Often times, people look at their band/music project as an endless money pit. They view it as impossible to break even. However, I’d argue that over time, breaking even is pretty attainable. A lot of young bands don’t pay enough attention to money - they give up early and view their losses as necessary evils for the sake of “the game,” so to speak. And they also give way too much away for free. That’s fine if free merch is your thing and you’re not concerned with breaking even (in fact, I think that’s noble of you). But if the reason you’re doing that is due to an idea that success comes only from terrible losses, I think you’re wrong. You can start making money now, and it’ll probably help you to continue your music henceforth.
Price Your Merch at Cost (at least)
This is the most obvious of the bunch but breaking even starts with keeping track of how much your merch items cost to manufacture. That goes for your recording costs as well, even though that can be hard to break even on. But the point is: keep track of your expenses, and for each item, charge what you paid for it or above. Personally, I think it’s good to charge more than you paid for each item if you’re trying to break even on recording as well, or gas if you’re on tour. Sometimes payouts aren’t very much. So know how much you need to pay off for other expenses as well - that’s what will help ensure you are able to keep doing this whole music thing.
Keep Your Receipts
Ever heard of that band The Lawrence Arms? They’re on Epitaph Records and have toured the world with the likes of Alkaline Trio, Rise Against, and many others. Well, they took a very long hiatus because they, (barely) professionals, got audited by the IRS. Now not to be paranoid, but you don’t want to be at a point some day where the IRS (of all organizations) comes after you, because you didn’t keep track of where your band funds went. Even when that money goes to cheeseburgers in a drive through, they could ask about it, and better to know where it went earlier on in the conversation. So keep your receipts, or at least some kind of record of them. Not just for your receipts though…
Keep Basic Records
By records, I’m not talking about those melting 7-inches in your back seat. Along with your receipts, keep track of everything you sold as well. Know what financial documents are the most important. And for Pete’s sake, take a friggin’ merch inventory. Advice: Google Spreadsheets (basically a free version of Microsoft Excel) is great for this AND free with a gmail account. Excel may be more versatile, but if you’re not super tech savvy Google Spread is simpler to use. I recommend using either of them, though - there’s not a right or wrong here. If you do need help with Excel though, things like Excel University exist to aid you!
Backup, Backup, Backup!
Let’s be honest: bad things happen. It’s not uncommon for computers to crash or get stolen out of tour vans. Or even getting hacked - cyber security affects everybody. So I recommend figuring out a back up system to keep track of your records aforementioned, especially for tax reasons. Cloud storage or third party backups are safe ways to go, if you feel comfortable trusting an outside source. Otherwise you have to keep track of your extra memory block. If your computer crashes and you don’t have backups (that is, you haven’t heeded my excellent warning), you can always look into data recovery - though I hope you never have to.
Any critiques or things I need to know about? Let me know on Twitter @robolitious.