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Band Guide

5. FINANCIAL ISSUES

If it were up to us, your band wouldn't have to play its first few shows for free. And we'd see to it you received guaranteed £100,000 advances on multi-city concert tours, with all expenses paid. But the reality is your early gigs will be in the "leisure-time activity" category rather than the "paid professional" category.

As with almost every other business, bands have to pay dues. In the small picture, the initial gigs can be tiny affairs, such as friends' parties, high-school dances, and maybe tiny coffeehouses or nightclubs. But in the big picture, they're valuable first steps toward exposure and, yes, money. If you're diligent and keep the band together for a long time, these small steps can lead to bigger ones.

The main reason you won't make any money at first is because your band is still an unproven entity. A nightclub booker won't take a chance unless you've shown you can draw crowds of beer drinkers. A wedding planner won't take a chance until you've generated a few recommendations from other wedding planners. Nonetheless, maybe your mother's company is planning a party and can pay £50 for live entertainment. And after the show, maybe the company's CEO will be willing to write a recommendation, or talk to another CEO about yet another party. Again, small steps lead to big ones if you stick with it.

For an entry-level band—that's you—£50 gig at a company party isn't a bad deal. Neither is a £80 gig at a small club. These scenarios obviously won't make you rich, as you'll have to deduct expenses and divvy up the money among the band members. (This helps explain why some musicians spend their entire careers as solo artists.)

After a gig or two, though, you may have a little bit of leverage to negotiate for a higher salary. What salary should this be? Have a number in mind when you deal with potential clients. Figure out how much it'll cost to play your gig—regular expenses include gas, guitar strings, drumsticks, gaffer tape, and possibly, renting sound and lighting systems. In a perfect world, your gig salary will cover these costs and leave the band with spending money.

Nonetheless, until you're a big star, it's generally better to make a little less money and get the gig. Stubborn negotiating has its place, but don't shut yourself out of an opportunity, especially if you know the club booker or wedding planner doesn't have much of a budget to play with.

Do you need a contract? Ultimately, yes, to protect yourself. If the club doesn't do contracts as a matter of policy, consider writing one up yourself: "Crash Cat Boogie Cat will play on this date and receive £50 at the end of the performance." Some clubs will refuse to deal with contracts, which is a shame, but if you're interested in playing the gig, you may have no other choice but to submit. Wedding and bar mitzvah planners are likely to pass you a contract, while less formal party planners and many clubs almost never do.

Scrutinize every contract you receive. Under optimal circumstances an attorney should read over any contract that spells out more than the basic time, place, and salary.

To secure your first party, dance, or club gig, you'll need to begin networking. Talk to everybody you know who might need live entertainment.

For dances, approach the local high school student council or a nearby university's campus activities board and ask about upcoming events. Ask if those entities can pass information about your band to the proper committee.

To secure party gigs, spread the word more broadly. Order several flyers, with little perforated tabs at the bottom, announcing your band for hire. Put them up at record stores, campus radio stations, city kiosks, and whatever public bulletin boards you can find. Clever advertising expressions never hurt: The musical description "polyethnic Cajun slamgrass" took Boulder's Leftover Salmon a long way.

Club gigs are the result of auditioning, so you need connections and a reputation to land an audition. Be prepared for less-than-optimum circumstances. Your first gigs may involve playing for free on a Sunday night.

The "Accountant"

It's not absolutely necessary to appoint a band member to handle the finances. But it sure helps. As with many other roles in the band—the leader, for example—who will be the money person may well become obvious. He or she is scrupulously honest, can balance a checkbook, and earns the trust of the entire band. Although an MBA degree isn't a prerequisite, business savvy and negotiating skills are a bonus.

The band's "money guy" (or gal) takes on time-consuming and important responsibilities. Serving as a sort of band treasurer, the money person collects all the money from gigs, writes checks for group expenses, and takes care of band bills. Ultimately this person maintains a checkbook, whether it's out of a personal account or a central band account, and makes certain that the band never bounces a check. Keeping a budget—the gig paid £50on a certain night, £2 went for gas, £5 went for equipment, and the rest was profit—is always handy. Ideally, the fund grows according to the paid gigs you play.

Everybody should keep an eye on the money person—it's your money, too!—but ultimately the money person should be trustworthy enough that you don't have to watch him or her. And remember the band treasurer is taking on tons of extra work and responsibility, so don't give him or her too much grief. Also, the band treasurer should never have to front personal money to pay for expenses; this road leads to frustration and resentment and could ultimately break up the band.

It goes almost without saying that no band member gets to dip into the collective fund for individual purposes. No matter how hard up you are, it isn't "your money."

Goals

Financial goals, for a band, can be as simple as opening a bank account or as complex as investing in the stock market with the band's collective funds. Early on, if you're playing parties, your immediate goals will be to cover expenses and have a little beer money left over. If you're playing weddings or bar mitzvahs, the salaries may be a little more lucrative, so perhaps you'll supplement your existing yearly income with a regular cash stream. Or maybe you'll want to quit your day job and play in the band full-time—and, someday, make millions with a record contract. Either way, as we noted previously, it's important for the band to discuss these goals periodically.

Manager?

A manager—at least, a good one—takes care of almost every band detail save the music-making itself. He or she can be your most valuable ally, a well-connected businessperson who will give answers to questions like "how come we didn't get the merchandise settlement yet?" and "when's the gig?" This person should be experienced, helping you wade through the music industry on several levels, and give you straight-up advice that will advance your career. Such a person is hard to find, especially at first. For now, you may have to settle on a trustworthy, somewhat business-savvy friend, relative, or even band member. Eventually, when you start to make money, the band can upgrade.

The standard deal for rock managers is 15 percent of the band's gross (though it can vary from 10 to 50 percent). So if you make £100 for a show, £15 of it goes to the manager—which means a paid manager may not make sense yet for the band. If you start grossing £50,000 per show, definitely, hire a manager. And maybe two or three.

An entry-level band—which is to say, musicians who've played a few gigs at most and have been together a few months or less—probably can't afford a paid manager. Until 15 percent of your salary per gig is worth something, a professional won't be interested. It's possible you'll get lucky, or just be really, really good, and a manager will catch your show and want to work with you right away. These things happen in the music business. But don't count on it.

Still, somebody has to deal with the band's boring business stuff. Staying in touch with party planners, negotiating gig salaries, and collecting money can be a pain, but in addition to saving the band money on a paid manager, the do-it-yourself manager will learn how to do the job. When it's time to hire a manager, that person will know what to look for.

A drawback to the do-it-yourself approach to band management is it may take away from your music-making time. Try not to let this happen. Art and commerce intersect in many ways, but your guitarist-manager shouldn't be so busy working the spreadsheet that he or she can't make it to practice.

What does a manager really do? When it's time to book a gig, somebody has to sit down with the intimidating concert promoter or wedding planner and attempt to get a reasonable amount of money for the band. These negotiations aren't usually complex, at first, but they do require finesse, conversational skill, and perhaps courage. If the band wants £200, and the club owner offers £100, it's difficult to say, in a nice way, "No way, you're screwing us, we need more." But such is the lot of the band manager.

Early in the band's career, you probably won't have much leverage, which means enough clout to significantly influence the negotiations. Joe's Local Band, which hasn't played many gigs and has demonstrated little ability to draw a crowd or media coverage, won't have the leverage to ask for much more than the promoter offers. R.E.M., on the other hand, can expect to get almost anything it requests. It can never hurt to ask for more money, but if you desperately want the gig, at least at first, you'll have to compromise.

Terms are the basic details of any gig you play. How much money will you make? How much time will you be onstage? How many breaks do you get to take? Do you have to play any specific songs? Can you videotape the band? Do you have to bring in your own sound system? All these questions are part of the negotiation, and while not everybody is out to bamboozle you, some people are.

A good manager, in addition to having the time and energy to simply do the work, has a built-in "B.S. detector." This person won't be seduced when the club owner drops the salary below a reasonable level but accounts for it with "one free beer per musician." A good manager will also have the instinct to know when to stop—you never want to alienate your boss or burn an important bridge—even if the deal isn't perfect. These skills come with time and experience.

On a smaller scale, your negotiating partners will probably be honest, regular folks who just want to create a good event. For dances, it could be the representatives on a college activities board or high school student council. For parties or weddings, it could be your next-door neighbor, or someone from a local banquet hall. For extremely large events, such as a large theater, arena, or stadium show, you'll deal with a big-time concert promoter. But that'll come much, much later in your band's career, if at all.

Club owners—or, in many cases, bookers or promoters—are not generally "regular folks." They're usually honest and straightforward, but keep in mind these people make their livings dealing with all-night beer drinkers, bouncers, and rowdy crowds. They tend to be a little tough.

They also tend to be aggressive, high-energy, and busy. On any given night, a club owner has 8,000,000 things to do—making sure the bar is stocked, keeping the fire marshal happy, denying entrance to underage patrons, and so forth. To deal with them effectively, meet them at their pace. As with any business negotiation, it helps to connect on their level. Is a particular club owner a classic-car collector? Maybe you have some knowledge of these topics and can work your uncle's 1954 Austin Healy into the conversation. To a point, "schmoozing" is an acceptable and honorable way to develop a business relationship. There's an art to it.

Promoter

While a promoter may own a venue and serve as a booker in some cases, this character generally books bigger shows—national attractions in the ornate downtown theater or the sport arena. Generally, working for a promoter is a step or two up from playing in clubs.

Promoters also make important decisions about opening acts. When a national star comes to town, the promoter may want to warm up the crowd with a hot local artist. Often this decision is a matter of simple math: If the local band consistently draws 200 people to its shows, and the promoter needs to sell 200 tickets to fill up the venue, that local band my be perfect.

Booking Agent

A booking agent sets up gigs for your band to play. This person will have experience and connections that a do-it-yourself musician or manager can't possibly match. You may, for example, want to play in Liverpool but can't get an "in" simply by sending your demo to clubs and following up. A good booking agent will know all the connections and have experience dealing with them—and may score you a gig by making a few phone calls.

Are you ready to hire one? Use the same math you used for hiring a manager. Most booking agents take 10 percent of your profits. If you're making £100 per gig, and a booking agent takes £10, and you have £30 in expenses, that leaves £60 to split among four band members—just £15 each. So no, under that scenario, you aren't ready yet.

As with a manager, it's best to find someone who "gets" your music. A booking agent whose clients are Pink and Lenny Kravitz may not understand your band's predisposition toward country-punk songs inspired by Lefty Frizzell and Son Volt. This agent probably won't know the right clubs in which to book your music. So make sure you get references and do some research before signing any contract.

How can you find one? The same way you'd find a good manager. Ask friends in bands. Ask the slightly larger band for whom you've just opened a local show. Managers and booking agents tend to gather at these things to catch more than one band at once. But it's also smart to network, schmooze, and work the crowd for connections.

You can, of course, send your demo tape and press kit to big-time booking agents throughout the country. And you may get lucky, or bowl somebody over with your talent. But unsolicited packages are a tough way to go and lead to a ton of rejections. Best to have a connection first.

Lawyer

Ultimately, if you plan to stay in the music business in the long run and hope to draw larger and larger crowds, you'll need a lawyer. Unlike a manager or booking agent, this specialist won't be involved in the band's day-to-day operations. But any time you have to sign a legal document, from a club contract to a record-label deal, you'll definitely want advice from a lawyer. But use these experts sparingly, because they can charge hundreds of pounds an hour.

First and foremost, lawyers can protect you from legal problems down the road. If the nightclub you play has a fire, somebody gets injured, and the club owner tries to sue the band, you won't want to scramble for counsel at the last minute. (The fire scenario hardly ever happens, but you never know.) If a label scout shows up at your gig and wants to sign you right away—again, a rarity, but a welcome one—you'll need a lawyer to peruse the paperwork. Also, lawyers can provide an introduction to record labels and help you "shop" for a deal.

Although the "do-it-yourself approach works reasonably well, at first, for managers and booking agents, the members of your band can't possible generate adequate legal expertise on short notice. You'll need to hire an expert.