In meetings this weekend with bands it all came down to this:

What are your goals?

Depending on your situation it may refer to simply goals with your music, but odds are if you want a career in music you will also have to consider all aspects of your life - at least in the short term [and by short term there I mean anywhere from the next 2-5 years].

It is hard to know if you are making progress if you don’t know where that progress should be taking you. The idea of releasing one album and selling out the pressing is a great goal and one almost any band that releases an album has. But it is such a small part of your band’s bigger, long term picture that if you don’t know what comes next or how the first release will help you build to the next step it is almost pointless [I am assuming you plan on doing this with some seriousness for as long as possible].

I recall reading a survey that polled a good majority of America’s richest people - the most common shared trait amongst them was that a large majority, I believe it was over 80% had written down their goals and/or plans to achieve them.

In my post M|E: An equation showing how FREE can = $$$ I noted the equation David from Digital Audio Insider posted:

(A x B x C) - E = D
A = the total # of people who acquire the work
B = the percent who actually pay for it
C = the average amount each person pays
D = the total revenue received
E = promotional and marketing expenses (not to mention recording, mixing, and mastering costs)

If I gave that equation to a number of bands I would bet my right pinky finger that the majority of them would start with A and likely base that number on the physical copies being pressed, maybe with some downloads added in, and proceed from there.

But where you should really start is with D. That’s your goal. In a four piece where everyone has agreed making $25k a year from music is enough to make them happy? Then your D is at minimum [have to account for expenses as well] $100K.

But in knowing you have a target of $100K you can tweak the other numbers as you go, monitering how close you are coming to your goal.

Quick example using live performances only as your revenue:
If your band reaches the point where you know you can receive a guarantee of $1000/night, you know based on selling no recordings or downloads or merch, you would have to play a 100 shows in a given year.

From there you could breakdown all revenue into a 100 units of a thousand for benchmarking your progress, so every 100 CDs sold for $10 is one less show you need to play.

Summary

1. Brainstorm with your band on goals/consider personal goals as well
2. Come to agreement with all band members on goals going forward - then write them down
3. Determine measures for measuring your progress
4. Get to it
5. Adjust accordingly
6. Repeat

M|E = Music and Entrepreneurship
While entrepreneurial aspects of the music industry have been a focus on my blog since I started I am aiming to make them more explicit going forward. Exploring business model options and simply getting musician readers thinking of themselves as entrepreneurs will be two main aspects of such posts. So when you see M|E expect a more business/entrepreneurial slant on things.

To start off though before exploring new models, here is an equation that summarizes the current landscape quite nicely:

(A x B x C) - E = D
A = the total # of people who acquire the work
B = the percent who actually pay for it
C = the average amount each person pays
D = the total revenue received
E = promotional and marketing expenses (not to mention recording, mixing, and mastering costs)

The equation comes from David at Digital Audio Insider. He explains it in more detail and provides some context as well and you should definitely take a minute and have a read.

Then keep it in mind when you are planning your next release and how you can tweak any of A. B or C because as noted:

In theory, the beauty of the equation is that — if all else remains the same — any increase in A, B, or C, however small, results in more D.

Keep the equation and more importantly the idea behind it in mind when planning but read the post to see the catch.