Low on cash? Red ink? Stagnating sales? Many of you may have noticed that your mighty dollar has been less than mighty in the past year or so. The money you bring in doesn't stretch as far. The dollar seems to buy you much less than it did a year ago. It is not nearly as readily available. Are you feeling squeezed? It's called recession.
Experts are predicting a fairly long recession with negative growth in all areas. Negative growth translates to losses. Will your small business be able survive the next few years? Will you be able to continue making music in the future or will this be the end of the road?
Most peoples reaction to a downturn is to borrow money, use their credit as a life support system and hope their cash advances outlast the bad economy. You can continue with business as usual with loan money and hope that when things turn around you'll still be standing. This will still leave you with a big wall of debt to deal with in the future.
A much wiser choice is to contract your business, to pull the tentacles of your business inward in order to conserve your core resources. You will have to make some hard choices on what you can afford and what you don't really need. It is not an easy task considering most of a musician's business is about making an investment now and hoping to recoup that investment plus extra in the near future. Whether you invest in a new CD release or invest in putting together a live band, the costs are always before the profits. In lean times it is important to conserve cash so you have money for the priorities.
Here are a list of expenses that may be worth cutting. It would be wise to take a good look at these and decide which ones you will be able to trim from your budget. You'll be surprised how these add up to hundreds and hundreds of dollars during the course of the year.
1) Web site - This expense may be a couple of hundred dollars for the year. With the invention of Myspace and Facebook, everything you need from a web site is available for free. These newer sites run much better than the old "geo-cities" and "angelfire" free sites of the past. If you are like me and have most of your sales channeled through distributors such as Guitar9.com and CDBaby, this would be an easy choice. Save your domain name but drop the web site. Have all links re-direct to your MySpace page. Similar sites include indie911.com and UBL.com.
2) Bank Fees - My bank account has continuously raised prices on fees and services. When I had seen that I was paying over sixteen dollars per month just to keep my account open and cash checks, I closed my account. Now all payments have to come to me through PayPal.
3) Promo Items - When I was the editor of Guitar-2001 Magazine, I was shocked to learn that Shrapnel Records no longer sent out promo copies of their CD releases. It turned out that they were sending out hundreds of promo copies with only minimal reviews and return on the expenditure for this. I used to send out a blanket mailing of my new CD releases. Now I have it cut down to about 35 Zines and webzines that I know will possibly give me reviews and will have the most impact for getting sales of the CD. I used to mail out 200 or more CDs. Just the savings on postage alone is huge.
4) Standard Mailings - The only mailing I do now via the postal service is CD stock to my distributors. There were some sales that I would get though "snail mail" mailings but the return had flipped in recent years. The flyer and ad mailings started costing more than the few sales I would make from them. Same goes for live shows. These are the days of email - use it and save.
5) PO Box - My PO Box fees have risen greatly in the past few years from $60 to $150 for the year. This was a tough decision for me. I had the same mailing address with this PO Box since 1990. The truth is, not much mail came to the box anymore. Anyone that needs to contact me always contacts me through email.
6) Want/Need - It is important to identify the difference between want and need. I want the new Paul Reed Smith guitar but my Charvel and my Gibson Les Paul will do fine for any job that is in my path. I want the Line6 POD 3.0 but I can get just as great sounds by using my amp and the effects I already own. I don't need an endorsement deal that lets me by another guitar (that I don't really need) at wholesale price. I do need to buy guitar strings before my next recording or gig.
7) Time spread - If you had plans for the coming year that entailed big expenses you should slow things down. Spread out the time between your projects so sales and payments can come in and accumulate. Passing on some opportunities that will cost you money upfront makes good sense for now. Sometimes its better to see how some things pan out before you get involved with your money and time.
8) Purge - Purge your unused items and instruments. If you haven't used it in the past year then you don't need it! Very few items increase in value with time. Since the advent of Ebay, even things that were once at high value for their rarity have severely dropped in price. It turns out a whole lot of people had these supposedly rare items in their basements or attics but just didn't know where/how to sell them. They do now. Sell, sell, sell... the cash can be put to better use now.
Just a quick tally on what I have saved per year:
Website - $200
Bank fees - $180
Promo items - $250
Mailings - $176
PO Box fee - $150
Grand Total: $956
That's $956. more in my pocket. This figure was tallied counting only the most tangible savings. I've saved even more money by just waiting and thinking before I spend. Sales and payments don't come easy, don't let that money slip away so easy either.
One more tip for the tough road ahead...
Making money is job one! Anything that will put money in your hands right now is your priority. If that means doing a fill-in gig with a cover band, working in a music store, or, doing roadie work for a prominent club band, you will have to take what you can get. Good luck and best wishes to you all in the year ahead.
Give me some feedback concerning this article using the e-mail link in the sidebar.
Michael Knight is a composer and guitar player from Floral Park, NY, who has released several independent CDs on his own label, Knight Music Productions.
His latest CD is entitled "Electric Horrorland", another musical descent into the darkest depths of the abyss.