Six Tips to Prevent Money Issues with Your Band
On the early stages of forming your indie band, anything related to money is most often avoided because you don’t want to “ruin” the excitement or because it’s just too early to think about money or because you want to focus on your music first.
That’s okay if you’re still not making or owing any money; but the moment you receive your first pay from your first gig, awkwardness and quick calculations happen as you split the money at the end of the night. But quick calculation is not something you can do forever. The drummer who’s driving the band will sooner or later think that he needs a bigger share because his car is not for free use. So, to avoid money issues, here are some things every band should do and talk about once they start getting money:
What’s the rule for gigs? In general, all money should be split equally between the members of a band after you subtract all the expenses. The problem is in determining the expenses. Make sure you pay for your gas and your driver (even if he says it’s okay) as this is often overlooked.
Keep Track of Every Dollar. Don’t underestimate what a dollar can do. Money is money so even if it’s just a $10 pizza for your band practice, you have to write it down. There are many online tools for managing your band money but you can also go to a simpler route- Google docs. But your laptop isn’t always with you and it’s just takes so much effort to jot down every single thing online so just record income and expenses in a small notebook or your iPhone and type them online on your convenient time.
Should songwriters get a bigger cut? This is a very important thing that you should talk about. Maybe it’s okay if you still have 2-3 songs written by one band member but if you already have an album an it’s all written by one person, you gotta have some serious talking. Is he going to get a bigger cut for every gig? By how much? Or is he going to get a bigger cut for CD sales only?
Pay the guy who booked the show. This is a basic rule but new bands need some reminding. Sure it won’t be an issue if it’s your fourth gig but it will be soon. Booking a gig required effort and is not easy so the band member who books a show should get a certain amount (or percentage) before you split the profit equally.
Hardworking Band member VS Lazy Band member. So you’re complaining and you want a bigger cut of the pie because you’re working twice as much as the lazy drummer who’s always late and who never even bothered about your website. My suggestion is that if he’s that lazy but he’s exceptionally good, keep him and just deal with it. He’s there to play. Just hire a good band manager and a VA (if you can afford one) to handle all your online marketing. In other words, don’t expect to get paid for your extra effort. It’s either you ditch him (if you have the authority to do so) or just deal with it. No “ I should get more money because I do all the work” talk because that is a surefire way to make everything sour. You may complain but don’t connect it with money.
You Need a Band Agreement. The Music Biz Academy published an article about this and I agree that you need to draft a band agreement before you even start making money as a band. Here are some things that should be included in the agreement: Who owns the copyrights to your songs? Who is/are the songwriter(s)?, Share of profit and loss considerations, How do you make group decisions? How will you vote on band issues? , Who owns the name of your group? Or, what about leaving members?, How will you fire someone who isn’t carrying their load?, Ex-members and money—who gets what?, Money issues: band member investments and/or loans to the band, Spending money and hiring other business professionals.
They say money changes everything and that is very true in everything- even to “passion-driven” endeavors like making music. Once money enters the equation, you have to sit down and come up with the best measures to prevent issues and to make sure money is spent wisely. If you value your band and your relationship with one another, do the money talk before money does something to you.
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