Music sponsorship
Different ways to finance your music
There are many ways to finance your music business, for example through public grants, loans, private funding, sponsorship and crowdfunding.
Finding music business finance is rarely easy, but options are available if you know where to look for them.
Common options for music business finance
The most common ways music businesses get finance and funding for their projects is through:
- self-financing your music - eg using cash from private sources, friends and family, or partners
- grants and subsidies for music - including from European, UK and Northern Ireland government, local councils, Arts Council Northern Ireland, etc
- private investment for music - including equity and angel investment, and venture capital
- debt finance for music businesses- including bank finance and loans
- crowdfunding for music projects
- music sponsorship and endorsement deals
Before you seek funding, make sure that you identify your exact needs. Ask yourself:
- what you need the money for
- how much money do you need
- how will you spend that money (and make sure that you don't overspend)
- who is your preferred funding source
- how can you approach them
Depending on the type of project you are looking to fund, some of the finance options may be better suited than others. For example, a quick overdraft may help you deal with a temporary cashflow issue, but it may not stretch enough if you are embarking an expensive tour. Likewise, crowdfunding may work well if you have strong support from your growing audience, but local grants or artist subsidies may be better suited if you are just taking off.
To maximise your chances of success, try raising funds from several sources of finance rather than just one. Make sure that you understand what the funders are looking for and what type of projects they normally support. See how to choose the right finance when starting up.
Also on this siteContent category
Source URL
/content/different-ways-finance-your-music
Links
Self-financing your music
How to fund your next music project or album out of your own pocket.
Self-financing is quite common with start-up businesses across a range of industries, including the music sector. Self-financing generally means one of two things:
- using your own money to invest in the business - eg your cash or personal savings
- using your personal assets as security for additional funding - eg borrowing against your life insurance, house, car, etc
It is very important to consider carefully any financial decision that could put you in debt or at risk of losing your personal or family assets. Seek professional advice if in doubt about these matters.
How to fund music with your own money
You can begin by doing a detailed inventory of your personal assets. These may include:
- savings accounts
- real estate equity
- retirement accounts
- vehicles
- equipment
- collections
Once you know what your assets are, you can sell some for cash or use them as collateral for a loan. If you have investments, you may also be able to use them as a resource.
If you don't have a savings account, it may be worth setting one up specifically for your music project. If you're already gigging, or have other regular earnings, you could set aside a part of your income to go into the project savings. If you need to increase your savings quickly, look into alternative options for earning cash from your music. For example, think about:
- offering music lessons
- renting your equipment
- selling off old systems
- fundraising with friends, family and at venues you perform in
- raising in-kind support - eg free services from organisations or individuals
If you self-finance your project, and need to turn to banks for future funding, having invested your own money in your business may go in your favour, as it will show commitment and determination to your business success. See debt finance for music businesses.
To self-finance your business successfully, you will have to use your assets wisely, manage your cash flow and economise where possible. If you're not able to self-finance, consider applying for grants and subsidies for music.
Also on this siteContent category
Source URL
/content/self-financing-your-music
Links
Grants and subsidies for music
Where to find public grants and support for music businesses.
Grants are a popular source of public funding for music start-ups, small businesses and projects. They are non-repayable, which generally makes applying for them very competitive. Most grant schemes have different criteria and usually fund only a part of your project's costs.
Where to find music grants
The largest sources of grants for music businesses are typically:
- the arts councils, including the Arts Council Northern Ireland
- the PRS for Music Foundation
- trade bodies, such as the British Phonographic Industry
- sector-related charities, such as Help Musicians UK
- community foundations
- benevolent funds
You can also use the Northern Ireland business support finder tool to search for grants and other forms of assistance.
Music grants - what can they be used for?
Specific grants will have different rules but, normally, you can seek funding for:
- research, development and marketing activities
- creating new work for production or touring
- training, mentoring and professional development
- business and market development
- export and trade show attendance
Keep in mind that the competition for this type of funding is high. Expect to spend time on research for this type of funding, as schemes, deadlines and criteria change regularly.
Tips for winning grants
To be successful at winning grants, you will need to:
- have a good business plan
- offer a comprehensive project or idea that fits with the grant objective
- convince the funders that you can carry out the project to a good standard
When applying for grants, make sure that you are eligible. Many music businesses get rejected because they are ineligible for that scheme in the first place. Making sure that you meet the criteria will prevent you from investing precious time and effort into unsuccessful applications. Read about grant eligibility and reasons why a grant application might be turned down.
If you are planning a project, make sure to build in plenty of time to tap into the right funding sources.
Also on this siteContent category
Source URL
/content/grants-and-subsidies-music
Links
Private investment for music
How to find and secure private investment to fund your music project or business.
The music industry can be a difficult sector for securing private investment. However, with proper research, preparation and the right sales pitch, you may be able to finance your music career with the help of an investor or a business angel.
Different types of private investment
To fully grasp the opportunities that may be available, you must first understand the difference between:
- equity finance - this covers different investment types usually made by private individuals or private equity firms
- venture capital - this is a form or private equity, but managed differently and reserved mainly for businesses with potential for high growth
- business angels - these are individuals who seek high returns on generally smaller amounts of private investment
When searching for the right music investor, you must take into account different factors including:
- the amount of money you need
- the type of project you wish to fund
- your return potential
- development opportunities
Remember that investors give their own capital to your business. In return for their money, they will normally expect you to agree to certain conditions. These may be:
- repayment within an agreed timeframe, if you've made a loan deal
- giving part- or joint ownership of your business
- registering as a limited company
Take into account what you may be sacrificing by getting an investor on board. Will you have to give up some of your business or your autonomy? Does the investor want to have a say in your business decisions? Do they have experience in the music industry?
For an in-depth overview of each of the three types of private investment, see shares and equity finance.
Where to find investors for your music
The most obvious routes to finding an investor for your music are:
- your local music scene - ask other artists and promoters
- your local business community, including local Chambers of Commerce, business development organisations, business networks and local councils
- trade bodies and associations
- local and national investing and venture capital groups
To find and secure investment, you will need a comprehensive business plan, a detailed marketing plan and realistic financial projections. See how to prepare to secure equity investment.
Also on this siteContent category
Source URL
/content/private-investment-music
Links
Debt finance for music businesses
How to raise money for your music project through debt finance, including bank loans, credit cards, overdrafts, etc.
Debt finance is money that you borrow (usually from a bank) to run your business. It covers credit in its many forms, including loans, credit cards, overdrafts, mortgages and others.
Depending on the type of loan you are seeking, debt financing can be:
- short-term - eg bridging finance such as overdrafts
- medium-term - eg term loans, asset finance and leasing
- long-term - eg mortgages and fixed asset loans
- working capital funding - eg invoice or supplier financing
You can get debt financing by application to any high street bank. Music businesses should also consider a few alternative sources of finance, including:
- creative industries funds
- community development funds
Getting bank finance for music
Music business loans are similar to other small business loans. If you apply for a music business loan, you will have to go through the same process as any other business.
The bank will generally carry out a risk assessment and evaluate you on several criteria, including:
- your financial stability
- your credibility
- your business plan
- your ability to repay
- your ability to find other investors
Before you apply for credit, think about how and when you will be able to make repayments, and if you have any savings you can use to underwrite a loan.
You will need to develop a strong business plan to support your loan request. Make sure that you write it clearly and include all the financial details of your business, such as an income statement, cash flow projections, and a balance sheet.
Remember, if you receive credit and borrow money from a lender, you will be charged interest and expected to repay it in full.
Find out more about the different types of bank finance for businesses.
Also on this siteContent category
Source URL
/content/debt-finance-music-businesses
Links
Crowdfunding for music projects
How and where to launch a crowdfunding campaign for your next music project.
Many music businesses use crowdfunding to engage with their fans and find the money for their projects. It is one of the best tools at their disposal to raise funds to:
- record, produce and tour their work
- promote their music to a wide audience
- develop and grow their business
- invest in professional development and study
- invest in equipment, set up a studio, etc
Crowdfunding can be a way of raising finance relatively quickly, but it is not always easy or suitable for all music businesses and projects. You can choose between different crowdfunding options. See types of crowdfunding.
Can crowdfunding work for your music project?
Before you decide to ask your fans for donations through crowdfunding, it is best to consider a few things. For example:
- your choice of platform
- the amount of money you need
- the audience you can appeal to
- the rewards you can offer
- your marketing strategy - to secure promotion before, during and after the campaign
It is important to set realistic fundraising goals and not be greedy. Create a compelling request, campaign for a specific purpose and work out exactly how much money you will need before you reach out to your fans. If you don't have an existing following, you may need to build up your audience first before you can ask them for money.
Your rewards and incentives will likely affect how many pledges you get. Think through different pricing options and reward levels, and give your fans a choice. See things to consider when choosing a crowdfunding website.
Crowdfunding platforms for musicians
Many steps go into planning a successful crowdfunding campaign, but the first one will generally be choosing the right platform for your project.
The most popular crowdfunding websites for musicians include:
Features and funding structures may differ between various platforms, so you will need to research and analyse your options to make sure that you choose a platform that best fits your project, goals and resources. Read more about crowdfunding websites.
Also on this siteContent category
Source URL
/content/crowdfunding-music-projects
Links
Music sponsorship
What are music sponsorships, where to find them and how to get an endorsement deal for your music business.
Music sponsorship is a two-way bond between an artist (or a band) and a commercial company. Sponsors can offer an additional source of income to help you fund your music career, in exchange for you promoting or helping to sell their products or services to your audience.
Typical music sponsorship deals may involve endorsements of, for example:
- beverages or food
- music equipment
- clothing brands
Sponsors will generally only be interested in you if you can guarantee them exposure to a wide audience. If you haven't yet established your fan base, you may not be ready to pursue a sponsorship deal. See how to develop a fan base first.
Getting sponsorship deals
Many different things go into finding and securing a sponsor. One of the main requirements is knowing who you are, and what value you can offer to the sponsor.
It is important to put together a strong case for a sponsorship deal. The following will work in your favour:
- you are selling out performances
- you are filling up venues
- you have a strong and engaged fan base - online and offline
- your YouTube videos are popular
- you have a ready-to-go fan email list
- you've won public recognition and awards
All these will create your value proposition, which you will be able to pitch to the prospective sponsors.
When you are shortlisting companies to approach, it may be worth thinking about your target market, the products or services you are already using, and products and business that you can easily get behind.
Competition for sponsorships can be intense. To maximise chances of success, be very clear - show the prospective sponsors what they will gain by sponsoring you, and give them a focused marketing plan that fits with their marketing needs.
Also on this siteContent category
Source URL
/content/music-sponsorship
Links