How To Utilize Business Plan Canvas For Success In The Music Business
In this piece we explore how bands and artist can use the tried-and-true business tool Business Plan Canvas as a planning resource and, ultimately, propel them toward greater success in the music industry.
Guest post by Sara-Lena Probst of BlackbirdPunk
Business Plan Canvas can be a great way to figuring your business planning out. Why? Because most musicians actually work for themselves. Read On!
Business Plan Canvas is a well-known method in the business world. That means a lot of startups use this when they start out.
Likewise, many self-employed people use this amazing method in the beginning. It is basically a different way to display your business plan other than writing a more traditional business plan.
On the contrary, not many musicians think that they are literally tiny little business entities.
Important to realise, most musicians are in fact working for themselves. Also, they are a part of the bigger music industry.
Thus, it is very important for any musician to know about business planning.
In the first place, the Business Plan Canvas is not originally for the music industry. However, it is a brilliant tool that you can use for your advantage.
How, you might ask? Exactly by thinking about your band or project as a little business in itself. What does that mean?
Think of your band as a business!
It means that you have your streams of income on one side and your expenses on the other. For example, your income as a musician can consist of royalty payments from the various collecting societies.
Then you might get a piece of streaming income. As well as what your record label is handing you over from the physical sales.
You might have further income out of your YouTube channel. Likewise, sponsoring can make up a huge portion of your income as well as Patreon support.
On the expenses side, you might have mastering costs for your new record, for example. That can happen if you go down the DIY route and finance the record production yourself.
Perhaps you play an instrument that needs regular checking in or software that is essential for your music production.
If you’re planning to amp up your live stream setting then this could be a cost related to your ‘business’ too.
What does the Business Plan Canvas help me with?
The brilliant thing about the Business Plan Canvas is that it lets you plan your whole project on just one poster. This is crazy, the design of the Business Plan Canvas is already laying out the structure. It consists of nine major building stones. This approach was first introduced by Swiss businessman Alexander Osterwalder in 2008.
You only need to have a proper think and fill it out! Traditional business plans involve a lot of text and calculation. This may be very difficult to do for creative people like musicians.
The advance of the Business Plan Canvas is that you don’t have to write a full body of the text. Just grab a bunch of post-its and start your journey!
How does a Business Plan Canvas work in detail?
Here is an example of a Business Plan Canvas. I’ll talk you through the different steps.
Firstly, grab a big poster and a bunch of post-its. Now, mark the different section with a felt-tip or marker. You can also use washi-tap if that is more up your alley. This makes it really easy for you to simply fill in the different sections.
Don’t be disturbed by the strong business lingo displayed in the picture above. Just always try to convert all questions into music business language.
Starting from left top corner:
- Key Partners:
Questions to ask: ‘Who are our Key Partners?’, ‘Which Key Activities do partners perform?’, ‘Who are our Key Suppliers?’
For example, Key Partners could be your distributor and the record label. But also your producer and manager. Your manager performs the Key Activity of searching your stuff out and to reach out to third-party people to make things happen for your project.
If you are a DIY musician your Key Suppliers could be the vinyl pressing plant that is producing the actual vinyl.
- Key Activities:
Here you mark what it is that you are doing. For example, you could write ‘I play the guitar and sing in the band XYZ, our genre is whale core’.
- Key Resources:
What do you need to do your work? For example, your Key Resource could be your guitar and your voice for singing. Of course, your songwriting is a huge Key Resource. Also, your fanbase is a Key Resource for you, too!
You can identify each segment as detailed as you like
- Value Proposition:
Here, you can mark what it is that makes you absolutely unique. Questions to ask: ‘What value do we deliver to the customer?’, ‘Which one of our customer’s problem are we helping to solve?’ ‘What bundles of products and services are we offering to each Customer Segment?’.
For example, your value could be this 4-lads-and-best-friends-from-school situation. Many famous bands still play on this like Foo Fighters, as an example. If you are writing a lot of love songs then you could solve your customer’s problem with heartache. Likewise, the bundle of products you are selling could be vinyl, CD and streaming. Also, the service could be a live stream and so on. Music is an essential need for human beings. By writing songs and making music you are serving one of the oldest art forms in human history!
Customer Relationship is super important to find out about in your Business Plan Canvas
- Customer Relationships:
Here you write down the relationship you need to have with your customers, i.e. your fans, in order to sell your products. Do you write with your fans in Instagram Direct Messages? Or do you even use Superphone.io? Also, how do you react to comments underneath your YouTube videos? Important to realise, the more you define how you want to communicate with your fans and what kind of relationship you want to have the easier it will become for you.
In the channel segment, you can write down how you reach out to your fans. Do you use Instagram and Facebook? Are you running a newsletter where you share exclusive content? Also, you can identify what it is your best running channel and what you can improve.
- Customer Segments:
Do a proper target audience research. That way you can really find out who you are selling your music to. Ask yourself:’ For who am I creating value?’.
Lastly, identify your Cost Structure and Revenue Stream in the Business Plan Canvas
- Cost Structure:
Note down all things that cost you money for your music project. What are some fixed costs that will come up every month? For example, if you a renting a practising room that would be a fixed cost. On the other hand, you have variable costs, anything that comes and goes according to a specific project.
- Revenue Streams:
The fun part, write down all your income! What sum comes in every month? Like do you have a Patreon account and Patreons that pay a fixed sum for your content every month? Do you also have variable income for example streaming royalties? Also, do you do songwriting for other people and therefore have a passive income.
By digging into these elements of your company (i.e. band or musical project), you can recognize and act on areas that can be improved. It also reveals clear paths on which to build your organizational innovation strategy.*source: OneFire
Become the boss you need right now!
This is crazy, once you’ve gotten the hang of thinking about your band or musical project as a business you can plan so much better. The Business Plan Canvas can be a great way to help you identify all different areas.
Next, you can use this analysis to find out about segments that need improvement. Also, you can clearly see how all segments are connected together.
This is essential in understanding the growth you could generate. Yes, the most important job for a musician is to write songs and music.
However, in the modern music business, most musicians work for themselves. Also, there is a huge illusion that once you’ve got your label contract, you don’t need to do any work anymore.
That is oftentimes not the case. Many musicians still need to take care of at least of their social media channels.
On the other hand, it can be a great chance to take your luck into your own hands and start the business planning for yourselves.
Don’t wait till some music industry expert comes around the corner in order to fix your business.
Use Business Plan Canvas and become the boss you need right now!