Here I am, about to start a new company. And my hope is that it becomes successful, brandwise and financially. So, I believe it's important to reach back into the past and revisit the utter failure my first company was and still remains to be. When I started Up to Zero Records, I had no idea what I was doing. I just wanted to be involved in the underground music scene. Armed with a list of suggestions from Mike Park of Asian Man Records, I felt my way along to failure and financial ruin. It's been six years since I spent any money on the label but I still have a mountain of debt to call my own. The music industry is fickle, so there are a million reasons for a record label to fail. But I could have set myself up for success and probably not have incurred so much debt. So, let's look at how to not run a record label, or any business for that matter.
I had no plan.
So, before you start any business, it's important to have a plan. I had no plan, no budget and no guidelines whatsoever for running the company. My label had no slogan and no direction. If you want to be successful, you have to have a vision of where you want to go with your company. Once you know where you want to go, you then need to make a plan to get there. Your plan should have phases with alternate routes in case things don't work out. And the plan should be revisited often to make sure you are still on track with your vision and also reviewed to see if the plan needs to be adjusted.
I had no brand.
So, I was looking for a logo pic of Up to Zero on my labtop and there were a good 10 logos in the Logo File, all of which were used at some point. And that didn't include the 2 other logos that were used on releases just because the graphic artist wanted to make me a new logo. Yikes! It's called branding and every business needs it. Your logo/brand is what your customers will see as your representation of your company. It defines your company. Everything and everyone is visual and your logo ties everything together. You should also have some sort of slogan or mission statement that spells out to people exactly what your company is all about.
I didn't treat my business like a business.
Up to Zero was my baby and I treated it as such. I never set the business apart from myself. I never filed a DBA or got a business license. I never got a separate business account. Any time I need money for the company, I just opened up my wallet and dumped it out. I ran everything on credit cards. I had no budget, so it was okay to keep dumping money into the project. And that's what it became, a project. It was never a business because I never treated it as such. The only thing I did do was register with GS1 so I could get my own barcodes and that was probably the one thing I didn't need to do. With my new company, I am going to do the things I mentioned I didn't do the last time and I'm going in with a set investment. If it doesn't work out, there will be no credit card bailout.
I didn't know my product.
It's still a bit strange to me to call bands products, but that's what they are in the music industry. I was selling bands and their music. Now I started my label at the dawn of the digital age, so it could be said that I had a little bad luck there. But if I had done some research on the industry, I would have realized that mp3's were the way to go and not cd's. I still would have pressed cd's but not as many and I probably would have found a more cost effective way of producing them. Now take a step back and see where I mentioned research. You have to research the industry you are getting into. I am doing that heavily this time around. I've already been researching for months now. Back with Up to Zero, I signed bands if I liked their music. Then I would put out their music and market it to the scene. But I never really did research on the bands I signed. If I had, I might have realized that the band from Ohio had no fans whatsoever, so there was no starter market to sell their music to. Without a starter market or niche, you have no one to be the base of your sales. You are basically starting from scratch and trying to create your own market. It's a lot easier to sell things and be successful if you have a starting point to grow your brand from. Which brings me to my next mistake.
I didn't know my market.
In order to sell things, you have to know who you are selling those things to. When I started my label, I thought I knew who I was selling to. I had been in the scene for 8 years, going to all the local punk and ska shows. I assumed people got into new bands the way I did, by going out and finding them. Turns out most music fans are not crack addicts like me. They learn about new bands by accident or referral. I blew tons of money on ads that no one could listen to. And most of the bands I signed did not have big fan bases, so I had no starter market that could refer them to their friends. "If you build it, they will come" is the dumbest marketing strategy you can use and I was the poster child for that insane reasoning. Just because you put something good out there doesn't mean that someone is looking for it. You have to understand your market, who is going to buy what you are selling and how do you get them to experience it enough for them to pull the trigger and buy it.
I didn't protect myself.
Hindsight is 20/20 and I'm glad I'm in a position to say that looking back, I got lucky no one tried to sue me. I ran my business as a Sole Proprietor. This is fine and I'm starting my new business this way, although I will probably go the LLC route once I can afford it. The problem is, I did not protect myself at all. I did it all on handshakes and the goodwill of myself and everyone I dealt with. But know this, I got away with it. None of my bands were signed to actual contracts. I didn't do anything that a business is supposed to do, like file a DBA, get a license, register with the IRS, etc.. Spending money on legalities is a sound business strategy. You'll save money in the end and you'll sleep better.
I did not focus on the business.
If you're starting a small business, it takes a lot of time and work. Most of us have to run our new businesses in our spare time in hopes that one day our passion will become our bread money. But we've all got a job to go to until that day comes. I can sit here and honestly say I worked hard on Up to Zero. I had to because I did everything. I was the sole employee with only my bands to help me out. That being said, it wasn't my only focus. Besides work, I was in my own band, I played hockey a lot, I had a blog and several other websites I was doing for fun. Having a lot of hobbies is fine, but being a scatter brain when it comes to your business is not. I did not focus completely on the label when I should have. I didn't set aside specific time to take care of the business. I pushed through project after project like a bull in a china shop. Again, this goes back to planning. Make sure your business plan has allowances for time set up. And make sure you save time for family and friends because what's the point if you lose touch with everyone you care about.
What I did right.
It's easy to look back at all the things I did wrong with my first business. Overall, I can say I failed fast and often and this is what I will learn from for my new venture. Running headlong into things can create lots of valuable experience for yourself. Just be prepared to take some blows along the way. There were some other things I did well. I put out a great product that showed a keen eye and ear for detail(well, after the first release). I learned a million interesting and cool things about the music industry. I also experienced a lot of cool industry things that no one gets a chance to participate in. I made strong, long lasting relationships with bands, promoters, other labels, vendors, 'zine and scene people, and fans. And I built something awesome, even if it was an awesome failure.
Music, Food, Hockey, and Society through the eyes of a misanthrope named Quez Def.