Budgeting should really be any independent bands primary concern. Figuring out how to divvy up the money at the end of a gig and then deciding how you are going to reinvest that can, in and of itself decide the future of your band. Of course – there are pretty much as many ways to do this as there are bands and to talk about all of them would obviously be to granular. Instead, I want to talk about a couple of ideas that allow you to get an idea for the kind of spending you need to be looking at and how you need to consider be budgeting in your band, especially as you prepare to go on tour and take the world by storm.
The first thing you need to realize is that your first and most important expense should always be your merchandise. Unless you’re on tour and gas is becoming an issue you always need to be willing to shell out for merch, even before you eat. This is the lifeblood of your band – it grows your brand it makes you the best margins and it is what is paying for that gas to get from venue to venue. In other words – if you’re not working hard on the merchandise side of things then you might as well stop being a band trying to make money. There is simply no other way to do it, unless of course you are selling hundreds of thousands of records.
From that you need to realize that yeah, your touring vehicle is going to be a money sink and that you need to cover costs for that too. Whether you need to buy one or not is a legitimate issue that really is a case by case thing (Though ultimately I would encourage almost every band to buy a van) You need to be willing to budget around $100 just for your vehicle when on the road, assuming you are renting, but again – this is the kind of thing that your merch earnings should be covering. Guarantees can also help with this sort of thing – but that’s not something you can expect at lower levels anyway. In most case you’ll be looking only at your merch sales and maybe gas money provided by the venue. Now that we’ve talked about your two biggest costs let’s figure out how we should be dividing up our money.
There are two main ways that I have seen bands divide up the money and they seem to work equally well – it really just depends on the personalities in the band and the specific situation. The first is to simply give everyone a percentage cut of all of the money and then reinvest from everyone’s personal finances when it comes time to purchase new merchandise, gas, etc. This can be good because it requires a lot less paperwork. However the main drawback is if not everyone is getting an equal share of the cash and isn’t making an equal share of investments everyone needs to kind of keep an eye on everyone else to make sure that things are going to be okay. Depending on how friendly band members are this can potentially be very stressful. In cases like this it’s easy for one band member to take their share of the money and then drop off the radar when it comes time to reinvest.
The other way is to simply put all of the money into a band fund, maybe giving band members some scratch from that, but primarily reinvesting everything back into the music. Though this usually can require contracts and an extremely well trusted party to handle the money this can also create a much more efficient system of investment into the band. It means that people don’t have to worry about their personal finances when it comes to the music and allows you to have a perpetually growing (Well hopefully growing) band fund that you can much more easily tap into when it comes time to buy plane flights, a touring van, or make any other major band purchase.
Of course between these two options lies a whole spectrum of payout ideas – from percentage deals where the majority goes into the bank, to salaries overseen by the bands manager. Like I said – this is largely a case by case thing, it depends on how much you are pulling in and how much you are looking to invest in your band. I personally believe that letting the manager kind of oversee everything is the best way to do it – but then again I manage bands, so I’m obviously biased (Although I will guarantee almost every big band does it that way) As is though, this is something that requires a lot of thought from everybody involved. People get touchy over money, and rightfully so – we don’t want people getting hurt because of it.
Not everyone will be super responsible about money either – that’s part of why it’s good to have a manager who is good at handling this sort of thing. Almost every band has at least one member who isn’t fully tuned into the financial situation. That’s okay though – they don’t necessarily need to be. What they need though is a manager who will make sure that they are compensated fairly. The music industry isn’t a place for people who are willing to spend money willy-nilly. So if you are not comfortable with money you may want to do some research on your own to help make sure you’re not negatively impacting your career or your band.
At the end of the day – talking about money with your friends in your band really sucks and can make it a hard time for everyone involved. The best attitude to have is that you won’t be making any money off of the music industry and you just need to be at peace with that before going in. You need to be aware that gas can cost a whole hell of a lot and that a single van accident can screw up any salary you thought you were going to be getting. Be smart and gracious as you work out your personal money issues without having it impact the music – your bandmates and partners will be grateful for it.
Independent Music Promotions’ (www.independentmusicpromotions.com) revolutionary music PR campaigns are the most effective in the industry. Submit your music to us today.
