Funding Your Career
The Funding Mindset
By now you should have built up a very detailed picture of just what the financial cost of your goals are. This is the point where many people begin to be defeated, because being an artist is very expensive. Once you have goals and targets set you may realise that to achieve them you need more capital than you originally thought. Especially if you are running paid-for incentives alongside your organic strategy – the price gets higher and higher which leads many artists to feeling their goals are unattainable due to their financial situation.
As with each of our tasks we must first master the correct mindset in order to make this successful.
Let’s get into talking about the money mindset.
When we talk about the mindset that we need to be in to generate the funding we need for our projects, firstly, we need to talk about why nothing that we set our minds to is unattainable.
It may seem unattainable to begin with, it may seem like you have a lot to generate, and it may seem insurmountable.
It’s easy to think that way when you don’t immediately have the funds that you require for your project available to you. But the truth be told: there are always ways to generate funding, there are always options for funding and there are always ways that you can engage with people that you know or people that like your product to generate the funds that you need for your next project.
What really is a major setback for a lot of artists is not being able to see through the activity that they have to carry out in order to get the funding, i.e. not finishing the funding application, not messaging enough fans to buy merchandise, not pushing Bandcamp Fridays so that they can keep 100% of the revenue. The revenue was always there. It exists in the ether and is not something that you have to work super hard to drum up to find. But it is something that you have to be super dedicated to from the outset of the journey to the very end. Otherwise you’ll fall at the very first hurdle.
Now this mindset issue is something that you’ll see pop up in a lot of the modules and the reason why you will see it pop up so often is because there were so many blockers in the tasks that we need to do in order to make our career successful that we miss out on i.e., financial blockers, task completion blockers, all kinds of things. Things that make us think that our dreams are unattainable, when actually they’re never unattainable.
Bridging the Gap & Finding the Figures
However, once we’ve set the goal and we have clarified what it is we want to achieve, what then becomes difficult is bridging the gap between what we want to achieve and the amount of work that goes into achieving that. And I think that’s where lots of artists fall short. They fall short at the point where the work needs to get done. It’s all good to project, it’s all good to imagine and it’s all good to forecast. But, if you’re not willing to actually go out and do the work that is needed to be done to raise the funds to get the streams to get the audience to get the fans, then it is futile you won’t ever succeed.
So we need to shift our mindset from thinking about funding as this scary, unattainable figure that we’re trying to reach to make our dreams come true and turning it into logical steps that we’re taking to achieve our business goals.
Logical step one being “I need X amount of finance, and therefore I’m going to need to spend X amount of time securing X amount of Finance to make my project as successful as it was going to be once we made that decision”. What we do next is work backwards from how much funding we need to raise. We can then see:
- How much capital we’ve got accessible to us
- How much we’re able to save
- How much we’re able to contribute from our jobs
- How much we have left residually from any streaming income that we may have made from previous releases.
Once we have settled on what income we already have, we then also have a figure of how much is left and subsequently, the amount left is our funding figure.
That’s where we’re going to need to now start looking to external sources to bring in the amount of income and there’s a variety of ways that artists do that. Lucky you, we’re going to explore some of those ways in this module.
We have already touched on a lot of these in the budgeting module but let’s go in depth into, what we identify as, the main five ways to fund your career.
Advances on Deals
If you strike up a deal with another business entity for use of your services or music, you may be paid an advance. This is an upfront payment against your future earnings. How much the business entity makes from the use of your music and service is dependent on the nature of the contract. The advance will always be recoupable. Sometimes there may even be hidden or additional costs that also need to be recouped outside of the advanced (studio time, marketing costs, etc) that should also be factored in.
Advances are useful, especially when you need time and space to create the art. However, as is a common story in the music business, sometimes artists do not understand clearly or in enough depth the nature of their arrangement and are surprised at how little they receive from the revenue generated from their art. This is why it is important to have a good lawyer when going into any contract situation. It is also very important to gain transparent clarity over the nature of your deals to avoid any nasty surprises down the line. You may be offered advances for:
- Bespoke and custom work
- Label deals
- Brand deals
So first, let’s talk about self funding. The main method of funding that most musicians use. It’s no secret that many musicians work multiple jobs around their gigging and music creating schedules to fund their music careers. Oftentimes, this is an independent artist’s main source of funding. Typically, artists are known to work in waitressing, retail, and even sometimes office jobs.
Using your wages to fund your music career isn’t an issue if you have the disposable income to do so. Where it starts getting tricky is when you have lots of overheads and little disposable income.
Now, some artists choose to save for large periods of time and generate the revenue that they need to put into their projects. But that can hinder the release schedule. It means that you aren’t able to release as frequently, not releasing as frequently can have a knock on impact on your wider strategy and many artists find that not releasing as frequently is harmful to their fan base building as well. So ideally, artists want to be able to release very regularly however, this is not always possible, especially if you have a lot of overheads.
The main important takeaways to keep in mind if you are to self fund via work is to have a very clear budget in mind, make sure you prioritise your living expenses – make sure that you are clear and have them mapped out first and foremost. You want to be able to very clearly see what residual income you have remaining and what money, if any, you can assign to your music career. Bet on yourself! Believe in yourself. Being self-funded is risky, but is a major way to show up for yourself and demonstrate that you believe in yourself.
It is this forward action that gets you towards getting the career you want. However, this has to be done sensibly. And whilst you should always bet on yourself, and you should take risks on yourself, make sure that your core responsibilities are taken care of. The stress that comes when debt and personal responsibility is not taken care of can really impact you not only creatively but also professionally when it comes to releasing. The stress that gets placed on each release is different if you’re really riding on the return on investment.
So be smart with your investing in yourself but also be bold. Make sure you have a clear plan. Make sure you have budgeted to the penny, cent, euro, for your personal life and make sure that you are only using money that is disposable. This is the safest and best way to invest in yourself.
Now let’s talk about existing income from your musical activity. If you’ve been making music for a while, you’ve had previous releases, you gig or you have had previous deals that bring in regular revenue you may have some form of cash flow that allows you to live and create.
Your business may be in the place where a term we like to use is “it washes its own face.” That essentially means that you don’t have to put any of your own funds from work or any savings into your music, because the activity generated from your music brings in enough revenue for you to carry on with the project (hooray). This is really the ideal situation where you want to be in and the reason being because if you do still work a part time or full time job, you don’t really want to be dipping into your income to support your music career. You want for your music to be generating enough money for you to be able to support itself…and you!
When you reach this phase it’s really important to then forward plan on how you’re going to distribute that income and keep the generating whilst you move on from project to project.
You also must ensure that your next project is as successful as the last to maintain and exceed the level of income. Once you have ended up in this cycle, you find that you will be on a more even playing field when it comes to your future releases. It means that you can then start thinking about return on investment (ROI) and profit long-term and it means that you are able to safely release at quite a consistent pace. Funding your career this way is the ideal way to fund it. And realistically, if you are at a beginner stage, this is where you should be aiming for. If this is the stage you’re at, this is where you should be aiming to not only maintain but grow.
Arts and Public Funding
Funding is a great way to get yourself on to the independent ladder as a start. It’s a place that you can build from, is a place that you can develop from and it’s a place where you can take some of the financial strain off yourself and really just create freely.
The main benefits that artists explain from having funding given to them is the fact that they are then able to create in a much freer, much more carefree way, but still have the accountability of driving a result from the funding organisation. Quite often these funding options will come along with additional support as well. So in addition to the funding, you may receive mentorship, have access to workshops, support calls and all things that will make life as an artist much simpler for you.
Funding is a great way to really start out especially when you’re at that beginner or mid stage of your career where you can just do with an additional push. And a lot of these funding options do serve to be the additional perks that people need to get over to the next level.
An investor is an individual or brand that provides cash for you to run your business in exchange for their investment back plus a pre-agreed share of the profits. An investor may also have a particular skill or expertise in the field in which they are investing and provide additional valuable support to the business. Sometimes businesses have what’s known as a silent investor, this is someone who invests cash but does not generally involve themself in the running of the entity.
Now, you may be thinking “but I’m not a business, why would someone invest in me?”… Music catalogues are actually a good investment if done correctly with the potential of generating revenue for indefinite periods of time and the potential to generate even more if other aspects of the business (like publishing) do well. If you show exceptional promise and can demonstrate some data to support there are definitely people who will invest.
Nothing is without its challenges though and finding an investor isn’t super straightforward. You need a business plan, you need projections, targets, a sales plan (all things you are making during this course….see what we did there). Then you need to find an investor, and where do you even begin to look? Is there just a place where investors hangout? Is there an app like tinder but for investors and investors? Where do I begin? Again, we take it back to business. If you need funds to start up, usually most people will begin with family and friends. If you don’t know anyone likely to be looking to invest (at least ask) there are databases of people looking for various investment opportunities as well as brokers you can use to help you to find an investor but be aware there are very often costs associated with this approach.
If you are further along in your business, you may look to other brands or labels to invest in you. Also similarly, use databases to look for someone and existing proof of your revenue generation ability to make your pitch an enticing investment opportunity for someone.
One thing people often don’t factor in is the investment of time from others. We think this is very important to address. Sometimes in the flurry of creation and distribution people’s individual efforts get missed, overlooked and in some unfortunate cases completely disregarded.
It is important that when looking at what has been invested into a project, you factor in the time people volunteer for you. That’s the mixing that your cousin did for free, or your friend who shot the video on their only Sunday off or even the person who lent you their midi keyboard. The artists who say they are self made are lying – behind them is someone who took time to help them with an opportunity at some stage or other. Sometimes behind the scenes there are efforts the artist will never even know about going into their release, be considerate and value people’s time as much as you value cash investment, because in most cases the time and effort someone gives you for free is far more lucrative than its monetary value.
From the above details, make a list of four different channels of funding you are going to pursue. Be specific; where are you finding the funding? Who will you approach? And, how will you pitch to them?