the material might appear. Most important, should you have a topic you'd like me to address in future newsletters, please email: mailto:keith@holzmansolutions.com


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Copyright 2008 by Keith Holzman, Solutions Unlimited. All rights reserved.