Here we are at part two of our upcoming DIY Musicians Guide. Last week we discussed some of the basic things you as a band needed to know before going from the basement to the stage.

This week we are going to take a brief look at something that has been the bane of many bands in the past. None other than our good friend Money!

Money is the driving force behind every industry on the planet, including this gem of a industry you are trying to break into. Behind the money are all kinds of business adventures just waiting to happen.

If you are unprepared, you could find yourself out of a band, or even worse, stuck in a band that is getting screwed.

Talk Money

For whatever reason, people do not like to talk about money. It’s on everyone’s mind day in and day out, it’s what gets most of us up out of bed every day, and is the #1 tool used by the most people the world over. So why not talk about it?

If you are ready to take your non-hobby band out of the basement, then it’s definitely time to talk about money.

Don’t be scared to bring it up, someone has to do it. The sooner you talk about it, the sooner everyone will be on the same page, and you can get back to making that awesome music.

The more you discuss it, the less painful or awkward and uncomfortable it will be, so try to make it a regular topic at your band meetings. Does not need to take up the whole meeting, but break down where you are at financially and what your goals are.

Getting Paid

Now that you are hitting the stage and promoting your shows, there is a good chance people are going to show up, and if you are lucky, pay to get in.

Standard practice at most smaller venues is the promoter and bands keep the door, the venue keeps the bar.

If you did your part in promoting and bringing folks out, you should get a cut of the door so talk to whoever put the show together. Remember when talking to your promoter, treat others as you wish to be treated.

In some cases, if not enough people show up, the ‘door’ fund is used to pay for production, aka the sound guy. If you didn’t bring anyone to the show, you will not be getting paid. Don’t get your feelings hurt, just promote better next time.

Other ways you will initially be making money is off of your merchandise. I can not stress this enough, GET MERCH, HAVE MERCH, PEOPLE WANT YOUR MERCH.

The first time I met Andre 3000 of Outkast, he walked into a small club here in Atlanta asking “where’s the merch, where’s the albums?”.

NONE..I repeat..zero percent of the bands performing that night had anything at all to offer in regard to merchandise. Fortunately, we had some stuff for other bands that were not playing that night in the car and hooked him up.

People want to take a piece of your awesomeness home with them and show it off to their friends, and you never know who that person might be.

Cash Box vs Bank Account

Let me start by saying this is NOT YOUR JOB…at least not yet. You should not expect to be paying your rent from your shows right away. Keep your day job for now.

Since you have a job, and do not need that $25 split from playing your local bar, what should happen to that money?

SAVE IT! Invest it back into the business, your band, because you are going to need it to pay for gas, merch, a van, food, hotels, recording, and a ton of other stuff..

The more you can earn with your band and not have to come out of pocket, the better off you’ll be. Consider yourselves all equal investors into this business, and every time you make some profit, you each are investing it for future growth.

Where should you save it? Two options, your cash box, or a bank account.

Not every band, nor every business, is going to make it. During your early phase of making money, it’s probably safe to have someone keeping the funds in a cash box in their closet for now. You should certainly be keeping tabs on money coming in and money going out, but it’s not necessary to jump right into a bank account.

Once you are sure about sticking it out as a group, move into a Bank Account. You can get a joint account that several members can have access to if you want. My recommendation is to have at least two persons on the account allowed to retrieve the funds when needed in case one of them flips out and runs away.

Business License

Should you get a business license for your band? The simple answer is yes you should.

When should you get it? That’s up for debate, but here is what mentors have told me.

Get started first, get the ball rolling, and get some cash flowing. Once you have established that you are still interested after that point, go ahead and legitimize the business.

Use some of the funds that you’ve been saving in your cash box, register your business, and get a Tax ID. Once you have this, you can start to write off almost everything you need to purchase for your group. The merch, gas for touring, instruments, food, etc.

Writing off purchases used to build your business is a great way to save money in the long run.

Also, having a business license is going to make it easy for you to get paid the right way once your group has a large enough fund to start paying the band members.

Let’s Recap

Talk openly with your group about money so that it’s not a stigma. Set financial goals.

Once you hit the scene, it’s time to start getting paid from shows and merchandise.

Save your money as a group and invest it back into the business that is your band. Start with a cash box, move into a bank account.

Get a business license and Tax ID so that you can write off your band purchases, as well as legitimize your business.

Thanks for reading! If you have any comments or suggestions, tell us on Facebook or Twitter.

Did you see our previous article Before Playing Outside Your Mothers Basement, Your Band Should Know This?