The Business Plan: Road Map to Success
What�s In It and Why You Need One

By John Stiernberg © 2003

The more people I speak with, the more convinced I am that we all get into the music business because of passion and opportunity. For those with strong creative and musical chops and ambition, it�s common for recording artists, musicians and songwriters to experience a certain level of success and popularity without having a business plan. However, without having a written plan that outlines goals and expectations, many times one�s career is filled with disappointment and burnout rather than artistic and financial success.

Can financial problems and workload issues be anticipated and prevented? Can musicians learn from the business world and succeed without �selling out�? The answer to both questions is yes! Whether you are already making all or part of your income from playing, composing, or singing, this article provides practical guidelines and inspiration for creating or updating your business plan. So get yourself a cup of coffee or soda, settle in a comfortable chair and read on�

Why have a business plan?

You may have heard the expression �If you do not know where you are going, any road will take you there.� Most businesses (music, entertainment, or otherwise) do not have a written business plan. They can make money, attract talented artists and receive a lot of press. However, if they do not have a complete business plan, they are at risk, and many fail as a result. Here are three key reasons to create a written plan:

1. Measuring Stick. The plan includes financial and non-financial objectives with a timeline and roadmap so you can track your progress.

2. Opportunity Management Tool. This allows you to identify viable business opportunities, and to avoid or manage the opportunities that don�t make sense for you.

3. Securing Financing. Your business plan helps you anticipate cash needs. A solid business plan is a requirement of any worthy financial institution�even your �rich uncle.�

What�s in a business plan?

A business plan is a written system of documents that describes 1) What you are going to do, 2) How you are going to do it, and 3) What the consequences are.

The main text can be 15 to 20 pages long. In addition, the plan document includes financial details and supplemental material that are included in the reference section or appendix. Here is a brief description of the contents of each of five main sections or �chapters�.

Chapter 1: Description of your company, business, and your role in the music industry.

Chapter 2: Description of products and services. This is where you describe what you do in detail, plus the features, benefits, and advantages of your product vs. the competition. �Products� are what you get paid for. Examples of products include:

� Songwriter: original compositions, songbooks, records
� Musician or Performer: repertoire, stage show, records, merchandise
� Engineer or Producer: recording projects, studio time, technical services

Chapter 3: Market overview and marketing strategy. This is where you describe the size and growth of target market segments, the competitive environment, your promotional strategy, product distribution channels, types of performance venues, your sales force (which may only be you or your manager!), and target audience.

Chapter 4: Management and organizational overview. This section describes your business experience, history, and personnel needs. In addition to yourself, comment here on band members, collaborators, agents, managers, accountants, lawyers, or other service providers who round out your team. Future needs refers to people who will be added to the business as it grows.

Chapter 5: Financial summary. This section includes $ projections for sales revenue, expenses, sources and uses of working capital (cash) over a three-year period. These are summarized briefly in the text of the plan, and shown in full detail in the appendix.

Good business plans also include an Executive Summary. This is a one or two page document that includes the essence of the whole business plan. Executive summaries are helpful when seeking financing, especially when many people are reviewing the plan.

The Payoff

Whether you are thinking about �turning pro,� going full time, or planning to grow an existing career, creating a business plan is essential for long-term success. Your business plan will guide you and help prevent you from making mistakes and bad decisions.

Once you begin to implement your business plan, you�ll find that you are spending more time making or recording great music, bringing entertainment to new audiences, and making a good living doing something you love. From my standpoint, it�s worth the effort!

About the Author: John Stiernberg is co-founder of Succeeding In Music, a multimedia publisher of business education tools for music industry professionals. John is a co-founder and presenter of the Business Chops workshop training series.

The next workshop, Business Chops: Success Coaching for Musicians and Songwriters takes place Sunday, November 2, at The Knitting Factory in Hollywood from 9 am � 6 pm. For more details visit: www.Business-Chops.com. Readers of OnlineRock are entitled to receive a special $10 discount by clicking here.