Are you looking to start a music licensing business?
If you talk to any entrepreneur, getting started is one of the hardest parts of launching your own business.
There are many things to consider, such as:
- Validating your business idea
- Setting up your business structure
- Launch ideas for your business
- Determining your marketing strategy
- And much more!
In this detailed guide, we lay out all the steps to help you get started and run your business successfully.
💡 Introduction To Starting A Music Licensing Business
Is Starting A Music Licensing Business Right For You?
There are many factors to consider when starting a music licensing business.
We put together the main pros and cons for you here:
Pros of starting a music licensing business
• Little startup costs required
The cost to start a music licensing business costs significantly less money than most businesses, ranging anywhere from 62 to 35,923.
• Rewarding work
Starting a music licensing business can be really rewarding work. After all, you are solving an immediate issue for your customer and you're working on something you truly care about.
• High customer retention rates
Once a customer invests in your product, they've invested their time and energy to utilize your product/service which is highly valuable to them. Typically, your product or service becomes indispensable to your customer.
• Pick & choose the clients you work with
Music Licensing Businesses have the ability to choose the clients they work with. You have the freedom to work with only a few loyal clients or with hundreds of clients!
• Control of workload
With starting a music licensing business, you have the unique ability to choose how little or how much you want to work. You also have the freedom to decide which projects you want to work on, and can turn down the ones that do not interest you.
• Gain exposure and experience
This career allows you to gain experience working for multiple different businesses - which will benefit your resume and also keep things interesting for you!
• Unlimited income potential
With starting a music licensing business there is no cap as to how much income you can make. The stronger your business skills and the more energy/time you put into your career, the more you'll make.
• Daily physical activity
Music Licensing Business's typically involve a much greater degree of movement than other lines of work. Most days, you will spend your day walking, running errands for your business, and performing a multitude of tasks. This can have a positive impact on energy levels and your overall health.
• You are your own boss!
With starting a music licensing business, you are the one to make decisions for almost all of the operations. Calling the shots can be empowering and liberating!
• Local Community
One of the best parts of starting a music licensing business is that you can develop a local following by selling your products at craft shows, farmers' markets, or even local storefront businesses! This gives you access to additional revenue streams and loyal customers.
• Predictable income stream
Your businesses income stream tends to be predictable based on the number of customers you have signed up. This makes financial planning and outlooks much more seamless!
• Higher likelihood of getting referrals
This business is all about referrals, which can be a a very impactful way to attract and retain customers. It's critical that you have a great referral program in place that incentivizes your customers to tell their friends about your product.
• Face to face interaction
If you are the type of individual that thrives on human interaction, then this is the business for you! With a music licensing business, you will be hands-on with customers and or employees every day.
• Simple business model
A music licensing business has the advantage of a simple business model, which makes launching and building the business more seamless.
• Greater Income Potential
With this business, the sky is the limit in regards to your income potential.
• You get to do something you truly love
With starting a music licensing business, you get to put your energy into something you are truly passionate about! You'll find yourself devoting as much time and energy as possible into the business to make it successful.
• You can decide who you work with
Gone are the days of working in a toxic work environment with employees that you may not vibe with. As a small business owner, you get to decide who you work and surround yourself with.
• Strong Demand & Relatively Recession Proof
The demand for music licensing business is increasing year over year and the business is known to be relatively recession proof.
• High Hourly Pay Rates
On average, the hourly pay rates are high for your music licensing business - which means quality of clients is often superior to quantity of clients.
• You establish yourself as an expert
With starting a music licensing business, you establish yourself as an expert in your niche, which builds your credibility. In return, customers are more likely to trust you and refer you to other friends and family.
• Can build solid foundation of clients
It's unlikely you will have one-off customers as a music licensing business. Typically, you have a solid foundation of clients that use your product and services regularly.
Cons of starting a music licensing business
• Motivation of employees
If you plan to have a sales/content team on board, finding creative ways to motivate them can be a challenge. It's important that you're able to offer great incentives and a good work environment for your employees.
• Longer Sales Process
A music licensing business can be a big time and money investment for your customer, so it's important you plan and predict a longer conversion funnel and stay in communication with potential customers.
• Work can be inconsistent
As a music licensing business, the amount of work assigned to you and schedule tends to be more inconsistent, which may make your income less stable. It's important to set boundaries and budget accordingly based on the amount of work you plan to have.
• Lack of benefits
With a music licensing business, you are typically self-employed and responsible for finding your own insurance, which can be quite costly and time-consuming.
As a music licensing business, you typically pay self-employment taxes which can be quite high. It's important to understand what you will be paying in taxes each year so you can determine if the work you're taking on is worth it.
• No safety net
Typically, as a music licensing business, you do not receive a consistent pay-check and instead earn money based on your transactions each month. During the slow periods, you typically take away less since the job is based on commission. It's important to budget accordingly for the slow times.
• Stressful work
This line of work can be stressful for both you and your clients. This type of transaction is a significant financial decision for your client, so expectations are very high for you. Although this career path can be very rewarding, it also comes with its challenges and stressful moments.
• Work can be repetitive
You may find creating the same product over and over repetitive and tiresome. One way of avoiding this is to diversify product lines and revenue streams - this will keep things interesting!
• Time commitment
With starting a music licensing business, all responsibilities and decisions are in your hands. Although this is not necessarily a negative thing, work life can take over at times. This can place a strain on friends and family and add to the pressure of launching a new business.
• Be prepared to get out of your comfort zone!
Although this is exciting for some entrepreneurs, it can be a big challenge for others! You may find yourself in uncomfortable social and business situations, jumping into tasks and responsibilities you aren't familiar with, and pushing yourself as far as you can go!
• More of a challenge to run your business from home!
Running your business from the comfort of your own home is a big appeal for many entrepreneurs. With a music licensing business, you are more likely to run your business out of your office or storefront space.
• Work is not always glamorous
With starting a music licensing business, you may need to get your hands a little dirty. Although it may seem glamorous from the outside to start this business, the work can require a lot of physical activity and repetition.
• The job can be demanding
This is one of the major disadvantages starting a music licensing business. It's important to understand that you may need to make yourself available on a 24/7 basis.
• High liability
Running a music licensing business involves a lot of liability, which means the cost for insurance premiums may also be high.
• Equipment Breakdowns
Over the years, your equipment can get damaged, break down, and may need repairs which can be expensive. It's important you prepare for these expenses and try to avoid damages/wear & tear as much as possible.
• Answering Phones
The music licensing business is still considered a traditional business, which means answering phones is a big part of the job. If you or your team miss phone calls, you could be missing out on potential revenue opportunities. If you are unable to attend to your phone throughout the day, it would be in your best interest to hire a call center or an employee dedicated to this.
• You'll spend a lot of time in the car
Many music licensing business offer their services outside of their office or home, which means you'll be spending quite a bit of time behind the wheel. You will also need to consider traffic and delays, which can be time consuming and take each job longer than expected.
• The job can be dangerous
Your music licensing business can have its dangerous moments, which puts you and your employees at risk. It's important to consider all liability and put processes and procedures in place that will prepare you and your team.
• More challenging to earn passive income
It can be more of a challenge to make passive income in this business. Often times, the amount of revenue you bring in is limited by the amount of time you have in the day.
- Royalty free music and sound effects (5.19K Alexa Ranking)
- Musicbed (23.5K Alexa Ranking)
- CCLI (37.8K Alexa Ranking)
- ProductionCrate, LLC (48.5K Alexa Ranking)
- Tribe of Noise (55.9K Alexa Ranking)
- Easy Song - Revenue $315K/month
- Crucial Music - Revenue $75K/month
- ProductionCrate, LLC - Revenue $50K/month
Let's take a look at the search trends for music licensing over the last year:
How To Name Your Music Licensing Business
It's important to find a catchy name for your music licensing business so that you can stand out in your space.
Here are some general tips to consider when naming your music licensing business
- Avoid hard to spell names: you want something easy to remember and easy to spell for your customers
- Conduct a search to see if others in the space have the same name
- Try not to pick a name that limits growth opportunities for your business (ie. if you decide to expand into other product lines)
- As soon as you have an idea (or ideas) of a few names that you love, register the domain name(s) as soon as possible!
Why is naming your music licensing business so important?
The name of your business will forever play a role in:
- Your customers first impression
- Your businesses identity
- The power behind the type of customer your brand attracts
- If you're memorable or not
It's important to verify that the domain name is available for your music licensing business.
You can search domain availability here:
Find a domain starting at $0.88
powered by Namecheap
Although .com names are the most common and easiest to remember, there are other options if your .com domain name is not available. Depending on your audience, it may not matter as much as you think.
It's also important to thoroughly check if social media handles are available.
As soon as you resonate with a name (or names), secure the domain and SM handles as soon as possible to ensure they don't get taken.
Here's some inspiration for naming your music licensing business:
- Limited Lease check availability
- Permits Place check availability
- Unrestricted Permits Pro check availability
- Baroque Bands Place check availability
- Use check availability
- Let Place check availability
- Song Place check availability
- Permit Place check availability
- Heighten License check availability
- Special Certification Place check availability
- Permission Group check availability
- Permanent Permission check availability
- Connivance License check availability
- Commercial check availability
- The Multisector check availability
- Resident Allow Group check availability
- Organ Songs Trading Co check availability
- Abusing Music check availability
- Modern Melodies check availability
- The Professional Licensee check availability
- Concealed Countenance Spot check availability
- Light Bands Pro check availability
- The Unrestrained Certification check availability
- Literary Leave check availability
- The General check availability
- Npdes Permission check availability
- Exclusive Licensee Group check availability
- Pure check availability
- The Popular check availability
- BaroqueMusic check availability
- Such License Collective check availability
- Modern Moh check availability
- The Tonal check availability
- Musician Co check availability
- Modern Musica check availability
- PureMusic check availability
- The Greater check availability
- The Favorite Sheet Music check availability
- Romantic Sheet Music Place check availability
- The Unbridled check availability
- Classical Bands Co check availability
- Crisis License check availability
- Distant Musicians Collective check availability
- GreaterLicense check availability
- Barnet Permit check availability
- GreekMusic check availability
- ConcealedPermit check availability
- Considerable check availability
- Countenance Collective check availability
- Limited License Fee check availability
- Preliminary Platting check availability
- Official check availability
- The Literary check availability
- Clueless Music check availability
- Licensure Spot check availability
- Favorite Euphony Spot check availability
- Permanent Certify Place check availability
- Permanent check availability
- The Traditional check availability
- Considerable Licensure Co check availability
- Occupational Certificate check availability
- Wild Medicine Co check availability
- Npdes check availability
- Permits Pro check availability
- Nice and License check availability
- License Co check availability
- Building check availability
- Musicians Co check availability
- PrintedMusic check availability
- Modern Musicales check availability
- Recorded Concerts check availability
- Befits Permit check availability
- Grazing check availability
- Bruises Music check availability
- Electronic Musical Trading Co check availability
- Unbridled check availability
- ProperLicense check availability
- Cross Permission check availability
- RetailLicense check availability
- Royal Permits Trading Co check availability
- Prior Possible check availability
- Free Licensee Pro check availability
- Certification Group check availability
- The Patient check availability
- Burnet Permit check availability
- Slicing License check availability
- Unlicensed Group check availability
- Contemporary Medicine check availability
- Incidental Euphony Place check availability
- Irish Bands check availability
- Provisional Possible check availability
- Bands Trading Co check availability
- Certificate Co check availability
- IndividualPermit check availability
- The Poetic check availability
- Licence Pro check availability
- Human Music check availability
- Much Musicians check availability
- The Popular Jazz check availability
- Royal Authorization Pro check availability
- The Gospel check availability
- Musician Place check availability
- The Separate check availability
- Permanent Platting check availability
- Preliminary Pass check availability
- YearPermit check availability
- The Symphonic Song check availability
- Separate Countenance check availability
- Patient Prohibited check availability
- Songs Co check availability
- Federal Permit Pro check availability
- General check availability
- Day Licensee Place check availability
- IrishMusic check availability
- Persist Permit check availability
- Greek Musicians Co check availability
- Sweet Bands Group check availability
- The Building Permission check availability
- Loud Song Trading Co check availability
- Literary Permits Collective check availability
- Much Licence Group check availability
- StrangeMusic check availability
- Much Concerts Place check availability
How To Create A Slogan For Your Music Licensing Business:
Slogans are a critical piece of your marketing and advertising strategy.
The role of your slogan is to help your customer understand the benefits of your product/service - so it's important to find a catchy and effective slogan name.
Often times, your slogan can even be more important than the name of your brand.
Here are 6 tips for creating a catchy slogan for your music licensing business:
1. Keep it short, simple and avoid difficult words
A great rule of thumb is that your slogan should be under 10 words. This will make it easy for your customer to understand and remember.
2. Tell what you do and focus on what makes you different
There are a few different ways you can incorporate what makes your business special in your slogan:
- Explain the target customer you are catering your services towards
- What problem do you solve?
- How do you make other people, clients, or your employer look good?
- Do you make people more successful? How?
3. Be consistent
Chances are, if you're coming up with a slogan, you may already have your business name, logo, mission, branding etc.
It's important to create a slogan that is consistent with all of the above.
4. Ensure the longevity of your slogan
Times are changing quickly, and so are businesses.
When coming up with your slogan, you may want to consider creating something that is timeless and won't just fade with new trends.
5. Consider your audience
When finding a catchy slogan name, you'll want to make sure that this resonates across your entire audience.
It's possible that your slogan could make complete sense to your audience in Europe, but may not resonate with your US audience.
6. Get feedback!
This is one of the easiest ways to know if your slogan will be perceived well, and a step that a lot of brands drop the ball on.
Ask friends, family, strangers, and most importantly, those that are considered to be in your target market.
Here's some inspiration for coming up with a slogan for your music licensing business:
- Valid Licenses Are What We Do
- Ding-Dong! Permit Calling!
- Free Diploma, Special Unlicensed
- Work Hard, Empower Harder
- See You At License.
- Work Hard, Rap Harder
- The Best License Under One Roof.
- Site Of The Song
- Conditional Authorization, General Trachinotus Falcatus
- Royal Authorization, Such Permits
- Work Hard, Ensured Harder
- Musics With Literature
- Real License, We Care
- Work Hard, Pop Harder
- Sacred Sounds Are What We Do
- Only A Fool Breaks The Music.
- Music One Size Fits All.
- From Unitary To Union
- Central Heating For Music.
- Special And Successful
- Licenses With Hand
- Permit It's Guaranteed.
- I Can't Believe It's Not Permit.
- Permits With Argument
- Music Inside You.
- Valid Permit, Satisfaction Guaranteed
- Popular Mohs Are What We Do
- Conditional And Integral
- I Feel Like License Tonight.
- Musics With Opinion
- Exceedingly Good License.
- You Too Can Have A Permit Like Mine.
- Instrumental And Central
- Sacred And Hated
- Don't Live A Little, Live A Music.
- Lock Is What We Do
- Real Hunting Licenses Are What We Do
- Position Of The Consent
- Music Only.
- Poetic And Redic
- General Diploma, Real Diploma
- Such Licenses Are What We Do
- Clearance Is What We Do
- Only The Crumbliest Flakiest Music.
- Permit Rocks.
- Free Sorns Are What We Do
- Such Authorization, Compulsory Certificate
- Break Through With Music.
- Where's License?
- Conditional Requireds Are What We Do
- From Recorded To Last
- Everyone Wants A Permit.
- Work Hard, Certify Harder
- Valid Approval, Special Let
- Official And Provincial
- Takes A Music But It Keeps On Tickin'.
- Compulsory And Accessory
- Permit Is A Never Ending Story.
- Valid Granteds Are What We Do
- Permit - Today And Tomorrow.
- Special Permit, Take A Seat
- Ding-Dong! License Calling!
- Range Of The Permit
- Break Through With Permit.
- It's How License Is Done.
🎬 How To Start A Music Licensing Business
How Much Does It Cost To Start A Music Licensing Business
If you are planning to start a music licensing business, the costs are relatively low. This, of course, depends on if you decide to start the business with lean expenses or bringing in a large team and spending more money.
We’ve outlined two common scenarios for “pre-opening” costs of starting a music licensing business and outline the costs you should expect for each:
- The estimated minimum starting cost = $62
- The estimated maximum starting cost = $35,923
|Startup Expenses: Average expenses incurred when starting a music licensing business.||Min Startup Costs: You plan to execute on your own. You’re able to work from home with minimal costs.||Max Startup Costs: You have started with 1+ other team members.|
|Employee & Freelancer Expenses|
|Payroll Costs & Fees: Payroll cost means the expense of paying your employees, which includes salaries, wages, and other benefits. This number depends on if you decide to pay yourself a salary upfront and how many employees you have on payroll. At first, many founders take on all responsibilities until the business is up and running. You can always hire down the road when you understand where you need help. Keep in mind, if you do plan to pay yourself, the average salary founders make is $50K.||$150||$250|
|Employee Hiring Expenses: Apart from payroll and benefits, there are other hiring employees costs. This includes the cost to advertise the job, the time it takes to interview candidates, and any other turnover that may result from hiring the wrong candidate.||$1||$2|
|Total Employee & Freelancer Expenses||$151 (min)||$252 (max)|
|Website Builder: The cost of your website will vary depending on which platform you choose. There are many website builders on the market, so it's important you choose the right one for your business and overall goals. To learn more about your options + how to build a great website, check out this article.||$10||$500|
|Web Designer: Web design includes several different aspects, including webpage layout, content creation, and design elements.If you have the skills and knowledge to design your website on your own, then outsourcing this to an expert may not be necessary. There are plenty of other ways you can design a beautiful website using design tools and software.||$200||$6,000|
|Domain Name: Your domain name is the URL and name of your website - this is how internet users find you and your website.Domain names are extremely important and should match your company name and brand. This makes it easier for customers to remember you and return to your website.||$12||$200|
|Business Email Hosting Service: An email hosting runs a dedicated email server. Once you have your domain name, you can set up email accounts for each user on your team. The most common email hosts are G Suite and Microsoft 365 Suite. The number of email accounts you set up will determine the monthly cost breakdown.||$1||$15|
|Website Hosting Costs: Server hosting is an IT service typically offered by a cloud service provider that hosts the website information and allows remote access through the internet. A hosted server can help you scale up and increase your business’s efficacy, relieving you from the hassles of on-premise operations.||$0||$300|
|Total Website Costs||$223 (min)||$7,015 (max)|
|Business Formation Fees|
|Small Business Insurance: Depending on which state you live in and the business you're operating, the costs and requirements for small business insurance vary. You can learn more here.||$500||$2,000|
|Permit and License Fees: Depending on your industry, there are certain licenses and permits you may need in order to comply with state, local, and federal regulations. Here is an article that goes over all the permits and licenses you may need for your music licensing business.||$50||$700|
|Lawyer Fees: Although you may want to avoid attorney fees, it's important that your business (and you) are covered at all costs. This comes into play when creating founder agreements, setting up your business legal structure, and of course, any unforeseen circumstances that may happen when dealing with customers or other businesses.||$0||$1,500|
|Set up business: LLC & Corporations: The first step in setting up your business is deciding whether your business is an LLC, S Corp or C Corp. The cost for this depends on which state you form your business and which structure you decide on. We put together an article that goes over the 10 Steps To Setting Up A Business.||$50||$500|
|Total Business Formation Fees||$600 (min)||$4,700 (max)|
|Mode of Transporation: For your music licensing business you'll need to rent or purchase an operating vehicle such as a van, vessel, RV, or enclosed trailer.||$0||$10,000|
|Total Vehicle Expenses||$0 (min)||$10,000 (max)|
|Retail Business Expenses|
|Utilities (storefront business): This refers to the cost of monthly utilities for your storefront location, which is typically based on a per-square-footage rate.||$0||$1,000|
|Building improvements and remodeling: If you plan to operate a physical location, you may find yourself dealing with building improvements and remodeling costs. Even if these costs are minimal, this is something to consider when renting/buying a physical location.||$0||$950|
|Storefront Property Rent: This refers to the storefront space you rent or buy for your business. The cost depends largely on the city and the size of the space. Keep in mind that other costs may be involved with your base rent and your lease will define additional expenses you are responsible for.||$1,250||$3,500|
|POS System: Gone are the days of cash registers! Many businesses now use point-of-sale systems for their checkout needs and to track sales and inventory. Here is a list of the best POS systems for small businesses!||$0||$1,200|
|Total Retail Business Expenses||$1,250 (min)||$6,650 (max)|
|Advertising & Marketing Costs|
|Business Cards: A music licensing business involves quite a bit of customer interaction, whether that is attending tradeshows, sales calls or simply having face to face interaction with prospective clients. Business cards are a great way to stay front of mind with your clients.||$0||$50|
|Business Signage: Business signs let people know they're in the right place and are one of the first impressions your customer will have of your business.The cost for signage depends on a variety of elements:- material- size- number of colors- durability- installation and laborThere are plenty of design tools and software to create your own signs, or you can hire a sign business to do this for you.||$75||$2,486|
|Direct Campaigns, Printing and Mailing: Although it may sound old-school, traditional marketing methods can be a cost-effective way to drive awareness for your brand. This includes flyers, postcards, sales letters, coupons, special offers, catalogs and brochures.||$0||$300|
|Press: If your business and story is unique enough, press and media attention may come to you, but odds are, you may need to do your own outreach and budget for this. We put together a guide here that discusses different press opportunities (both free and paid).||$0||$500|
|Google Ads: With Google Ads you have the ability to control how much you spend by simply setting a monthly budget cap. Additionally, with these ads you only pay for results, such as clicks to your website or phone calls! It's okay to start with a small budget at first and make changes accordingly if you see valuable returns.||$0||$300|
|Facebook & Instagram Ads: With Facebook and Instagram ads, you set your budget and pay for the actions you want (whether that be impressions, conversions, etc).You can learn more about pricing based on your impressions here.||$0||$350|
|Total Advertising & Marketing Costs||$75 (min)||$3,986 (max)|
|Email marketing tool: If you plan to grow your email list and email marketing efforts, you may want to consider investing in an email marketing platform (ie. Klaviyo, MailChimp). We put together a detailed guide on all of the email marketing tools out there + the pricing models for each one here.||$0||$100|
|IT Support: IT support installs and configures hardware and software and solves any technical issues that may arise.IT support can be used internally or for your customers experiencing issues with your product/service.There are a variety of tools and software you can use to help with any technical issues you or your customers are experiencing. This is a great option for businesses that do not have the means to hire a team of professionals.||$150||$2,000|
|Accounting & Invoicing Software: It's important to have an accounting system and process in place to manage financials, reporting, planning and tax preparation. Here are the 30 best accounting tools for small businesses.||$0||$50|
|CRM Software: CRM (customer relationship management) software system is used to track and analyze your company’s interactions with clients and prospects. Although this is not a necessary tool to have for your business, implementing this, in the beginning, may set your business up for success and save you valuable time.||$12||$300|
|Internal Communication Tool: If you plan to have multiple members on your team, you may want to consider an instant message tool such as Slack or Telegram. The cost is usually billed per month (approx $5/user/month) or there are freemium versions available on many platforms.||$0||$20|
|Social Media Management Tools: If you plan to do social media marketing for your music licensing business, you should consider investing in a social media automation or publishing tool. This will save you time and allow you to track performance and engagement for your posts. Here is a list of 28 best social media tools for your small business.||$0||$50|
|Payroll Software: The main purpose of payroll software is to help you pay your team and track each of those payments (so that you don't have to do it manually). If you do not have any employees or have a very small team, payroll software may not be necessary at this stage. Here are the 11 best payroll tools for small businesses!||$0||$200|
|Total Software Expenses||$162 (min)||$2,720 (max)|
|Office Space Expenses|
|WiFi & Internet: Whether you work from home or in an office space, WiFi is essential. Although the cost is minimal in most cases, it should be appropriately budgeted for each month!||$0||$100|
|Total Office Space Expenses||$0 (min)||$100 (max)|
|Specific Industry Expenses|
|Handyman Tools: To start your music licensing business, you will need to have the essential tools to bring to each job. Here's a list of tools to get you started - you may find that you already have these in your tool-kit or garage!||$0||$500|
|Total Specific Industry Expenses||$0 (min)||$500 (max)|
|Total Starting Costs||$62 (min)||$35,923 (max)|
Raising Money For Your Music Licensing Business
Here are the most common ways to raise money for your music licensing business:
You may not need funding for your music licensing business.
In fact, many entrepreneurs take this approach when starting their own business, whether they have a little amount of cash or a substantial amount to get started.
So what exactly does the term "bootstrapping" mean?
This method essentially refers to self-funding your businesswithout external help or capital and reinvesting your earnings back into the business**
Bootstrapping means building your company from the ground up with your own, or your loved ones, personal savings and reinvesting all earnings back into the business
Here are some tips to consider when bootstrapping your business:
- Use your savings as your capital - one of the best ways to bootstrap your business is to collect your savings and use them as startup capital. This will also help you avoid using your personal or business credit cards when getting started.
- Determine exactly how much capital you need and how much capital you have to get your business off the ground. Generally, when bootstrapping your business, you may want to consider starting a business that involves less startup capital.
- Consider starting a business that will generate immediate returns so you can put money back into the business
- Be as lean as possible - this refers to cutting down expenses as much as possible, such as payroll, fancy software tools, unnecessary travel, renting an office, etc
- Consider outsourcing instead of hiring - in the beginning, you may not need to hire someone permanently to help run your business. It tends to be much less expensive to outsource work to a freelancer and hire someone permanently down the road!
Want to learn more about bootstrapping your business? Check out this article
VC funding is a traditional and long process, but an effective way to raise money for your business.
The term "VC funding" refers to venture capital firms investing in businesses in exchange for equity.
The VC's (venture capitalists) are an individual or small group investing in your business and typically require substantial ownership of the business, with the hope of seeing a return on their investment.
VC's are typically the best approach for businesses with high startup costs - where it would be very difficult to raise the money on your own or through a loan.
When deciding whether to take this approach, it's important that you have a few things in place first, and know what you're getting yourself into:
Determine if your business is ready
Having an idea is not enough to get VC funding.
Typically, VC's will check to make sure you have these things in place prior to closing any deal:
- An MVP (Minimal Viable Product)
- A founding team with all proper documents in place (articles of organization, business formation)
- A validated idea with actual customers buying your product/service
Get everything in place and build a pitch deck
A VC individual or firm will be expecting a fine-tuned presentation that gives an overview of your business.
Here's what you should consider including in your pitch deck:
- Management team, their previous experience + current roles in the business
- Market challenge and solution
- Company financials - including a P&L statement, cash flow statement, and projections
- Company progress
- Investment amount - how much do you need and why?
Research the right VC to fund your business
Research the types of VC investors out there and what niche they focus on.
Then, put together a list of target VC's you want to approach and your strategy around setting up meetings.
Be sure you have everything in place (as discussed above) before setting up any meeting!
Make sure the terms and expectations are right for your business
Committing to VC funding is a big deal and a decision that should not be made lightly.
Although the money and experience from VC's can help your business quickly grow, you are also giving away a stake in the company, and the money comes with strings attached.
Be sure you do your due diligence in finding the right investor - one that truly believes in the growth and success of your business.
For your music licensing business, a common way to raise money is through crowdfunding.
So, what does it mean to crowdfund your small business?
Crowdfunding refers to funding a project through many individual investors.
Here are some items to keep in mind when planning your campaign:
- Sell more than just your product. Sell your passion, your vision, and your story.
- Be real. Give your community honest details about your product.
- Treat your audience as your friends (not just potential customers)
- Put together a great presentation - it will attract people quicker.
To launch a successful crowdfunding campaign, you first need to select the type of crowdfunding platform to host your campaign.
Here are the most popular crowdfunding platforms to raise money on:
Funding platform for creative projects.
Businesses using Kickstarter:
Crowdfunding platform for innovations in tech and design.
Businesses using Indiegogo:
Crowdfunding platform that has helped more than 350 companies raise $175M+ from a community of over 250,000 prospective investors.
Businesses using StartEngine:
We connected with one of the most successful Kickstarter campaigns, Photobooth Supply Co, and asked founder, Brandon Wong to give us some insight on his strategy:
Product first, campaign second
So with all of those positive benefits of the platform figured out, we wanted to make sure we had the product itself in the right place before we launched.
We’ve been working on Salsa for a long time now and wouldn’t have felt comfortable revealing the ability to pay for it until we hit a very important milestone. We had a final prototype.
Doing all of the sourcing and actual production is secondary—there was absolutely no way we could have gone public without people being able to see real photos (and touch in person) a functioning prototype.
This meant that we had to do all of the development before we ever saw a cent.
Finding backers in the real world
We launched the product at our annual Booth Summit, which is a convention for photobooth owners to get together and learn from experts in the field. Launching a product in a receptive environment is generally considered to be a good idea. The same was definitely true for us!
We had a crowd of people who had just told us they were dedicated to growing their business… and we had the chance to offer them a way to do just that. I really can’t emphasize enough how important it is to make products that matter for people who will care about them.
This opportunity to see the product in real life was an essential component for our launch, but it might not be the same for you. I think it just shows how essential having a great prototype is. People love to touch and feel what they’re buying, if you’re talking about something physical… you should be able to show a prototype before you ask for money.
Building excitement with even the smallest backers.
We knew that we wanted to have a ton of incentives for early backers so that they’d be rewarded for taking a leap of faith on a new photobooth.
We’re obviously not making a whole lot of money on that first $1999 tier. But it enabled people to be part of something fun.
Every $1999 backer is always going to be able to say, not just that they got a great deal, but that they were one of the first to get on board. It means a lot more than a discount code expiring—just look at how frustrated people are on Twitter when a limited stock of rewards is secretly gobbled up.
Kickstarter doesn’t reveal the names of backers, but it humanizes them. And it just adds to the fun of getting your own spot! Even for someone backing now, they’re able to say that they were an early adopter.
Delivering on our promise
One of the most common critiques of Kickstarter items is that they either never show up or that they take years. I wanted to make sure that our timeline was easy to deliver and also reasonable.
Nobody deserves to wait two years for your product after they pay for it. I felt like we needed to offer a much quicker turnaround than that. We launched on Black Friday 2018 with an estimated delivery of April 2019.
That’s under 6 months and much lower than the average Kickstarter! The most important thing is that we will be able to meet that timeline. You can’t go around promising delivery dates and missing them, this isn’t a consumer product.
Anytime you’re working with the events industry you have to be very transparent and up front about timelines. A bride who books a photobooth needs it to show up on her wedding day. It’s non-negotiable!
What Skills Do I Need To Succeed In Starting A Music Licensing Business?
As a music licensing business, there are several essential skills and characteristics that are important to identify prior to starting your business.
Let’s look at these skills in more detail so you can identify what you need to succeed in your day-to-day business operations:
The ability to negotiate on behalf of your client will be an essential part of your every day job.
This is one of the most important qualities you can have when starting a music licensing business, so it's important you practice and perfect these skills.
Here's what this looks like:
- Ability to analyze all parts of the deal: your biggest power is to understand and analyze all parts of the deal for your client, choose when to walk away, and know to what lengths you can negotiate a deal.
- Building rapport: This is key in the music licensing business. You are much likely to reach an agreement and favorable terms if you spend just a few moments getting to know each other before talking about the deal at stake.
- Be diplomatic: Being in control of any situation presented and showing intention with your words are key qualities for someone in this line of work. This includes asking good questions and listening actively.
Becoming a good negotiator does not happen overnight, but as long as you are persistent with practicing these skills and putting them into action, you will see growth day by day!
Self Motivation Skills
Self motivation and discipline skills are critical in order to become successful in this field.
It's likely that you will find yourself starting and running your music licensing business from home, which could mean there are more distractions for you.
Here are the basic skills needed for self motivation & discipline:
- Becoming a self starter: It's important that you are capable of independently completing a task without the help or direction of anyone else
- Listening and following directions: When you are given direction by others, it's critical that you are able to follow directions and ask the right questions in order to get your job done
- Taking the initiative in problem solving: Instead of taking the easy route, you'll need to learn to troubleshoot issues on your own as much as possible.
Customer Service Skills
Friendly communication with customers and the ability to address service issues is a critical part of the job.
Here are some customer service skills you may want to consider prior to starting a music licensing business:
- Professionalism: The way you act, present yourself, and respond to situations all leave an impression on your customer. It's important to stay professional at all times when handling customer requests or issues.
- Problem-solving: When issues arise, it's important that you are able to think quick on your feet and address the situation with a calm and clear solution
- Friendly-manner: This is an obvious one, but customers truly appreciate someone that can respond in a quick, efficient, and friendly manner.
- Proficient in writing: These skills include the ability to write well-crafted emails, service tickets, and any other programs used by the business (ie. chat functions, SMS texting)
Business Savvy Skills
When starting a music licensing business, there are a few fundamental business skills you will want to learn in order to be successful:
- Leadership and training skills: A great team starts with YOU. Make sure you have all company policies and training procedures in place prior to hiring your team
- Decisive and self-confident: Over the course of your career, you will need decisions that could impact your business significantly. It's important you are able to think clearly and rationally about these decisions.
- Ability to understand the financials: You don't need to be an accountant, but it is important that you are able to clearly understand and define metrics such as expenses, revenue, profit, margins, COGS, etc.
- Strategic Thinking: Setting clear goals and benchmarks, identifying opportunities, risks. Ability to effectively communicate these insights to your team.
These are a few of many business savvy skills you should have (or work on) when starting a music licensing business.
For a full list, check out this article here.
Advice For Starting A Music Licensing Business
We've interviewed thousands of successful founders at Starter Story and asked what advice they would give to entrepreneurs who are just getting started.
Here's the best advice we discovered for starting a music licensing business:
Aaron Green, founder of Easy Song ($315K/month):
The old entrepreneurial saying comes to mind; ‘you need to reinvent yourself every 4-5 years to maintain success’, which we can personally attest to. Staying rigid and stubborn regarding your original business plan and execution can only lead to dead-ends if you do not experience any hint of the growth you were anticipating.
Read the full interview ➜
Aaron Green, founder of Easy Song ($315K/month):
If you can truly visualize the entire blueprint of your business model inside your brain and how it will be successful, anything is indeed possible.
Read the full interview ➜
Tanvi Patel, founder of Crucial Music ($75K/month):
Stay focused, and keep going. Great ideas need follow-thru. It’s very easy to get sidetracked or give up because it’s really hard.
Read the full interview ➜
Aaron Green, founder of Easy Song ($315K/month):
As a small business grows larger, it presents new and more complex challenges in how we accommodate our people where we had to pick and choose our priorities while enforcing a more structured approach compared to years past.
Read the full interview ➜
Aaron Green, founder of Easy Song ($315K/month):
Transparency equals trust, coupled with an open/flexible mindset to accept all ideas. If you want to improve, get out of your own head and go out and find out more.
Read the full interview ➜
Write a Business Plan
Writing a business plan from the start is critical for the success of your music licensing business.
Because this allows you to roadmap exactly what you do, what your overall structure will look like, and where you want to be in the future.
For many entrepreneurs, writing out the business plan helps validate their idea and decide whether or not they should move forward with starting the business.
You may want to consider expanding upon these sections in your business plan:
- Executive Summary: Brief outline of your product, the market, and growth opportunities
- Overviews and Objectives: Overview of your business, target customers, and what you need to run your business
- Products and Services: Specifics on the products and services your business will provide
- Market Opportunities: Analysis of customer demographics, buyer habits and if your product is in demand
- Marketing: Outline of your marketing plan and how you plan to differentiate yourself from other customers
- Competitive analysis: Analysis of your competition and the strengths and weaknesses therein
- Operations: Hierarchal structure of the company and what it will take to run the business on the day-to-day
- Leadership Team: Detailing roles and responsibilities of each manager based on their specific skill-set
- Financial Analysis Understanding of all expenses, operating budgets, and projections for the future.
Learn more about how to write a business plan here
Determine Which Business Bank Account You Need
There are hundreds of banks out there, and it can be overwhelming to find one that's right for your business.
Here are some factors you may want to consider:
- Location - Is your bank close enough that you can easily make deposits or get cash?
- Low Fees - Make sure to understand any and all fees associated with setting up and maintaining your bank account. Ask for a list - banks usually try to keep this hidden and in the fine print.
- Online Banking Services - Make sure you can easily navigate through your online portal and you have easy access to everything you need.
- Line of Credit - What do your options look like (even if you don't need this now, you may need this down the road).
- Every bank has something that differentiates them from the rest, so make sure whatever that is applied to your needs and values.
Check out this list of the 13 Best Banks for Small Business in 2020 and what makes them so unique.
Setting Up Your Music Licensing Business (Formation and Legal)
When it comes to setting up your business, you may find yourself in a place where you have to make some financial and legal decisions.
The first thing you'll want to decide on is whether you want to be an LLC, S-Corp, or C-Corp.
These three options are found to be the most common when starting a small business, and all serve to protect your personal assets and also provide you with certain tax benefits.
- LLC: All income and expenses from the business are reported on the LLC personal income tax return.
- S corp: Owners pay themselves salaries + receive dividends from profits.
- C Corp: C Corps are separately taxable entities that file a corporate tax return (Form 1120). No income tax is paid at the corporate level and any tax due is paid at the owners individual expense.
Depending on where you're conducting business, you'll also want to consider securing the proper permits, licenses and liability insurance.
Need to start an LLC? Create an LLC in minutes with ZenBusiness.
How Do I Pay Myself As A Small Business Owner?
Most entrepreneurs start a business to do something they love- but at the end of the day, you still have bills to pay (maybe now more than ever).
But it's important to strike the right balance - if you pay yourself too much, you could be putting your business at risk.
There are two common ways to pay yourself as a business owner:
1. Owner's Draw
Many entrepreneurs pay themselves through an owner's draw. This means that you are technically sean as "self-employed" through the eyes of the IRS and are not paid through regular wages.
At the point that you collect money from the draw, taxes typically are not taken out - so make sure you are prepared to pay these taxes once you file your individual return.
As an owner who takes a draw, you can legally take out as much as you want from your equity.
This type of compensation is suited for Sole props, LLCs, and partnerships. If you’re an S corp, you can pay yourself through both a salary and draw if you choose.
If you decide to pay yourself a salary, you will receive a set and recurring amount. This will be taxed by the federal government and the state you reside in.
The reality is that it can be really complicated to set your own salary, so we have some tips for you to consider:
- Take out a reasonable amount that allows you to live comfortably but also sets your business up for success
- Consider the number of hours you are working weekly + the type of duties you are performing.
- Set your salary based on your industry-standard, location, and profits (or projected profits)
- Look at your P&L statement: Deduct your own pay from that amount. This is important so you can first tackle important business expenses, and then pay yourself from the amount leftover.
- Pick a payroll schedule (and stick to it)! In the US, it's most common to pay yourself and employees twice a month.
To learn more about how to pay yourself and what is a reasonable amount, check out this article.
How To Price Your Music Licensing
One of the most challenging aspects to starting a music licensing business is determining how much to charge for your music licensing.
When businesses under-price their product, this can be extremely detrimental to their bottom line and reputation.
Often times, businesses under-price their products to drive demand and volume, but that last thing you want is for customers to view your product/service as "cheap." Additionally, this can have a big impact on the type of customer you attract, which can be difficult to recover from.
On the other hand, when businesses over-price, this tends to be just as damaging to the business.
When customers buy, it's likely that they will explore the internet and look at other competitors to ensure they're getting the best value + deal. This is why it's so important that you research your competition and understand where you land in the marketplace.
Here are some factors to consider when pricing your product:
Understand your customer
It's important that out of the gates, you identify the type of customer you want to attract and how much they're willing to pay for your service. One great way to do this is by surveying your customers. Here are some important items you'll want to takeaway:
- Customer demographic: Age, gender, location, etc.
- Buying habits of your customer: What they buy + when they buy
- Level of price sensitivity with your customer
All of these segments will help you identify the type of customer you're attracting and how to price your product accordingly.
Understand your costs
When pricing your music licensing, it's critical that you first identify all of your costs and consequently mark up your music licensing so you can factor in a profit.
The actual cost of your music licensing may include things like:
- The actual cost to make the product (ie. raw materials, supplies, manufacturer).
- Shipping + overhead fees
- Operating costs to run your business
You may want to consider creating a spreadsheet with every single expense involved in operating/owning your business. This will give you an idea as to what you need to generate in order to at the very least, break-even and will help you price your products to factor in a profit.
Create revenue goals
When determining the price of your music licensing, you'll want to create goals for revenue + how much profit you want your music licensing business to make.
This process is simpler than you may think:
- Think about your breakeven cost (by completing the above step).
- Create a revenue goal based on your break-even cost
- Evaluate the # of items you plan to sell in a given period (make sure this is a realistic number)
- Divide your revenue goal by the number of items you plan to sell
This figure will help determine your estimated price per product in order to meet your revenue goals.
Evaluate your competition
The last piece in determining how to price your music licensing is by simply looking at your competition.
The best way to do this is by finding like-minded businesses that offer product(s) with similar perceived value. Then, you can compare prices of the different businesses and determine where your music licensing fits best in the marketplace.
All of these factors play an equal part in pricing your music licensing, so it's important you evaluate each one individually to come up with an accurate price that will help optimize your business from the start.
Gross Margin Calculator: How to Calculate The Gross Margin For Your Music Licensing
Our calculator is designed to be simple and easy to use.
The goal is to help you set realistic expectations and understand what is considered a healthy gross margin for your music licensing business.
What Type Of Clients Will Buy Your Music Licensing
It's important to first establish who you will be selling to, whether it's to businesses or consumers.
Typically, in this industry, products are sold to B2B markets (business-to-business).
Let's take a look at what this means for your music licensing business:
B2B (or business to business) is a transaction where your music licensing business sell's your product or service to other businesses to help them grow.
Business-to business industries typically includes SaaS products, B2B marketing firms, and other business supply companies.
Unlike B2C markets, the audience is not a consumer at all, but instead a business - so it's important to understand how to best market your product/services to that target audience.
With B2B, driving leads means understanding another company's business processes and creating a business strategy that will help their operation scale and grow.
Here are some tips to consider:
- Your main focus when selling to other businesses is showing value to their business and overall return on investment
- Focus on building relationships, rather than extending your brand awareness through social networks.
- Marketing approach should include things like attending conventions, conferences, and optimizing your online presence (SEO, email outreach, etc)
- Understand that the sales process may mean more effort educating your client, so it's important that you have a well-trained sales team that is knowledgable about the product
Design A Prototype
Turning your idea into a reality can feel like a daunting task - but it's critical that you have an idea of what your product will look like (even if it's just a sketch) prior to finding a manufacturer.
Here are some common ways you can design your prototype:
- Draw Your Initial Design on Paper
- Form pieces of fabric together
- Consider Taking A Generic Product And Putting Your Own Brand On It
- Try Making the Product Yourself
- Consider Building A Prototype With A 3D Printer
To learn more about how to design and prototype a product, check out our latest guide here.
CHRIS KELLY, founder of ProductionCrate, LLC dives deep into the process of designing and prototyping their product:
I found my business partner, Patrick, after running the show for 3 years by myself. Patrick brought on the programming and SEO skills. He introduced me to A/B testing, which we promptly put to use with our payment options. We still test various payment tiers regularly, trying to find that magic formula for a total fee, length of subscription, and promotional pricing.
We tried an entirely ad-driven revenue model for a bit, but quickly realized it didn’t scale as quickly as we needed it to. We switched to selling per-item, to per-bundle, but found success when we tried our subscription model.
$39/year was the price we landed on. $39/year to access our entire library, with no download limitations. This was probably 2014. Now, seven years later, our pricing model is just $99/year with 50 daily downloads. Any subscribers who signed up and retained a previous ‘discounted’ price can keep it. We’re focused on big numbers when it comes to users, not when it comes to our pricing.
Our content varies widely. This is based on several factors. We make what our users ask for, and they ask for the content we’d never think of. Our content is also based on missing results, another way our community speaks to us, though indirectly, and helps us build a robust library of assets.
We have full-time artists who manage the content. They either create it themselves or work with specialists to build out the assets. Our developing team creates toolsets for our community, often stemming from one of our creatives needing a tool that does not yet exist.
We have a few of those tools under-wraps at the moment, but one that we’ve teased already is a face-relighting tool. This is something that the Augmented Reality community has already figured out and nearly perfected, we were able to piggyback some of their ideas and port them over to post-production!
When we first started, it was just me making content. I wasn’t that good if we’re being honest, but I got better. For the first few years, Patrick and I put every dollar we made back into the company. We hired designers for the website and saw a noticeable increase in revenue. We started hiring specialists, often friends of mine, for various asset creation. The company has grown immensely since the early days, but the roots are the same.
🚀 How To Launch Your Music Licensing Business
Build A Website
Building a website is imperative when launching your business, and with the right tools in place, this can be a simple task to check off the list (without having to hire someone).
- Pick a domain name that's easy to remember and easy to type
- Choose a Web Hosting Plan (ie. Shopify, Squarespace)
- Make sure you choose the right theme and design
- Implement the proper page structure (ie. about page, contact page, pricing etc)
To learn more about how to build a stellar website with little stress, we give you all the details on this step-by-step guide.
Once you have chosen the domain, web hosting, and platform, it's time to get started with the design phase.
Themes are a great way to produce the fundamental style and identity of your website - this includes everything from your font design to your blog post styles.
One of the best ways to get started is to simply explore the various themes (free or paid depending on what you're looking for) and test them on your site.
If web-design really isn't in the cards for you, you may want to consider outsourcing a web designer to help bring your vision and brand to life.
Traditional Launch Strategies For Your Music Licensing Business:
There are various different ways you can launch your music licensing business successfully.
Here are a few different strategies to get customers excited about your music licensing business:
- Set up a Facebook page for your business. This is a great way to establish an online presence
- Host an event in a fun location with drinks & food. This is a great way to get exposure in the local community.
- Get Press! Pitch your story to the media and you may just land in an amazing publication
- Live sales to get customers excited
- Send a hand-written letter in the mail with a discount on your services to the local community/neighborhoods.
Tanvi Patel, founder of Crucial Music dives deep into the process of launching the business:
I was lucky enough to have a mentor who eventually became my business partner, Jim Long, who financed the launch of CrucialMusic.com. We didn’t have an unlimited budget, but we spent what was needed to launch and build a business; I wasn’t privy to the exact number, but it was a couple hundred thousand dollars.
Since I had designed and maintained the Point Classics website, as well as developed previous websites for Honest Entertainment and OneMusic, I knew what would be needed for the launch of our sync licensing service: we needed a dual-purpose website that would handle music submissions from artists (from submission to contract execution); and for our clients, it needed to be a searchable database where one could search, listen and download the songs that fit their music briefs.
We had an established relationship with our programmer in Nashville, so we hired him to program the back end of CrucialMusic.com. And for the front end, we hired a graphic designer based in LA and a marketing company called Lazdore to write all the site copy and develop our marketing campaign, which also included hiring a PR company to promote our services in the trades, blogs, and online magazines. Our attorney in Nashville drafted our artist contract, which would be incorporated into the site. As songs were accepted, contracts were automatically emailed to the artists to print, sign and return for execution.
Once the site was complete, we launched in May 2006 with 100 indie songs by artists I had worked with previously and 200 classical tracks from Point Classics. In the early days, we only received 5 submissions a week from artists, but as the years progressed, more and more artists submitted their music as word got out in the artist community. As of June 2021, we receive 30-50 submissions a day; we have over 16,000 songs in our catalog and are adding approximately 1800 songs a year. We reject nearly 90% of the music that is submitted to us, as we like to focus on the quality of music rather than quantity.
On the sales side, since I was already working the Point Classics catalog for synchronization, I had established relationships with the studios, networks, and music supervisors, so it was just a matter of getting on the phone and telling them about the new catalog available on CrucialMusic.com. For the most part, it was easy to add Crucial as a trusted vendor as Point Classics was already approved. From there, it was a matter of bird-dogging new clients and building/maintaining relationships the old-fashioned way, i.e., wining and dining and emailing weekly or monthly to see what they were working on and what they needed for specific scenes their projects.
🌱 How To Grow Your Music Licensing Business
Improve your SEO
SEO is not just about driving traffic to your site, it's about driving the RIGHT traffic to your site, and ultimately, converting leads into customers.
One of the most important aspects of SEO is understanding what your customers are searching for, otherwise known as "keyword research."
Here are some tools that can help you choose the right keywords for your music licensing business.
- Google Ads Keyword Planner invaluable for discovering search trends.
- Google Search Console is very helpful once your website is up as it shows you what words/phrases are generating traffic.
- Ahrefs and SEMRush are paid tools that allow you to look at results of your competitor's website.
Publish Great Content
Finding keywords is an important piece of the puzzle, but Google also ranks your site based on the actual content you produce, as this is what your customers are reading and engaging with.
There are various different "forms" of content that you may want to consider diversifying on your sites, such as blog posts, articles, studies, and videos.
So let's discuss what google considers "good content:"
- Length - This will vary depending on the page, however, generally having a sufficient amount of content helps search engines recognize that your site is a good source for a specific topic
- Engagement - The longer people stay on your website to read your content, the higher Google will rank your website. It's important to have informative and "thick" content that keeps people reading
- Avoid Duplicating Content - Google will recognize this and may consider your content to have low value
- Ensure pages load quickly - This will also help with engagement and time spent on your website
- Shareability - Create content that people want to share, and is easy for them to share, especially to their social media accounts (ie. "click to tweet" is a great example of this).
Another element of creating good content is creating consistent content.
If (and hopefully you are) publishing content frequently, it's important to stick to a schedule - this helps build brand trust and easy user experience with your customers.
Planning out your content with a content calendar is key to staying consistent.
Here are a few great content calendar tools that can help you:
Backlinks are an important piece to SEO, as they allow for other websites to link to your content.
Search engines recognize that other sites are essentially "verifying" your content and essentially rank you higher because of this.
Of course, some links are more valuable than others and can affect your site in different ways.
For example, if a highly valuable and credible site like the New York Times links to a page on your website, this could be remarkable from an SEO perspective.
Aside from organically getting mentioned from other sites, there are other ways that you can increase and earn backlinks:
- Create infographics with relevant data that people want to share
- Promote your content on different sites/look into "guest blogging"
- Contact influencers/journalists/bloggers and ask them to mention you!
- Write testimonials for other sites in exchange for a backlink
- Leverage existing business relationships
Build A Blog
One of the most effective ways to build brand awareness and grow your business is through consistently blogging.
We've outlined some useful tips for you to consider when creating content:
Consistency and Quantity
Quality is important, but it should be the standard for any content you publish.
What’s more important is consistency and quantity.
Consistency is as simple as committing to publishing and sharing a certain number of posts per week. For me, that’s three per week right now.
This kind of commitment is key, because one day, a random post will blow up, and you will have never expected it.
The easiest mind trap is to think "I’m posting too much", and “I need to give my readers/audience/this platform a break”.
This is nonsense.
There is no such thing as oversaturation. Well, there is, but it is just someone else’s opinion.
For every person that tells you you are posting too much, there is another person that wants even more of your content.
You should ignore people’s opinions on how much you post.
Patience & Persistence
Keep posting, keep trying, and keep putting out good content on the regular. Your time will come, and when it does, it will change everything.
The only thing you have control over is your content.
You can’t control how people will react to it. You can’t control pageviews, likes, or shares.
So the only metric you should focus on is how much content you can put out in a week, month, etc.
Where to share your blog content
I know it sounds obvious, but the best places to share your content is on your mailing list. It is guaranteed traffic and it is a great way to get rapid feedback from your most loyal readers.
Send newsletters often. I have done once a week since starting, and I’m moving to twice a week soon.
Work on increasing your mailing list as well. Look into ways to increase your conversion rate to your mailing list. I added a flyout popup thing to my site and now I’m collecting ~30 emails per day.
An email newsletter is one of the most powerful assets you can have and it is worth its weight in gold.
Reddit is one of my favorite places to promote content.
It is a very scary place because you will often get banned or heckled, but it can really pay off.
Create social media accounts for your blog, the main ones I use:
Twitter Facebook Instagram LinkedIn
Set up Buffer and share all of your blog posts to all of your accounts. All of these little shares really do add up.
Automate this as much as possible. I automated all of my social media for Starter Story.
When I started out, I put together a spreadsheet of relevant Facebook groups for my niche, and I would post to these groups whenever I had a big story I wanted to share.
Grow Your Email List
The more engaged list of emails, the more engaged customers, which ultimately leads to more sales.
One of the best ways to start growing your list is by providing your customer with something free (or discounted) in return.
This could also be anything from:
- Fascinating case study
- Video series
- Free week of the product
- Discount on the product
Learn more about how to grow your email list and improve email marketing ➜ here.
Dylan Jacob, founder of Brumate states their email collection tactic that is proven to work:
We use Spin-a-Sale for this (you spin a wheel for a discount code in exchange for subscribing to our email list). This has been the best email-collecting tool we have found because the customer truly feels like they won a prize rather than just a coupon code.
Even if a customer doesn’t convert right away, if we have their email we have a 19% chance of converting them into a future customer whether that is through future promotions, new releases, or simply just sending an email at the right time for a purchase to finally make sense for them.
We also have a return customer rate of over 14%, so one out of every 6 people we convert will end up buying from us again with an average order value of over $60.00.
Add an exit-intent popup to your online store
A great way to double, or even triple, your email opt-in rate and to grow your list is to add an exit-intent popup to your site, and offering a discount or content upgrade for subscribers.
Here's an example of what that might look like:
One thing that I spent years NOT doing, that I now kick myself about, is adding an "exit intent pop-up" to our site, which lets people enter a sweepstakes to win a Xero Shoes gift certificate.
That one idea has added over 100,000 subscribers to our email list, which is one of our most effective marketing channels.
Improve Your Email Marketing
Different types of emails
Here are the most common types of email campaigns you can send to your customers and their benefits:
- Welcome emails - the perfect way to provide information from the start with a clear CTA. Make sure to tell your customer everything they need to know about your product or service.
- Newsletters - a great way to give customers updates or send out your latest content
- Product launch emails - the quickest (and easiest) way to increase sales is by selling to current customers. Make sure they're the first on the list to know about your new product
- Promotional emails - promote discounts, deals coupons etc. Try and make this feel exclusive and for a limited time only
- Abandoned cart emails - give your customers a reason to complete their purchase!
Here's a great resource for finding curated email designs, for all types of email campaigns!
Abandonded Cart Flow
The abandoned cart workflow is one of the most effective strategies for turning your lead into a customer, and a powerful tool to have if you're an e-commerce business.
Think about all the times that you went on a shopping frenzy only to add items to your cart and then either forget or realize nows not the right time to pull the trigger.
Then, minutes later you receive an email saying "Hurry up! Your cart is waiting - and we want to provide you with 20% off your order."
Maybe that's the special touch (and discount) you needed to pull that trigger.
Implementing this workflow can automatically trigger this for your business every time a customer abandons their cart.
Here's a great example of an abandoned cart email from Brooklinen:
Things they do well:
- Showcase 5-star reviews from other customers
- Offer a small discount + free shipping
- Great design + clear call to actions!
Experiment With Pay Per Click Ads (PPC)
Pay-per-click (PPC) is a performance-based marketing method that allows you to show specific ads for services or products oriented to a very defined target, with the goal that the user visits your website or landing page.
Here are some tips to consider:
- Consider connecting the ad to your corresponding landing page so that the audience receives the necessary information after clicking on the ad.
- Conversion Tracking: When running PPC campaigns, be sure to run the ads with conversion tracking.
- Focus on quality keywords, even if there are few as this will save you time and money. When assessing the performance of a keyword, it's important to track the expense, conversion, and cost per conversion, as well as the ROI.
PPC advertising can be a very important lead generator as long as it's done properly. Your PPC campaign is intended to drive traffic to your website and help the business scale.
Additionally, if the campaign is not having the desired results, you can make the necessary changes immediately to improve them.
Ryan Schortmann, founder of Display Pros talks about their investment in PPC Ads:
My name is Ryan Schortmann and I’m the founder of Display Pros. We are a custom trade show display booth company offering easy to use portable display “kits” for small and medium businesses wanting to get into the trade show game.
It did not take long to come to the realization that to compete at any reasonable level, we were going to need to take the plunge and invest in Pay Per Click ads and display.
From experience, I know that it is important to give Google’s hivemind some time to settle in before each campaign starts seeing consistent results (this is largely dependent on budget).
A certain amount of PPC budget must be viewed as a “marketing research” expense and then you can look at the analytics data and make informed decisions on where to refine, tweak or plain scrap an idea.
Google Shopping was an entirely new concept for me. You can’t assign keywords to products so at first, I was asking myself “How the hell do you refine these?”. Then I found some good reading material and courses and learned of some advanced methods that the pros are using. It turns out you can utilize negative keyword lists combined with the priority setting on each shopping campaign to “shape” the keywords that are coming in and how much you are spending on them.
To learn more about PPC Ads and Google Shopping, check out this video to learn everything you need to know!
Social Media Advertising
Social Media Advertising is one of the leading ways to get the word out when it comes to music licensing business.
There are various different Social Media platforms available to you. Some may be more critical for your marketing efforts than others, however, it's important to have an understanding of what's out there and available to you.
Let's talk about a few of the main platforms and what makes them unique:
- Facebook Advertising - more than 2 billion monthly users. Facebook is the best for lead generation + capturing email addresses for e-commerce businesses.
- Instagram Advertising - approximately 500 million monthly users and has a higher audience engagement rate than any other platform. Instagram ads are best for linking to a product page or landing page and reaches the 18-29 age group most effectively.
- Twitter Advertising- Small businesses typically use twitter ads to drive brand awareness, but the platform is meant more for organic engagement (and is not as heavily used for paid advertising)
- Pinterest Advertising - 175 million monthly users and most effectively reaches the female audience. Pinterest is great for promoting products without "promoted". The promoted pins have a way of blending right in.
- LinkedIn Advertising - 227 million monthly users and is geared towards the B2B market and generates the highest quality leads. Great platform for recruiters, high-end products and services that will help businesses
It's important to first define your goal/objective so that you don't waste time and money into the wrong platform:
Here are some different questions to ask yourself as it relates to your goals:
- Do I want to simply drive brand awareness?
- Do I want to drive users to my website to gather information?
- Do I want to increase sales and get my customer to take action?
From there, choose the platform that targets your audience best and start experimenting!
Learn more about social media advertising ➜ here.
Founder Andy Hayes talks about mastering FB ads and the pixel:
The biggest bang for your buck will likely be mastering Facebook and it’s platform - which we all know is pay for play, so you’ll have to come up with a small amount of budget to start for marketing.
We’ve spent countless hours (and paid numerous coaches) before we cracked the code that works for us on Facebook, but it is working really well for us now.
Some of the most important things to know when it comes to FB Ads:
- Start with retargeting (that’s showing ads to people who already know you but did not purchase). Master this - and start building information on your Facebook Pixel - before you do anything else
- Once you have that down, try working with the 1% “Lookalike” audience to prospect for new customers. This may take awhile because your pixel audience is small, so try layering on interests - 1% Lookalike and your largest competitor, for example. Don’t use interest-only targeting until you master this.
- Great photography and videography is key, as is smart copy. Research what’s out there in your industry and constantly test - what works for one company may not work for other people.
- Make sure you have good offers. For example, we have a $5 trial for our subscription, which converts affordably - if we promoted our subscription with the standard $30 front charge, it wouldn’t be as cost-effective.
🏃🏼♀️ How To Run Your Music Licensing Business
How To Retain Customers For Your Music Licensing Business
Retaining customers is one of the most effective ways to grow your music licensing business.
Oftentimes, it's easy to find yourself focusing on generating new customers, vs retaining your current ones.
Look at it this way - you are 60-70% more likely to sell a new product to an existing customer than you are a new customer.
That's not to say that finding new customers and revenue streams is not important, however, the easiest (and most inexpensive) source of new revenue is right there in front of you.
Here are some ways you can retain customers for your music licensing business:
- Responding to comments on social media
- Send discounts (or freebies) to loyal customers
- Provide valuable content, for free
- Write a hand written thank you note
- Provide awesome customer service and build relationships with customers
To find out more tips and tricks on retaining customers, check out this article ➜ here
Aaron Green, founder of Easy Song dives deep into the process of attracting and retaining customers:
By the summer of 2015, things were moving fast and we wanted to capitalize on this new void within the indie mechanical licensing industry, so we made significant investments in our online marketing efforts, such as Google Adwords and strengthening our social media presence.
We focused on strengthening all of our existing publisher relationships, while publicly listing each and every copyright holder on our website to serve as a good net to attract organic searches and find new online window-shoppers (today we have over 6,000 publishers listed).
Having CD Baby in our corner opened many new doors. Prospects built an instant trust with our team, knowing we had a big brand name backing us. Online traffic was skyrocketing, and more and more indie labels, online stores and businesses flowed over to us since we boasted a reputation of having the best customer service in our industry.
We listed a 1-800 phone number at the top of our website, which was unheard of within our industry. We made it a point that ESL would be the new Ellis Island with the fastest customer service and the most efficient licensing system. Still to this date, we promise a 1-2 business day turntime for all standard mechanical song licenses, as well as offering free copyright holder searches (even for users who decide not to officially proceed with a license). This friendly way of servicing artists was refreshing, in which our display of “music business karma” was coming back to us in spades.
We also set up a schedule where our employees would actually phone each individual who had signed up, but did not pay for the license. This scored many lifetime clients and even more new partnerships arose (this was only done once per client, and there are obviously some people who do not like to get cold-called, especially from a website, so we had to be sensitive about this). Our motto quickly became “there is no such thing as a dumb licensing or copyright question”; it is a complex jungle and we strive to be the most accessible tour guides in the industry.
In 2016, we launched our Custom Licensing Service division, specializing in assisting clients who need help with any type license (not just mechanical) where special permission is needed on behalf of the rights holder (such as synchronization, master use, print licensing, theatrical rights and international copyright registration within the US). This brought our company to a whole new level where we grew even closer to each existing publisher, and formed new relationships as well. No type of permission was off-limits to resolve. We could now handle it all, and word was spreading quickly within all pockets of the market.
In the same year, we also launched a new product called the “Seal of Authenticity”. This is an image that is displayed on our customers’ physical album artwork, digital cover or artist website that directly links their proof of licensing document when clicked or scanned with a smartphone (using QR code technology). It indicates that music licensing had been obtained, verified, and can be viewed publicly online at IDBLM.org (“International Database of Licensed Music). At the same time, by purchasing this seal at checkout, this entitles the client to fee-free reorders in the event they need to purchase additional units for an existing project where they exceed the initial quantity (they still need to pay royalties to each copyright holder, but our company does not charge any future administrative fees to do so). We made it very clear since the launch that this is not mandatory by any law, but offers clear transparency to the public, serving as a license plate for their album or single release. Our customers took an instant liking to this new add-on product, and the value we delivered did not go unnoticed.
Diversify Your Product Line
Adding new products to your business is a great way to expand into new markets and grow your business.
It's important to note that adding new products and diversifying may not be in the cards for you right this moment, and that's okay. You can always consider it down the road.
Here are some reasons you may want to considering adding/diversifying your product
- Meeting the needs of your customers
- Establish yourself as a top provider in your industry and stay ahead of the game with competition
- Resistance to downturns/trends fading
- Create new revenue streams
Provide Great Customer Service
Providing exceptional care and creating relationships with clients is a great way to build your reputation and retain customers.
Whether you are an online business or a physical business, it's highly important to communicate with customers and make them feel like they are the priority.
Just remember: customer service represents your brand, values, vision and YOU as a person.
As a brand, you want to deliver an experience that authentic, honest and transparent.
Don't make the mistake of giving your audience less credit than they deserve.
If you go around chasing every trend and only focused on yourself and money, you’re going to lose very quickly.
There have been many times where we have been tempted to do this but stayed true.
Sure we sacrificed sales, but we kept our integrity, played the long game and people saw and appreciated that, and really began emotionally investing in the brand.
Build a Referral Program
Word of mouth is one of the best ways to get the word out about your business and acquire new customers. Especially when you are starting out, it’s important to build a solid referral program to encourage existing customers to help you find new ones.
A great way to do that is by offering a reward (ie. credit on your service or cash) to customers that refer you to their friends and family.
A fantastic referral program will help with clout, credibility, and establishing yourself in the space.
Word of Mouth
The most tried and true way to grow a music licensing business is through word of mouth - some entrepreneurs would say it's more important than all social media.
Why you should focus on word of mouth:
- Consumers trust word of mouth above all other forms of marketing
- 92% of consumers believe recommendations from friends and family over all forms of advertising
- 64% of marketing executives indicated that they believe it is the most effective form of marketing
Learn more about word of mouth in our guide: 30 Ways Founders Grow Their Business ➜
How To Crush The Sales Process For Your Music Licensing Business
You may find yourself in a spot where you're ready to hire a few (or many) salespeople to support the sales conversion process.
Regardless if you have one or thirty salespeople, it's critical that you assign them specific roles and responsibilities to nurture the client and provide excellent support.
Mike Korba, co-founder of User.Com walks us through the entire sales process and which teams are responsible for what:
User.com Sales Process
Each user and account is qualified with a specialist. For business leads, they are handled by the sales team, and if they are qualified we give them a demo, more than often at the end of their fourteen-day trial. If they’re happy they’ll add a payment, and get an account manager, so a customer support and success team who will help implement the solution and to use the technology.
Sometimes, users will convert naturally on their own, after using the freemium product and finding it to be something that they will find beneficial.
After they convert, we help with onboarding, give them some personalized tips for their specific business or industry to grow plus all kinds of support, for whatever they need - something we take huge pride in.
The team is right now more than 30 people, with more than half working on the IT and product side, and the rest are in three teams: Support, Marketing, and Sales who all work together very closely.
We put together the best resources on the internet to help you start your music licensing business.
- Social media tools such as Facebook, Instagram, Twitter, YouTube or LinkedIn
- Advertising tools such as Facebook Ads or Google Adwords
- Analytics tools such as Google Analytics
- Productivity tools such as Google Suite, Dropbox, Slack, Microsoft Office 365 or Discord
- Payments tools such as Paypal, Authorize.net or Payment Rails
- Accounting tools such as Quickbooks or Google Sheets
- Platform tools such as Custom Built
- Sales tools such as Salesforce
- Reviews tools such as Google My Business
- Start Your Music Business: How To Earn Royalties, Own Your Music, Sample Music, Protect Your Name & Structure Your Music Business
- What Are The Steps To Start Your Own Music Licensing
- 6 Tips For Starting A Music Licensing Business From Home
- 2 Best Music Licensing Business Models (How To License Music)
- 2 Paths To Make Full-Time Income W/ Music Licensing
- I Bootstrapped A $600K/Year Video Production Company [10M Downloads]
- How We Bootstrapped A Music Licensing Business to $2.5M/Year
- We've Bootstrapped Two Successful Music Licensing Businesses [With $0 In Marketing]
Hey! 👋I'm Pat Walls, the founder of Starter Story.
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